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Tuesday, January 22, 2013

It's Easy For the Public To Like Real Estate

Rising real estate always looks good to the public until capital concentrates and the cycles turn down.  After that, it burns everyone without mercy.  Real estate while nowhere near as dangerous as 2005, it won't return to its glory days of can't lose without the substantial passage of time.

Chart 1: S&P Homebuilders (HB), HB to Gold Ratio (HBGOLDR) and HB Cycle Z Scores (HBC1 & HBC2)

Chart 2: S&P Homebuilders (HB), HB to Gold Ratio (HBGOLDR) and HB Cycle Z Scores (HBC3 & HBC4)

Chart 3: S&P Homebuilders (HB), HB to S&P 500 Ratio (HBSPXR) and HB Cycle Z Scores (HBSPXRC1 & HBSPXRC2)

Headline:  Housing starts climb to highest rate since June 2008

Groundbreaking to build new homes accelerated in December to its fastest pace in over four years, supporting the view that housing is poised to provide a substantial boost to the U.S. economy.

The Commerce Department said on Thursday that starts at building sites for homes surged 12.1 percent last month to a 954,000-unit annual rate.

Source: more


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