November 10, 2016

Housing peak ?

Sales of durables (as seen at Whirlpool, PPG and others) are probably peaking, as is the housing turnover that drives them. In Miami/Dade County, the epicenter of housing speculation, we are back to a three-year supply of condos at the current rate of sale. Some bad paper is undoubtedly out in the market and banks are tightening credit. As one banker told a friend of mine, "Money is cheap unless you need it."

If one looks at the weekly new high list of stocks, the consumer sector is suffering. There are few consumer stock 52-week highs and many at new lows. Much of this malaise is now beginning to be priced into the sector, where multiples are well below historic ranges.

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