Over at Yahoo! Finance, the headline for one of the most popular articles
screams, "Housing Already Shows Signs of a New Bubble." The exact same
sentiment is being shouted from the rooftops at Forbes, too: "Home Builders Could Become Heartbreakers Again." We're less
than one year into a legitimate recovery in prices, and already the pundits
can't help but sound the alarm about another possible "bubble"? Give me a break!
Forget Rodney Dangerfield, the residential real estate rebound gets "no
respect." Don't worry. We're nowhere close to another peak. Nor has the profit
potential for housing-related investments suddenly vanished. Here are 10 hard
facts to prove it…
1. Too Far, Too Fast? Nope!
Housing market bears point to the meteoric rise of homebuilding stocks as proof that the recovery has been too robust, too soon.
The S&P 1500 Homebuilder group is up 170% since hitting a low in August 2011. In the last year alone, many individual homebuilder stocks, like KB Home (KBH), PulteGroup Inc. (PHM) and Ryland Group (RYL), doubled in price.
As Bespoke Investment Group aptly points out, though, "Remember that 'too far, too fast' is relative." And, in this case, short-term relativity can be deceiving. It turns out that the S&P 1500 Homebuilder group is still down 55% from its 2005 high, despite the impressive run-up over the last 18 months. Too far, too fast? I don't think so!
1. Too Far, Too Fast? Nope!
Housing market bears point to the meteoric rise of homebuilding stocks as proof that the recovery has been too robust, too soon.
The S&P 1500 Homebuilder group is up 170% since hitting a low in August 2011. In the last year alone, many individual homebuilder stocks, like KB Home (KBH), PulteGroup Inc. (PHM) and Ryland Group (RYL), doubled in price.
As Bespoke Investment Group aptly points out, though, "Remember that 'too far, too fast' is relative." And, in this case, short-term relativity can be deceiving. It turns out that the S&P 1500 Homebuilder group is still down 55% from its 2005 high, despite the impressive run-up over the last 18 months. Too far, too fast? I don't think so!
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