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May.01

10:50 AM ET

Friday, 1 May 2009

The Case for Housing Stocks

Posted By:JeeYeon Park

Topics:Nasdaq | NYSE | Stock Market | Stock Options | Stock Picks

Companies:Lowe's Companies Inc | Home Depot Inc | Meritage Homes Corp | KB Home | D.R. Horton Inc

It’s time to get into housing-related stocks, said Jim Wilson, managing director at JMP Securities.

“The [housing] recovery is going to occur regionally, as it always does, and it’s already occurring in the same order that it went down,” Wilson told CNBC. “So the markets that went down first—particularly California—has seen 18-straight months of resale home improvement.”
(See Wilson's stock picks, below.)

Mike Crofton, CEO of Philadelphia Trust Company disagreed. He advised investors to steer away from the housing market.

“All the regions are in trouble,” he said. “I think the housing market is in real trouble and the stocks are very far ahead of themselves. I don’t see them justifying these prices at all.”

Crofton said employment and credit are two important features that determine the strength of the housing market. However, with the unemployment numbers continuing to soar and banks tightening credits to borrowers who wish to buy homes, Crofton said the housing market is still in for “some very difficult times.”

Instead, Crofton recommended investors look into some home-improvement companies: "People are definitely fixing up what they already have," he said. "We're moving from a consumption to a savings-based economy."

Recommendations:

Wilson Likes:

D.R. Horton [DHI Loading... () ]