Threat to Homeownership: 5 REITs Being Targeted by Short Sellers

(Written by Rebecca Lipman. List compiled by Eben Esterhuizen, CFA. Short data from Yahoo! Finance.)

The percentage of Americans who own their home is in the greatest decline since the Great Depression, according to government data.

American homeownership over the past decade fell to 65.1%, an overall drop that equals 1.1%.

And although that figure pales in comparison to the 4.2% drop in the 1930′s, CNN Money says these numbers only tell half the story.

The data shows that home ownership in the 2000s peaked in the middle of the decade, up to almost 70% in 2004.

“The crash from that peak was more than 4 percentage points in just about five years — a far more dramatic decline than the 1.1% drop over the 10-year period.”

These numbers are accompanied by more upsetting statistics about homelessness, foreclosures, and vacant homes.

Reports show the percentage of vacant housing jumped 43.8% to 15 million, or 11.4% of all houses – up from 10.4 million homes in 2000.

 

The National Association of Realtors has a public advocacy campaign that addresses the issue in ads like these for TV and radio:

Wondering how you can gain an exposure to the real estate market, without having to buy an actual house?

Real Estate Investment Trusts offer an easy way to gain access to a portfolio of real estate holdings. They trade just like stocks, and give investors a chance to own a slice of a large collection of properties.

Of course, with all the doom and gloom surrounding the current housing market, short sellers are paying close attention. Below we’ve listed five Real Estate Investment Funds that have seen a sharp increase in shares shorted over the last month (i.e. increased bets that these investments will fall in value).

Short sellers seem to think these real estate stocks are in deep trouble–do you? How long before the housing market stabilizes, and ultimately rebounds?

Use this list as a starting point for your own analysis.

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1. American Capital Agency Corp. (AGNC): Operates as a real estate investment trust (REIT). Shares shorted have increased from 5.56M to 7.46M over the last month, an increase which represents about 1.06% of the company’s float of 178.45M shares.

2. Apartment Investment & Management Co. (AIV): The company is a real estate investment manager. Shares shorted have increased from 5.49M to 7.05M over the last month, an increase which represents about 1.31% of the company’s float of 119.14M shares.

3. ARMOUR Residential REIT, Inc. (ARR): Shares shorted have increased from 9.39M to 10.21M over the last month, an increase which represents about 1.14% of the company’s float of 71.95M shares.

4. Campus Crest Communities, Inc. (CCG): Focuses on building, owning, and managing student housing properties in the United States. Shares shorted have increased from 1.58M to 2.10M over the last month, an increase which represents about 1.7% of the company’s float of 30.58M shares.

5. Education Realty Trust Inc. (EDR): Develops, acquires, owns, and manages student housing communities located near university campuses in the United States. Shares shorted have increased from 3.14M to 4.46M over the last month, an increase which represents about 1.84% of the company’s float of 71.68M shares.

Interactive Chart: Press Play to see how analyst ratings have changed for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.


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