In the August 28th edition of Barron's, Andrew Bary reports that "the investment community seems to be buying the argument of housing bears that the slump will be long and deep." This sentiment can be seen in the share prices of housing related stocks. The thrust of the article is than housing related stocks have a lot of upward potential if the housing market does not continue in its downward trends.

Although this blog focuses on residential real estate, the line of thought Mr. Bary expresses is interesting. If the investment community is coming to believe in a long and deep housing downturn. then I take note. However, the market's logic still seems weak. As I have written here previously, without a loss of employment, housing prices, in the aggregate, are not likely to fall. Thus, the market seems to be signaling that an economic slowdown and its associated job loss will occur. There is no major broad based stock indices that concurs. This "bears" close watching.