Is This the Next Housing Bubble?
Welcome to Episode #50 of the Zacks Market Edge Podcast.
Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.
In this episode, Tracey is joined by John Blank, Zacks Chief Equity Strategist, to discuss what’s going on in America’s housing market.
In 2016, builders are expected to add 320,000 new apartments across the United States, up 50% from 2015.
Tracey and John have the most hands on experience with Chicago and Los Angeles as Tracey lives in Chicago and John lives in Los Angeles so they are both able to see the cranes that are dominating the skylines.
In Chicago, another 8,300 apartments are expected in 2016 with 6,200 going up in Los Angeles.
There are also big condo/hotel and commercial real estate projects going up in both cities.
Los Angeles has a $700 million mixed use project expected to go up across from the Staples Center. In Chicago, ground was just recently broken on the Vista Tower, a $1 billion hotel and condo building which will be the third tallest in the city.
Tracey and John discuss whether or not it is too much at too high of prices.
Who owns all of these buildings? Will someone get into trouble if there is an economic slowdown?
As a stock investor, you can own apartment REITs.
Tracey and John discuss some of the biggest REITs and their payouts:
1. Equity Residential (EQR): dividend = 3.1%
2. AvalonBay (AVB): dividend = 3.1%
3. UDR (UDR): dividend = 3.4%
They also discuss the single family home rental market which has become big business after companies bought up foreclosures following the Great Recession.
There are two big home rental companies:
1. American Homes 4 Rent (AMH)
2. Colony Starwood Homes (SFR)
Colony said in the second quarter that total occupancy was at 95% and that it was still seeing “strong demand.”
Should you invest in any of these real estate stocks?
Listen to the podcast to find out what Tracey and John think about getting into real estate now.
Interested in the emerging markets?
Learn how to invest in Colombia and Mexico to take advantage of their growing middle class in this podcast.
Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor of the the Insider Trader and Value Investor services. You can follow her on twitter at @TraceyRyniec and she also hosts the Zacks Market Edge Podcast on iTunes.
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AVALONBAY CMMTY (AVB): Free Stock Analysis Report
EQUITY RESIDENT (EQR): Free Stock Analysis Report
UDR INC (UDR): Free Stock Analysis Report
AMERICAN HM 4 R (AMH): Free Stock Analysis Report
COLONY STARWOOD (SFR): Free Stock Analysis Report
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