Housing in recovery, but not its stocks | North Salem Real Estate
Stocks of some of the nation's publicly traded home builders are hovering in correction territory. This, despite higher sales of newly built homes in February and satisfactory, if not stellar, quarterly earnings for most of the companies. Housing starts are still running well below historical norms, but are still about twice what they were at the trough of the construction crash in 2009.
"It seems like everything is set up very nicely for the housing market to have a solid year, not a boom that we can't replicate, like we saw in the first half of 2013, but I think it's just about right-sizing people's expectations," said analyst Ivy Zelman, CEO of Zelman Associates.
"It seems like everything is set up very nicely for the housing market to have a solid year, not a boom that we can't replicate, like we saw in the first half of 2013, but I think it's just about right-sizing people's expectations," said analyst Ivy Zelman, CEO of Zelman Associates.
Last year, Zelman famously declared the market was in "housing nirvana." Then last month, she admitted nirvana had taken a pause but was "around the corner" yet again. She said fundamentals are still good, and she is surprised at the bearishness among traders.
"We think housing starts will be definitely up at least double digits. We know the builders are bringing a significant amount of new product to market," Zelman said. But, she added, "I guess the expectations have just gotten so negative, and I think that it's piling on bearish sentiment with [Federal Reserve Chairman Janet] Yellen also indicating that the Fed could tighten sooner."
Indeed, in the past month, builder stocks have been hit hard: D.R. Horton is down 13 percent; Lennar down 11 percent; PulteGroup down 11 percent and Toll Brothers is off more than 9 percent.
http://www.cnbc.com/id/101534737?__source=yahoo%7Cfinance%7Cheadline%7Cheadline%7Cstory&par=yahoo&doc=101534737%7CHousing%20in%20recovery...so
"We think housing starts will be definitely up at least double digits. We know the builders are bringing a significant amount of new product to market," Zelman said. But, she added, "I guess the expectations have just gotten so negative, and I think that it's piling on bearish sentiment with [Federal Reserve Chairman Janet] Yellen also indicating that the Fed could tighten sooner."
Indeed, in the past month, builder stocks have been hit hard: D.R. Horton is down 13 percent; Lennar down 11 percent; PulteGroup down 11 percent and Toll Brothers is off more than 9 percent.
http://www.cnbc.com/id/101534737?__source=yahoo%7Cfinance%7Cheadline%7Cheadline%7Cstory&par=yahoo&doc=101534737%7CHousing%20in%20recovery...so
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