5 to 10% one-day increase in your real estate value

[gzz]

Residential REITs are all up 5 to 15%. Now technically that’s the value of their equity and they may be leveraged. However, they have to pass-through 90% of their income, and they trade similar to cap rates, and usually are not all that leveraged.

I’ve been wanting to bargain buy AVB, which has high end large apartments around the USA. Up 13% today!

[sdrealtor]

Ive got a bunch and they did great today

VTR +18.19%
O +6.23%

Some RE funds also that will settle later.

They have lagged for a while so its not like they were killing it. I own for the income so its nice to be more confident that will continue

[gzz]

A bunch of my laggards are also soaring today and/or yesterday.

I am a glutton for value-stock blue chips fallen on hard times: Orange SA, WalgreensBoots, Deutsche Bank, Thai ETF, Mexico ETF, Verizon and ATT, Intel, Hanes, Wells Fargo, KraftHeinz.

Whatta bunch of losers! One day there’ll be be a value stock rotation, and the 4%+ dividends are better than the bank.

[sdrealtor]

Been watching WBA a while and wanted to buy when it dropped to 34 for long term hold with 5.5% yield. Should have

[gzz]

I read the WBA annual report and it looks like it is in pretty good shape and very cheap.

They have constant “one time” expenses, but even including them, they are making about $5 billion a year in after tax profit. And maybe they will have a year without major “one time” expenses and make more like $7 billion in GAAP profits. Debt is also fairly small and going down each quarter.

They are managing to prune store count while increasing sales and cutting admin costs. Offsetting this is gradually declining margins.

Their biggest competitor is CVS of course. The other one is Rite Aid. They wanted to buy Rite Aid, that fell through, (so did Albertson’s attempt to buy Rite Aid.) Instead WBA purchased 2000 of their locations, leaving 2500 remaining Rite Aids. Rite Aid is doing badly and will probably go bankrupt at the next national recession.

Ultimately healthcare is going to only grow, and I think chain pharmacies are doing a good job evolving. It isn’t a great business, but the earnings are amazing compared to the price and I think will be roughly stable long term with the higher sales/thinner margins trend continuing.

[gzz]

Rapid inventory collapse is consistent with my sudden covid RE price boost theory.

92107: 0.44 month condo inventory, 0.76 single family house inventory

I didn’t run 92109, but active SFH and condo listings are also setting new 2020 lows, and likely multi decade lows.

[sdrealtor]

It really is stunning up here in 92009. We usually have between 100 and 150 SFR’s on the market. Today heading into the weekend we have 31. Only 2 are under $1m. One is looking for a 3 year rent back and the other is a probabte sale that will get a pile of offers. Its hard to predict whats ahead at this point besides prices are not coming down anytime soon

[gzz]

November was a multi decade low in 92107-ocean beach inventory. December it got lower.

When I first purchased here in 2011, I had about 80 houses and 50 condos to choose from in inventory.

In the white hot market of 2013-2015, my zip typically had about 32 houses and 15 condos for sale.

Now, 11 houses, 0 condos.

[sdrealtor]

Same story here albeit a much bigger zip. Down to 28 houses

For comparisons sake 92107 shows 155 closed YTD sales and 92009 shows 478 closed YTD sales.

That makes my home zip is about 3x yours.

With 11 there vs 28 here inventory is at least as thin if not thinner up here.

I owe you all an update and ran the numbers I’ll post tomorrow. a sneak peak says sellers shutting down for the year up here but buyers still beating the bushes

[Author]

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