The Credit Crisis Is Over! (Or so they say)

I just heard on CNBC this morning that the credit crisis is over. All of the bad news is behind us. Good times will be here again.

Heck- look at the housing numbers. They went UP for the first time in five months. Housing starts were up 8.2% in April- which means builders are building MORE houses than they did last month.

Isn’t that great?

They’re apparently doing this even though there are a record number of homes sitting empty around the country. That “inventory” is massive.

But hey- what’s not to like? So a few more are now being built.

What’s “supply v. demand” anyway- when the housing bottom has been reached?
Yes- that’s also what I heard on CNBC this morning. This is the bottom of the housing market. We all should be buying in now because it only has one place to go- and that is up.

I’m all for being optimistic. And yes, someday housing WILL rise again. But the bust only started about two years ago- after over a 10 year bull run. Historically, that would mean we’re not even close to the bottom of the market.

Additionally, the bottom of busts happen when no one is paying attention and when no one is buying the asset. Take the bottom of the Nasdaq bubble. You couldn’t get anyone to buy shares of Yahoo or Cisco. In fact, you couldn’t get people to buy much of any stocks (and still- many people don’t “believe” they can make money in the stock market.)

In Chicago, I still hear stories of flippers, investors, and speculators in the housing market. That doesn’t seem to indicate a bottom to me.

But maybe I’m just wrong and CNBC is right. Maybe housing will rise from the dust this summer- despite the banks tightening credit and actually requiring a downpayment.

Maybe…or maybe not.

The stock market, however, is making quite a few people money right now. Housing will too- someday. But that day is not right now.