Industry Analysts are exclaiming a change in the Home Builder Market shows increases in some Home Builder Stocks while nationally the trend for new homes is still falling.
So, what does this mean for investors and the industry?
Well truth be told the increases in home building stocks is not an overall increase it is only a short term bounce from a seriously low level.
Toll Brothers one of America’s largest builders is still showing quarterly losses but its stock is showing a 2.9% increase closing Friday at $22.70 per share. If you were to take that as an indicator you may think that 2.9% is something to cheer about but overall in the past year Toll Brothers has had a 52 week high of $35.64 and a low of $18.85 per share.
At the end of August Toll Brothers announced a 85% fall in profits for its third quarter. “Chief Executive Officer Robert Toll said the company had a higher rate of cancellations than at any time in its 21-year history as a public company.”
So, are things turning around or not?
Well if you are looking to invest in Home Building Stock now or sometime in the near future may be a good time but from what the builders themselves are reporting don’t expect dramatic changes in the stock unless some outside business decides to purchase the company.
Much of the increases in home sales and prices in the past 6 to 7 years has been through urban flight due to scares after 9/11 and the Katrina disaster that left upward of half a million people without a place to live.
These same circumstances will hopefully never repeat themselves and for now the market is flooded with new homes that have yet to be sold and a hand full of others that need to be resold so their owners can escape mortgages.
Overall the population of the World will increase so is home building a good investment?
Sure people will always make a lot of money in the Building Trades but if you are looking for fast money right now might not be your time.
Stocks may be up from last week but they are no where near their all time or even years high right now.