Bill Engvall and Real Estate:
Giving Us Signs
Comedian Bill Engvall established his own trademark bit while appearing on the Blue Collar Comedy Tour several years ago. He would share an anecdotal story with an obvious, humerous punchline and conclude with the slogan "here's your sign" meaning the story's ending was a foregone conclusion. Right now we're seeing the empirical evidence of where our real estate market is headed based on the last 45 days through home builder stocks. I think with some certainty we can now speak of the direction of the market and say, "here's your sign."
Like clockwork over the past 4 decades when the direction of the real estate market has turned, it has done so on mark, 9-12 months after the stock prices of national home builders have changed directions. It happened in late 2005 when the builder's stocks peaked and began going down translating into an actual real estate market that showed it's ugliness beginning in late 2006. It was obvious to those of us in the business that post Labor Day in 2006 home sales were the pits. Needless to say they still are BUT......here's your sign.
On or around July 14, to the letter, national home builder stocks have changed direction and for the most part are now trending up as the housing bill was signed. In fact on this day the 15 most impactful builders in the dow are all up.
Take a look at the direction of these national builders and see if the trend isn't more than a bit obvious:
Pulte, Toll Brothers, D.R. Horton, Centex
The stock market isn't stupid (well, most of the time). There's a reason the investors of some of our nation's largest home builders are buying back in. NOT because it's going to turn tomorrow. The investors in these companies are looking at all of the market factors and believe that there's light at the end of the tunnel. What does that translate into for consumers? I'll take a look at what home SELLERS and home BUYERS should do over the next 9-12 months in part 2 of Here's Your Sign coming Monday September 1st.
Questions? Comments? Donations? Greg@GregCooper.com or 317.848.GREG (4734)