The latest dip in home sales<\/strong><\/p>\n It should be noted that sales volume drops before any impact is reflected in prices.\u00a0 This is simply the way things go in housing.\u00a0 In fact, you\u2019ll need a good year or two of lackluster sales to really have any pull on prices.\u00a0 Any journey needs to take a first step and it is abundantly clear that housing values are being jacked up in manic ways in many areas.<\/p>\n First, let us look at the drop in sales:<\/p>\n Clearly something occurred last month.\u00a0 Of course one month does not signify a trend.\u00a0 And this would be an odd time for it to occur since summer is generally a good month for home sales.\u00a0 The stock market seems fine and employment seems okay on the surface as well.\u00a0 But turning points usually happen when folks least expect it.<\/p>\n The drop here is the biggest in over five years.\u00a0 And we see this happening across many markets in the U.S.:<\/p>\n Lower sales volume simply means there will be more inventory if this pattern continues.\u00a0 More inventory means more choices for buyers and assuming the belief continues to hold that real estate never goes down, we may see this pattern continuing.\u00a0 But there is this virtuous circle effect going on at the moment.\u00a0 We\u2019ve been on an upward slope when it comes to seeing home values going higher therefore inspiring more people to buy.\u00a0 From mansions to crap shacks, all home values seem to be moving strongly in one way.\u00a0 The housing fiasco now seems like ancient history.<\/p>\n So the major gains in home prices need to continue to keep this party going but what if things stall out?\u00a0 If anything the drop in sales is more of this realization.\u00a0 How many HGTV upgrades can people flip before the entire market is left with only granite countertops and stainless steel appliances?\u00a0 This might be a good ancillary market to follow.\u00a0 Quick, someone dig up a chart on stainless steel appliance sales per year.<\/p>\n At some point something will give.\u00a0 People tend to have this blind faith in the Fed which by the way, missed the last housing bubble and largely set the stage for its expansion.\u00a0 I will remind you what the former Fed Chairman said back in 2007:<\/p>\n Things can change very quickly.\u00a0 We\u2019ll have to see if this is simply an odd ball month or something bigger.<\/p>\n![\"US-home-sales-Redfin-2016-07\"](\"http:\/\/www.doctorhousingbubble.com\/wp-content\/uploads\/2016\/08\/US-home-sales-Redfin-2016-07.png\")
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