Housing - Bubble Pop

AMEX:VNQ   Vanguard Real Estate ETF
Idea for Housing/REITs ( VNQ ):
- The Housing Market will crash. I am short REITs.
- Lumber rose 400% in a year during a global crisis and then dropped 50% in a month... This is not a correction, but a bubble pop.
- China reining in commodity prices. They announce that they will soon release state stockpiles of metals:
- State firms ordered to curb overseas commodities exposure.
- Fed continues MBS purchasing with QE , despite RRP skyrocketing. Why? The MBS and Housing bubble is critical, and it is ready to collapse.
- Homebuyer sentiment drops to 10 year low:
- Homebuilder sentiment declines to reach a 10 month low (NAHB):
- Housing prices being speculated such that locals are priced out of the market. Institutional investors and State-backed institutions buy up neighborhoods as they seek yield in an overheated global market.
- The Credit Cycle has turned down, and the liquidity flows have been shut off. Institutions can no longer bid up their own assets.
- As commodities prices crash, it will become cheaper to build a house than to buy one off the market, leading to increasing supply and decreasing demand.
- When housing no longer provides yield, institutions will dump their assets onto the market and prices will crater.
- MBS's and Lumber leading the crash, the REITs will soon get the hint.

Trade active: Entered position based on wave cycle:
Comment: HGX next leg down Jul 12-15, EOM at latest:


Calling tops is not easy! Thanks for sharing your reasoning and good luck to your trade. This was featured in Editors' Picks.
100 coins
+9 Reply
DarkPoolTrading TradingView
@TradingView, Wow... My first. Thanks TradingView, and thanks for this wonderful platform and community!
+4 Reply
This chart is not very realistic of actual real estate, at least it does not reflect the prices where I am on Long Island or a few other areas I know pretty well. With my house worth the most its ever been since 14 years ago when I purchased the current house I do not expect these prices to go without a drop but they do just continue to rise. When you thought it topped out, its just continuing to go up, up and up. A neighbor just sold their house in days at a price that just shocks me. But looking at this chart... this does not reflect the fluctuations even remotely to the real world prices around here or in California or Florida that I know pretty well. I do expect to see a pullback in housing prices but not a "crash". The stock market, different story, I do expect to see a 30 percent drop in the indexes.
+5 Reply
@CJS04, thats probably a fair assessment, especially in popular markets that have a steady population growth or job growth. You had bubbles in 2008 also that didn't suffer nearly as bad as other regions.
+1 Reply
@CJS04, inflation is why all assets are increasing in value including the stock market. Its pricing in all this money printing that still hasn't stopped. Should be Interesting to see where we are by this time next year.
CJS04 nawlins511
@nawlins511, I think by next year at this time we will have had the crash and be working our way to making new highs.... a crash is coming I believe. A 30 percent drop to the indexes. Anyone buying at this point is an absolute fool as is anyone sitting in the market. The charts are looking very, very, very stupid. A drop is imminent in my opinion.
+1 Reply
@CJS04, If they just quit kicking the can the market can really get healthy but these boomers are so scared. Yeah I am talking to you J Powell.
CJS04 nawlins511
@nawlins511, the matter how you shake it... at this point the market needs a drop in a big way. The chart says so and fundamentally it just does not make sense to be up this high. Clearly though the market is just a propped up fed market.
+2 Reply
@CJS04, all it is. 100% agree. Just a big welfare market.
+1 Reply
inguar CJS04
@CJS04, I could tell you as an appraiser in US, real estate is a very unreasonable market (especially residential). However, I think the real problem will be combination of tightening of mortgage availability and when prices for properties will be not affordable for people. In Chicago metropolitan area, we are already there. Some of the areas increased for about 50%( in the last 3-4 years) without people doing anything to the property (I meant improvements). People in US still think that they will buy a house and it will go up automatically up, despite the fact, that there is always pull back as it was in 2006-2008. Average year salary $50,000 and rent is $2,300-3,000 (detached/attached house), plus 41bln rental assistance per month now, will see how it will work out after increasing rates and removal of mentioned assistance. The only way how it could possibly be avoided - is locally separated price change, when only some of the areas will go down.