The outlook for the spring housing market is anyone’s guess, based on recent conflicting reports on housing starts, housing sales and testimony from market experts. “Mixed signals” was how CNBC real estate reporter Diana Olick characterized the news of the US real estate market this week.
On the one hand, U.S. home prices edged lower, according to a Case-Shiller Index report. On the other hand, U.S. home sales rose 11.6 percent in December.
Of course, what’s happening depends on who you ask. Job growth and gas prices offer tailwinds, while the consistent issues of tight lending standards (albeit still record low interest rates), a low housing inventory, and prices still considered too high, are the headwinds.
Place real estate brokerage firm Redfin in the optimistic camp. Redfin says sales in the first three weeks of January are up 7.6 percent over January 2014.
But our survey of small cap home builders is focused on the new home market, and according to the U.S. Census Bureau, monthly sales of newly built homes was up nearly 9 percent in December from a year ago and the median price of a newly built home rose 8 percent from a year ago.
The country’s largest home builder, D.R. Horton (NYSE: DHI) reported first quarter results Jan. 26 that beat estimates and drove all the homebuilder stocks higher, at least for the day. Its low priced line of “Express Homes” for entry-level buyers was cited as one factor that was driving revenue.
Let’s see how our small cap home builders are faring:
Red Bank, NJ-based Hovnanian Enterprises (NYSE: HOV) is a homebuilder that for 60 years has been providing single-family detached homes, condominiums and townhouses. Its main two areas of operation are homebuilding and financial services. Its homes are marketed under the names Brighton Homes, Parkwood Builders, and K. Hovnanian Homes. Last time we look, last Oct. 17, HOV closed at $3.71 with a market cap of $541 million. HOV closed Jan. 28 at $3.36, down 11 cents for the day, with a market cap of $490 million. Its 52-week trading range is $3.06 – $6.20.
KB Home (NYSE: KBH), is a homebuilding and financial services company based in Los Angeles and geared primarily to providing service to first-time home buyers. This month KBH declared a quarterly cash dividend of $.025 a share, payable Feb. 19 to shareholders of record on Feb. 5. Back on Oct. 17 KBH closed at $15.51 with a market cap of $1.4 billion. KBH closed Jan. 28 at $11.93, down 26 cents for the day, with a market cap of $1.1 billion. Its 52-week trading range is now $11.76 – $20.78.
Columbus, OH-based M/I Homes Inc. (NYSE: MHO) operates in the Midwest, Mid-Atlantic and southern parts of the U.S, building small homes and offering financial homebuilding services. For the most up-to-date information, investors can tune in to MHO’s fourth quarter and year-end earnings webcast at 4 p.m. Eastern time on Tuesday, Feb. 3. Back on Oct. 17, MHO closed at $20.61 with a market cap of $504 million. MHO closed Jan. 28 at $20.37, down 10 cents for the day, with a market cap of $499 million. Its 52-week trading range is now $18.73 – $25.95.
Atlanta-based Beazer Homes USA (NYSE: BZH) operates in 16 states and specializes in single-family and multiple-family homes, as well as acquiring, renovating and renting already-existing properties. Back on Oct. 17, BZH closed at $17.71 with a market cap of $468 million. BZH closed Jan. xx at $16.59, down 42 cents for the day, with a market cap of $438 million. Its 52-week trading range is $15.27 – $23.98.
Standard Pacific Corp. (NYSE: SPF) is an Irvine, CA-based company building single family and detached homes targeting a diverse range of homebuyers and providing mortgage financing services through its subsidiary, Standard Pacific will release its fourth quarter results after the market close on Thursday, Feb. 5, and then hold a conference call and webcast at noon Eastern on Friday, Feb. 6. Back on Oct. 17, SPF closed at $7.60 with a market cap of $2.1 billion. SPF closed Jan. 28 at $7.04, up 6 cents for the day, with a market cap of $1.97 billion. Its 52-week trading range is now $6.52 – $9.20.
Westlake Village, CA-based The Ryland Group (NYSE: RYL) is a homebuilder operating in 17 states and mortgage finance company, and also operates in design, construction, title insurance and escrow. On Jan. 21, RYL introduced a new single-family home project called Water Valley in Windsor, CO with prices ranging from approximately $330,000-$370,000. RYL will present its fourth quarter results conference call at 9 a.m. Pacific on Thursday, Jan. 29. Back on Oct. 17, 2014, RYL closed at $33.55 with a market cap of $1.57 billion. RYL closed Jan. 28 at $36.67, up 18 cents for the day, with a market cap of $1.7 billion. Its 52-week trading range is now $30.33– $46.67.