Fund Manager: The Housing Market Goes Down The Drain

Monday, October 8, 2018
By Paul Martin

SilverDoctors.com
October 8, 2018

Dave Kranzler has crunched the latest numbers, and sales haven’t just dipped slightly. Sales are falling off a cliff and plunging. Here are the details…

by Dave Kranzler of Investment Research Dynamics

The Denver Post published an article last week titled, “Major cold front slams Denver housing market in September” (note, weather-wise, September was one of the warmest and driest in many years). Single-family home sales in September plunged 30.5% from August and 21.7% from September 2017. Condo sales fell off a cliff, dropping 43% from August and 17.3% from August 2017. Normally inventory drops slightly in September. This year inventory in September soared. The median price of homes sold fell 3.8%. The article said the high-end of the market – homes worth over $1 million – fell 44.4% from August to September.

In terms of economic trends, Denver historically has been representative of the same economic and demographic trends nationwide. Based on subscriber emails and articles I’ve read from around the country, the activity in the housing market nationwide is similar to Denver’s.

New home sales for August, which were released last week, showed another year-over-year decline on a SAAR basis and missed the Street’s expectations. In addition, the 627,000 SAAR print for July was revised down 3% from 627,000 to 608,000. Revisions for June and July together were taken down by 39,000. The fact that new homebuilders are sitting on a near-record level of inventory (measured both by value and units) contradicts the NAR’s contention that home sales are declining because of a lack of affordable inventory. Recent results from lower-end, lower-priced homes (Beazer, DR Horton and Pulte) show demand for “affordable” homes is waning.

The Rest…HERE

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