Go to any financial news daily or (if you dare to be exposed) any realtor news site right now and you bound to see some write up about a “turning of the tide” or “stemming of losses” or “green shoots” in the real estate market. The thoughts that are generating these write ups are nothing more than hoping on news that was bound to come. That is, with yesterday’s news that we did not have another month-to-month loss for only the 2nd time in over two years, many are thinking this is a sign that an end to the housing crisis is close by.
Don’t be so easily fooled. As Bill Gross of PIMCO Investments said yesterday, fixed income is still the investment order of the day. Basically, things have been SO bad in the real estate world, that people are jumping on any amount of good news. For an insightful look at exactly why it may not be the smartest thing to fall for this bear market rally, have a look at today’s article “US Home Prices May Be Lost for a Generation” by Bloomberg columnist John Wasik.
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