Ok, I’ll be the first to post on this one. “The pending home sales index fell 6.5% in August after dropping a revised 10.7% in July, the National Association of Realtors reported Tuesday. The index is at its lowest level since its inception in 2001.”
And what kills me about the reaction to this? Toll Brothers up 5%, Beazer up 9%, Centex up 4%, Pulte up 6%, and so on. Why? The thought is that we must be at bottom, and we only can go up from here!
I can only laugh at the stock market’s and seller’s reactions anymore. Housing stocks are on the rise, and housing prices remain stickier than I thought. We’re about to have another round quarterly earnings. It will be interesting to hear what the homebuilders say… and how the market and people react to it.
There will be a point where you will want to go long on some of the HB’s, this is not that point. I think what you need to see is one or two of the big boys fold. I think that is inevitable at this time and will probably occur in 2008. Once you see some real blood in the street identify the strongest players and start a position. IMHO.
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