(note: this was accidentally published as a private post several days ago, so i am republishing it now. not sure how that happened).
nouriel roubini compiles the latest data on the housing market, (he rebuts his critics in another piece) and his analysis is that things are not good.Ã‚Â definitely worth the read. ritholtz cites lon witter and says the situation is more properly understood as a lending bubble (again, recommended reading).
Ã¢â‚¬Å“The Biggest Slump in US Housing in the Last 40 YearsÃ¢â‚¬Â: These are not my words but those of the Toll Brothers, the famous luxury McMansions homebuilders. As reported by the WSJ today: In his 40 years as a home builder, Mr. Toll says, he has never seen a slump unfold like the current one. “I’ve never seen a downturn in housing without a downturn in employment or… some macroeconomic nasty condition that took housing down along with other elements of the economy,” he says. “This time, you’ve got low unemployment, you’ve got job creation, you’ve got a stable stock market and relatively low interest rates.”. This followed last weekÃ¢â‚¬â„¢s CNN headline: Ã¢â‚¬Å“Builder: Oversupply slump worst in 40 years. Toll Brothers slashes outlook on new homes as orders plunge and revenue misses forecastsÃ¢â‚¬Â Indeed, yesterdayÃ¢â‚¬â„¢s sharply falling profit results from the Toll Brothers confirmed their view that this is the worst housing slump in decades. Similarly, Angelo Mozilo, the CEO of Countrywide Ã¢â‚¬â€œ the countryÃ¢â‚¬â„¢s largest independent home mortgage lender – recently stated: “I’ve never seen a soft-landing in 53 years, so we have a ways to go before this levels out. I have to prepare the company for the worst that can happen.” So, the only debate now is whether housing conditions are the worst in the last 40 years or in the last 53 years. So much for the bullish soft-landing wishful thinking coming out of Wall Street these daysÃ¢â‚¬Â¦.