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Lumber price analytics and builder confidence point to a bottom in real estate price
Peter Oberois
Mar. 19, 2007
In the last thirty years two things have correctly predicted the future real estate prices. The first is the lumber price and the second is the homebuilder confidence. When these two reaches extreme pessimism, the real estate market bottom. It may be happening again now. The lumber price has crashed since the last year. The homebuilder confidence shows they are embracing a massive depression in the sector.
Analytical models interpret this to sentiment conditions that lead to new bull market. At least it is clear; there will be very fierce and solid corrective rally now if not the birth of a new bull market. There are clear signs that commercials are buying lumber futures. That is bullish for the real estate market. The builders have cleaned out the old inventories and the pipeline new homes are far less in number. This is very bullish for the next twelve months.
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