I understand housing has seen a resurgence, but I wanted to outline three points that I believe may have a serious negative impact.

1. China’s housing market got crushed on yesterday’s news, and we all know about the Chinese ghost cities right? If not, here is a refresher. Companies like LBY are having record earnings, but as is the case in LBY– and many other names –their largest growth is coming from China. What if that all comes to a halt?

2. The median price per square foot here in SF is $500, and that is an old number. In my neighborhood, where there is such high demand places aren’t making it to the open market before being under contract, the last three places to sell on my street sold for between $950-$1100 per square foot. The demand is very high, but the supply is very low. The more inland you go, the cheaper it gets, but businesses and private citizens alike are leaving inland CA for Texas and other locales. In many of the other locales, take Las Vegas for example, there is a large inventory of houses built in the last 5-10 years. Why develop new land, when you have houses that were built, but have never been lived in, got it?

3. Giving mortgages to people who weren’t qualified to receive them was our downfall in the first place. Sub-prime mortgages surely cannot be allowed again, “so where do the consumers come from?” That’s my question, along with, “who is going to lend these people money?”

I think we have seen the most recent peak. With the markets at highs, but debt and food stamps at highs too, I have to go “full Zerohedge” on housing.

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