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Sustained Economic Recovery Not Possible in the U.S. as Housing Market Deteriorates Further
Profit Confidential, the popular stock market and economic e-letter, reports today that a sustained economic recovery eludes the U.S. as the real estate market deteriorates further.
According to Profit Confidential, “We cannot have a sustained economic recovery without a recovery in the real estate market. Job growth in the U.S. will not happen unless the construction industry, housing industry, and real estate market in general come back. And, from all sides, the housing market is far from a recovery. The Dow Jones U.S. Home Construction Index, an index comprised of the largest U.S. homebuilder stocks and a great leading indicator of the real estate market, is still down 80% from its 2007 high—the worst performance of all Dow Jones sub-indices.”
Profit Confidential says the median price of a new U.S. home fell 10% in September 2011 from September 2010, the biggest drop in two years. The median price of a resale home, which makes up 94% of the real estate market, fell 3.5% in September 2011 from September 2010. Cash deals account for 30% of all home resale transactions in the U.S.
Michael Lombardi, a lead contributor to Profit Confidential, writes, “Until we have a recovery in the real estate market, which could be years off, we can’t have a bankable economic recovery. That’s the bottom line. And that’s why we simply continue to be in a bear market rally—a period in which the stock market moves higher as the bear completes its Phase II cycle of luring investors back into the stock market before stock prices fall again.”
Profit Confidential, which has been published for over a decade now, has been widely recognized as predicting five major economic events over the past 10 years. In 2002, Profit Confidential started advising its readers to buy gold-related investments when gold traded under $300 an ounce. In 2006, it “begged” its readers to get out of the housing market...before it plunged.
Profit Confidential was among the first (back in late 2006) to predict that the U.S. economy would be in a recession by late 2007. The daily e-letter correctly predicted the crash in the stock market of 2008 and early 2009. And Profit Confidential turned bullish on stocks in March of 2009 and rode the bear market rally from a Dow Jones Industrial Average of 6,440 on March 9, 2009, to 12,876 on May 2, 2011, a gain of 99%.
To see the full article and to learn more about Profit Confidential, visit www.profitconfidential.com.
Profit Confidential is Lombardi Publishing Corporation’