More Evidence That Housing Hit A Wall In August

Homes sales volume PLUNGED in August in Southern California, San Francisco/Bay Area and Las Vegas. These had been among the hottest markets in sales volume, low inventory and price increase in 2012/2013. Not anymore:

Southern Cal August Home Sales Volume
SoCal August Sales Volume

SF/Bay Area August Home Sale Volume

The numbers for Vegas are for July, but I guarantee that August was worse

Furthermore, a large percentage home sellers in Orange County have been forced to cut prices if they want to attract prospective traffic:

In Orange County, the region’s priciest market, about one-third of sellers have been forced to cut prices, according to data from real estate firm Redfin. Across the Southland, prices have hit a plateau this summer, with sales volume slumping as buyers got pickier.   LA Times

The San Francisco market has been hailed by housing market bulls and Wall Street stock pimps as the “poster child” for the new bull market in housing.   Well, you can ignore reality, but you can’t ignore the consequences of reality.  Sales volume absolutely plunged over 20% in August.  Alas,  San Francisco, like it was in 2005, will be the poster child for the housing market collapse Part Two.

Please note that “New Home” sales in Vegas did a Wiley Coyote cliff-dive of nearly 17% in July.  Homebuilders have loaded up their “boat” with inventory by issuing debt and spending shareholder cash – right at the top of the market, just like in 2005.

I have three homebuilder short-sell ideas featured on this blog:   Homebuilder Research  Each report offers insight, analysis and presentation of misleading accounting like you will never find anywhere else.  The only other time in my 30 years of involvement in the stock market that I have seen a better short-sell opportunity than right now is the tech bubble in early 2000 and original housing bubble in 2005.

Note:  I originally sourced some of the source data from the Dr Housing Bubble blog.

5 thoughts on “More Evidence That Housing Hit A Wall In August

  1. The tables don’t show it, but I think the verbiage does. The columns with the dates Aug 13 and Aug 14 be from August 13, 2013 to August 14, 2014. Is this correct? Thanks.

  2. Is there evidence that the remaining buyers are Chinese? That’s the only thing keeping the Vancouver market so ridiculously inflated.

    1. The Chinese are buying trophy properties in the U.S. to hide cash. I read a few months ago that they have faded because of the bad economy in the homeland. Vancouver is a completely different demographic for the Chinese than the U.S.

  3. China’s housing and commercial investments, such as in non-aligned nations, Chase tower and gold vault in NY or industrial parks in the US, exercises new found freedoms. More than just dabbling in areas like remote Africa and USA, they make long-term commitments. Such as those that take the “barbarous” out of gold trades:
    China advances gold exchange launch, Singapore delays contract
    By A. Ananthalakshmi
    SINGAPORE, Sept 16 Tue Sep 16, 2014 12:41am EDT
    (Reuters) – China will launch its international gold exchange 11 days ahead of schedule, sources said on Tuesday, racing ahead in the scramble to set up an Asian bullion benchmark as rival Singapore is forced to delay its gold contract due to technical issues.
    Asia, home to the world’s top two gold buyers – China and India, has been clamouring to gain pricing power over the metal and challenge the dominance of London and New York in trading.
    The state-run Shanghai Gold Exchange (SGE) will launch the global gold bourse in the Shanghai free-trade zone on Thursday, two sources familiar with the matter told Reuters…

    CME Group will launch a physically deliverable contract in Hong Kong later this year, while Dubai is also preparing to launch a contract. Thailand is also considering setting up a spot gold exchange.”

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