I am retired and take educated guesses on all things financial.

April 25, 2007

April 26, 2007: Housing VACANCY (Take my house, please - Henny Youngman circa 2007)

"For Sale" pre-owned homes are languishing on the market in greater numbers. Instead of a few paragraphs of "why", the following chart should suffice:

Existing inventory changes, March 23-April 23, 2007:
All major markets report an increase in existing homes for sale.

San Jose +19%
D.C. +11%
San Fran. +10%
Sacramento +9%
L.A. +8%
Seattle +8%
Balt. +8%
Newark +7%
Minn. +11%
Boise +7%
St. Louis +11%
Albuquerque +11%
Orange Ct. +10%
Houston +6%
Portland +4%
S.L.City +10%
Austin +6%
Denver +7%
Columbus +8%
Memphis +6%
Chicago +7%
Boston +8%
Atlanta +9%
Nashville +8%
Milwaukee +7%
Cleve. +8%
Inland Empire +12%
Dallas +6%
Cin. +6%
San Ant. +3%
Vegas +7%
Reno +6%
Phoenix +6%
Phil. +4%
Detroit +6%
Orlando +8%
K.C. +7%
San Diego +7%
New Orleans +7%
Omaha +5%
Raleigh +3%
Louisville +3%
Jacksonville +5%
Indy. +5%
Tucson +3%
Oklahoma City +3%
Miami +7%
Honolulu +1%
Tampa +4%
Ft. Meyers +2%

Year to year, the comparisons are bad for almost all markets (Boise up 111%,Tampa 56%, Albuquerque up 111%, Seattle up 43%, Vegas up 35%, Miami up 54%,Jacksonville up 69%, Portland up 82%, Memphis up 33%, Phoenix up 46%, etc.).

Over the past two months, investors are starting to return to the carnage and are picking up real estate at pennies to the dollar. Carl Icahn is amongst some well-known investors taking the plunge. I have facilitated and also participated in several excellent transactions. As mentioned in an earlier post, I may be a little early, but I am well satisfied with my investments.

Now may well be the time for investors to begin to nibble at distressed real estate. The upside is likely greater than the remainder of the bull market run past 13000.

New home construction was UP this month to date. With all the builder incentives, why buy old when you can buy new at the same price or lower?

Stocks of builders that might be worth taking a look at:

Centex (CTX)
Lennar (LEN)
M/I Homes (MHO)

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