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While we wait for the September real estate sales, inventory and price data to be released next week, Chris Kimble today makes the observation that real estate proxies in the equity markets are behaving à la 2007.
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Says Chris Kimble Sept 28, 2018:
"This 4-pack (chart above) compares the price action of today with the price action of the 2007 highs in the Dow Jones Home Construction Index, Bank Index & Real Estate.
Before the S&P peaked in 2007, Home Construction, Banks and Real Estate started creating a series of lower highs, diverging with the S&P.
Joe Friday Just The Facts Ma’am– Divergences similar to 2007 are taking place of late.
The long-term trend for each of these Stock indices reams up at this time! Stock market bulls hope that it’s different this time and that these divergences are just noise."
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I have been making a similar observation on my chart of Housing Price Momentum for Vancouver, Calgary, Toronto Single Family Detached Prices and the TSX Real Estate Index.
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"In August 2018 Vancouver, Calgary and Toronto SFD price momentum hovered about the flat line while the TSX Real Estate Index cash buyer momentum ticked back up to the nearby highs." |
Notice on my chart of August 2018 below, the July 2007 TSX Real Estate Index tested its highs yet on the ground in the physical world, the price momentum of Calgary Single Family Detached Prices plummeted, while Vancouver SFD prices coiled their way towards the eventual lows and while Toronto's SFD prices made their eventual way towards their 2008 lows to be followed by Vancouver and Calgary into their 2009 lows. Is it different this time? Stay tuned.
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