Housing stocks back on the radar screen

[Bob]

heres my quick take on housing mkt...

There are 2 factors that are out of whack in the housing mkt:

1. Home prices as a percentage of household income are at all time highs

2. There is a disconnect between the rental mkt and the for sale mkt. meaning i can rent a $400K house for $1,200/month.

Until these 2 factors change expect continued pain in this sector...and goofer if someone put a gun to my head, i'd rather get shot than by a homebuilder right now.

How much of that 1200/month figure is the result of a glut in rentals versus market values? Are you waiting for the days of 150-200k for the 1200/ month rental house. Don't think we'll ever see that. More likely the rental figure will rise more than the comps will fall, but time will tell.

 

[Babyblue]

For the record......I have canceled my bids in the homebuilders. The only stock in the sector I am still bidding for is Lowe's at 31. I reconsidered my thesis....I think it is a little too early to buy the homebuilders in this cycle. Different from Last July/QAugust time period when I last recommended them. I want to see them NOT going down on bad news. Will keep you posted.

I would buy Lowe's all day long. There are only 2 hardware super stores and Lowe's is clearly leading. I remember when Lowe's first came out and they were terrible to go into. But now they have watched the "Inventor" of the concept fall. Typical "Rich Mans" cycle as they say in Spain. Plus I like Gene Hackman.

 

[SHELLY]

How much of that 1200/month figure is the result of a glut in rentals versus market values? Are you waiting for the days of 150-200k for the 1200/ month rental house. Don't think we'll ever see that. More likely the rental figure will rise more than the comps will fall, but time will tell.

Or.....Behind Door #3: Prices and sales can stagnate for a very, very long time until inflation, deflation, stagflation and/or wages are given a chance to work their magic.

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