The demand side is critical because, without it, housing will be a giant bust —again. It's difficult to analyze the appetite for foreign buyers, but data on millennials is a bit more tangible; and there are few glimmers of hope this generation can be the octane for a housing boom.
According to the Federal Reserve Bank of New York, only 22 percent of 30-year olds who had student debt also had a home loan in 2013. This is down from 34 percent in 2008. In addition, wages and employment for this group are lower when compared to the overall population.
In 2012, 63 percent of 18- to 31- year-olds had jobs compared with 70 percent in 2007, according to Pew data. The unemployment rate for people from 25 to 34 was 6.7 percent in May, compared to the national rate of 6.3 percent. And regarding wages, according to the Washington-based Progressive Policy Institute, the average annual earnings of Americans 18 to 34 who worked full-time fell by about 5 percent from 2007 to 2012; whereas the general population saw an increase of 2 percent during that time.
Read MoreMillion-dollar homes: Summer vacation edition
If you're banking on this group of 85 million Americans to single-handedly save housing, or at least have it strengthen to be a viable part of the domestic economy, then you're just as big a fool as those suckers who recently purchased a home. You need younger generations to pick up the slack if you wish to have any sense of growth in the sector.
Finally, the one true proxy, which really serves as the ultimate gauge of truth and sentiment, is the stock market. And despite the Dow and S&P 500 hitting higher highs recently, the real-estate sector is embarrassingly underperforming the broader averages. Over the rolling 12-month period, the Dow Jones Real Estate Index — consisting of companies such as Toll Brothers, KB Homes, Hovnanian and Lennar — is only up 9 percent while the S&P 500 has returned close to 20 percent in that time period.
And with critical earnings reports due out in the coming weeks for these companies — in what should be an easy analyst beat — will likely disappoint and put added pressure on a sector in serious need of a jolt of adrenaline. Investors and homebuyers are continuing to look like fools in what should be a stable and supporting investment environment.
Commentary by Todd M. Schoenberger, the founder and managing partner of LandColt Capital LP. He also serves as Portfolio Manager of the LandColt Onshore and Offshore Funds. Follow him on Twitter @TMSchoenberger.
Disclosure: The LandColt Fund sometimes holds long and short positions in real estate, and only uses ETFs and mutual funds that mimic the Dow Jones Real Estate Index. Currently, the fund does not hold any positions in real estate. And, neither Schoenberger, nor the fund, have positions in any of the stocks mentioned in the article.