The Economic Recovery Has Begun!

Hey Everybody,

Today, the Commerce Department announced that U.S. housing starts jumped a staggering 22.2 percent to an annual rate of 583,000 units last month. That is the biggest percentage rise since 1990.

Housing (banking) led us into this economic mess and it will be housing that leads us out of this mess...

Last week, CitiBank shocked everyone by turning a profit.

This week, home builders shocked everyone by actually building homes again. This announcement comes as the first gain in housing starts since April of last year.

Wall street understood the meaning of this announcement and posted a 178.73 point (2.48%) gain for the Dow, NASDAQ posted a 58.09 point (4.14%) gain, and the S&P 500 gained 24.23 points (3.13%) on the Commerce Department's great announcement.

All last week, I was reading stories by the various so called experts saying that this month's housing news from the Commerce Department will be more bad news... In reality, this day or this week may well mark the turning point in the market. 5 out of the last 6 Wall Street sessions ended the day in the green... The economic recovery has begun!

Here are some of today's stories.....
- Wall Street Journal - Home Building Rebounds While Wholesale Prices Rise
- CNN - Housing Starts Unexpectedly Surge
- Fox Business - Pleasant Surprise: Housing Starts Surge 22%
- Reuters - U.S. Housing Offers Hope For Economy
- Yahoo - Surprise Jump In Housing Starts Ignites Wall St. Rally

The Housing Market Has Already Hit Bottom...

The signs are all over the place. The housing market has hit the bottom and is due to spring up in the next couple months.

Here are the basic facts:
- Home sales contracts rose in June. Click here for the Reuters story
- The $300 Billion Housing Bailout Bill has been signed into law.
Click here for the Reuters Video
- The gas prices we've all felt the pain from have caused the cost of home building materials to raise sharply. Home builders will have to charge more for new homes in the coming months. If they don't (or are not able to get the higher prices), then they will slow down construction of new homes causing a shortage. The rule of "Supply & Demand" says if supply of new homes goes down, then the price will go up. Plain and simple.


What does all this mean to you? Well, the market activity is picking up, sales are picking up, the news media is seeing all the signs of the market stabilizing but are trying to stick with the problem stories because bad news sells better. The stories are beginning to be comical... "The real estate industry had some good news (sales are up), but something bad thing could happen at some point in the future."

I believe that the stories that will be reported starting somewhere around January of 2009 will be reporting that the housing crisis is over, the market hit bottom in August or September with the Housing Bailout legislation... All the polititicians, especially the newly elected ones taking office, will be taking credit for having fixed the housing industry problems. We'll have a new President who will be taking credit for having fixed the problems and created new jobs and got the economy rolling forward again...

The smart investors are quietly gobbleing-up the real estate on the market now and will be for the next few months. Next Summer, you'll be able to recognize them... They'll be the ones smiling!!

-Bill

Pending Home Sales Rebound

In a Reuters news video reported by Conway Gittens published August 7, 2008, it was announced that Signed Contracts for pending home sales unexpectedly rose in June.



Watch the video for more...

Reuters: A glimmer of light for US housing?

In a news video released by Reuters news agency July 25th, 2008 reports that new home sales have been better than expected.








This Reuters news video is reported by Sasha Salama with a soundbite courtesy of Eric Landry of Morningstar.