Even though they say hindsight is 20/20 it’s not always clear when hindsight kicks in. Let’s take the housing market for instance since that’s what we’re really concerned with. Does it take 1 month for us to have some perspective on the past? 6 months? 6 years?
It’s not always clear. So we’ve got to be very careful when we make calls about the past because they may actually turn out to be premature.
Wells Fargo has begun trying to explain the previous buying season and use it make calls about the past. According to them the downturn in housing starts last quarter was a major imbalance in price versus demand. Tight inventories and the fact that most purchases were made by investors has caused there to be a lot of panic about the future.
Based on this they think the housing recovery (whatever that might be) will be longer and bumpier. That’s a quote. But it basically sums up what everyone is thinking.
Tight reins on mortgages, a sluggish economy, etc. etc. All of these things are going to contribute to a slowdown this summer and a tough road ahead.
But as I always say, where there’s a challenge there’s an opportunity.