Recs

5

Bad News in Housing

If you're looking for bad news related to the housing market, it's not hard to find.

  • At bubblemeter.blogspot.com, for example, I learned that one of the nation's wealthiest counties, Loudoun County, Va., is facing a budget shortfall of a quarter of a billion dollars, thanks to the slumping housing market. Property values have fallen about 10% there over the last year, and they're expected to fall nearly as much in the next two years. The county is considering charging fees for ambulance usage, among other ideas -- such as a big property-tax hike.
  • Meanwhile, according to an AP story, single-family home construction fell 5.5% in November, hitting its lowest level in 16 years. Building permit applications dropped for the sixth month in a row. "The overall construction decline left home building 24.2 percent below the level of activity a year ago," the story reported.
  • At the thehousingbubbleblog.com, I read that "the median price of a home in Los Angeles County and the rest of California (recently) plummeted a record 12% percent from a year earlier," with sales falling by more than a third.

This is not good news for homeowners who want to sell, or those with hefty mortgages who might end up owing more than their homes are worth. It's also not good news for companies that provide supplies for construction. As you can see below, prices of many such companies have fallen along with the housing market:

Stock

1-year return

Home Depot (NYSE:HD)

(35.5%)

Lowe's (NYSE:LOW)

(31.5%)

USG (NYSE:USG)

(32.7%)

Owens Corning (NYSE:OC)

(33.0%)

Sherwin-Williams (NYSE:SHW)

(9.1%)

Source: Yahoo! Finance.

It could be good news for you, though, if you're looking for investments. Check out these and the many other real-estate-related investments out there, and add the most attractive ones to your watch list. When the housing slump starts turning around, consider snapping up some shares.

And remember that you don't have to buy at the first possible sign of a turnaround. Patience is a good thing!

Learn more in our Home Center and in these articles:

Help us in our goal to give every young person around the globe a financial education! Learn more about the new direction of Foolanthropy, now in its second decade, here.


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Selena Maranjian
TMFSelena

Selena Maranjian has been writing for the Fool since 1996 and covers basic investing and personal finance topics. She also prepares the Fool's syndicated newspaper column and has written or co-written a number of Fool books. For more financial and non-financial fare (as well as silly things), follow her on Twitter...

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Related Tickers

7/24/2014 4:00 PM
HD $81.20 Up +0.18 +0.22%
Home Depot CAPS Rating: ****
LOW $48.00 Up +0.09 +0.19%
Lowe's CAPS Rating: ****
OC $35.29 Down -1.09 -3.00%
Owens Corning CAPS Rating: ***
SHW $213.47 Down -1.14 -0.53%
Sherwin-Williams CAPS Rating: ***
USG $27.60 Down -1.21 -4.20%
USG CAPS Rating: ****

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