iREIT Daily

Is the Housing Market About to Shift?

Brad Thomas

467 postsJanuary 18, 2022

I want to write, “The markets aren’t sitting pretty a day after their Martin Luther King Jr. Day break.” But I’m writing this at 6:30 in the morning and – as we all know by now – there can be major differences between such early pre-trading and how stocks end.

So I’ll refrain from mentioning any such thing. That way, I can get to greater certainties and already-established facts faster.

For one, crypto-specific Delta Exchange CEO Pankaj Balani says he’s seeing a lot more sellers than buyers these days. He told CoinDesk’s Omkar Godbole yesterday that:

We are not seeing any bottom fishing at these levels. And the interest to own bitcoin risk around $40,000 remains low. We could retest $40,000 and, should that break, we can see a fresh round of selling come through.

That’s all taken from a Fox Business article published between 3:00 and 5:00 this morning. At that time, bitcoin was trading at about $41,800, a 2.04% overnight drop. Ethereum had fallen 3.13% to $3,160, and Dogecoin was losing out as well, though only by 0.56%.

So what are people buying instead? Well, oil did just hit a 2014 high after Abu Dhabi experienced a drone attack on three fuel trucks parked in front of a storage facility.

Three people were killed and six injured in the strike, at last report.

As a result, brent crude rose 1.49% to 87.34 a barrel and U.S. West Texas Intermediate crude jumped 1.43% to $85.02. Moreover, Yahoo Finance reports, oil prices have “climbed more than 10% since the start of the year.”

More Non-REIT News

Obviously, that attack on oil isn’t going to help already existent inflationary issues. Though, when bad weather and labor shortages are keeping trucks off the road anyway…

Maybe it won’t be as impactful as it otherwise could be? There’s that at least.

There will also be a number of less cruises requiring fuel to get from point A to point B. That’s because they won’t be leaving Point A to begin with.

Norwegian Cruise Line (NCLH) canceled a 10-night Caribbean trip mid-voyage late last week, citing “Covid-related circumstances.” Those “circumstances” were apparently sufficient enough to also cancel 11 other outings through April 23, along with all Pride of America ventures through February 25.

That’s a lot of cancellations and a lot of refunds to issue.

Hopefully, would-be passengers can find other things to spend that money on. Like cost-of-living increases.

We know for a fact now that’s a problem in the U.K., at least. Its Office for National Statistics (ONS) reported that real average weekly earnings took a tumble in November.

While average total pay with bonuses rose 4.2% (and 3.8% without bonuses), consumer price inflation jumped 5.1%. You don’t need to be a math genius to see how that doesn’t add up in most people’s favor.

The World According to REITs

Here in the U.S., the numbers might be about to shift in favor of the average homeowner want-to-be. Admittedly, it’s in a very strange way but beggars can’t be choosers.

You see, interest rates on 30-year fixed-rate mortgages climbed week-over-week from 3.22% to 3.45%. Data from Freddie Mac shows that’s the highest since March 26, 2020. And Yahoo Finance reminds us, it was just 2.79% this time last year, helping to fuel housing demand.

So how does that help anyone?

Well, the recognition right now that rates are headed higher is pushing even more buyers into the market. They want to get what they can get while they can still get it. But that additional influx will likely start cooling down as the year progresses.

In which case, there will be less infighting over the small supply available these days. First-time buyers especially have been shut out of the market as-is, but this new twist could give them better availability when everything is said and done.

Then, over on the commercial side of things, we’ve got our Daily REITBeat updates back as usual:

The SEC informed Ashford Hospitality Trust (AHT) that its investigation into the real estate investment trust (REIT) is completed. It will not be recommending any action against Ashford.
The SEC informed Braemar Hotels & Resorts (BHR) that its investigation into the REIT is completed. It will not be recommending any action against Braemar.
Armada Hoffler Properties (AHH) completed its purchase of a 79% interest in Exelon, a mixed-use property in Baltimore, Maryland. The $246 million transaction also includes an 11% economic interest in the 23-story office building, 103 multifamily units, 38,500 square feet of retail space, and 750 parking spots.

And here’s your REIT extremes from Friday:

(Source: The Daily REITBeat)

Happy Investing

Brad Thomas

467 posts

View all my Posts

Brad Thomas is Senior Research Analyst at iREIT and CEO of Wide Moat Research LLC. With over 30 years of real estate experience, he is also long-time Editor of Forbes Real Estate Investor, a monthly subscription-based newsletter that dives deep into the vast world of profitable properties, and since 2021, he has served as an adjunct professor at New York University.

Thomas has also been featured on or in Forbes magazine, Kiplinger's, U.S. News and World Report, Money, NPR, Institutional Investor, GlobeStreet, CNN, Newsmax, and Fox. And he was the #1 contributing analyst on Seeking Alpha in 2014, 2015, 2016, 2017, 2018, 2019, 2020 and 2021 based on both page views and number of followers.

Thomas is the recently-published author of The Intelligent REIT Investor Guide (2021), co-author of The Intelligent REIT Investor (2016), and he wrote The Trump Factor: Unlocking The Secrets Behind The Trump Empire (2016) - all available on Amazon.

Thomas received a bachelor of science in business/economics from Presbyterian College and is married with five wonderful kids.

A Major Acquisition, Activist Anger, and REITs Are Right Where We Want to Be

REIT Mutual Fund	Symbol
Alpine Realty Income and Growth Fund	AIGYX, AIAGX
American Century Real Estate Fund	REAIX, REACX, AREEX, AREWX, ARYCX, AREDX
Real Estate Securities Fund	MRESX
AR Capital Real Estate Income Fund	ARIAX, ARICX, ARIPX
AssetMark Real Estate Securities Fund	AFREX
Aston/Harrison Street Real Estate Fund	AARIX, ARFCX
Baron Real Estate Fund	BREIX, BREFX
BlackRock Real Estate Securities	BIREX, BAREX, BCREX
Brookfield U.S. Listed Real Estate Fund	BRUAX, BRUCX, BRUIX, BRUYX
CGM Realty Fund	CGMRX
West Loop Realty Fund	REIIX, REIAX, REICX
Cohen & Steers Institutional Realty Shares	CSRIX
Cohen & Steers Realty Income Fund	CSEIX, CSDIX, CSBIX, CSCIX
Cohen & Steers Realty Shares	CSRSX
Columbia Real Estate Equity Fund	CREAX, CREIX, CRRVX, CRERX, CREEX, CRRFX, CREWX, CRECX, CREBX
Compass EMP REC Enhanced Volatility Weighted Fund	CWRAX, CWRIX, CWRTX, CWRCX
Davis Real Estate Fund	RPFRX, DREYX, DRECX, DREBX
Delaware Real Estate Investment Trust Portfolio II	DPRTX, DPRBX
Delaware Real Estate Investment Trust Portfolio	DPREX, DPRSX, DPRRX, DPRCX
DFA Real Estate Securities Portfolio	DFREX
Dunham Real Estate Stock Fund	DAREX, DNREX, DCREX
DWS RREEF Real Estate Securities Fund	RRRRX, RRREX, RRRAX, RRRSX, RRRBX, RRRCX
DWS RREEF Real Estate Securities Income Fund	REFAX, REFCX, REFIX, REFSX
Eaton Vance Real Estate Fund	EAREX, EIREX
EII Realty Securities Fund	EIIRX
Fidelity Advisor Real Estate Fund	FHEIX, FHEAX, FHETX, FHECX, FHEBX
Fidelity Advisor Real Estate Income Fund	FRIRX, FRIQX, FRINX, FRIOX
Fidelity Real Estate Income Fund	FRIFX
Fidelity Real Estate Investment Portfolio	FRESX
Fidelity Spartan Real Estate Index Fund	FSRNX, FRXIX, FSRVX
Fidelity Series Real Estate Equity Fund	FREDX, FREFX
Fidelity Series Real Estate Income Fund	FSREX, FSRWX
Forward Real Estate Long/Short Fund	KSRYX, FRLSX, FFSRX, KSRAX, KSRCX, KSRBX
Forward Real Estate Fund	FPREX, FFREX, KREAX, KRECX
Forward Select Income Fund	KIFYX, FSIMX, FFSLX, KIFAX, KIFBX, KIFCX
Franklin Real Estate Securities Fund	FREEX, FRLAX, FRRSX, FSERX
GMO Real Estate Fund	GMORX
Goldman Sachs Real Estate Securities Fund	GREIX, GRETX, GREAX, GRESX, GRERX, GREBX, GRECX
Great-West Real Estate Fund	MXREX
Heitman REIT Fund	OARTX, OBRTX
ING Real Estate Fund	CRARX, IREWX, IDROX, CLARX, CRWRX, CRCRX, CRBCX
INVESCO Real Estate Fund	REINX, IARFX, IARIX, IARYX, IARAX, IARRX, IARCX, AARBX
Ivy Real Estate Securities Fund	IRSAX, IREIX, IRSYX, IRSRX, IREEX, IRSCX, IRSBX
John Hancock Real Estate Securities Fund	JIREX
Johnson Realty Fund	JRLTX
J.P.Morgan Realty Income Fund	URTLX, JRIRX, URTAX, URTBX, URTCX
J.P. Morgan Security Capital U.S. Core Real Estate Securities Fund	CEEAX, CEERX, CEEFX, CEESX, CEECX
J.P. Morgan U.S. Real Estate Fund	SUSIX
Lazard U.S. Realty Equity Portfolio	LREIX, LREOX
Lazard U.S. Realty Income Portfolio	LRIIX, LRIOX
Manning & Napier Real Estate Series	MNRIX, MNREX
Morgan Stanley Institutional U.S. Real Estate Portfolio	MSUSX, MUSDX, MSULX, MURSX
Natixis AEW Real Estate Fund	NRFAX, NRFYX, NRFBX, NRFCX, NRFNX
Neuberger Berman Real Estate Fund	NBRIX, NBRFX, NREAX, NRERX, NRECX, NRREX
Nuveen Real Estate Securities Fund	FREAX, FARCX, FRSSX, FREBX, FRLCX, FREGX
Oppenheimer Real Estate Fund	OREAX, OREIX, OREYX, ORENX, OREBX, ORECX
PHOCAS Real Estate Fund	PHREX
PIMCO RealEstateRealReturn Strategy Fund	PRRSX, PETPX, PETAX, PETDX, PETCX, PETBX
Pioneer Real Estate Shares	PWREX, PYREX, PCREX, PBREX
Principal Real Estate Securities Fund	PIREX, PIRPX, PREPX, PRETX, PREJX, PRRAX, PRERX, PRENX, PRAEX, PRCEX, PRLEX
ProFunds Real Estate UltraSector ProFund	REPIX
Prudential Select Real Estate Fund	SREAX
Prudential U.S. Real Estate Fund	PJEAX, PJEZX, PJECX, PJEBX
REMS Real Estate Income 50/50 Portfolio	RREIX
REMS Real Estate Value-Opportunity Fund	HLRRX, HLPPX
Rydex Real Estate Fund	RYREX, RYHRX, RYCRX
SA Real Estate Securities Fund	SAREX
SEI Institutional Mgd Real Estate Fund	SETAX, SEIRX
Spirit of America Real Estate Income & Growth Fund	SOAAX
SSgA Clarion Real Estate Fund	SSREX
Stratton Real Estate Fund	STMDX
T.Rowe Price Real Estate Fund	TRREX, PAREX
TIAA-CREF Real Estate Securities Fund	TIREX, TRRPX, TRRSX, TCREX
Vanguard REIT Index Fund	VGSNX, VGRSX, VGSLX, VGSIX
Virtus Real Estate Securities Fund	PHRAX, PHRIX, PHRCX, PHRBX

REIT ETF	Symbol
Flex Shares	ASET
Wisdom Tree Global Ex-US	DRW
S&P 500 Equal Weight	EWRE
iShares FTSE Industrial/Office	FNIO
MSCI Real Estate Index	FREL
S&P REIT Index	FRI
First Trust S&P REIT	FRI
iShares Real Estate 50	FTY
Flexshares Global	GQRE
iShares Cohen & Streers	ICF
iShares International Developed RE	IFGL
iShares US RE	IYR
Premium Yield Equity REIT	KBWY
ETRACS Monthly Pay 2x Leverage	MORL
Market Vector Mortgage	MORT
iShares Global REIT	REET
iShares FTSE Mortgage	REM
iShares Residential	REZ
IQ US Real Estate Small Cap	ROOF
iShares FTSE NAREIT Retail	RTL
DOW Jones Global RE	RWO
SPDR Dow Jones	RWR
Schwab US REIT	SCHH
Super Dividend REIT	SRET
ProShares Ultra RE	URE
Vanguard REIT	VNQ
Vanguard Global ex-US	VNQI
iShares International Developed	WPS
Wilshire US REIT	WREI
Pacer Benchmark Data & Infrastructure RE	SRVR
Pacer Benchmark Industrial RE	INDS
Pacer Benchmark Retail RE	RTL
Hoya Capital Housing	HOMZ
NetLease Corporate RE	NETL

REIT Name	Ticker	Annual Increases/yr
Federal Realty	FRT	51
Universal Health Realty	UHT	33
National Retail Properties	NNN	29
Realty Income	O	27
Tanger Outlets	SKT	26
Urstadt Biddle	UBA	25
Essex Property Trust	ESS	25
W.P.Carey	WPC	22
National Health Investors	NHI	17
Equity Lifestyle	ELS	15
Digital Realty	DLR	15

Is the Housing Market About to Shift?

Brad Thomas

467 postsJanuary 18, 2022

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467 postsJanuary 18, 2022

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