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Greenspan Says U.S. Home Prices May Stabilize in 2008
- Thread starter S2007S
- Start date
Quote from HedgefundTrader2:
The home builder stocks are all turning higher and 50 day moving averages rising? Why? The market is looking forward 6-12 months ahead when these inventories will be sold and revenues come in. That should give you a clue whats going to happen in real estate.
I wish this were true, but I think the recent bounce in the homies has more to due with the tax bill that would allow them to "carry-back" taxes paid up to 4 years ago when posting a loss. This will help them to "smooth-out" their balance sheets.
What does this do for inventory? Nothing. Theres nothing in these bills that will get people moving back to the RE markets. I don't see much downward pressure on inventories. Why not?
(a) Sales at record breaking historical lows (means less inventory coming off the market)
(b) Forclosures and NoDs at record breaking historical highs (means increasing inventory, about 6 months out)
(c) tougher lending standards (means artificially reduced demand)
(d) Downward pressure on rents (due to increased rental supply due to decreased sales)
and
(e) new development inventory continuing to rise as projects started in '06 and '07 complete and hit the market.
In short, inventory will be up, demand will be down, and that means prices must fall, with or without a credit crunch or recession.
While I certainly don't claim to have the kind knowledge that Greenspan or any of those guys do, I do sell real estate for a living. I can tell you right now that it's gonna be a while before we see aturn around. There is so much inventory, it's insane. Lenders have also became UNREASONABLY tight, I fully agree that standards to need to be tightened but the bullshit going on right now is nothing short of arbitrary. When they get back in touch with reality, inflation slows a little, and gas goes down some we will see a pick up. The media also has been very very negative, which I fully understand. But the sheep out there watch the evening news and the doom and gloom makes them scared to buy. IT will pass though, all things do.
We had the worst credit bubble ever in American history, perhaps world history. I can't remember anytime in history when people were able to buy a house with no money down -- sometimes with no income. You don't clean out a bubble like that in six months to a year. I've been short the U.S. investment banks by using the Amex Securities Broker/Dealer Index [ticker: XBD], an exchange traded fund with exposure to many of those firms. I've also been short Citigroup [C] and Fannie Mae [FNM]. I'll short some more if we get nice rallies in any of them. I am still short some of the U.S. homebuilders like Lennar [LEN].
http://online.barrons.com/article/S...?mod=9_0031_b_this_weeks_magazine_main&page=2
Quote from crgarcia:
Greenspan' predictions should be better used as a contrarian indicator.
didn't people give him hell when last year around this time when we where booming and he said the US had a chance at recession in the next year? I think he said that comment in toy co also, market dumped and everyone told him to keep his mouth shut. Looks like A) he was right and B)he cant win either way