Housing rebound coming in 2012

Firstly from all at Grant Property Investment, we would like to wish all our clients and suppliers a Merry Christmas and Happy New Year!

Attached and below is a fantastic article from Barclays outlining their forecasts for the 2012 housing market. As we expected they have forecast a bumper year for 2012. We have further press articles relating to a positive outlook for 2012 within our website, please Click Here to see more.

Barclays Capital (BCS: 10.17 0.00%) analyst Stephen Kim predicts a housing recovery buoyed by improving jobs numbers and the fact prices for nondistressed homes will have stabilized without government support.

"In the absence of a government homebuyer incentives, prices for non-distressed home sales have stabilized for almost a year," Kim said. "This is the most important trend in the housing industry right now, and we are amazed at how little attention it has been getting from the media and the street. This stability on the part of nondistressed prices has occurred despite a very high share of distressed activity and continued declines in overall prices."

Barclays said recent economic data — including higher job creation in November, housing starts and improved homebuyer traffic — point to some improvement potential in the sector.

In mid-2010, the federal homebuyer tax credit expired, leaving the housing market without training wheels for the first time since the 2008 economic meltdown. Yet, prices in some housing markets remained stable on the back end.

With its new outlook in the market, Barclays upgraded D.R. Horton's (DHI: 11.76 0.00%) stock to buy and raised price targets for D.R. Horton, Lennar (LEN: 18.51 0.00%), Toll Brothers (TOL: 19.26 0.00%) and Meritage Homes(MTH: 20.28 0.00%).

At the same time, the investment bank raised its 2012 earnings-per-share estimates for D.R. Horton, Lennar, Meritage Homes, Pulte (PHM: 5.59 0.00%) and Toll Brothers, while lowering its estimates for KB Home (KBH: 7.03 0.00%).

"Thus, the key to timing housing’s recovery depends primarily on when these first-time buyers decide it is safe to buy a house," Kim concluded.

Please visit our WEBSITE for more information on this article and about Grant Property Investment's unique range of in-house property investment solutions!

If you have found this post interesting please use the share buttons below to tell others in your online community, there's a good chance they will find it interesting too.

What makes residential property a good investment?

Hi All,

I thought it worth giving a brief update on what’s happening in the world of property. It’s an interesting picture!

While the world around is going through turbulent times, with high stock market volatility, the property Investment market has grown on several fronts.

1. Property prices rose by 0.8% in October, compared to October 2010, according to Nationwide 
2. The number of mortgages written in October rose to a three year high, helped by a strong growth in the mortgage products available. 

In fact it’s not unusual. History shows that residential property has very low volatility. When I look back at the major events of the past 15 years, (such as the 1991 recession, 9/11, the dot com bubble), while the stock markets invariably crashed, property either rose, or worst case went flat for a period. The attached graph shows the big picture.

The big impact was when mortgage lending was pulled back in 2008. The market went back by around 18%, and then rebounded by around half that figure. It’s been flat for the past 18 months, but now seems to be rising again.

But let’s not forget it’s a buyers market. On the ground we are finding several things.

1. We can drive a bargain. House sellers in need to sell quickly are more likely to accept a lower price, because of the Euro zone headlines. 
2. Yields are at a record high. Even in Prime areas we are able to get 7% - 9% yields (and 100% occupancy). 
3. Smart investors can smell a bargain. In November so far enquiries and purchases are up at record levels. 

I hope this helps paint a useful picture of what’s going on. It’s certainly a good time to cherry pick a bargain. If we can help, we’d be delighted to do so. The headlines all indicate investors becoming more active. The press has even been highlighting property as a safe haven – with high returns.

Visit our website for further information about us.

Kind Regards,

Peter Grant
CEO

If you have found this post interesting please use the share buttons below to tell others in your online community, there's a good chance they will find it interesting too.