Home builder stocks recently have seen a dip in valuation. What does that mean for the real estate market? Well, with inventory at record low levels, mortgage rates creeping higher and higher, mortgage applications slowing and labor costs continuing to increase, it all points to a squeeze on the supply-side of the real estate market.
In some ways, since New Jersey has not reflected national trends, it still has a great deal of pent-up demand and pent-up supply that is fueling the market.
Top 5 New Jersey Counties in Foreclosures
Warren 1 in every 324
Atlantic 1 in every 354
Cumberland 1 in every 400
Sussex 1 in every 413
Gloucester 1 in every 458
New Jersey as a state: 1 in every 743
This does not portend a prognosis of doom and fear, rather something of a positive when considering the long-term trend of this market, which is been going up since 2012.
Jim Cramer gave a report on program Mad Money stating that the home builder sector was not a place to be investing in these stocks right now. It’s not that they’re losing money, but rather they’re not able to keep up with demand, cost and the cost of supplies. Most home builders have not forgotten the crash of 2008. It has taught them that cycles of Boom and Bust only last so long, and when they were hit in 2008, they were hit hard and it stayed hard for a while.
Just last week the company Toll Brothers lost nearly 10% of their value in one day because they missed earnings estimate reports.