POST SCRIPTS

fair to good. The sentiment index among U.S. home builders fell for the sixth month in a row to an 11-year low in June. The June index reflects a broadbase decline over all four regions of the U.S.

The threat of A.R.M.adjustable rate mortgage foreclosures has spooked the stock market today, which is currently down about 80 points. The Washington Post said today, "As more hybrid adjustable rate mortgages adjust upward and housing prices dip, many Americans can't refinance out of this squeeze. They are finding themselves trapped in too-high monthly payments, and some face foreclosures."

And this just minutes old from an AP wire story, "ARMs are a ticking time bomb," said Brad Geisen, president and chief executive of property tracker Foreclosure.com. "Through 2006 and 2007, I‘m pretty sure we‘ll see a high volume of foreclosures."

This caps a MarketWatch story that indicated the current housing boom is the biggest on record since 1890 when records were started. That is one huge bubble and when it goes the effects will be significant. Economist Robert J. Shiller said Friday that new data suggests the market might be coming to an end. "I don't see why home prices should be shooting up that strongly," Shiller said, adding that speculation may have played a role. "It's a sign of concern."

It is expected that about $300 billion worth of hybrid ARMs will readjust (increasing interest rates) for the first time this year. In 2007 that number will rocket to $1 trillion, says the MBA. That means as payments leap upward some homeowners that were victimized by predatory lending practices will be coming up short and foreclosures will follow.

This is from one of these pricey investment letters, "Toll Brothers (TOL). If you don’t know Toll, it’s the biggest publicly traded builder of “McMansions� — those ostentatious, oversized homes that popped up all over the U.S. It was flying high. But now look at how it’s getting utterly slaughtered. This is a stock that was trading for about $58 and has now plunged by more than HALF in just a few months, crashing through all support levels, and heading still lower.

In short, the market has spoken, and we’re no longer alone: The market itself is now forecasting a real estate bust. Not a “soft landing.� Not a “maybe-bust someday.� It’s forecasting an outright collapse, starting right now. Still not convinced? Then take a look at the chart of another major homebuilder, KB Home (KBH). You’ll see the exact same kind of action."

FYI, stocks are generally the first to show declines when a sector, like housing, transports, energy, etc.,gets hits and now, well, here you go... real estate stocks are doing poorly. That has to be a big red flag.

The news letter goes on, "Right here in my zip code (33458), there were recently 574 properties with at least two bedrooms and two bathrooms for sale between $100,000 and $500,000, according to Realtor.com. When I started tracking almost a year ago, only 150 fit that description. That’s a 283% increase. Almost four times as many houses, condos, and town homes are piling up, still unsold.

In one nearby community, called Chasewood, the same listings have been sitting on the market month after month. The lowest priced unit used to be listed at around $210,000. Now, you can score one for just under $175,000. That’s almost a 17% drop in just the past several months!"

The author suggests several ways to protect yourself: