Will a Housing Market Crash Affect Home Depot Stock?

Will the housing market crash again? Maybe. Many aspects of the economy are cyclical, and housing prices do occasionally fall. Is a housing crash imminent? That’s harder to answer.

Some have sounded the alarm on housing for good reason. Consider the famous Case-Shiller Home Price Index, an inflation-adjusted metric created by Standard & Poor’s tracking housing prices. The index’s value was 100 back in the year 2000 and had been close to 100 when applying the index’s criteria backward to the 20th century. But since 2000, it has risen above 180 on two occasions. The first time preceded the housing crash of the Great Recession.

The second time the Case-Shiller index exceeded 180 is right now. In reality, it passed the mark way back in 2016, and it’s currently around 215. So no need to panic: Crossing 180 doesn’t immediately flip a housing-crash switch. It just shows housing prices have gone up a lot. The bigger problem, though, is how much faster home values are growing relative to average income. Consider the data over just the last 10 years.

Case-Shiller Home Price Index: National Chart

Data by YCharts.

It’s probably unsustainable for home values to outpace personal income long term. Eventually people could be priced out of affordable housing, and that could spark a housing market correction. Will that affect companies like Home Depot (NYSE:HD)?

To answer that, we can start by going back to the Great Recession. 

A model house sits atop Jenga blocks while a businessman removes a piece, creating instability.

Image source: Getty Images.

The last time Home Depot’s revenue fell

Home Depot’s revenue fell from 2007 to 2009. In fiscal 2006, when things were going well, the company generated $90.8 billion in full-year net sales. In fiscal 2009, it generated just $66.2 billion — down 27% over three years. Likewise, net earnings took a hit as the company lost operating leverage from lower sales per location. Net earnings fell a whopping 55% from $5.8 billion in 2006 to $2.6 billion in 2009.

The Case-Shiller index fell 20% from the beginning of 2007 to the end of 2009, and it’s tempting to attribute Home Depot’s slumping results entirely to plunging home values. Results from Lowe’s (NYSE:LOW) lend credibility to this theory. In fiscal 2007, Lowe’s sales at existing stores, known as comparable sales, fell 5.1%. This is similar to Home Depot’s 6.7% comps decline that same year.

But this is correlation, not causation. Consider that home values were already going down in 2006 when Home Depot’s sales were still up. Furthermore, the Case-Shiller index fell another 7% from the beginning of 2010 through the end of 2011. By contrast, both Home Depot and Lowe’s had already returned to revenue growth.

To summarize, home values and revenue for home-improvement retail don’t always track in the same direction. And that makes sense. Regular home maintenance doesn’t stop just because the value of a home drops.

Wooden blocks spell the word risk.

Image source: Getty Images.

The greater risk

There were multiple other issues affecting Home Depot’s revenue in the Great Recession, including high unemployment, lack of credit, and a construction slowdown. But that last factor

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Select Interior Concepts to Attend Zelman & Associates 2020 Housing Summit

ATLANTA, Sept. 14, 2020 (GLOBE NEWSWIRE) — Select Interior Concepts, Inc. (NASDAQ: SIC), a premier installer and nationwide distributor of interior building products, today announced that L.W. (Bill) Varner, Jr., CEO, and Nadeem Moiz, CFO, will participate in the Zelman & Associates 2020 Virtual Housing Summit on September 22, 2020.

The Company’s latest investor presentation will be utilized at this conference. A copy of the presentation can be accessed from the “Investor Relations” section of the Company’s website at https://ir.selectinteriorconcepts.com.

About Select Interior Concepts
Select Interior Concepts is a premier installer and nationwide distributor of interior building products with leading market positions in highly attractive markets. Headquartered in Atlanta, Georgia, Select Interior Concepts is listed on the NASDAQ.  The Residential Design Services segment provides integrated design, sourcing and installation solutions to customers, in the selection of a broad array of interior products and finishes, including flooring, cabinets, countertops, window treatments, and related interior items. The Architectural Surfaces Group segment distributes natural and engineered stone through a national network of distribution centers and showrooms under proprietary brand names such as AG&M, Modul and Pental. For more information, visit: www.selectinteriorconcepts.com.


Investor Relations:
Tully Brown
(470) 548-7370
[email protected]

Source Article

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Midtown, Hell’s Kitchen hotels housing the most single homeless adults by far

The vast majority of single homeless adults moved from shelters to stop the spread of COVID-19 were relocated to hotels in Manhattan, the city’s Department of Homeless Services data shows.

a close up of a busy city street with tall buildings: The Lucerne Hotel on West 79th Street and Amsterdam Avenue in Manhattan, New York City.

© Gardiner Anderson
The Lucerne Hotel on West 79th Street and Amsterdam Avenue in Manhattan, New York City.

Of the 8,969 single adults assigned to “COVID-relatedhotels, more than 5,400 are living in 32 Manhattan hotels — with at least 3,000 concentrated in Midtown, Hell’s Kitchen and Chelsea.

Those numbers are a stark contrast to other boroughs.

Staten Island hotels haven’t housed any single adults as part of the city’s effort to reduce the density in shelters and prevent the spread of COVID-19, city data shows.

As of July 31, 1,600 single adults have stayed in 15 Brooklyn hotels, 1,719 in 14 hotels in Queens and 240 in two Bronx hotels.

More recent data suggests there’s a bigger homeless population in Midtown hotels — up to 4,300, according to Barbara Blair, head of the Garment District Alliance. The numbers are consistent with a wave of complaints from borough residents fearful about the influx.

“It’s terrifying people,” said Dan Biederman, president of the Bryant Park Corporation and the 34th Street Partnership, which represents local businesses. “I have never seen such vociferous comments from owners and tenants.”

a pile of luggage sitting on top of a building: A homeless encampment along W. 39th St. between Ninth and Tenth Aves. on Saturday in Manhattan. (Barry Williams)

© Provided by New York Daily News
A homeless encampment along W. 39th St. between Ninth and Tenth Aves. on Saturday in Manhattan. (Barry Williams)

A homeless encampment along W. 39th St. between Ninth and Tenth Aves. on Saturday in Manhattan. (Barry Williams) (Barry Williams/)

The Garment District Alliance, which represents local businesses, wrote in an Aug. 17 letter to Mayor de Blasio the situation has “degraded to a crisis point.”

“Since the arrival of the temporary shelters throughout West Midtown, there has been a precipitous increase in crime and antisocial behavior on our streets,” the group wrote in a letter signed by dozens of businesses and residents.

“Open drug use and sales, drinking, fighting, aggressive behavior, panhandling, verbal altercations, urinating and defecating in public and loitering have become commonplace.”

“None of these issues existed at this level and intensity before the use of area hotels commenced,” the alliance added.

Some of the most vocal backlash has come from the largely white and upper-middle class Upper West Side, where for weeks residents railed against the relocation of about 300 homeless men to the Lucerne Hotel.

De Blasio last week said the men would be moved from the Lucerne — not because of the political pressure from residents or Randy Mastro, the high profile lawyer and former deputy mayor who promised to sue the city over the controversy — but because it was part of a broader city policy goal, first outlined in 2017, to phase out hotels as shelter for the homeless and disperse the homeless more evenly throughout the city.

COVID-19 put that plan on hold as the city scrambled to slow the virus spread in homeless shelters by transferring people to

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Plan for affordable housing in Leonidas, Lower Garden District faces neighborhood criticism; mayor, City Council in support | Local Politics

In a vote that could advance or delay plans to build affordable housing in rapidly gentrifying areas, the City Planning Commission will consider on Tuesday a key piece of a $20 million development plan for vacant sites in Leonidas, the Lower Garden District and other areas along the Mississippi River.

The Planning Commission will consider redividing several lots in the Leonidas area so that the Housing Authority of New Orleans can build affordable duplexes on the lots, which are owned by HANO.    

But the duplexes have been dogged by residents who say HANO’s designs are out of step with their neighborhood’s character. They told the City Council last week that HANO needs a more extensive federal review to ensure its buildings hew to historic standards.

Meanwhile, HANO and partner Iris Community Development say the project will help realize a broader effort to ensure the city’s most desirable areas remain accessible to people with lower incomes. And affordable housing advocates say resident criticisms are actually thinly masked objections to having poorer residents of color as neighbors.

Housing Authority approves new mixed-income developments in these New Orleans neighborhoods

Council members were briefed on the plans at the council’s Community Development Committee last week, but did not vote on them. But several members, and Mayor LaToya Cantrell, agreed with HANO’s take. 

“If we get to the point where certain segments of the community can no longer live here, we’re going to lose the magic that is New Orleans,” said Councilmember Jay H. Banks, who chairs the committee. 

Cantrell added in a statement that the project is “beyond needed,” and will bring “new affordable housing to high-opportunity neighborhoods.”

Two large former public housing sites in Algiers and the Upper 9th Ward would become mixed-income developments under proposals the Housing Aut…

HANO’s current effort is part of a plan to break up the concentrated areas of poverty that were standard under its previous public housing model, and to instead place lower-income residents in higher-income communities that are more likely to be near jobs and opportunities. 

The plan is also aligned with an Obama-era housing rule — which the Trump administration rescinded in July — that required local governments to try to make wealthy neighborhoods more diverse and to pump more money into poor ones. 

HANO wants to redevelop vacant “scattered site” properties it owns as two-family and single-family homes for low-income residents. The majority of the 117 units HANO wants to build are located in Leonidas, while several others are located in the Lower Garden District, East Riverside and West Riverside areas. 

Each of those areas has seen rapid appreciation since 2012, according to a market-value analysis the city last commissioned in 2018. Long-time Leonidas residents, in particular, faced an increasingly higher risk of being priced out from 2009 to 2018, the study found. Median home values in that neighborhood rose anywhere from $50,000 to $150,000 between 2015 and 2017. 

Roughly 80 of the 117 homes HANO wants to build will be leased or sold to people earning at or below 80% of area

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