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Vultures Circle the US Housing Market, Again
Why EWI's team of analysts, including Bob Prechter in his Conquer the Crash, foresaw the real estate crash -- and what Elliott wave analysis suggest for housing now

By Nico Isaac
Tue, 27 Sep 2011 16:00:00 ET
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On site of the gruesome real estate crash, financial paramedics have tried every resuscitating trick in the book to revive their dying patient: Trillions of dollars in government bailouts; repeated first-time buyer tax breaks; and record low mortgage rates.

Yet, the US housing market is showing no gain activity. To wit: A September 26 Commerce Department report revealed that new home sales are on pace for their worst year ever -- since the government began keeping records a half century ago. What's more, writes one business blogger:
"The vast majority of [economists] completely missed the $8 Trillion housing bubble in the United States." (Truthdig)
In the small minority, however, Elliott Wave International president Bob Prechter saw the dry ice patches ahead on the road of the racing housing market long before they were visible to the masses. In his 2002 New York Times business bestseller “Conquer the Crash,” Bob wrote:
“What screams ‘bubble,’ giant historic bubble, in real estate is the system-wide extension of massive amounts of credit to finance property purchases… When prices begin to fall, lenders will experience a rising number of defaults on the mortgages they hold.”
Three years later, the animal spirits surrounding the U.S. housing bull had become stronger than the animal itself. Our analysts saw the potential for a serious breakdown, and the July 2005 Elliott Wave Financial Forecast issued this unbelievable -- at the time -- warning:
"There's no mistaking it now. The extreme psychology has taken up residence in real estate. Now is the most dangerous time to be on board the home bandwagon. There’s no mistaking who the Enrons of the bust phase will be. They will be the firms now peddling adjustable-rate, no interest/nothing down and assorted other types of subprime mortgages.”
In 2010-2011, after enduring five agonizing years of a subprime mortgage implosion and real estate deflation, the bullish mainstream chorus rebanded and declared an end to the recession and start of a US housing recovery.
Yet the April 2011 Elliott Wave Financial Forecast our analysts revealed that despite the economic rebound, US Median Home Prices showed a strong "reawakening" of downside pressure:
"The move back through the low of late 2008 reveals that another dramatic price deflation is already unfolding."
Now in its expanded 2nd edition, Bob Prechter's "Conquer the Crash" has an entire chapter devoted to whether real estate will be a safe investment in coming years.
The best part is, for a limited time only, our risk-free Financial Forecast Service subscription includes a complimentary copy of Bob Prechter's "Conquer the Crash." This unbelievable offer means you can flip right to Chapter 16 of "Conquer" and read Bob Prechter's myth-busting insight into how home prices actually coincide with stock prices, combined with a jaw-dropping chart of both markets dating back to 1785.
This free-book bonus, plus a complete Financial Forecast Service won't last long. Click on the links throughout to get started.

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