It’s Not Over Yet, Homebuilders
Ouch! Housing starts really took a hit last month:
It’s not just unusually cold weather at work. The western states had the steepest decline, though they are not usually as weather-affected as the northeast. The northeast actually increased on a seasonally adjusted basis. So what’s going on? Overblown housing market is caving in.
Business Strategy Implications: This is not the year that housing recovers, but later this year, housing will stop getting worse.
Comments
Bill, do you translate your housing market analysis into stock market analysis?
I missed the last large run in housing stocks and am interested in bottoms for these stocks once the bust is over.
Not sure when bottom is. Probably some time late in 2007. With another 10% drop in housing starts, I think we’ll have worked off most of the excess inventory. But there’s some psychology regarding when the bottom feeders first start hitting the housing stocks, then when they get disappointed and bail out. You want to be the first of the second round of bottom feeders. good luck.