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Mish Schneider The hidden charm of real estate

With real estate on the rise, Mish Schneider, director of trading research and education at MarketGauge.com, considers the shifting sector and explores what opportunities this might provide investors.

 

 

The real estate sector [IYR] has cleared an important price level at $88.76, its 9 November 2020 high.

The real estate recovery has been slow compared to the rest of the market, which is more like a roller coaster ride at this point.

However, the IYR ETF has put in some decent consolidation from $80-$87 area.

Now that it has broken major multi-month highs, it looks clear to head even higher.

The real estate sector shifted when people began to leave highly populated areas or cities in search of more space and lower housing costs.

Working from home gave people more freedom to move about without the confines of reporting to a physical office location.

Furthermore, people soon desired upgrades or bigger houses as they found out that working from home can be a bit tough without some dedicated space.

This led to increased property sales and created housing booms in specific areas.

With interest rates at historic lows, people could not help but take advantage of their extra buying power.

Additionally, the US Federal Reserve plans to keep rates low for at least the next one to two years, which will continue to attract buyers that feel pressure from a time limit on low rates.

A rising housing market means homebuilders should also see an increase — right?

 

 

If you look at the homebuilders’ sector [XHB], it looks as though we are late to the party. XHB broke its highs around late July 2020.

While IYR is lagging in price, it has a great amount of upward space to explore, especially if IYR can hold over $89 as new support.

 

This article was originally published on MarketGauge. With over 100 years of combined market experience, MarketGauge's experts provide strategic information to help you achieve your investing goals.

Disclaimer Past performance is not a reliable indicator of future results.

CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.

CMC Markets does not endorse or offer opinion on the trading strategies used by the author. Their trading strategies do not guarantee any return and CMC Markets shall not be held responsible for any loss that you may incur, either directly or indirectly, arising from any investment based on any information contained herein.

*Tax treatment depends on individual circumstances and can change or may differ in a jurisdiction other than the UK.

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