In addition to keeping up on the news in Chicago real estate, business and the stock market, I’m always looking for bits and pieces of information that give me insight into particular companies. Being able to get a look at a company’s future earning ability helps with my personal investment philosophy when forecasting a company’s success (I’m a bit of a stock market junkie and follow my stock portfolio at least three times a day) as well as gives me an insight into the macroeconomics that could affect Chicago real estate.
One of the stocks I’ve picked, with the help of my stock broker, was Home Depot, based on a turnaround for the real estate market. Sure enough, the stock has been a real money maker for me this year, and I think its a great prognosticator of what is happening in the national and Chicago real estate market.
Home Depot’s latest earnings provides me with a lot of optimism that the best is yet to come in this market. the company provides some really concrete reasons why it anticipates that the real estate market is in the midst of a turnaround. A few highlights from the report include:
-Strong sales of paint, bathroom accessories and kitchen installations helped lift the company’s net income by 12%, and is also an indication that people are spending money on their homes and real estate. The report said that Americans boosted their spending at retail businesses in July by the largest amount in five months, with upped spending on furniture, building materials, etc.
-Home Depot’s Chairman and CEO also noted that the housing market is now contributing to the country’s GDP, not dragging it down.
-When the housing market is weak, companies like Home Depot struggle because of slowed new construction and cutbacks from contractors and homeowners working on projects.
-Spending isn’t as high as it was during the housing bubble, but Home Depot says there were signs of improvement in key areas that signaled good news for the real estate market.
And being “out in the field” of the Chicago real estate market, I’ve certainly seen that inventory has become quite scarce, which could indicate that things will be headed up in the not-too-distant future. Rental inventory is also extremely scarce, with rental rates going through the roof. While Chicago is still more affordable than cities like New York (where a two bedroom can go for upwards of $5,000/month), rents in downtown Chicago are over $3,000 for a two bedroom, and can climb much higher with additions like parking.
All of this bodes well for the real estate market in general. Extremely low mortgage rates right now make it even more lucrative to make a Chicago real estate purchase before this opportunity has passed by. A real estate purchase can’t be timed perfectly–by the time you know the perfect window to buy, it has already passed. I have no doubt that many buyers will look back at today’s market and mortgage rates and question why they didn’t purchase real estate.
To see what’s on the market, or even just to look closer at Home Depot and other stocks that serve as indicators for the housing market, contact me at (312) 498-5080 or email me at [email protected]