October home sales fell in the United States by 1%, with analysts expecting further drops in the months ahead. If these falls in real estate continue, the prediction of uber-investor Jim Rogers that there is “100% chance” of another financial crisis will transpire.
As detailed in many previous articles on www.emergingmoney.com, global real estate is weak. It will only be going one way for the foreseeable future, with the exchange-traded fund for homebuilders, SPDR S&P Homebuilder (XHB, quote) off for the year. The weakness in global real estate has been the focus on many articles on www.emergingmoney.com. It is not just the United States, as emerging market homebuilders such as Xinyuan Real Estate (XIN, quote) of China and Brazil’s Gafisa SA (GFA, quote) are both near 52-week lows.
Construction accounts for about one-fifth of the gross domestic product in China and the United States. If another financial crisis hits as Rogers claims and is worse than 2008 — as he also predicts — homebuilder and other real estate stocks will be devastated around the globe.