Existing vs. New Home Sales = Opportunity?
April 25, 2011 – Calculated Risk charts and comments on divergent sales rates for new and existing homes. This raises important questions that must be answered:
1. Will the sales rate of existing homes decline or the sales rate of new homes rise to close this historical gap?
2. Which major component of the new home do you think will most dramatically adjust (or has already adjusted in some areas) to help bring new home prices in line with resale home prices?
3. Is a buying opportunity presented for long term investment in this major price-adjusted component?
If you choose to make an investment in this asset; remember it is illiquid and will likely take many years to determine if your thesis is correct.  Tread carefully and choose well.
