Posts Tagged 'Real Estate'

Housing: Metro Areas Boom & Bust

Metro Area Home Price Appreciation 2000-2008

source

Daily “Ways-to-Play” The News Before the Moves 3/31/2010

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4 Reasons to Consider Utility ETFs

There are a gazillion ways to play the energy sector with exchange traded funds, but you’re not just limited to oil, natural gas or solar power. Utilities might be an off-the-beaten path way to invest in the nation’s changing energy picture.

ETFDesk users see this as a potential opportunity to: buy Rydex S&P Equal Weight Utilities ETF (RYU)

buy Vanguard Utilities ETF (VPU)

buy iShares S&P Global Utilities Sector Index Fund (JXI)

buy iShares DJ US Utilities (IDU);

Check out how others are using ETFs to capitalize on this news or add your own opinion

Are Home Prices Cheap?

Analysts at Deutsche Bank attempt to answer the question “Rent of Buy?” in a new research piece out today. While falling home prices and declining interest rates have narrowed the rent-buy gap, home affordability is not high by historical standards.

ETFDesk users see this as a potential opportunity to: sell iShares DJ US Real Estate (IYR);

Check out how others are using ETFs to capitalize on this news or add your own opinion

Long-Term Rates Finally on Verge of Breaking Out

ALTHOUGH THE FED HAS reaffirmed its low short-term interest rate policy, it cannot control long-term interest rates. In fact, the yield on the benchmark 10-year Treasury note has risen from a low of 3.23% at Thanksgiving of last year to its current level 3.87%.

ETFDesk users see this as a potential opportunity to: sell iShares Lehman 20+ Year Treasury Bond Fund (TLT)

sell iShares Lehman 7-10 Year Treasury Bond Fund (IEF)

sell iShares Lehman 10-20 Year Treasury Bond Fund (TLH)

buy UltraShort Lehman 7-10 Year Treasury ProShares (PST)

buy UltraShort Lehman 20+ Year Treasury ProShares (TBT)

sell PIMCO 7-15 Year U.S. Treasury Index Fund (TENZ);

Check out how others are using ETFs to capitalize on this news or add your own opinion

M&A surges in Asia while US and Europe suffer

Mergers and acquisitions boomed in Asia in the first quarter in sharp contrast to a slump in deal volume in Europe and the US, underlining a global shift in activity in the wake of the credit crisis.

ETFDesk users see this as a potential opportunity to: buy Gabelli Global Deal Fund (GDL)

buy IQ ARB Merger Arbitrage ETF (MNA);

Check out how others are using ETFs to capitalize on this news or add your own opinion

Oil in Big Macs: Chart of the Day

The idea for this comparison of Oil to Big Macs, is that a Big Mac is representative of a basket of agricultural goods and thus compares the relative advantage of trading food for oil. Whats interesting about this is that theoretically, it should be a somewhat inflation-adjusted measure of oil prices. As of now it appears agricultural goods is undervalued relative to Oil.

ETFDesk users see this as a potential opportunity to: sell United States Oil Fund LP (USO)

buy ELEMENTS – Rogers International Commodity Index Agriculture Total Return (RJA);

Check out how others are using ETFs to capitalize on this news or add your own opinion

Are Home Prices Cheap?

Analysts at Deutsche Bank attempt to answer the question “Rent of Buy?” in a new research piece out today.  While falling home prices and declining interest rates have narrowed the rent-buy gap, home affordability is not high by historical standards.

According to Deutsche Bank, the rent-buy gap has narrowed by 5.2% in Q4 2009 to 88.5% the second highest level since Q1 2003.

national rent-buy gap (rent as % of after-tax mortgage payments, ATMP)

 

source: Deutsche Bank “Rent or Buy?”

While home affordability has improved, rents remain more affodable compared to income.  The cost to rent in Q3 2009 was 9.4% of household income, while the cost to own is 11.3% of household income. Notice the graph below, ATMP as % of household income has fallen signficantly from its peak in Q2 2006 of 17.2% but not below historical trend levels.

source: Deutsche Bank “Rent or Buy?”

 

However, other affordability metrics have shown housing affordability at alltime hights. For example, the most commonly cited metric – the National Association fo Realtors (NAR) index has set highs since December 2009.  However, the Deutsche Bank analysts question this as an appropriate measure. NAR looks at housing costs in isolation.  This grossly underrepresents the dwelling options of any individual.  As we all know, renting is a viable option, so any index that does not take into account the cost of renting a home vs. owning a home is fundamentally flawed.

source: Deutsche Bank “Rent or Buy?”

Using a Price-to-rent ratio, akin to a price-earning ratio, Deutsche Bank analysts argue that home prices could decline another 11%.  During the early 1990s, the average price-to-rent ration was 16.2.  During the mid 2000’s the ratio reached a peak of 24.7 in Q2 2007 and has since fallend to 18.2 in Q4 2009.  However this 18.2 reading is still elevated compated to that of the 1990s. 

During  the  1990’s  a  booming economy did little to push price-rent ratios out of equilibrium as both home prices and rents
moved in the same general direction. In our view, rents are likely to decline, thus prices may
need to fall even further than the 11% that the price-to-rent ratio implies.

source: Deutsche Bank “Rent or Buy?”

source: Deutsche Bank “Rent or Buy?”

With mortgage rates starting to creap up as the FED is signaling the end of mortgage buying, it doesn’t seem like a stretch to think that as rates go up, home prices will fall in order to keep some sort of equilibrium in affordability. 

With the tax credits expiring towards the middle half of this year, continued increase in forclosures, headwinds still persist for the housing market.  Now might be a good time to start building shorts in IYR in the face of exhubirant optimism with the recent Case-Shiller index.

source: www.etfdesk.com

New Home Sales Fall to Record Low in February

New Home sales came in at a seasonally adjusted rate of 308,000 for Febraury 2010, 2.2% below the revised Janaury rate of 315,000 and 13% below the Feb 09 rate of 354,000.

Months of supply is rising to 9.2 months of supply in Feb 2010.

One has to wonder how bad these numbers can get post Tax credits in 2nd half 2010?

Existing Home Sales Decline in February

Existing-home, which are finalized transactions that include single-family, townhomes, condominiums and co-ops, slipped 0.6 percent nationally to a seasonally adjusted annual rate of 5.02 million units in February from 5.05 million in January, but are 7.0 percent higher than the 4.69 million-unit pace in February 2009.

Total housing inventory at the end of February rose 9.5 percent to 3.59 million existing homes available for sale, which represents an 8.6-month supply at the current sales pace, up from a 7.8-month supply in January. Raw unsold inventory is 5.5 percent below a year ago.

more at Calculated Risk

Daily “Ways-to-Play” The News Before the Moves 3/15/2010

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Eight ETFs That Will Add Income to Your Portfolio

Trying to interpret what the markets are doing can be just as crazy-making as attempting to predict what’s happening. That’s why it might be necessary to add in some income-producing ETFs along with the risky funds.

buy PowerShares Dynamic Utilities Portfolio (PUI)

buy PowerShares Financial Preferred Portfolio (PGF)

buyiShares iBoxx $ High Yield Corporate Bond Fund (HYG)

buy iShares S&P U.S. Preferred Stock Index Fund (PFF)

buy PowerShares Insured National Municipal Bond Portfolio (PZA)

buy SPDR Lehman High Yield Bond ETF (JNK)

buy Market Vectors High Yield Muni (HYD)

buy JPMorgan Alerian MLP Index ETN (AMJ);

Check out how others are using ETFs to capitalize on this news or add your own opinion

New round of foreclosures threatens housing market

The housing market is facing swelling ranks of homeowners who are seriously delinquent but have yet to lose their homes, and this is threatening a new wave of foreclosures that could hit just as the real estate market has begun to stabilize

buy UltraShort Real Estate ProShares (SRS)

sell SPDR S&P Homebuilders ETF (XHB)

sell iShares Dow Jones U.S. Home Construction Index Fund (ITB)

sell iShares DJ US Real Estate (IYR);

Check out how others are using ETFs to capitalize on this news or add your own opinion

China’s Property: Bubble, Bubble, Toil and Trouble

And these days not much — aside from the possibility of a double-dip recession in the U.S. — has more economists, international investors, hedge-fund managers and bankers tearing their hair out than the deceptively simple question, Is China’s property market a bubble?

sell Claymore/AlphaShares China Real Estate ETF (TAO);

Check out how others are using ETFs to capitalize on this news or add your own opinion

The Greater China Fund Approves And Announces Terms Of Rights Offering

Posted: 12 Mar 2010 06:50 AM PST

The Greater China Fund Approves And Announces Terms Of Rights Offering

ETFDesk users see this as a potential opportunity to: buy Greater China Fund, Inc. (GCH);

Check out how others are using ETFs to capitalize on this news or add your own opinion

Leave yuan to us, China tells Obama

The United States should not make a political issue out of the yuan, a Chinese central banker said on Friday, as the two countries lurched towards a potential bust-up over Beijing’s currency regime.

sell WisdomTree Dreyfus Chinese Yuan Fund (CYB);

Check out how others are using ETFs to capitalize on this news or add your own opinion

Energy: A foot on the gas

The rush of European interest in shale underscores wider awareness of a change in the outlook for gas supplies. A surge in US production has meant that within three years the world has gone from running out of natural gas to being drowned in it.

buy First Trust ISE-Revere Natural Gas Index Fund (FCG);

Check out how others are using ETFs to capitalize on this news or add your own opinion

Export Revival Threatened By Shipping Bottlenecks

The U.S. finally is enjoying some strength in exports, thanks to economic recovery in Asia and a generally weak dollar. But just as U.S. goods find demand abroad, there’s a problem getting them there. (Looks like shippers are finally getting some pricing power)

buy Claymore/Delta Global Shipping Index ETF (SEA);

Check out how others are using ETFs to capitalize on this news or add your own opinion

Consumer Rebound Is Going To Sputter Out

Goldman Sachs’ Jan Hatzius lays out three reasons the recovery will sputter out. Specifically they expect consumer spending growth to fall from a current rate of around 3.25% to 1-2%:

sell Retail HOLDRS (RTH)

sell SPDR-Consumer Discretionary (XLY)

sell SPDR S&P Retail ETF (XRT)

sellClaymore/Robb Report Global Luxury Index ETF (ROB);

Check out how others are using ETFs to capitalize on this news or add your own opinion

ETF threat hangs over gold

THE much-vaunted gold-backed exchange-traded funds (ETFs) could play a critical role in determining the gold price this year if holders of the instrument start selling out and cause a large amount of physical metal to come onto a market where demand is relatively weak.

sell iShares COMEX Gold Trust (IAU)

sell PowerShares DB Gold Fund (DGL)

sell streetTRACKS Gold Trust (GLD)

sell UBS E Tracs CMCI Gold TR (UBG)

sell ETFS Physical Swiss Gold Shares (SGOL);
Check out how others are using ETFs to capitalize on this news or add your own opinion

Daily “Ways-to-Play” The News Before the Moves 3/1/2010

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Cumberland Advisors: ETF Strategy Update

Our “core” US ETF strategy has been favoring growth over value and large cap over small cap since the autumnal equinox last year. A blend of three ETFs achieves the mix in the core strategy. At Cumberland, “core” can vary from as much as 70-75% of the total weight to as low as 30-35%. Right now it is about half the weight.

buy iShares S&P 100 Index Fund (OEF)

buy iShares Russell 1000 Growth (IWF)

buy iShares S&P 500/BARRA Growth (IVW);

Check out how others are using ETFs to capitalize on this news or add your own opinion

JP Morgan’s Dimon: It’s California, Not Greece, You Should Fret About

JP Morgan Chase (JPM) CEO Jamie Dimon this afternoon told investors at the company’s annual meeting that he’s more worried about California fiscal solvency than about Greece.

sell iShares S&P California Municipal Bond Fund (CMF)

sell Alliance CA Municipal Income Fund (AKP)

sellBlackRock CA Municipal Income Tr II (BCL)

sell Nuveen California Performance Plus Municipal Fund (NCP)

sell Nuveen California Premium Income Municipal Fund (NCU);

Check out how others are using ETFs to capitalize on this news or add your own opinion

Why China Can’t Cool Its Overheated Real Estate Boom

Even among Western analysts who live and work in China, the major role played by municipal governments in fueling China’s increasingly speculative real estate boom is underappreciated. The actions of those local authorities are at the heart of China’s property bubble, and they explain why the central government’s attempts to cool lending and construction are failing.

sell Claymore/AlphaShares China Real Estate ETF (TAO)

sell China Materials ETF (CHIM);

Check out how others are using ETFs to capitalize on this news or add your own opinion

Copper futures surge on quake fears

Copper futures rose as much as 5 per cent to a five-week high early on Monday after a massive earthquake in top producer Chile sparked supply worries but prices soon retreated.

sell iPath Dow Jones-AIG Copper Total Return Sub-Index ETN (JJC);

Check out how others are using ETFs to capitalize on this news or add your own opinion

M&A burst drives Wall Street higher

A burst of mergers and acquisitions activity moved US stocks higher on Monday morning, aided by stronger-than-expected consumer spending and signs that a Greek bail-out may be announced soon.

buy IQ ARB Merger Arbitrage ETF (MNA);

Check out how others are using ETFs to capitalize on this news or add your own opinion

Greece Now, U.K. Next as Scots Ready for Pound Plunge

March 1 (Bloomberg) — While the eyes of the world focus on Greece’s debt crisis, investors in Edinburgh are busy preparing for the U.K. to be next.

buy PowerShares DB US Dollar Index Bullish Fund (UUP)

sell Rydex British Pound Sterling Trust (FXB)

sell iPath GBP/USD Exchange Rate ETN (GBB);

Check out how others are using ETFs to capitalize on this news or add your own opinion


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