T2 Partners Whitney Tilson says the apparent housing recovery is only setting us up for worse things to come.
"The rebound has been stronger than we've anticipated," Tilson told Yahoo! News.
Yet he remains "confident this is the mother of all head fakes."
Tilson attributes the housing upturn of the past few months to low interest rates, first-time homebuyer tax credits, falling prices and seasonality — not improving market fundamentals.
He also believes there's still supply and demand issues that will hamper the recovery.
“The total inventory is triple what's actually being reported," says Tilson, who estimates there are twice as many homes in foreclosure or near foreclosure that aren't for sale yet.
Though Tilson doesn’t foresee “anther calamity to come” he thinks the housing sector won’t rebound until those homes are off the market — and he does expect another 10 percent decline in prices and no true bottom for the housing market for at least another year.
Experts attribute 370,000 home sales to qualified first-time buyers thanks to the $8,000 first time homebuyer credit, which Congressional leaders have pledged to extend past its expiration Nov. 30.
Though some economists take this as a positive sign, others remain skeptical.
"If all you have done is shifted home purchases that would have occurred anyway from the future into the present, that is simply moving home sales around rather than increasing their overall level," economist Kevin Gillen, vice president of Econsult, told The Philadelphia Inquirer.
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