For Education Only
Has the housing market begun to crash? We look at new home sales and home prices. The median home price declined 8.8% while housing starts have dropped due to lack of sales. The most troubling part is this is supposed to be the good times. Next we look at an anomaly in the bond market. In particular we focus on the spread between prices of risk. The HY sector has seen a serious drought of liquidity and it reflects in a sudden rise in price. We also look at how this applies with the example of two different banks who have debt sitting on their books with no buyer.
In this housing bubble video YOU’LL discover the proof no one can deny. It’s shockingly simple to see but no one want’s to look. Housing bubbles and housing prices, over the long term are extremely predictable. Even the Fed, who has a terrible track record of making predictions, was able to predict housing prices reverting to their mean at the end of the last housing bubble.
It’s so obvious when you do a basic level of homework the question becomes, “how does everyone not see the housing bubble?” But the same could be said back in 2005-2006. In doing research for this video, it’s shocking to go back to see what people were saying before the last bubble. It’s word for word the same. There’s no supply, housing prices don’t go down, inventories are low, unemployment is low etc. It’s like deja vu.
The average American’s home is their largest investment, so it’s natural for people to rationalize their purchase to avoid cognitive dissonance but for those how have an open mind and are objective housing bubble’s are easy to see.
Economist Robert Schiller has confirmed this numerous times.
The proof that’s starring everyone in the face is the fact home prices, adjusted for inflation, always mean revert. In the video you’ll see how and why this has always happened and always will happen in the future.