Home Sales Data Show The Bubble Is Bursting
By: Dave Kranzler
GoldSeek.com
Wednesday, 25 July 2018
There’s no question in my mind now that the housing “snowball” has started downhill and it won’t take long to develop into an avalanche. In addition to all of the “for sale” and “for rent” signs I’m seeing with my own eyes popping up around Denver, I’ve been receiving emails from subscribers describing the same thing in their area. – Short Seller’s Journal, July 22nd issue
The existing and new home sales reports this week were worse than even I expected. Given the statistical manipulation tools used by the National Association of Realtors (existing home sales) and the Census Bureau (new home sales) – both entities use the same regression software – one can only wonder about the true rate of home sales decline.
Yesterday, CNBC.com featured a report titled, Southern California home sales crash, a warning sign to the nation. I was surprised to see CNBC issue a bearish report on anything. This report is similar to what’s occurring in New York City – rising inventory and falling sales. Apartment rents in NYC are also dropping. It’s similar in nearly all “bellwether” markets.
The Housing Bubble Blog (thehousingbubble.com), which was around during the mid-2000’s housing bubble, posted an article on Friday titled, “Discount sales can create a snowball effect.” The article featured articles from different cities, Portland, Dallas, Ft Collins (Colorado) and Minnapolis/St Paul which described rising inventory and falling prices.
This explains why the homebuilder stocks are in an official “bear market,” with some homebuilder stocks down over 30% since late January. I have yet to hear or read about this fact from the mainstream financial media or Wall Street.
Today’s new home sales report, along with the serial decline in the housing starts data, disproves the “low inventory” narrative. Affordability, rising rates and a shrinking pool of potential homebuyers who can qualify for a conforming mortgage has torpedoed demand. The latest U of Michigan Consumer Sentiment report featured this chart on homebuying sentiment:
The Rest…HERE
