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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: orkrious who wrote (54196)2/18/2006 2:26:58 PM
From: UncleBigs  Read Replies (3) of 110194
 
The housing bust has begun but it's going to be a long drawn out bust in my opinion. If you read Ben's housing blog, most of the people who post there are hoping for a bust so they can buy. There is an amazing amount of buying interest under the market. With the exception of condos in the most speculative areas, I don't see a rapid price retreat as long as long term interest rates are low.

I'm not saying people refi out of 30 yr to a 40 yr. fixed rate mortgage. There are millions of people who bought in 2001 to 2004 who have used arms and have quite a bit of equity in their homes. These people are prime to refi to a fixed rate mortgage. Could be 30 yr. or 40 yr or interest only. A long term fixed rate mortgage with another cash out booster shot.

Shorting the homebuilders right now with a 6 p/e and sky high short interest is a very high risk trade in my opinion. I'm thinking of going long on the mid priced homebuilders for a trade with a stop below the most recent lows.
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