Charting the Real Estate Bubble

BigCharts.com has a free charting service where the Dow Jones Housing sector can be tracked. I am following KB Homes (KBH)- America's largest builder, Pulte (PHM), DR Horton(DHI)-largest cap builder. There are 31 builders in the DJ Construction sector.

If you track target='new'>KB Homes from 10 years back until today, you can see the remamrkable rise of their stock. It seems to parallel the rise in housing prices.

Since KB Homes is the leading builder in the first time home buyer segment, it would seem any weakness in their sales would show up pretty quickly in their bottom line. They have to report results on a quarterly basis to Wall Street, and any hint of problems would reflect in the value of their stock.

I also check the websites for these builders and see what markets they are building. To most investors, it is a guessing game as to where to invest their funds...To these guys, it is a business..They guess wrong too often and they GET FIRED.

Looking at the charts of these major builders over the last 2 years, I see no weakness anywhere. In my opinion, housing is still a very good investment.

Comments(2)

Add Comment

Login To Comment