Is There Still Upside in Housing?

Jeff Reeves and I chat about the prospects for the housing market.  Read Jeff’s comments from his write-up on The Slant:

Charles Sizemore stopped by the office last week to talk about the current state of the housing market, and demographic trends that could mean long-term growth for real estate even if the short-term outlook is rocky.

In a nutshell, we are facing a bit of muddled data right now as the big run-up off the bottom of the real estate market has created some froth in the markets. Homebuilder stocks including Toll Brothers (TOL), PulteGroup (PHM) and KB Home (KBH) have all been battered in 2013 after a strong 2012, and mixed data on housing starts lately is starting to hint that real estate isn’t as bullish as it was last year.

But Charles said that while there is admittedly a cooling off, in part because of fears of tighter central bank policy boosting mortgage rates, housing remains buoyed by long-term trends including the aging Millennials and an increase in household formation.

In short, in about five to 10 years folks will start a family and settle down in bigger numbers simply because of demographics. They are going to buy houses and boost real estate and housing as a result, so any short-term softness may in fact be a big long-term opportunity.

Charles Lewis Sizemore, CFA, is the editor of the Sizemore Investment Letter and the chief investment officer of investments firm Sizemore Capital Management. As of this writing, he had no position in any stock mentioned. Click here to learn about his top 5 global investing trends and get your copy of “The Top 5 Million Dollar Trends of 2013.”

Disclaimer: This material is provided for informational purposes only, as of the date hereof, and is subject to change without notice. This material may not be suitable for all investors and is not intended to be an offer, or the solicitation of any offer, to buy or sell any securities nor is it intended to be investment advice. You should speak to a financial advisor before attempting to implement any of the strategies discussed in this material. There is risk in any investment in traded securities, and all investment strategies discussed in this material have the possibility of loss. Past performance is no guarantee of future results. The author of the material or a related party will often have an interest in the securities discussed. Please see Full Disclaimer for a full disclaimer.