The Most Interesting Thing You May Not Know About Real Estate
It’s Friday in the Wall Street Daily Nation. And longtime readers know what that means…
We’re taking a break from my typically longwinded commentary (keep the hallelujahs to yourself) and instead cherry-picking a few graphics to convey some of the week’s most important economic and investing news.
Or more simply, we’re going for less talking and more graphics.
This week, we’re tackling what’s been one of the most depressing areas of the market for years – residential real estate. Ironically, though, we have some good news to share. So let’s get to it…
Inventory Keeps Slip Sliding Away
The latest stats from the National Association of Realtors reveals that the inventory of homes listed for resale is declining. A lot.
In fact, last month the number hit the lowest level since September 2005, making it the eighth consecutive month of year-over-year decreases.
So what explains the drop?
Well, homeowners could simply be giving up on selling their houses in the face of such a crappy market. (The latest S&P/Case-Shiller home prices index reveals that prices dropped another 3.8% in the last year.)
Then again, foreclosure delays and banks holding back inventory could be another explanation.
Regardless of the cause, though, a drop in supply is a drop in supply. And it means less competition for new homebuilders.
Or as Captain Obvious, I mean Citigroup analyst, Josh Levin, put it, “Declining inventory is bullish for the homebuilder stocks.”
Indeed it is!
The SPDR S&P Homebuilders ETF (NYSE: XHB), which invests in 36 housing-related stocks, is up 38% off its October lows.
That’s it for this week. Before you sign off, let us know what you think about this weekly column – or any of our recent work at Wall Street Daily – by sending an email to: feedback@wallstreetdaily.com or by leaving a comment below.
Thanks and enjoy the weekend!
Ahead of the tape,
Louis Basenese
Related Topics: Small Cap, Stocks, Tech & Innovation
