Although there are clearly still issues to be resolved in the housing market, there appears to be a surge in optimism among investors and homebuilders.
USA Today reports that talk is turning from when housing will hit rock bottom to whether it’s time to buy housing stocks and count on the sector to propel the economy again.
Stock prices for homebuilders have jumped 20 percent to 134 percent since August, even though housing starts are expected to rise just 15 percent to 20 percent this year, USA Today reported.
The landmark $25 billion settlement of foreclosure abuses is pushing homebuilder stocks to the highest level in almost a year, according to the Los Angeles Times, which also reported that an index of large homebuilding stocks is up 10.3 percent this month, and some companies have risen more than that.
Real estate companies and homebuilders are also reportedly feeling better about the market.
Ryland Chief Executive, Larry Nicholson, hasn't seen a yearly profit since before the recession, according to USA Today, but the homebuilder expects one this year buoyed by a 31 percent increase in homes on order at year's end.
Still, everyone is not convinced that the recent optimism is a sign of a housing recovery.
Yahoo's Breakout reported that recent data shows that home sales slid in December, dragging on the entire year, making 2011 the weakest on record for the sale of new homes.
BlackRock is reducing its position in homebuilding stocks to take profits, Robert Doll Jr., the firm's chief equity strategist told USA Today.
Furthermore, Breakout said Todd Schoenberger, managing director at LandColt Trading, warned that the housing market is still too broken to consider investing in the sector through homebuilding stocks and through traditional home ownership for that matter.
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