The housing picture follows the employment picture, as you would expect.
The prices of homes, like any other asset, commodity or security, he added, are dictated by the laws of supply and demand.Perhaps many of the institutional investors understand the precarious nature of the US economy under Obama, but the individuals involved may believe that they can get out safely before the next bubble bursts.
“Here we are … three to four years after the initial detonation and we’re still left with this gargantuan inventory and that’s going to put an ongoing downward pressure on residential real estate prices,” he stated.
Even worse, he noted, despite the sharp declines in mortgage rates, home sales and demand remain tepid.
“We have excess supply, home prices can go down even more dramatically,” he said.
Housing is the quintessential leading indicator of economic activity, Rosenberg asserted
“As long as housing is in the doldrums and home prices keep going down and putting people in negative net equity position, the government will have to find… creative ways to keep the [economic expansion] going,” he added.
Indeed, he noted, many investors don’t seem to realize that the U.S. economy and markets are still operating on “steroids” (namely, government stimulus and quantitative easing). _IntBusTimes
The stock market and commodities are presenting a false picture of economic resurgence to a gullible public. Journalists are too stupid to know better, and those who do know better are generally keeping quiet so as not to annoy Obama and his zombie army.
Hope for the best, prepare for the worst.