Goldman, Blackstone turn bullish on housing

New York /
Dec.December 29, 2011 03:10 PM

alternate
text
Goldman Sachs, the Blackstone Group and several other notable investors have turned bullish on the U.S. housing market, the Wall Street Journal reported, buying up shares of home building companies, like Pulte Group, Beazer Homes and Hovnanian Enterprises. Those stocks are up 30 percent since the end of the third quarter, according to Dow Jones, far outpacing the 10.5 percent increase recorded by the Standard & Poor’s 500.

In a recent report, Goldman said it expects home prices to decline 3 percent next year, before gaining 30 percent — not taking inflation into account — through 2022. Meanwhile, a Blackstone hedge fund said it is banking on the fact that “the inventory picture has cleared meaningfully.” Inventory fell 5.8 percent in November to its lowest level in 2005.

Investors also believe that pent-up housing demand will be converted into home sales, as record-low mortgage rates ADD LINK and improving affordability finally convince hesitant buyers to take the plunge and make a purchase.

Still, the Journal noted that many pessimists still lurk among investors. Bears say sustained high unemployment and the backlog of foreclosed homes waiting to be unleashed on the market will limit growth for years. [WSJ]


Related Articles

arrow_forward_ios
1209 Dekalb Avenue in Brooklyn. (iStock, Kutnicki Bernstein Architects)
Industry suffers setback in 421a class action suit
Industry suffers setback in 421a class action suit
An index tracking applications for mortgages to purchase homes decreased 5 percent. (iStock)
Frenzy ending? Mortgage requests fall 5%
Frenzy ending? Mortgage requests fall 5%
(iStock/Illustration by Kevin Rebong for The Real Deal)
March madness: Homes sold faster than ever last month
March madness: Homes sold faster than ever last month
February were 10.4 percent higher than last year. (iStock)
Home price growth hits 15-year high
Home price growth hits 15-year high
(iStock/Illustration by Kevin Rebong for The Real Deal)
Foreclosures and evictions could be halted for rest of 2021
Foreclosures and evictions could be halted for rest of 2021
The four-bedroom home in Silver Spring, Maryland (Photos via Realtor)
Overheated? DC-area fixer-upper gets 88 offers — 76 all-cash
Overheated? DC-area fixer-upper gets 88 offers — 76 all-cash
FEMA overhauled the National Flood Insurance Program, which will result in savings or stable premiums for most homeowners. (iStock)
FEMA flood-insurance overhaul goes easy on homeowners
FEMA flood-insurance overhaul goes easy on homeowners
Overall, mortgage credit availability is at its lowest level since 2014. (iStock)
Mortgage lenders play hard-to-get
Mortgage lenders play hard-to-get
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...