Tag: real estate market

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I Am Calling For A Real Estate Top Here

Daily Ticker Writes: “The Party Is Over” for Housing — and Bank Earnings:

Burning-House-investwithalex

Market watchers are increasingly concerned about recent weakness in the financial sector.

In a related development, technical analyst J.C. Parets of All-Star Charts has expressed concern about a potential topping pattern in JPMorgan while blogger ChessNWine identified a bearish pattern in Goldman Sachs “with potentially devastating ramifications to financials.”

“The party is over” for refinancing activity while a weak job market and flat consumer incomes are preventing a pickup in purchase activity, Whalen says. “Structural reasons, apart from rates [mean] you’re going to see a real tail-off in demand” for mortgages.

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Those following the Real Estate market should be very concerned with the data coming out. It is showing that the top is very near or has already been set. If you actively participate in the real estate market this is an important issue to watch.  Let’s look at some bullet points.

  • Refinancing is down substantially.
  • Banks are shutting down/moving their mortgage operations and firing tens of thousands of people. They expect a substantially lower volume going forward.
  • Interest rates are much higher from a year ago and are likely to rise further.  
  • Rapid speculation in various markets. Las Vegas and So.Cal.
  • Banks are lowering their earnings due to much lower volumes.
  • Bearish technical patters are starting to develop in real estate and financial stocks.
  • Both the US Economy and the stock market are facing severe declines.
  • Please see other factors in my previous posts CLICK HERE

These are just a few, but it gives us enough information to paint a clear picture. Real estate is toast. The rebound that we have experienced over the last 2-3 years is now over (or nearly over).  While various local markets might top at different times, the overall real estate market is topping right now and should start its decline shortly.

Therefore, I feel confident enough to call for a real estate market top right here and now.  I am going on the record here. Even if I am a few months early I believe it is a good call.

“I never buy at the bottom and I always sell too soon.” – Baron Rothschild

If you are in, now is a good time to get out.  

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Timing The Real Estate Market Crash

So, do you want to know when the real estate market will start heading south, way south? Read on.

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As of right now,  the real estate market in the US is anything but clear. Here is just a few articles from today’s paper to prove my point.

 

Confusing at best, isn’t it?

The reason real estate data is all over the place is because the real estate market is undergoing a topping process. As I have mentioned earlier,  that is the way the bear market in anything works. It sucks investors back in before slamming the door and resuming it’s decline. Once again, this stage of the decline should at least 2X the magnitude of the previous one between 2007-2011.

The million dollar question is….when will it happen? Thanks to our friends at Doctor Housing Bubble we might have an answer.

They have correctly identified Las Vegas Real Estate Market as the one to watch for the first signs that the overall (nationwide) real estate market is about to roll over and start it’s decline. Here is why…

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Reason #1: Las Vegas market has seen the fastest real estate appreciation in the nation over the last year. Up 34% in just the last year alone. That is a stunning pace of appreciation.

Reason #2: The majority of buyers in the Las Vegas market are investors/speculators.  The number is estimated to be at 50-70%.   With about 60% of buyers paying in cash.

las-vegas-home-buyers-with-cash-investwithalex

What does it all mean? 

Las Vegas market is experiencing a speculator frenzy with 50-70% in cash buying from investors. There are no fundamental reasons for that to happen in Las Vegas. One can argue that real estate there was especially depressed but I don’t find that argument valid based on the median price and median income at the time of 2010-11 bottom.  Plus, there is no housing shortage.

Either way you slice it,  Las Vegas real estate market is driven by pure speculation and hot money. As such, it could be the first market to cool down and reverse itself  -OR-  it could just blow up.  

Therefore,  if you are interested in timing the real estate market with great precision it might be a good idea to start watching Las Vegas real estate like a hawk.   

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