This copy is for your personal, non-commercial use only. To order presentation-ready copies for distribution to your colleagues, clients or customers, click the "Reprints" link at the top of any article.
Housing’s Narrowly Open Window
Foreclosure levels have continued to drop throughout the summer, and the already dwindling foreclosure activity over the past year has led to a scarcity of properties and increasing demand for housing. These factors have prompted real estate websites such as Zillow and RealtyTrac to announce that the U.S. housing market may be at near a bottom.
There’s certainly reason to feel that the long-suffering housing market is getting better. New home inventories are at historic lows and high rental rates are shifting sentiment toward home ownership. Although housing guru Robert Shiller isn’t completely convinced, it’s hard to be bearish when even the Miami market is starting to bounce.
The real test will come when mortgage rates rise. In the face of higher stock prices, a bit more optimism on Europe and some hope that the fiscal cliff will be extended into next summer, the logic for owning fixed income will likely get increasingly weak. If the uptick in home buying can survive higher rates, we just might have a bull market on our hands.
About the Author
Ben Warwick, Quantitative Equity Strategies
Veteran investment strategist Ben Warwick brings 20 years of investment management expertise to AdvisorOne.com in his blog, Searching for Alpha. His market and economic insights provide readers with an insider’s view on generating alpha through asset allocation, the use of strategic portfolio “tilts” and alternative investments.
Ben Warwick founded Quantitative Equity Strategies (QES) in 2002 as a platform for implementing his quantitative investment strategies. The firm manages assets with traditional long-only equity and fixed income, private equity, managed futures and alternative investment mandates. QES has developed an industry leading expertise in building investment programs that can replicate alternative returns, while offering daily liquidity and transparency. These products include the HFRq, a hedge fund replication strategy developed in concert with Hedge Fund Research in Chicago; the Managed Futures Beta Index, with Aspen Partners; and the Nomura QES Modeled Private Equity Returns Index (PERI), which was developed with Nomura Bank and Preqin, the leading source of information in the private equity industry.
He is the author of several books, including "Searching for Alpha: The Quest for Exceptional Investment Performance," (Wiley, 2000) and "The Handbook of Managed Futures," with Carl Peters, (McGraw-Hill, 1996). He can be reached at ben@qesinvest.com.
Comments
