Another point: Low interest rate are not the only catalyst for the incredible demand we are seeing in places like Miami for example. Other causes: The week dollar vs. the Euro and Pound has contributed to a surge in buyers from Europe. Baby Boomer demand. Speculative money from former equity market participants. (don't think for a minute all of these speculators are dumb money) Sure sentiment will change.... maybe next year or in 5 years, but until then the "now" money is playing the real estate game and fortunes are being made.
What kind of demand people are talking about? One house being sold four times in one year? is this a demand or speculation?
National Housing values by local markets http://www.consumerreports.org/main/detailv4.jsp?CONTENT<>cnt_id=579825
I wonder if there ever was a time where everything was reversed, the underpriced markets were overpriced and the overpriced were underpriced. I guess it would be hard to imagine since who the heck wants to live in Rochester or Syracuse, NY.
============== Ba-lda; Thanks, interesting read , Midas. Interesting read Wall Street Journal today/page B6; Chicago meeting of Sam Zell and some other RE kings. ''Sell what you dont want to keep'' Sam Zell said; and article noted He ''had been selling a lot of assets.....'' Mr Zell said sell. Dont want to get too far off topic, but Mr. Zell said sell; many were selling semisector again, & homebuilder stocks . Dont care much for the highly inaccurate word ''bubble''; but WSJ article did mention '' could be a condo bubble'' Like RE and RE books better than homebuilder stocks and neat thing about homes , they always need home improvement, and one can profit nicely on just [1]one buy/sell property. Wisdom is the principal thing- Solomon,trader/investor king
ur right about that one. Syracuse is a pos city. Get those nice NY State taxes and a city with streets built on a hill in the middle of the snow belt. In the middle of winter ur car just goes sledding down hills thru stop lights intersections. Ridiculous place Senor Zen
Entering June '05 TOL, DHI and homebuilders hit new all time highs. Also entering June we get a blurb from Dallas Fed President Richard Fisher that the next FOMC meeting in June would be "the ninth inning" of the current tightening campaign. Ahhhh.... it is amusing to read all the comments from the housing bears - from mythical high inflation to rising rates to a national housing bubble. How people can get simple things so wrong is truely mindboggling. Then again, what happened to that China revaluation bullshit?!
Interesting news...this fund manager has been one of the biggest real estate bulls for a number of years. Makes sense, sell into strength after having bought weakness a number of years ago. Booking a nice profit for his shareholders too. Smart money sneaks out the backdoor, while the dumb money moves in and continues the party at the front of the bar. At least Mr. Heebner is smart enough not to be drinking the Kool Aid...OWP "CGM's Heebner dumps home builders The fund manager worries about real estate speculation; broadens bets on REITs. Money magazine -- June 3, 2005 -- By Stephen Gandel http://money.cnn.com/2005/06/03/markets/heebner_homebuilders/index.htm NEW YORK (CNN/Money) - Worried that the housing boom could go bust, veteran fund manager Ken Heebner has dumped his large positions in home-building stocks. Heebner, the co-founder of Capital Growth Management, said in a recent interview with Money magazine that in the first quarter he sold all of the home-building stocks in CGM's four mutual funds: CGM Capital Development (LOMCX), CGM Focus (CGMFX), CGM Mutual (LOMMX), and CGM Realty (CGMRX). Heebner had long been a fan of the group. "I am concerned about speculation at the high-end of the [real estate] market," said Heebner. If home prices were to fall, worries Heebner, real estate activity would slow, including home building. The biggest portfolio shift was in CGM Realty, in which Heebner had invested 63 percent of the fund's assets in the companies that build single-family homes or condominiums. The fund's three largest positions were in Hovnanian Enterprises, Toll Brothers, and DR Horton. In his other funds, Heebner had slowly started exiting the sector last year. Home-building stocks are up 18 percent in 2005, as consumers continue to snap up houses at ever higher prices. "I probably didn't time it right," said Heebner. For the Realty fund, Heebner said he is now buying shares of commercial, mall and office real estate investment trusts. Heebner thinks the economy is improving, and that those REITs should be able to command higher rents as demand for office and retail space improves. "The economy's cyclical upturn will be good for those REITs," he says. The fund also owns shares in hotel REITs as well as casino company Las Vegas Sands (Research) and real estate brokerage CB Richard Ellis (Research). Heebner has a history of making bold and swift sector calls. Often they turn out right. Heebner began buying homebuilding stocks in early 2001. Over the next four years, home-building stocks rose, on average, 229 percent. The Standard & Poor's 500 stock index fell 8.2 percent during the same time period. That prescient call and others have boosted the performance of CGM, which manages $4.5 billion in assets in its four funds and private accounts. CGM Realty Fund has risen an annualized 27 percent a year for the past five years, outperforming 98 percent of all other real estate funds, according to Morningstar. The fund is down slightly this year. Heebner hasn't necessarily lost his touch, however. CGM Focus rose nearly 11 percent in the first quarter -- it was the best performing diversified U.S. stock fund during that period."
KB Home Hammers Estimates By TSC Staff 6/17/2005 10:38 AM EDT KB Home (KBH:NYSE - commentary - research) ignited another ferocious rally in the homebuilders Friday with a strong earnings performance. The Los Angeles-based homebuilder posted a 78% year-over-year earnings gain late Thursday on a 36% revenue jump and ratcheted up full-year guidance. The numbers breezed by Wall Street's estimates and pushed KB shares up 8% early Friday to a 52-week high. KB said the future looks good as well. The company said its May 31 dollar backlog climbed 52% from a year ago to $6.79 billion, while its unit backlog jumped 31% to 27,089 units. As a result, KB boosted its 2005 earnings forecast to $9 a share from the previous $7.88. For 2004, the company earned $5.70 a share. Analysts had been expecting about $8. "Our outstanding second quarter performance underscores the strength of KB Home's geographically diverse operations," said CEO Bruce Karatz. "Consumer demand in our markets remains vibrant, fueling strong growth in unit deliveries and selling prices." He added that a "significant improvement in our margins during the quarter amplified the impact of top-line growth." --------- Giddyup!