Over the past 3 or 4 years I have watched with keen interest (and participated) in the ups and downs of the American and Canadian real-estate markets. Recently published stats have fueled a bit of media frenzy which has become an interesting study in conflicting market noise.
In the Canadian market there are those pointing to sustained or increased property values and a market that is bloated with high unaffordable prices ripe for a correction and the other side that says sales are sustaining and even growing and we are and there should be no correction on the horizon.
Case Shiller composite index of 20 metropolitan areas climbed 10.9 percent year over year, beating expectations for 10.2 percent.
Institutions like the Blackstone Group have spent more than $4billon for 24k homes in the U.S housing market that it plans on renting out.
A recent analyst forestry report cited housing starts that are 29% above year ago level and inventories of new homes for sale near 50yr lows and is predicting a cumulative housing deficit of 2.8M units in 2014
Last year, Realogy Holdings Corp who is a franchisor of six of the most recognized brands in the real estate industry:, CENTURY 21®, Coldwell Banker®, Sotheby’s International Realty® etc. (NYSE:RLGY) had revenue of $4.7 billion and a gross profit of $1.0 billion. In the first quarter of this year compared to last year and EBITDA was up 34%.
The Keller Group, an engineering specialist, has reported a near doubling of full-year profits as it benefited from an improvement in the
The Federal Reserve housing affordability index has declined 13% since the beginning of the year. And about 22 million Americans may lack enough home equity to move, keeping property listings tight and limiting sales as the housing market recovers.
Shadow inventory John Burns Real Estate Consulting, estimates approx. 10.0M housing units have negative equity and an estimated 53% are keeping their mortgage payment current,
Lender prosessing services reports in May 2013 over 9% of outstanding mortgages in the us were either delinquent or in forclosure.
According to the Campbell/Inside Mortgage Finance Housing Pulse Tracking Survey, the average American Joe isn’t participating in the
A recent IPO filing of American Homes 4 Rent provided some interesting information on the market: total
Some companies are hedging both sides of the market a recent IPO American Residential Properties (NYSE:
Which to believe?
My view based on these stats is that these is still the start of a long recovery…..If you have a longer time horizon of 5 – 10 years then enter at any time. If you want to try and time the market then there “may” be a short-term pullback over the next 3 – 12 months, but trying to time the bottom and the extent of a pullback is risky and one could miss the opportunity altogether. Do your research and know your marker….not just compared to other home or real estate in that area, but also the macro trends that creates an environment where the market you invest in should outpace the greater real estate market.
Chad Wasilenkoff is the CEO of Fortress Paper and a regular contributor to MoneyTalks