TGIF For The Home Builders, Bubble Denial
It has been a tough week for the home builders. Several announced a record quarter, backlog, etc., yet the markets punished them. This chart of the housing index (^HGX) shows that sentiment has taken a turn for the worse.
Speaking of sentiment, how about this headline from Yahoo Finances' weekend edition. 'Housing Bubble Exists Regionally', is actually a MarketWatch story from a while back, but taken with the CNN piece earlier, it looks like the media has decided it's a bubble after all.
2 Comments:
This doesn't surpise me at all. The stock market isn't impressed with Toll's antics and they're not buying the hype from the HB's in general. Larger inventories are larger inventories. No matter how you stack it, that's NOT a good leading indicator. Plus the insider trading is giving these fools away.
It seems that the bubble theory is picking up steam at a rate faster than housing appreciation.
Last May I place a bet with my friend about whether Bay Area RE prices will suffer a 50% drawdown in 5 years. I was about 50% sure.
I am now about 95% certain the initial drop will occur within the next 6 months.
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