December Existing Home Sales: The Housing Bear Roars

December existing home sales were released last week by the National Association of Realtors.  Despite the happy headline report of a 1% gain over November, when you factor in the nearly 6% downward revision of November’s previous reported result and look at the 6-month trend in existing home sales, the market is clearly headed back down into the bear trend that started in mid-2005.
Anyone holding onto stock market positions is hereby officially forewarned to get out now.  It’s going to get ugly.  The trade that drove the SPX up at a near-parabolic rate last year and drove gold lower is going to unwind.  Don’t listen to Wall Street.  Wall Street’s only job is to take money from your pocket and put it in theirs.  Just like stocks shocked people to the upside in 2013, gold is going to shock even more people this year with its move higher.

By PM Fund Manager Dave Kranzler, Truth in Gold:

I wrote an article for Seeking Alpha with the numerical analysis which you can read here:  December Existing Home Sales

Two specific points of data that I found the most troubling for housing market hopefuls:   If you look at the rate of decline in homes sales for the entire 4th quarter of 2013, Q4 was down over 27% from the fourth quarter of 2012 and nearly 8% from the third quarter of 2013.  That’s something you will not see reported by the media or Wall Street.  I guarantee you that Obama will not talk about that fact in his State of Disaster speech tomorrow night.

The biggest factor that everyone is overlooking is that the consumer is dead in terms of ability to spend over and above necessities.  Real disposable income is declining and people in general do not have much left over after paying for daily necessities plus the much higher than advertised cost of Obamacare.

One more point, I predicted last quarter that we would start to see a lot more “for sales” signs pop up in January despite the fact that the real listing/selling season doesn’t get started until March.  Anecdotally judging from what I’m seeing everywhere I drive in Denver, my prediction is correct.  I really noticed it this past weekend.

FYI, anyone holding onto stock market positions is hereby officially forewarned to get out now.  It’s going to get ugly.  The trade that drove the SPX up at a near-parabolic rate last year and drove gold lower is going to unwind.  Don’t listen to Wall Street.  Wall Street’s only job is to take money from your pocket and put it in theirs.  Just like stocks shocked people to the upside in 2013, gold is going to shock even more people this year with its move higher.