Don’t take if from me, take it from honest industry professionals:
Plenty of volatility to come for the home builders. I received a text from a major national builder this week letting me know they would take $90K (14 percent) off of the listed price for one of their inventory homes. Several Katy/West Houston neighborhoods rolling over on price as inventory builds in the upper price segments.
While industry pundits and the marketing arm of the local real estate board keep telling everyone things are fine, the underlying fundamentals continue to deteriorate. – Aaron Layman, Aaron Layman Properties, Houston, TX
It’s not just Houston, I receive emails from readers all over the country with similar stories. Most of them are from people who were able to sell before the summer started and now are seeing a literal avalanche of homes “stuck” on the market.
Note: The National Association of Realtors’ inventory data is severely lagged and based on sketchy data surveys. Also, it would not include “coming soon” homes, which are a one-broker exclusive and not put in the MLS system for at least 30 days. There is a literal plethora of “coming soon” homes in Denver. Real estate brokers are glorified car salesmen. They sit somewhere on the ethics scale between Best Buy electronics salesmen and Wall Street fraud pimps.
The homebuilders rolling over here. The pop in price over the last two days was a function of the enormous Fed intervention in the equity markets. Despite one Fed officials hint of possible negative interest rates today, the homebuilders are red:
My homebuilder reports give you a unique insight into why these stocks are extremely overvalued and have a long way to fall. The two reports on my “sidebar” to the right show why these two stocks will hit the wall sometime in the next 24 months, if not sooner.
You can access my reports here – the price is going up once I get them updated. Anyone who buys now (or previously) will receive the updates upon request: HOMEBUILDER REPORTS
Each report takes a in in-depth look at the questionable accounting games being played by these homebuilders, shows why they are burning cash and contains trade management advice and suggestion for how to use puts and calls.
Here’s the extra good news: Jim “Mad Money” Cramer has been pounding the table on the homebuilder stocks! You know what that means…