The U.S. housing market has been experiencing great business for the past few months as the country is being able to recover during the post- financial- crisis- era. However, analysts say that people should never put their full trust on the on- going recovery.
According to businessinsider.com, though U.S economy is moving slower as the same os the global's economy, many are still hopeful that it will be continuous.
However, Barclays analyst Stephen Kim, said that the "housing market bullish is more of a fairy tale."
He also added, At this point, it has become hard to overlook housing's dismally slow pace of recovery and yet, over the past several months, we have become increasingly concerned about the way many analysts are portraying the industry's current weakness as a strength. To us, this seems perilously Pollyannish and a risky oversimplification."
With all the sales that went up for the past few months, Kim has remarked that other aspects of housing market is not really in good shape.
He said, "The housing recovery hasn't lived up to expectations so far; this is something about which housing bulls and bears can probably agree. Indeed, 10 years after the last peak, single-family starts (which matter most for public builders) are at traditional trough levels, and total starts aren't much better."
Kim also regarded other analysts premise of "housing has lagged" and that "the housing demand is slow and steady" as dangerous to assume. He said in an interview, "Call us cynical, but last we checked, housing doesn't lag anything - it's a leading indicator; and just because housing is slow doesn't make it more steady or less cyclical, it's just slow."
Kim also explained that pent- up demand is existing but it still unsure when will be the consumers take action and purchase something. Kim said "To be clear, we believe pent-up demand in housing is real, but we also believe this deficit may persist for many more years. To our eyes, these challenges defy a quick fix, and are likely to keep the growth rate of housing demand constrained for the foreseeable future."
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