Premarket Promotions: Real Estate Frenzy Everywhere



What’s Happening: The International Monetary Fund’s Global House Price Index, which tracks 57 countries, surpassed its previous peak since 2008. According to Oxford Economics, house prices are rising more than 10% year over year in many major economies.

The madness is driving the stocks of this sector up The iShares ETF, which tracks residential real estate, will grow 23% in 2021, well ahead of the S&P 500.

AvalonBay Communities (AVB), which deals with the development and management of apartments in the United States, soared 31%. Home Invitation (INVH), which owns and operates single family homes in the United States, jumped 26%.
There are plenty of stories of insanity. Real estate agents told CNN Business the increasingly insane methods clients are using to protect property, from offering $ 1 million over the asking price to paying competing bidders hundreds of thousands of dollars just to walk away.
One agent this week put up a $ 590,000 home in Colorado Springs for sale, which she described as “every homeowner’s nightmare”. It is expected to sell for over $ 600,000, probably in cash.
Holiday homes goes fast too… Sales were up 16% in 2020 from a year earlier, according to a report by the National Association of Realtors. And this trend has continued this year, sales have already grown by 33% compared to last year to April.

It’s simple: online real estate broker Redfin said homes were on sale in May for just 16 days on average, a record low. At the same time, 54% of homes were sold at a price higher than their listing price, a record high.

Intense bidding wars, shortages of materials such as lumber, and the prospect of higher interest rates threaten to undermine the market. May housing commissioning and building permits data were weaker than expected, according to a government report on Wednesday.

And some are sounding the alarm, although analysts say the market is healthier than it was ahead of 2008, thanks to tighter lending standards.

Earlier this week, Bloomberg Intelligence economist Neeraj Shah wrote that the market “will face a major test” when borrowing costs begin to rise. The Federal Reserve said Wednesday that it could raise interest rates earlier than expected on fears of inflation (which, according to Oxford Economics, was exacerbated by the house price boom).

But Lennar (LEN), a home builder from Miami, says the good times are not over yet… The company said in its income statement this week that home orders and new orders continue to rise. Its shares jumped 3.6% on Thursday on the news.

Wall Street rushes to get workers back to office

Wall Street is wasting no time getting its employees back to the office – whether they like it or not, says my CNN business colleague Matt Egan.

Morgan Stanley (RS) CEO James Gorman warned this week that he would be “very disappointed” if workers don’t return by Labor Day. And if not? “Then we will have a different conversation,” he said.
Why is Wall Street in such a rush to get workers back to the office?
Goldman Sachs (GS) asked his employees to return to the office by this week and ordered employees to report if they had been vaccinated. Bank of America (BAC) also wants employees in their places for Labor Day.

The big picture: Even more than other industries, Wall Street is in a rush to turn the page in this expanded era of virtual work.

Cultural concern is a factor, as executives note that Zoom calls and Slack messages are not a substitute for face-to-face communication and learning. Others are concerned about the cybersecurity and risk management vulnerabilities inherent in companies that conduct billions of dollars in transactions almost every day.

Also, at its core, banking is a personal business, and no one on hyper-competitive Wall Street wants to lose a deal over a slow Wi-Fi connection.

“You create your own uneven playing field when you work from home when your competitors don’t see customers face to face,” said Mike Mayo, veteran banking analyst at Wells Fargo. “The banking sector is definitely committed to bringing employees back to the office. But this is much more pronounced on Wall Street, where the level of competition has always been several levels above the rest. “

Corporate America is struggling to honor June 19th

Thursday President Joe Biden signed the law the proclamation of June 19 as National Independence Day June 19 – a federal holiday in the United States, marking the end of slavery in the United States.

Now markets and regulators are struggling to figure out how they will include the day on their calendars.

SIFMA, a lobby group for the U.S. securities industry, tweeted Thursday that it would not recommend market vacations this year as June 19 falls on Saturday. But going forward, the organization said it would include this on its recommended weekend schedule for bond markets.

The Federal Reserve said in a statement that it will close its Washington DC office on Friday.

Follow this page: Bloomberg notes that US markets may be slow to catch up with Congress. Martin Luther King Jr.’s birthday became a federal holiday in 1983, but it took 15 years for major exchanges to decide to close for that day.

Businesses, which began to rally around June 19 following the assassination of George Floyd by a former police officer last year, are starting to range of approaches on the occasion of the holiday that marks the day of 1865 when former American slaves in Galveston, Texas, were finally informed of President Abraham Lincoln’s Proclamation of Liberation and the End of the Civil War, according to my CNN business colleague Chauncey Alcorn.

Amazon is sponsoring several June events this weekend. Apple provides corporate employees in the United States with a Friday day off. Starbucks pays employees hourly wages 1.5 times their regular wages on Saturday, while Chipotle gives customers the opportunity to help narrow the racial wealth gap by donating to Project 10X, an initiative that promotes racial equality.


Next week: Amazon (AMZN) hosts its annual Prime Day Sale, which is estimated to have brought in over $ 10 billion last year. But this event could also be a lightning rod for criticism of the company’s treatment of workers.


Source link