“I spent well over an hour surveying the housing market in my area (south-metro Denver) and the market is flooded with homes for sale, with many mid-range ($500-$750) homes being lowered 5-10% in price and still sitting on the market. Zillow is estimating the average home listed in my area is now down 8% from original listing. This is an area that has been one of the hottest areas of Denver in the last year. Homes over $1 million are piling up like dogs under a cat stranded in a tree.” – A colleague of mine who has been looking at the market as a buyer for a year
He sent me a link to the typical home listing he is seeing: Lowered 4 Times In Last Year
It’s not just confined to Denver:
– All cash sales fall to 6-yr low in June – that’s your investment buyer/flipper
– NEW home mortgage purchase applications plunge 9% in August – that’s your homebuilder home sales going down the drain, per the HOV/TOL 10-Q disclosures
– Interest rates are moving higher, quickly – that’s cuts off the remaining poor credit, FHA borrowers who borrow money to put down the required 3.5% to get taxpayer subsidized mortgages
– Inventories are climbing, sales are hitting the wall, prices are dropping, foreclosures are going up again.
This is 2005/2006 all over again. You can ignore reality, but you can’t ignore the consequences of reality.
My latest homebuilder short-sell idea has the potential to return at least $20,000 for every 1,000 shares sold short ($2000 per 100 shares): Homebuilder Bear Reports
This market is hitting the wall very quickly.