"Hundreds of Pages to Help Buyers, Sellers and Investors Decide"
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"Hundreds of Pages to Help Buyers, Sellers and Investors Decide"
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How Builders' Stocks Reflect the Real Estate Market
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Your Options Single story communities Gated communities 3,000+ , 4,000+, 5,000+ or 6,000+ sq ft Go to golfing communities Send me Listings of Single family listings in: Send me Condo and Townhome Listings in: Request information about Read news and articles about Las Vegas Send me listings in:
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I'm sure you've heard it- "be careful, it's a housing bubble." You have probably also heard from your friend or colleague about the cash he just made flipping condos. So, the real question becomes: do YOU believe we are in the midst of a housing bubble?
True, it's not necessarily an easy question to answer without doing your homework, but where do you go to get an indication of the housing market status? One good place to look is the stock market, where you can check every five seconds to see how the stock of your favorite buildings has been favored among investors.
At the time this article was written (Sept 2005), shares of many builders has been eroding. According to an article published in the Las Vegas Review Journal, although the Dow Jones Home Construction Index is up 21% for the year, the index has declined 11% during August 2005.
In the same article, author Scott Patterson observes its relationship with recent Labor Department news. In July 2005, over 200,000 jobs were added, which, as often happens, indicates a pick-up in the pace of the economy and investors move to stocks and pull out of government-issued bonds. That means construction stocks should increase, right? Wrong. As investors take their money out of bonds, the yields on bonds increase, which influences general interests rates to also increase. This means that interest has just become more expensive, and that means it has become more expensive to finance the purchase of a home.
Not everyone is seeing this as a negative impact. The Las Vegas Review Journal article reports that home building stocks are cheap compared to most other types of stocks. For example, the S&P's Home Building Index has a PE ratio of 7.6 for 2005 compared with a PE of 16 for the S&P 500, a broader index of stocks. As the earnings of builders decline, the PE ratios should increase.
I believe that the decline in earnings for builders is and will continue to be regional and city-specific. Many cities, like Las Vegas , are cities where people will move when it becomes too expensive. With nation-leading employment growth and a strong demand for housing, how would Las Vegas be a likely city to experience a housing 
bust? Not likely.
Just because a housing decline exists in one market, then, obviously it won't affect other markets in the same way. However, purchasing the stock of a builder who operates in both areas is the underlying valuation factor when researching and purchasing stocks.
Patterson, Scott. "What's Eating Home-Builder Stocks" Las Vegas Review Journal 28 August 2005: 6E.
Buyer Options:
Sellers Resources
This page contains information about the builder's developments to be completed or built since 2004.
This information has been gathered using articles in the Las Vegas Review Journal, information from the builder's web site and their representatives.
This information is reliable, but not guaranteed. A licensed Nevada Realtor has posted this information and is NOT affiliated with the builder, although general assistance is complementary to all buyers.
