The Big Short 2.0: The NAR Whiffed Badly This Month

Based on the National Association of Realtor’s “Seasonally Adjusted” Annualized Rate (SAAR) metric, home sales were said to have ticked up 0.7% in September from August. On a SAAR basis they declined 1.5% from September 2016.  In his customary effort to glaze the pig’s lips with lipstick, NAR chief “economist” and salesman, Larry Yun, asserted that sales would have been stronger but for the hurricanes that hit Florida and Texas.

This guy should do some better vetting of the data before he tries to spin a story. The Houston Association of Realtors was out a week earlier stating that Houston home sales were up 14% in September from August and up 4.2% from September 2016. Yun’s fairytale is a stunning contrast to what is being reported from Houston. But it illustrates the fact that the data on housing the NAR reports is highly suspect.

As I’ve been detailing for years, the NAR’s existing home sales report is highly manipulated and flawed.  It works well for the industry and the media in rising markets, but the real estate market has rolled over and is preparing to head south.  Likely rather quickly.  As it turns out, the September existing home sales report released Friday reinforces my view that the market is starting to topple over.  I go over the details in the next issue of the Short Seller’s Journal, with a couple examples which foreshadow a collapse in the over $1,000,000 price segment of the market.  This in turn will affect the entire market.  I always suspected that the “Big Short 2.0” would start at the high-end.  An example outside of Colorado can found here:  Greenwich Sales Plunge.

Four weeks ago I presented a housing-related stock as a short good idea.  The stock is down nearly 10% in four weeks.   How can this be?  Isn’t the housing market hot?  It will be going much lower.  This week I’ll be featuring a housing industry supplier stock that went parabolic and will soon go “cliff dive.”  If you want to find out more about this subscription service, click here:  Short Seller’s Journal info.

I love your Short Seller’s Journal. Keep up the great work – recent new subscriber

5 thoughts on “The Big Short 2.0: The NAR Whiffed Badly This Month

  1. Wasn’t you, Dave, who referenced a psychologist’s chipmunk analogy for why market crashes occur during the fall or the eve of winter? I always thought the it was a great way to explain the repeated pattern. Concerning housing, this season is going to cripple whatever is left, especially after a hell of a year for natural disasters. For those with disposable income, the propensity to hunker down and fortify the castle will likely overwhelm every hairbrained speculator for the foreseeable future.

    And speaking of hunkering down, I just finished building a solar-heater for the home using cheap materials, and I could not be happier. This chipmunk will be storing more nuts this winter, that’s for sure!

    1. That’s awesome and the only way to do it. Most people overpay for their solar installation from solar companies who are more than happy to lend them the money and then over-charge for everything. I ran the numbers for friend who was looking at it and the claim that it would save on energy costs was bullshit. Net net including financing costs, the monthly outflow from have solar installed would have increased 20%. And this was someone who could not afford to have that happen.

      1. I knew buying full retail wouldn’t save me that much, yet I hadn’t considered the financing costs. When you put it that way, my investment is a lot more rewarding than I ever hoped for. Thanks for that insight!

        Just to be clear, the unit itself utilizes a highly insulated green-house made from styro-foam, plexi-glass, recycled aluminum cans (for piping of fresh air), silicon and black paint…but is pumping well over 120+ F during 50+F weather (at indirect sunlight at that!). I just finished painting its wooden frame made from left-over plywood from a recent roofing project. Overall cost is shy of 80$ and will certainly heat up a respectable portion of the home for free. I definitely encourage everyone to try this out before the winter hits in full force, and it barely took me a week to finish. Granted…I am a work-a-holic, but most anyone can build one in at least 2 weeks with enough patience.

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