Two More Years Until Housing Bottom
Barry Ritholtz has published a piece by David Merkel on his Big Picture blog where Merkel analyzes the current real-estate disaster. After looking at all the aspects of what typical housing bottoms look like, Merkel concludes that we have about two more years to go.
I can’t see a way to link to specific posts on Barry’s blog, but if you go here, you should be able to find it. You may have to scroll down the page, but the title of the piece is “Fundamentals of Residential Real Estate Market Bottoms.”
Last week, Jim Cramer raved over homebuilder stocks on his Mad Money TV show. Then, the next day, he told his viewers not to buy the stocks. Then on Friday, he told his readers to buy HGX calls. Cramer likes the homebuilders, at the moment, because they are going up - just like he did in 2006.
While the sector may be good for daytrading from the long side at the moment, how far can the stocks really get with gigantic levels of inventory still on the market? And that inventory is only one factor that Merkel cites in the article linked to above.
August 30th, 2008 at 12:07 pm
Thanks for that article Matt,
from a link in the article:
“People still don’t understand what a catastrophe this is,” said Christopher Whalen, senior vice president and managing director at Institutional Risk Analytics of Torrance, California. “The guys who are really on the hook are Bank of America shareholders.”
http://www.reuters.com/article/fundsFundsNews/idUSN1251538220080812?sp=true
August 30th, 2008 at 3:02 pm
Its at the bottom of the post — marked permalink
In the redesign, the headline will be the permalink
http://bigpicture.typepad.com/comments/2008/08/fundamentals–1.html
August 30th, 2008 at 5:09 pm
OK, thanks Barry.
Matt
August 31st, 2008 at 6:55 am
My sesne is that some of the hardest hit markets like Florida are not too far from a bottom, but high priced markets like New York and New England — still not down too much form their highs — have a LONG way to fall.
September 2nd, 2008 at 1:21 am
http://globaleconomicanalysis.blogspot.com/2008/09/when-will-southern-california-home.html
http://www.cepr.net/calculators/hb/hcc.html
Bottom for real estate? Oh, say about 4-6 years from now.