Real estate stocks continue to rally this week, but trail the S&P

Zillow has seen its stock plummet 5 percent since Tuesday

Sep.September 06, 2019 08:00 AM
Real estate isn’t doing as well as the broader market (Credit: iStock)

Real estate isn’t doing as well as the broader market (Credit: iStock)

In the three days since the markets opened after the final long weekend of summer, real estate stocks have bumped up marginally.

And the increase trailed that of the broader S&P 500, according to an analysis of 28 real estate stocks by The Real Deal.

The S&P 500 since Tuesday morning increased about 2.3 percent, with a boost on Thursday amid, once again, news of trade negotiations between the U.S. and China. Meanwhile, the Wall Street Journal reported on Thursday that the Federal Reserve will likely cut its benchmark interest rate by just 25 basis points later this month.

The 28 stocks TRD tracks — a mix of brokerages, real estate services firms and real estate investment trusts — also ticked up, but by just 1.49 percent on average. The Real Estate Sector SPDR fund, an index heavily weighted in the industry, also rose this week. But its 1.48 percent gains also fell behind those the S&P has made so far.

Last week, a similar scenario played out: The markets reacted positively to the prospect of renewed talks between the U.S. and China over the countries’ back-and-forth tariffs on goods. The real estate sector also held its own, with brokerages Marcus & Millichap and Newmark Knight Frank leading the way.

Since Tuesday, the real estate stocks that saw the biggest price jumps, of over 5 percent, were brokerage firm Cushman and Wakefield and shopping center REIT Macerich. In the midst of a redevelopment plan for its properties, the mall operator reported net income of $15.7 million in the second quarter, almost double from the same time period in 2018. However, its leasing revenue for the quarter dropped year over year.

Only two of the stocks TRD follows posted losses so far this week, with Zillow Group’s stock plunging about 5.6 percent since Monday to close Thursday at $31.99. The real estate listings firm is looking for a $1.1 billion cash infusion to support “general corporate purposes.”

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