Monday, November 29, 2010


Home ? Chart Of The Day, Headline, Most Recent Stories, Strategy Lab

29 November 2010 by TPC 2 Comments

My outlook for housing remains largely unchanged in recent months.? Earlier this year I said the housing market was likely to come under renewed pressures in the second half of 2010 as government intervention ended and the market was allowed to begin clearing:

“As I said above, the most likely scenario is the “work-out”.?? Government stimulus continues to bolster the private sector in the back half of 2010, but the lack of direct aid in housing begins to weigh on the housing market in the second half of 2010.? Negative seasonal trends make for a very difficult H2 in housing and a tough start in 2011.? The economy appears fairly strong into the latter portion of 2010, but the dwindling stimulus ultimately pressures the private sector.? Demand for housing remains tepid as job growth is weak, the unemployment rate remains above 8% into 2011 and the negative inventory trends prove too much for the real estate market to overcome.? Ultimately, prices decline 7%-15% over the course of the coming 2.5 years.”

We’ve seen clear evidence in recent weeks that the housing double dip is in process.? Price declines have varied depending on different reports with the prices of new homes reported as low as -13% year over year.? The problems in housing remain entirely intact and as I’ve repeatedly stated over the course of the housing crisis it remains a problem of supply and demand.

If you’re attempting to visualize the problems in the housing market look no further than the following three charts (via Mortgage News Daily):




With supply near its all-time highs and demand near its all-time lows it’s safe to assume that prices have only one direction to move and that’s lower.


The content on this site is provided as general information only and should not be taken as investment advice. All site content shall not be construed as a recommendation to buy or sell any security or financial product, or to participate in any particular trading or investment strategy. The ideas expressed on this site are solely the opinions of the author(s) and do not necessarily represent the opinions of firms affiliated with the author(s). The opinions of all guest authors or contributors can and will differ from those of Mr. Roche. These opinions do not necessarily represent the opinions or investment decisions of Mr. Roche. The author(s) may or may not have a position in any security referenced herein and may or may not seek to do business with one another or companies mentioned via this website. Any action that you take as a result of information or analysis on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.

A brief note on comments – The increase in users in recent months has resulted in an increase in unproductive comments. Any user who engages in the use of racial epithets or uses the comment section as a place to insult other users will be banned from the site. The comment section is welcome to all readers who are interested in asking pertinent questions and/or engaging in thoughtful, intelligent, and productive debate. In short, just be nice. Thanks.

Post Footer automatically generated by Add Post Footer Plugin for wordpress.

This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read our FAQ page at
Five Filters featured article: Beyond Hiroshima - The Non-Reporting of Falluja's Cancer Catastrophe.

View the original article here

No comments:

Post a Comment