Sometimes there are articles in the MSM that contain elements of the truth, and the following is one of these that reveals the stark and grim truth of the housing bust’s long term revival probabilities:
#1 it will take years to recover,
#2 8,000,000 MORE foreclosures directly ahead of us,
#3 home prices falling ANOTHER 7% in 2013.
As far as it goes this is all valuable information, but even these facts are still presented in a deceiving manner, because:
#1 the vast and crazed expansions of the US Debt,
#2 the ultimate repudiation of that debt,
#3 the screaming inflation because of these things will combine with,
#4 the resurgence of the Super Tsunami “Kondratieff” Long-Wave’s second wave in the next 18 to 36 months that will completely overwhelm our entire economic system and further crash ALL Commercial and Residential Real Estate in ‘inflation adjusted’ terms for many years into the future – period.
The result of all of the above will be a systemic and generational collapse of consumer spending the likes of which this country has not seen since the 30’s.
If you and your company would like to consider the likelihood of these things, you should subscribe to our Market Review - now.
Housing Stocks Are Hot, But the Rally May Not Last
CNBC – 57 minutes agol 1/12/12; 3:36 PM
“Wall Street has bet big over the past few months on a housing recovery that, according to most views, is still likely a good distance in the future. (I’ll say, like {in ‘inflation adjusted’ terms} how about 27 years?)
Home builder stocks in particular have gotten a huge boost over the past three months or so, rising more than 50 percent since the end of the third quarter.
Analysts attribute the move to two primary factors: The belief that the government is planning some type of intervention to help deal with the glut of foreclosures still on the market, and a cyclical move in the stocks that often comes in anticipation of building season.
…."On the bright side, housing is legitimately improving," said Mike Widner, homebuilder analyst at Stifel Nicolaus in Baltimore. "In terms of housing and housing construction, it's going to take another five years-20 percent growth a year for five years-to get back to a normal pace of construction." (20% growth a year? How many more strip malls, houses, shopping centers or "See Through" Commercial, Office or Condo towers do we need in this country? So, try 6 to 7% erosion for 20 years AFTER the "Great Deception of 2012" fully plays out in 2013!)
The downside, though, is that most of the industry's biggest names are trading at nine times earnings, which is the target Widner has for them in 2016. In other words, without a powerful force to drive earnings, there's little reason to buy the stocks at current levels.
…"The housing market is very sensitive to the overall economy," said Michelle Meyer, U.S. economist at Bank of America Merrill Lynch. "It is going to take years before the housing market appears normal. But, progress should be made in the next few years."
Meyer sees five principle trends to watch: A sideways move in single-family starts; a continued torrid pace in starts for multi-families, which surged 60 percent in 2011; home prices falling another 7 percent through 2013; another eight million foreclosures through 2015, on top of the seven million so far during the crisis; and Congress to develop a plan to get real estate-owned, or REO, properties off banks' books.
Federal Reserve Chairman Ben Bernanke recently took a nearly unprecedented and controversial step to issue a white paper to Congress, asking for fiscal support to allow Fannie Mae and Freddie Mac to handle REOs. That proposal entails converting the properties to rentals either by having the two government-sponsored enterprises either rent them directly or sell the properties to investors who would rent them.
Ralph Axel, a rates strategist also at BofAML, called the plan possibly "one of the most important housing market developments this year," and investors have taken notice.
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