Financial pundits and agenda-driven economists have been pushing the line that a break out in housing is just around the corner – it’s just been cold weather or whatever that’s jamming things up.
Now that it’s June and no one can hide behind snow banks or spin that Enrico Fermi couldn’t measure, pundits – heck even the chair of the Federal Reserve – are finally admitting there are cracks in the foundation – existing home sales stalling out, pending home sales plunging, price increases slowing, and construction slowing.
This leads Capital Preservation Real Estate Report’s Keith Jurow to conclude that the “housing recovery” isn’t slowing – it’s over.
“I urge you not to listen to the pundits and Wall Street economists who continue to insist that we are on the path to housing recovery. If you follow them, you and your clients will make major investing mistakes that will cost plenty,” Jurow writes. “New home sales will not be picking up, so buying home builder stocks should be avoided.
“If you are not sure whether your clients should sell their investment homes, my advice is to list them now before markets weaken further,” the analyst writes.
Jurow goes on to discuss specific problems in Connecticut markets, where he lives, alleging these are indicative of larger problems in markets nationwide.
He looks at how the bottom has fallen out of household formation, as well as the looming disaster from home equity lines of credit out there now. Most of the surveys of underwater homeowners, he notes, don’t take into account the huge swathe of second liens on homes out there.
Jurow isn’t just going all doom-and-gloom because he’s in a bad mood. He recognizes that housing can’t be put on the right track until everyone admits that it’s on the wrong one, and that the correction itself may be painful.
“The problem is mind-boggling and will not go away. Wishful thinking will not help at all,” he concludes.
Emphasis his, but I second the emotion.