November 21, 2005

Day Late & Dollar Short: Homebuilder ETFs launch into softening market

New housing ETFs, new creative loans, and hundreds of thousands of condos about to come on the market

After the bubble has popped, and values are declining.

Timing is everything.

Boy, does it feel like 2001 all over again...

Wall Street often tries to cash in on investors' tendency to chase the latest hot trend, as evidenced by the technology and Internet funds launched in the run-up to the 2000 dot-com crash.

However, in the case of exchange-traded funds concentrated on the home-construction industry, asset managers may be behind the curve.

The first ETF focused on homebuilders recently began trading and another is in the works. The timing of the launches seems dubious, however, with the housing market losing strength after a prolonged bull run.

"We're seeing early signs of a softening housing market," said Brad Sorensen, senior sector analyst at the Schwab Center for Investment Research. "This housing boom was longer-lasting and more inflatable than previous ones, but the cycles are similar."


41cadillac said...

This is absolutely fantastic.

From: Reuters
Updated: 6:42 p.m. ET Nov. 20, 2005

LOS ANGELES - Real estate bubble or not, more and more Californians are betting on a future in selling homes.

Realtor hopefuls are arriving every day - a troubling trend for veterans, say economists who note that there soon will not be enough homes for sale to support all the newcomers.

Nearly 2 percent of adults in California hold a license to sell residential property in the state, where $30,000 commissions on million-dollar homes have become commonplace.

A report about one person taking the real estate test in California....

" Nathan Evenson, a 32-year-old works as a loan processor in the booming mortgage lending industry. In the last four years, he says, he has earned $500,000 in commissions -- some of which he invested in "flips," or speculative property transactions."

blogger said...

when you

1) have a failed career
2) have a high school or GED degree
3) don't like working for a living, preferring the easy money get rich quick route
4) believe everything you read
5) have no idea what to do with your life

then what do you do? Go to real estate school at the top of a bubble!


In Arizona, I believe the stat is there are now 40% more realtors than there were 5 years ago

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