Its the regular appearance on Kudlow tonite:
The old gang is together again — Me, Herb Greenberg, John Rutledge (whatever happened to that chicken$#@! Canadian?)
We will be covering the recent market activity, housing data, and the weak consumer spending.
G.E., one of the few stocks I have regularly mentioned positively on Kudlow — its part of the big cap multi-national sector — gained nearly 4% today.
Also on board tonight: Wendell Perkins, The portfolio manager for JohnsonFamily Large Cap Value fund, and good gal Elizabeth MacDonald of Forbes.
Yesterday, we learned that the NAHB Housing Market Index, a gauge of home-builder confidence, declined to its lowest reading since the 1991 recession:
Source: NAHB, Wells Fargo
Given the high inventory still around, its no surprise that all three components of index dropped: Single-family Home Sales fell to 29 (from 31); Traffic of Prospective Buyers droped to 21 from 22; Expected Sales for the next Six Months declined to 39 from 41.
The last time the HMI was this low was in the throes of the 1990-91 recession.
Rather than spend much time on this well-covered report, I want to draw your attention to a little followed report on Home Valuation. I stumbled across this extremely informative analysis, filled with great
info-porn maps (below) from Global Insight and National City
It looks at the regions of the country which have had the greatest home price appreciation and, by their measures, are the most overvalued.
First the good news: less homes are overvalued today than in 2005, when the study found
45% of all homes 23% of homes were overvalued by 45%.
Today, 14% of homes for sale are still overvalued — but by only 25%:
The following shows where the overvalued/undervalued homes are located:
That decrease in overvaluation comes as no surprise: The huge overhang of inventory = price decreases (see below).
Thus, many of the over-valued regions are becoming a little less overvalued.
But, depsite the hopes of the bottom-callers, there is still a ways to go.
Full Study: House Prices in America – Q1 2007
A Global Insight / National City Corporation, June 2007
2006 Q1 PDF: http://www.globalinsight.com/gcpath/1Q2006report.pdf
additional graphs, and a summary of the report, after the jump