Maybe you saw the recent article in USA Today reporting that the shares for stock in home-building companies are going up. Do you wonder how that will affect our housing market for Southlake TX real estate, Keller TX home prices, Grapevine real estate, or prices for Colleyville homes? Well, one thing to our advantage is our wonderful location in the heart of beautiful and convenient real estate in the Dallas and Fort Worth Metroplex.
Along with some resort areas in the nation, residents of homes in Southlake, Keller, Grapevine, Texas and in Tarrant County and Denton County real estate continue to enjoy a diverse and thriving economy. Thankfully, there is an underlying stability of home prices and the real-estate market in this region, reflecting a great quality-of-life that has been noticed with honors like “Best Place to Live” and “Best Cost of Living.”
However, stocks are a different ball game. So many variables are driving stock prices that it is worth pondering some of them to keep our perspective. Here are some basic facts to sharpen our saws.
• Home-building stocks are leading the pack in 2008 with a gain of 24.6 percent in Standard & Poor’s home-building index, making it the top-performing industry. Next, by the way, are casinos and gambling, oil exploration, merchandise, and household appliances.
• At the same time, the government reported sales of new single-family homes have fallen to a 13-year low.
• One prominent home builder, Toll Brothers, reported a quarterly loss of $96 million but their shares rose 71 cents each.
• The iShares Dow Jones U.S. Home Construction exchange-traded fund rose 1.4 percent.
On the side of caution and slightly pessimistic, USA Today comments that crazy figures—like the fast run-up of home-building stocks from 2000 to 2005—parallel the rise in dot-com stocks from 1995 to 2000. As with any stock that loses value, the lower prices of the stock may actually encourage the optimist to buy more, driving up the price. For example, one building-company executive bought 300,000 shares of his company stock at $5 each. Others followed suite and that company’s once-$5 stock costs $10 today.
Homes are not going out of style. Everyone needs a home and, in one sense, homes are necessities. Regardless of the fluctuating stock market, common sense says that the growing population in the United States, and especially in the great State of Texas, will eventually fill up what appears to be a glut of houses on the market and then some. The question is how fast will that happen and how fast will builders need to raise more roofs? Probably not in an instant during 2008 but we are hopeful that our territory will continue to appreciate far ahead of the crowd.
We’re putting our cash directly into the real estate itself.
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