Real Estate Crash Continues – Housing Bubble Bursts
A divergence in the markets has taken place, and we expect it to
continue for some time. The Real Estate Industry is in one of its worst
slumps in years, home builders are struggling to make a profit and sell off
inventory, mortgage providers are going bankrupt, credit standards are
tightening, and we are seeing record numbers of houses for sale.
Amidst all of this turmoil, the market is still seeing an opportunity to
rally, with the Dow hitting all time highs just today.
According to the National Association of Realtors, this real estate
downdraft is far from over. NAR has their own Senior Economist who is
expecting similar declines in September.
“The unusual disruptions in the mortgage market, including a
significant rise in jumbo loan rates, resulted in a fairly high number of
postponed or cancelled sales, with many buyers having to search for other
financing when loan commitments fell through”
In August, again backed by numbers from the National Association of
Realtors, existing homes available for sale represent approximately 10
months of supply. It doesn’t look any prettier in condos either, existing
sales dropped 11.7% from a year ago.
What does this tell us?
The Housing market is still in for some serious negative news. You are
going to see homebuilders continue to lose money, and write off assets
that are impaired.
In spite of the recent Fed rate cut, mortgage lenders, those that are
left anyway, have tightened their belt and won’t be making aggressive
loans any time soon.
Some talking heads on CNBC are starting to mention picking up value
plays in the real estate market. We think they are right, but 12 months
early. Investing in these stocks now is dead money, you are better off
putting your capital to use in other areas.
If you are looking for the Undiscovered Blue-Chip stocks that make wall
street millions of dollars a year, look to the Core Wealth Report to
find them for you. Editor searches the globe for
undiscovered blue-chip stocks that are ready to rally and make you 2 or 3 times
your money.
Category: Real Estate
