When do you buy the housing market?
November 24th, 2007 by Grant in: Investing, Market Trends, Real EstateI don’t usually lounge around on weekends and watch TV, but the four-day weekend has me unusually lazy. Or maybe it’s the left over tryptophan from Thanksgiving…
Anyway, one topic of discussion this morning on Fox’s Bulls and Bears show was finding the bottom of the housing market. A few of the talking heads were quick to point out that home builder stocks had dropped as much as 90% over the last year to 18 months, and that qualified them as a good buy, regardless of whether we’re at the bottom or not.
I disagree.
The stock market has the advantage of being able to predict where the housing market is going; one part statistics, one part speculation, if you will. All the housing market has is statistics; new home starts, mean housing values over the past 6-12 months, etc.
Personally I think there is still some bleeding to be had. In my opinion, the number of houses on the market and the mean housing value is the most significant parameter to look at in terms of finding a bottom. Right now, statistics show that the mean housing value has plateaued, but that statistic is skewed due to lack of movement of houses.
After people realize they’ll have to lower their asking price to sell their house, I suspect you’ll see the median housing prices fall.
At that point, it may be a good time to buy the housing market.
Tags: housing market | housing stocks | Real Estate
Leave comments below.
Subscribe to Comments
Loading ...
November 24th, 2007 at 11:02 pm
We have a slowing real estate market while the economy isn’t even in a recession. If we do enter a recession, look for housing to really suffer as foreclosures climb rapidly.
Also, I believe there are a lot of homeowners who are waiting for the real estate market to pick up before putting their home on the market. Once the market shows signs of life, a glut will occur again as these folks enter the market.
It is gonna get real ugly over the next couple years.
November 27th, 2007 at 5:34 am
Really good and really interesting post. I expect (and other readers maybe :)) new useful posts from you!
Good luck and successes in blogging!