'A lie told often enough becomes truth' -- Vladmir Lenin
January home sales in Southern California were their slowest in three years. The "bad weather" lies doesn't work there because SoCal was warmer than normal in January. How about the truth: the housing market is back in its bear market trend.
When you read such a quote -- and the source from whence it came -- it's amazing how much the political, banking and media machinery in this country has assimilated the characteristics of the old Russia that we were taught to despise in the 1970's U.S. educational system. I guess time is a flat circle. Everything ever done in this world will be done again, over and over.
The Lie
The big lie being told to the public right now is that the housing market is in a miraculous recovery, that inventories are extremely tight and that now is the best time to "invest" in a new home. Of course, if that were true, why are homebuilder insiders unloading their company shares in epic quantities?
January home sales in Southern California were their slowest in three years. The "bad weather" lies doesn't work there because SoCal was warmer than normal in January. How about the truth: the housing market is back in its bear market trend.
The Fine Print
The narrative that has been carefully spun around the housing fairy tale is full of lies. Sure, the way the National Association of Realtors reports inventory makes it appear as if listings are low right now. But the truth is that the banks have been withholding a large portion of homes they have foreclosed on over the past 4 years. They can do this because the Fed's QE has injected $2.5 trillion in cash onto their balance sheets. The homes will soon hit the market, as foreclosures are spiking up again. If you scan through enough homebuilder 10-Q's, you'll see that homebuilder inventories have seriously ballooned over the last year. And if you read my series of articles on the housing market over the past 3-4 months, you'll see the real data showing sales falling at an accelerating rate month the month and that prices are quickly dropping.
We saw even more evidence that the housing market is starting to fall apart today. Housing starts - which in and of itself is a dubious indicator of housing market vitality - once again spiked lower and was well below the expectations of Wall Street's "brain trust" aka snake oil salesmen. And the weekly index of mortgage purchase application took another big tumble this week, falling to 19 year lows and down 17% year over year. Mortgages, by the way, are the life blood of home sales. If applications to purchase homes are plummeting, so is true demand.
As I noted this morning, the housing market is in big trouble.
If you are thinking about buying a home because you think the time is right, wait for 6 months. Not only will you have a huge selection of choices but prices will be significantly lower. If you want to sell your house because you understand the nature of the big lie being told, get it listed now and price it to move.
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