Wednesday, November 29, 2006

Everything is rosy for housing!

- Interest rates still historically very low.
- Unemployment is exceptionally low
- The economy is still growing, albeit slowly
- The stock market is jamming - setting new highs
- Home sales have returned to normal, "pre-boom" numbers (not historically weak)

A realtor can throw any of these factiods at you and they're ALL TRUE, along with the obligitory "more great choices than ever for buyers". Everything is rosy, no?

But something doesn't feel right. Hmmmm? ... The way I would assess this is that EVEN with EVERYTHING that influences the big housing picture (jobs, mortgage rates, and economy) in good shape, PRICES ARE STILL GOING DOWN.

If housing is "strongly correcting" now, what happens when one of the support legs falls out, which it most certainly will eventually? Recession? Unemployment? Higher rates? Bueller? Any of the above and I imagine this ship will sink like the titanic.

One man's floor is another man's ceiling as they say, or vice-versa. And so it goes with all the spin. All depends how you look at it I suppose!


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