As per past trend, more people are out of work, the house-as-ATM is the way out. During unemployment, credit continues to be tight and spending is down. And all these indicators argue for a contraction of the very housing market which drove the economic expansion of the early 2000’s.
A Labor Day drive thru the countryside in Northern Maryland has identified dozens of houses for sale. The owners want higher sale prices than they will get. On asking many of them, you’ll hear something like “I can’t take a loss”. They feel entitled to a profit on their “investment.” Imagine that notion applied to stocks. And houses weren’t the only thing for sale. Cars with too-high prices sprayed on their windshields, farm equipment, even a telephone pole! The stock market rebound since March counts well as a Primary Wave Two.
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