The Housing Market Index

Well seems it dropped to a historic low.

This would be expected seeing it was at a historic and unsustainable high.


But what I find interesting about this is that it is the "builders" perception of the housing market. Builders thought that the future of housing was going to be GREAT in late 2005 while the rest of us educated schleps knew otherwise. Which means we should really view this as a good thing.

I don't mean to become the cheerleader for the housing market. I truthfully enjoy watching it tank, destroying those that laughed and mocked me and my economic brethren who warned of a housing crash. But in my experiences in banking and the housing market I realized one key thing;

Builders aren't economists.

I never once, NOT ONCE saw a builder bother to sit down and do economic research. I've never seen a builder do an absorption study. All I ever saw builders do is say, "Hey, I sold 4 houses last year. I'm going to build 20 this year!!!!" And that was the extent of their economic and market research.

And given their track record of miserably failing to predict the market, if they view things as being so bad, then I have a hard time thinking there isn't something good ahead.

But don't get excited. I'm not forecasting a quick recovery here. I'm just pointing to the beginning signs of a recovery, the most recent of which are the home builders' claiming doom and gloom.