At least there's a 2B sell signal in the REIT index...
http://stockcharts.com/def/servlet/...chart=$djusre,uu[g,a]daclyyay[pb50!d20,2!i!f]
http://stockcharts.com/def/servlet/...chart=$djusre,uu[g,a]daclyyay[pb50!d20,2!i!f]
Top in Real Estate?
- Thread starter moo
- Start date
Moo;
Could be a top ;
bu as a practical matter ,Moo i dont call tops in bull markets, just way to many of them.
Hope this helps Moo.
Could be a top ;
bu as a practical matter ,Moo i dont call tops in bull markets, just way to many of them.
Hope this helps Moo.
=======
OldTrader;
Moo did title it somewhat of a contraversial
question ;''top in real estate ?''
And wish RE commissions were as low as REITs
Few people understand that the crash in the money engine behind residential real estate (refi activity) began nearly 2 years ago and has now bottomed, I think. A driver for putting in this bottom is the 1-2 year duration of construction financing which is now being converted to the permanent, e.g. the house is done! Another driver is people dropping their heloc loans to get just 1 mortgage on their property.
My State Planning Office (my state is a New England/East Coast proxy) forecasted sequential 70+ and 60+ drops in refi activity for 04 05. Using an unfair analogy - think of a Dow 10K going to what, 1700 or so?
Much is also said about ARMs this, ARMs that. ARMs, NOT CONVENTIONAL have been the smart money route since basically the mid-90s. In a speech that so few paid attention to Greenspan bemoaned several years ago how much money consumers had wasted with conventional loans. Rates are just as low or near to it now.
Of course the above only refers to borrowing driven real estate demand.
The real estate top criers ignore how much cash is out there. And no, that cash is never, ever going back into the stock market. Anything bought and resold on Ebay is basically a better investment than the stock markets...
Next up in the real estate run - land, especially rural...
Finally, I am leaving out of this the obvious bubbles in certain cities. Of course those aren't going to end well. Also, interest only loans. Those scare me. But it may be that the risk is really on the lender - not the homeowner once you see the payment as basically rent. One of the other trends I haven't thought through and how it might affect real estate is this business with states imposing special capital gain taxes on non-residents when they sell. Take a 6% commish and add 2.5, 3, 4 or 5% more to it and sellers have some big closing costs.
That's my take.
Geo.
My State Planning Office (my state is a New England/East Coast proxy) forecasted sequential 70+ and 60+ drops in refi activity for 04 05. Using an unfair analogy - think of a Dow 10K going to what, 1700 or so?
Much is also said about ARMs this, ARMs that. ARMs, NOT CONVENTIONAL have been the smart money route since basically the mid-90s. In a speech that so few paid attention to Greenspan bemoaned several years ago how much money consumers had wasted with conventional loans. Rates are just as low or near to it now.
Of course the above only refers to borrowing driven real estate demand.
The real estate top criers ignore how much cash is out there. And no, that cash is never, ever going back into the stock market. Anything bought and resold on Ebay is basically a better investment than the stock markets...
Next up in the real estate run - land, especially rural...
Finally, I am leaving out of this the obvious bubbles in certain cities. Of course those aren't going to end well. Also, interest only loans. Those scare me. But it may be that the risk is really on the lender - not the homeowner once you see the payment as basically rent. One of the other trends I haven't thought through and how it might affect real estate is this business with states imposing special capital gain taxes on non-residents when they sell. Take a 6% commish and add 2.5, 3, 4 or 5% more to it and sellers have some big closing costs.
That's my take.
Geo.
Quote from Arnie:
Calling a top in a bull run as strong as housing is like trying to stop a freight train with your face. Good luck with that.
^^^^^^^
RE ;Arnie see you at the RE top.
However did mention a REIT old timer/old trader,April 13-2005 Wall Street Journal article;
mr Zell
said sell.
Even though its somewhat amusing to me when some call a top[singular] in a bull market;
actually its hard to go wrong if you use the word tops[ plural],
because there ARE so MANY of them.
in a bull market.And speaking of tops [plural]in the uptrending homebuilders;
TOL just made another of its many ,many TOPS [plural].
Should be interesting, because the sector is still strong;
but TOL sold off on above average sell vol.
My next reading material maybe more top traders.
I suspect real estate in some areas will top. My house in Sarasota was up nearly 50% in the last year which is great for me, not so great for the next person to buy it..or me for that matter if/when I decide to buy another house here in SRQ. At any rate, everyone is looking at the interest rates to stop the housing bubble. Here is my bet, it wont be rates that cause it to come down. Too many people know thats the catalyst. It wont be. y2K was supposed to kill the tech bubble too, and everyone knew it.
Brandon