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Strategies & Market Trends : Mish's Global Economic Trend Analysis
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To: John Vosilla who wrote (50405)5/2/2006 2:09:50 PM
From: Think4Yourself  Read Replies (3) of 116555
 
Are you folks following foreclosure data? Given your optimism I suspect not. Foreclosures are about to become a significant NEW source of homes coming onto the market, which is the last thing the housing industry needs. At the same time all the people losing those homes are effectively removed from the pool of eligible buyers for many years.

The housing bust here in the US is just beginning. As those ARM's start resetting this year it's going to get a lot uglier. The industry is in complete and total denial about what is very clearly happening.

In Michigan housing has been in trouble for over a year. Due to the long permitting process of subdivisions there are a half dozen large subdivisions (100+ homes each) within 5 miles of me that are in the early stages of construction (streets, sewers, grading). Even though months of inventory is climbing rapidly these companies are continuing, figuring this is all just a blip. If it isn't then houses are going to continue coming onto a dead market for the next year.

Nationwide housing prices are going to be lower at the end of this year than they were at the beginning. This will take years to play out as construction subcontractors are still in high demand. Construction has generated most of the job increases during the Bush administration. Those gains are about to start reversing.
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