How You Can Invest in the Housing Market Resurgence
While there are still many pockets of weakness in the housing market, there are now some positives beginning to emerge. We’ve seen plenty of companies reporting that the higher end of the housing market is certainly rebounding strongly. Last week, Toll Brothers, Inc. (NYSE/TOL) reported quarterly earnings that were the highest since 2008. The company’s CEO stated that it is currently seeing the most sustained demand since 2008.
Many are worried about the market sentiment for the lower end of the sector, the distressed housing market. With millions of homes left to be foreclosed, will prices continue to drop? It appears not, as investment funds are scooping up real estate at an exceedingly fast pace.
RealtyTrac Inc. reported that the prices of homes in the process of foreclosure are seeing the biggest annual increase since 2006. In a related story, Bloomberg interviewed many in the housing market industry who essentially said that there is not enough supply in many markets, which is pushing up market sentiment and prices. Market sentiment is clearly shifting in the housing market; the key point is that it’s not coming from the individual home buyer. This is where many analysts are getting it wrong, looking at such metrics as consumer confidence. Most of the buying is actually coming from institutions, large investors, and hedge funds.