Retail sales slumped 1.2% in September. It was the steepest decline for over three years. This is bad news for retailers. Andrew Snyder says this means investors should avoid retail-related REITs such as Simon Property Group (NYSE:SPG).
Yesterday, Ben Bernanke warned of a drawn-out slowdown for the economy. He also said the housing market “continues to be a primary source of weakness in the real economy.” Andrew Snyder says this “weakness” is really a strength.
Think about it this way: we could soon be facing a housing shortage.
Falling property prices and tighter credit markets are putting a stop on construction activity. Buildings — especially in the commercial and industrial sectors — take a long time to put up. So this industry will be the laggard when the economy recovers.
If you don’t own land, Andrew says real estate investment trusts (REITs) are a great way to play the bounce.
But you have to cherry pick.
The retail sector is a nightmare now, but health…
If you had all the money in the world, where would you invest it?
For sovereign wealth funds (SWFs), the answer is commercial real estate. These mega funds are homing in on the sector right now, according to emerging markets expert Irwin Greenstein.
We keep hearing about the real-estate meltdown. But as of the end of September, REITs have been up about 2% for the year — a far cry from the wreckage of other markets.
David Newman says we may be approaching the bottom of the real-estate slump. High levels of uncertainty remain. But when the market does turn, it will create huge opportunities for investors.
Once of the biggest casualties in the financial crisis has been REITs. Globally, these made astonishing gains during the property boom. But they’ve taken one heck of a beating since.
Eric Roseman says the US REIT sector is likely to recover first. That’s because Europe and Asia are behind the US in the credit crunch cycle and have further to fall.
Pending home sales index bounced 7.4% in September. And government-auctioned foreclosures create great property bargains. Eric says iShares Real Estate ETF (NYSE:IYR) is one good way of playing this recovery.
US foreclosure filings have more than doubled in 2Q from a year ago, reports Bloomberg.
According to RealtyTrac, 1 in every 171 households was foreclosed on, received a default notice or was warned of a pending auction in the quarter. That’s up a massive 121 percent from a year earlier - and 14 percent just from 1Q.
The housing housing market has yet to bottomed out, says Louis Basenese. But this doesn’t mean you shouldn’t consider a play in real estate.