joof

Single Family Homes Remain Oversupplied by Over 900,000 Units

The thought quantity (massive) and quality ( sloppy analysis, dated data, poor writing, and obvious emotional baggage) of the bear case is certainly a contrarian indicator - implies support for a long case.

Increasingly hard to rationalize the doom position as an end market continues running away from you (both volume and price) - continued obsessively talking your book is no longer enough .

The market is clearing at current levels. Debt is taken out each time a transaction occcurs, and replaced with lower and more supportable financing at lower asset price. Quality homes are being bid up. The overhang is real, but at this point has a fighting chance to be absorbed in an orderly way over the next few quarters.

A little known fact- all the national homebuilders are back in the market aggressively bidding up land. Someone is stupid - professional builders or the amateurs on these boards . You pick

Property Values Set to Fall 43% from Current Depressed Levels

except that prices are actually rising now


Dohhh!

Homeowner Equity at Post WWII Low

If you dig into the numbers ( at least the prior issuances of this data) you find that the % of owners with fully paid off mortgage or good LTV ratios hasn't changed that much. However the portion of people with high LTV (little to no equity; the new buyers of the past several years ) are much more levered. Hence, combined with value reducitons the average equity decline

we end up with two classes- the housed and comfortable, and the broke

Without a Widespread Economic Crash, a Housing Crash Is Unlikely

Comps in a number of major metros are already down 15-25% on psf basis. Combined with volume and inventory stats it is clear to anyone in the businsss ( not blogging at a desk) that not only is a crash likely - it started several quarters ago and is getting worse

Don't forget the effects of two factors that make housing markets different than tech stocks - 1. leverage and 2. the glacial pace at which price discovery occurs


It is no coincidence that major market paticipants ( hombuilders, banks , developers) have privately and some case publicly stated that this in many ways is the worst cycle in their insitutional memories