Residential Real Estate Looms Large In The U.S. Real Estate Sector
The US real estate sector is alive and is looking to rebound in the second-half of 2019, according to Reuters. Investors, however, are wary of their bets and are looking for stable property companies before investing. Residential and industrial Real Estate Investment Trusts (REITs) remain the best 'bets' in real estate investments, while office-related REITs and retail have become less and less attractive to investors.
Real estate has shown signs that it is on a different path since 2014. Figures have shown that the S&P 500 Real Estate index have grown to 18.5% so far in 2019. It had beaten its previous best, a 16.99% gain. If this continues, real estate has a chance to create records in regards to its biggest annual advance, the signs of which had already started to show earlier this year-as early as June 5.
Observers of the industry note that REITs can grow more as long as US earnings stays on the right path. If the earnings growth continue to 'weaken' and interest rates remain low, they could eventually move forward. Bob Zenouzi, Macquarie Investment's chief investment officer for real estate, added that the Fed policy becoming benign is a big boost.
While the S&P 500 did well during trading day, it may have been due to a 'celebratory' mood the stocks currently find themselves in. According to The Los Angeles Times, it may have been because of a cease-fire in the US-China trade war. Investors have took to this as a sign that things are getting better, and they have come out to buy properties during this lull.
The Dow Jones industrial average gained 117.47 points, good for 0.4% up to 26,717.43. The Dow had been climbing steadily to 290 points. Meanwhile, the Nasdaq composite posted 84.92 points, or 1.1% for a trading clip of 8,091.16.
This broad rally came as two of the world's biggest economies resumed negotiations, agreeing upon such a deal over the weekend. This truce involved the US holding off on fresh tariff impositions on $300 billion worth of Chinese goods, which also made the financial markets 'heave' a sigh of relief.
The gains made by Wall Street during the first half of the year was also marked by volatility in trading, as investors rode the ups and downs of the deal. This volatility is likely to stay, assuming that the US and China are still headed to yet another trade standoff. Residential real estate, for its part, appears to be in good shape despite these tensions.