Housing Water Torture

Today we hear more about the housing market. I don’t know about you, but these housing reports are beginning to wear on me. They’re like the drip, drip, drip of a leaky faucet.

Well, today we hear how existing home sales did for the month of February. I’ve got a prediction: they were lousy. Not only is the housing market in the worst recession it has seen since the early ‘90s—and  it’s been that way since late 2006—but the weather was lousy, too. Then you multiply these effects by all the “seasonal adjustment factors” that the government uses to get an annualized number, and February’s number will look terrible.

This is a theme I’ve hit on for a while: housing numbers issued in the dead of winter don’t really mean much. All they say is what we already know. Housing has pulled back.

The one silver lining in this cloud is the stocks of homebuilders. Call it foolish optimism, or bad money chasing good, but the stocks of these companies hit at least a temporary bottom a couple of months ago, and are up almost 50% from their lows. That’s real people putting real money to work. And I’d be surprised if it doesn’t indicate some real activity out there.

Douglas R. Tengdin, CFA
Chief Investment Officer
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By |2014-09-03T17:36:31+00:00March 24th, 2008|Global Market Update|0 Comments

About the Author:

Mr. Tengdin is the Chief Investment Officer at Charter Trust Company and author of “The Global Market Update”. The audio version of each post can be heard on radio stations throughout New England every weekday. Mr. Tengdin graduated from Dartmouth College, Magna Cum Laude. He received his Master of Arts from Trinity Divinity School, Magna Cum Laude and received his Chartered Financial Analyst (CFA) designation in 1992. Mr. Tengdin has been managing investment portfolios for over 30 years, working for Bank of Boston, State Street Global Advisors, Citibank – Tunisia, and Banknorth Group. Throughout his career, Mr. Tengdin has emphasized helping clients manage their financial risks in difficult environments where they can profit from investing in diverse assets in diverse settings. - Leave a comment if you have any questions—I read them all! - And Follow me on Twitter @GlobalMarketUpd

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