We’ve said over and over how the housing industry powers so much of the economy — everyone from lawyers to plumbers to architects to landscapers benefits from a healthy housing market.
The good folks at John Burns Real Estate Consulting took that idea and used it to see what the stock market thinks of the real estate market. Because anyone cansay that housing is recovering, but a better barometer is where they’re putting their money.
They looked at year-to-year changes in the stock price of companies in various industries tied to housing: Wallboard manufacturers (up 176%), home builders (up 162%), lumber (up 46%), architects (up 54%), and a bunch more. For comparison, the S&P 500 is up about 20% from last year.
What they found was encapsulated in the headline: “From Dirt to Drywall, the Stock Market Clearly Believes in a Housing Recovery.” If it’s an industry tied to housing, chances are it’s beating the market.
[M]ore than 140 companies and roughly 30 sectors are directly benefiting from the turnaround in housing. Stock market investors are clearly betting on a bright future for residential real estate, turning their attention to ancillary companies that will benefit from the trickle down nature of a true recovery.