Part 4/8:
A plethora of evidence suggests that Wall Street has recently adopted a bearish outlook on the housing market. Invitation Homes, for instance, currently trades at a notable discount to its NAV, casting doubt on the overall value of the housing market. As indicated by the recent Wall Street Journal findings, industry analysts argue that housing prices nationwide may be overpriced by anywhere from 10% to 35%.
To illustrate the extent of this overvaluation, shares of Invitation Homes imply that the homes in its portfolio are worth approximately $310,000, despite the market price standing around $415,000 — further highlighting the schism between actual property values and institutional perceptions.