Two Ways To Play: Home Prices Get Nailed
Strengthen your portfolio in good times and bad.
Bloomberg reports California home prices plunged 41% in August on a year-over-year basis as foreclosures pushed down values in the largest US state.
In data provided by the California Association of Realtors, the median price of existing, single-family detached homes dropped to $350,140. This comes after RealtyTrac said in September that over 101,000 homeowners in California received default notices, were warned of a pending auction or foreclosed upon.
Sales did increase by 56.7% in August on an annual basis and 1.8% from July, but Leslie Appleton-Young, vice president and chief economist of the association, said she expects more downward pressure moving into the off-peak season in the coming months.
From the Bull Pen: Need a recession proof stock? Bulls can consider Rent-A-Center (RCII). Sell stops can be set below $22 support.
From the Bear Cave: A purging of this excess supply will take many months, not days. With the thesis that the DJ US real estate ETF (IYR) will make a new low, bears can play the downside using trades above $65 as a buy stop.
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