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In a new research report, Goldman Sachs’ analysts Joshua Pollard and Anto Savarirajan call for a strong recovery in the housing market.”The super cyclical housing market has turned and a strong recovery in new-home sales is ahead driven by ‘Housing’s Long List of Positives’. Over the last year a number of risks to the housing market have abated, giving us confidence that rising home prices will drive a 3-7 year up-cycle in the US housing market.”
Here are the key points from Goldman’s list of housing positives.
- Renewed home price appreciation, which drives Goldman’s forecast for “20-30 per cent compound annual growth in new home sales and housing starts over the next four years.”
- 2011-1H12 job growth supports 200,000 more new home sales without further job adds
- Shadow supply has declined significantly, lowering the risk of another price shock
- Housing policy has been supportive since August 2011 and should remain so
Along with the expected recovery in housing, Goldman listed a number of stocks in which it likes, including PulteGroup (price target of $15), Toll Brothers (price target of $48), and M.D.C. Holdings (price target of $58).
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