by David Kranzler
Investment Research Dynamics
I’ve worked through four bubbles – they all end the same…I think the flippers in Denver metro are driving the under $400,000 price to a frenzy and the over $500,000 in the burbs are dropping in price. Some of these flippers have 8-10 houses at the same time. A little jiggle and they will dump. Then the part time rental landlords follow in selling as the rental market gets tough. A trashed house or eviction usually puts these houses on the market… – – Three decade-plus Denver real estate professional and subscriber to the Short Seller Journal
The homebuilders are getting hammered today – down 2.6% with the SPX up over 4 pts – on the news that housing starts for August dropped sharply, down 5.4% from July. Of course the report missed Wall Street’s “hockey stick growth” consensus estimate.
Funny thing about housing starts, it’s kind of a useless statistic. The data is collected and prepared by the Census Bureau, which is notoriously inept. The numbers presented are “seasonally adjusted” and converted into an annualized rate. Notwithstanding all other problems with the data sample and annualization calculation, presenting an annualized rate number for monthly report is idiotic.