Friday, July 27, 2007

Update on my prediction on inventory

In this old post I predicted national real estate inventory would peak at 1.3 to 1.4 million units in 2007 per ziprealty.com.

Go to zip realty
click on "buy a home"
click on "search for homes"

The current number is 1,298,636.

Last year the peak, by my tracking, was on September 20th at 987,601.

So I'm comfortable with the 1.3 million being broken. Believe it or not, I thought that was really bearish.

Note: my best SWAG is that ziprealty added about 10% more "region" so that some of the growth is just expanded areas.

I'm glad I didn't make a prediction on South bay inventory (here in LA). Inventory has stalled. I'm confused as to why... But I accept its going to be a multi-year process. Why didn't I make a prediction? I really didn't start tracking it with enough resolution until November. However, bearmasters' excellent blog (my last link) does an excellent job of that.

I love bloomberg news right now! (On the TV as background)
"Traders cannot wait for the weekend."

They are quoting a very bearish trader from Chicago (missed the name). He's pointing out to be really careful buying into this market.

He's also pointing out that a huge fraction of the late day trading is the investment banks doing huge purchases with net selling by others. He's also knowing that the bulls have been buying every dip, but if the downward momentum continues bulls will have no choice but to sell. (Can we say margin call.)

He ended with the advice that the bears are going to be in control for a while. Bwaa haa ha! (oops, out loud). I'm actually a really nice person... but this is like the dotcom bubble... just stupid and dangerous. Its time to end the mal-investment and re-divert recourses to new industries.

Prediction of $80/bbl oil in "A week to 10 days." Gulp!

Got popcorn?
Neil

6 comments:

Rob Dawg said...

Neil,
US Recession == lower oil. Other than that total wierdness.

justin said...

US Recession= lower oil

does that mean China, Europe, India, Asia et al will give up on buying oil?

The Chinese just built the largest oil storage tanks in the world and they are filling those tanks to reduce the shock of higher oil prices (much like the US Strategic reserve is supposed to do.)

It isn't the US as the Uber-consumer anymore, the game has changed and the major consumers for goods and services are coming from other countries now.

tj & the bear said...

Heck, the decline in the dollar alone will offset any demand losses.

wannabuy said...

It isn't the US as the Uber-consumer anymore, the game has changed and the major consumers for goods and services are coming from other countries now.

Yep. India is now building 17km of "super highway" a day. That is defined as three lanes each direction "off grade" like our interstates. So demand will shift to elsewhere.

But I agree with TJ, the dollar's inevitable decline will continue to push up oil.

I calculate that its worth keeping my current car until $120/bbl oil. At that point, its worth buying a used 4 banger as my commuting car.

But what has me more concerned is the market next week... up or down? If its up, I predict selling into strength. But will it be domestic or foreign sales? We'll be able to tell by the value of the dollar.

The same will be true if the stock markets take a hit...

Got popcorn?
Neil

tj & the bear said...

Neil,

4-banger? I'm thinking a motorcycle myself. Freeways ought to be a LOT safer when their empty!

wannabuy said...

Freeways ought to be a LOT safer when their empty!

Wouldn't that be the dream of every LA resident!

I could only dream...

Neil