Have You Heard About the Hard Landing in the U.S. Housing Market?
Monday, August 21st, 2006
By Michael Lombardi, MBA for Profit Confidential
They told us not to worry: The real estate developers, Greenspan, Bernanke, all those analysts, real estate agents, brokers and economists told us the housing market in the U.S. would be a soft landing situation. But that’s not what’s really happening today.
Consider these facts:
— According the U.S. National Association of Home Builders, home buyer traffic has fallen to its lowest level since 1991.
— The U.S. National Association of Realtors says 26 U.S. major metropolitan areas recorded a year-over-year decline in home price in the second quarter of 2006.
— Inventory of new homes for sale is near a record high. U.S. housing starts are down about 20% from January 2006 and U.S. home building permits are down about 22% since the early fall of 2005.
No my dear friend, this is not a soft landing for housing but a hard landing.
I write so much about the U.S. housing market because when the media starts to cover the truth, when analysts and economist start calling the situation in the U.S. housing market as it is, American consumers will find out what’s really happening with home prices. This will cool consumer spending and the U.S. economy substantially, with discretionary consumer stocks being the most affected. The decline in the price of the home builder stocks is just the beginning of the broader decline in consumer stocks.
Hopefully, you’ve been heeding my forecast and have prepared yourself for an economic environment where housing prices are declining and American consumers are running away from their past spending sprees. Once this snowball gets going, the economic situation in the U.S. will not look pretty.
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Michael bought his first stock when he was 17 years old. He quickly saw $2,000 of savings from summer jobs turn into $1,000. Determined not to lose money again on a stock, Michael started researching the market intensely, reading every book he could find on the topic and taking every course he could afford. It didn’t take long for Michael to start making money with stocks, and that led Michael to launch a newsletter on the stock market. Today, Michael only employs the top market analysts and editors. Some of our recommendations have posted gains in excess of 500%! Michael has authored and published over one thousand articles on investment and money management. Along the way to building Lombardi Publishing Corporation, now with over one million customers in 141 countries, Michael became an active investor in real estate, art, precious metals and various businesses. Readers of the daily Profit Confidential e-letter are offered the benefit of the expertise Michael has gained in these sectors. Michael believes in successful stock picking as an important wealth accumulation tool. Married with two children, Michael received his Chartered Financial Planner designation from the Financial Planners Standards Council of Canada and his MBA from the Graduate Business School, Heriot-Watt University, Edinburgh, Scotland.Follow Michael and the latest from Profit Confidential on Twitter
