Monday, January 22, 2018

Bloomberg: "This Rare Bear Who Called the Crash Warns Housing Is Too Hot Again"

by Bill McBride on 1/22/2018 01:54:00 PM

This article from Prashant Gopal at Bloomberg quotes me. But I'm NOT warning that "Housing is too hot again" (that is someone else). This Rare Bear Who Called the Crash Warns Housing Is Too Hot Again

Stack, 66, who manages $1.3 billion for people with a high net worth, predicted the housing crash in 2005, just before prices reached their peak. Now, from his perch in Whitefish, Montana, he says his “Housing Bubble Bellwether Barometer” of homebuilder and mortgage company stocks, which jumped 80 percent in the past year, once again is flashing red.

“It is 2005 all over again in terms of the valuation extreme, the psychological excess and the denial,” said Stack, whose fireproof files of newspaper articles on bear markets date back to 1929. “People don’t believe housing is in a bubble and don’t want to hear talk about prices being a little bit bubblish.”
Prices might be a little too high in some areas, but nothing like in 2005. And we aren't seeing the speculation and loose lending that was rampant in 2005.