| Home Prices Fall -- 5/22/2008 |
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The main driving factor continues to be the large inventory of homes in a lot of areas are forcing price reductions to drive sales. The largest declines happened in California and Nevada which were down over 8%, amazing declines. What does this mean? While sales of homes may be a little better as we have been saying, the velocity of sales is not strong enough to work through the inventory. As long as we show record high inventory numbers we will probably see price declines. As soon as inventory numbers start to get back to historic averages we will start seeing price increases. There are areas in the US where this is already happening. Oil still going up, what will stop it?
Oil passed $135 a barrel in overnight trading in new supply concerns. Many analysts are predicting $4.00/gallon by next week. Why? The demand looks strong; much to our amazement. Will be interesting to see if the supply/demand fears are warranted when the demand numbers come out. Supply is certainly constrained because of OPECs unwillingness to increase production. Get The Limit Order for $6.65/month with a 3 month membership. The Limit Order stock picks continue to outperform the market, Register for free and check it out. |
