Homebuilding Stocks Get Ahead of Themselves
Bloomberg Businessweek
By David Bogoslaw
...Richard Green, director of the Lusk Center for Real Estate at the University of Southern California, says he's encouraged that the National Association of Realtors isn't pushing Congress to extend the home buyers' tax credit beyond Apr. 30, and by the spreads between mortgage rates for jumbo and conforming home loans returning to more normal levels. With inventories of new homes at their lowest levels in more than 30 years, we're likely to "see a big uptick [in building] in the next 18 months," he says. "I don't think you need federal incentives anymore" to support the housing market.
Green believes the market should be able to absorb the coming wave of foreclosures by April 2011. And with an estimated 80% of private homebuilders having been driven from the market by the housing downturn, that suggests public companies will have a lot of pricing power once the housing market fully recovers, he says...