johnnymk

There are quite a few charts on this link. And there is more info which I did not include.

http://seekingalpha.com/article/5381...housing-market

There have been a number of stories written on the housing market in both print media and online sites. There are also a number of web sites which give bits and pieces of information on housing data. I collected data from these numerous sources to come up with a story that makes sense for investors.

For the past year or so, housing stocks (like Beazer Homes (BZH), Centex (CTX), D.R. Horton (DHI), Hovnanian (HOV), KB Homes (KBH), M.D.C Holdings (MDC), Meritage (MTH), Pulte Homes (PHM), Standard Pacific (SPF) and the broad housing market ETF (XHB)) have tumbled more than half. Without far sight, most of the builders were building houses without any prudent forecasting. There was a joke on the homebuilders that "if there is need for five homes, five builders will come to the market and each will build five new homes."

This year, existing home sales plummeted to 5.01 million and are expected to sell 19% below last year's sales. Foreclosures have reached 446,726 as of the end of September, a 100 percent increase since last year. There are 10 months of excessive inventory in the market as new homes are competing with existing homes. Consumers accumulated abundant non-revolving debt.

There were a number of factors involved in the housing slump, including sub prime mortgages, excessive lending more than fair value, excessive supply, over-estimation of population growth and the false impression of immigrant purchasing power. Here I tried to make some sense of the housing bubble by plotting the data that I collected from various sources. I hope this will make some sense in understanding why housing stocks are in a slump.

more on link provided

gwilks98

real estate is cyclical in nature. It will come back, with the end result being that the smart and strong will survive and consume those that can't outlast it. We'll just see a few much larger companies ruling the roost when this ends a decade from now.

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zippyjuan

Some people are clammoring for help for the housing market. Some want the Fed to raise the top price for loans they guanante, some want more money to help people buy the already too expensive homes (these actions would only support the high prices and encourage more people to buy places they cannot afford). Others want to bail out the companies holding the risky loans some of which are going into default (removing the risk they knowingly took on when they bought or issued the loans- encouraging them to take on more risk in the future). All we need to do is wait it out. And I don't think it will take ten years. The housing market does need to settle out at a lower level than it has been at for the last several years and should take longer than ten years (in most areas) to get to where it was when the bubble burst. That is more normal for housing prices.

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