BubbleYou wouldn’t know it from the housing industry organizations, Wall Street or the media propaganda, but the housing market is starting to unravel. It does not matter which person or political party occupies the White House and Capitol Hill. The debt orgy that followed the Fed’s QE program is now showing visible signs of unintended but inevitable consequences and it’s beginning smell a lot like 2008…

bubbleThen there’s China, where total debt has ballooned by 465% over the past decade.
China’s real estate market has grown become so ridiculous that a new project in the city of Shenzhen launched over the weekend selling tiny “pigeon lofts” of roughly 65 square feet for about $132,000.
The building sold out in a single day.

sovereignWhen I saw the chart, the first thing I thought was, “hockey stick”.
Hockey stick charts make me want to sell immediately.  They’re screaming indicators that we’re entering another housing bubble.
It’s not just Dallas; home prices across the United States are at or near their all-time highs, eclipsing the previous peak set a decade ago.

BubblePending July home sales were down 13% from June.
When the market rolls over, supply quickly builds and demand disappears and the market becomes very illiquid on the “bid” side.  The market is about to become very illiquid on the buyer side of the equation…

cliffThe homebuilder stocks are now more overvalued than they were at the peak of the housing bubble – using ANY financial metric.
What’s different is that the Fed is now out artificial fuel to power the next phony housing “recovery.”
The homebuilder stock are set up for a spectacular drop.