Some bad news out of the housing market yesterday as Zillow, a leading online real estate marketplace, released their third quarter report and it largely echos what was released in Monday's Clear Capital Report, the housing market looks to be double dipping. Home values fell an average -4.3% in the third quarter. Stan Humphries, the Chief Economist at Zillow, says the housing market decline is likely to surpass the Great Depression’s decline and that prices are unlikely to recover before next summer.
http://www.zillow.com/blog/research/2010/11/09/it%E2%80%99s-going-to-be-another-long-hard-winter-in-housing/
http://www.clearcapital.com/company/MarketReport.cfm?month=November&year=2010
We here at Brotelli Investments believe housing still remains a simple supply and demand story. The overhang of inventory is crushing meager demand and the mortgage mess is not helping matters as shadow inventory is pushed further into the future as banks have trouble with foreclosures. If you thought the housing crisis in the USA was behind us you might want to think again. We believe housing set the credit crisis in motion in 2007 and it could pose a very serious risk to the economy in 2011. We will be watching the housing index ($hgx) to see how it performs over the next few months to tell us what is going to occur.
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