The stats quoted in this article point to a rippling effect that weak housing is having on the job market. He notes:
1. Residential construction and related contractor jobs fell by 28,500 during the month and are now lower by 291,000 from their peak employment level nearly two years ago. The commercial real estate market appears to be topping out as 16,800 jobs were cut in December.
2. Existing-home sales have been right at or near 5 million for the past three months and are down 20% from a year ago and down 30% from the peak year of 2005. The current level of activity is far below that of even the pre-boom year of 2001.
The most interesting point to this article is not the downtrend we are too well aware of but his absolute enthusiasm about 2008 as a turn around year. He goes on to say "Though pent-up demand clearly exists, it is still tricky to anticipate when a meaningful recovery will take place. Will it be spring or summer or fall when we will see a notable pick-up in home sales? Difficult to say, but it will happen in 2008."
Some of this is paraphrased to isolate the point, still I wish it were true....My. Yun is certainly privy to more data than I, but I have noticed they were fairly optimistic all the way down.
How does he account for $450 billion in ARM's coming due in the next three years. These are supposed to increase monthly costs to homeowners by 30-50%, just as their equity is vaporizing. I think we will see a lot more supply and lower prices before that pent up demand actually gets off its dime and buys.