by Dave Kranzler, Investment Research Dynamics:
I am not even sure what to think about this horrific number, sales down 13% y/y; mo’s supply up 41% y/y. At least now we know that the demand destruction — most evident in the resale segment for several quarters — is not due to “lack of supply” or “the weather.” When a housing demand metric is 15% worse than my worse-case estimate, things are really bad out there. In fact, this is just more evidence that for the past two years housing data was buoyed by new-era, Fed-driven investor activity and the underlying, fundamental, end-user housing market is still in a serious depression…Mark Hanson, real estate and mortgage finance consultant.
It’s no secret that I’ve been bearish on the housing market for over a year. The performance of the homebuilder stocks in that time frame vindicates my view: the DJUSHB homebuilder index is down over 10%, with the S&P 500 index up nearly 25% in the same time period. That fact alone should be scaring flippers away from the housing market.
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