We recently The 10 best residential real estate stocks to buy. In this article, we’ll take a look at how Apartment Investment and Management Company (NYSE:AIV) stands against other residential real estate stocks.
In recent years, residential real estate has become one of the most popular real estate investments. In 2024, the residential real estate market reached a valuation of $11.14 trillion. The market is expected to expand at a compound annual growth rate (CAGR) of 6.07% and reach a value of almost $15 trillion by 2029.
One of the main drivers of this growth is urbanization: people are moving from small towns and the countryside to cities to improve their standard of living and integrate into modern society. Currently, about 4.4 billion people, or 56% of the world’s population, live in cities. By 2050, it is expected that about 70% of people will live in urban areas.
Although the supply of existing homes on the market is increasing, inventory shortages remain high and are expected to continue due to several factors. One major issue is that many homeowners are locked into low interest mortgages and are hesitant to trade up to higher interest rates in the current high interest rate market. As a result, demand for homes continues to outstrip supply.
Rick Sharga, founder and CEO of market intelligence and business advisory firm CJ Patrick Company, predicts that we won’t see a significant increase in the supply of existing homes for sale until mortgage rates fall into the low 5% range, likely until 2024 or later.
However, the market outlook is not so bleak. There is optimism that both property buyers and sellers are adapting to a prolonged period of rising interest rates. There is hope that an agreement on pricing will enable the real estate market to recover from its deepest slump in years. A stronger recovery in activity is expected in 2025 than in 2024.
Andrew Alperstein, a partner in PwC US’s real estate practice, also believes that despite economic challenges and the difficulty of obtaining financing, there is opportunity in the market for prime properties that meet today’s investor demands. Companies need to adjust their growth strategies to perform well in this time of rising interest rates. Another global investment manager at PwC commented:
“While event risk remains high, 2024 looks set to be an inflection point for increased liquidity in the property market. Investors have good reason to be hesitant, but we are heading towards a period of greater clarity and it should be an excellent time to buy.”
Our Methodology
In this article, we analyzed a database of 919 hedge funds as of the first quarter of 2024. From this massive dataset, we selected the best residential real estate stocks based on hedge fund sentiment. The top residential real estate stocks are ranked in ascending order of the number of hedge funds holding the stock as of the first quarter of this year.
Why are we interested in stocks that hedge funds are buying up? The reason is simple: our research shows that you can beat the market by mimicking the top holdings of the best hedge funds. Our quarterly newsletter strategy selects 14 small and large stocks each quarter, and has returned 275% since May 2014, beating the benchmark by 150 percentage points (Click here for details).
An aerial photograph of an apartment building that is symbolic of the company’s apartment market.
Apartment Investment Management Company (NYSE:AIV)
Number of hedge fund holders: 18
Hedge fund holdings: $228,622,000
Apartment Investment and Management Company (NYSE:AIV), also known as AIMCO, was founded by Terry Considine in 1975. The company focuses on real estate investments in multifamily housing in target markets including Colorado, Denver, South Florida and the Washington DC metropolitan area.
Apartment Investment and Management Company (NYSE:AIV) reported first-quarter 2024 rental and other property revenues of $50.2 million, slightly below the $50.8 million expected. Meanwhile, the company’s net operating income rose 6.5% year over year to $27.1 million. The growth was driven by a 5.4% increase in average monthly revenue per apartment.
Apartment Investment and Management Company (NYSE:AIV) has generated bullish sentiment among investors due to its 97.9% occupancy rate and strategic focus on managing risk and maintaining ample cash reserves.
As of Q1 2024, Apartment Investment and Management Company (NYSE: AIV) has $121.8 million in cash, $18.6 million in restricted cash and a $150 million revolving credit facility, more than enough to support the company’s ongoing development projects, totaling approximately $51 million.
Eighteen hedge funds reported holdings in the company as of the end of the first quarter of 2024.
Overall AIV 10th It is on the bestselling residential real estate stocks list. The 10 best residential real estate stocks to buy To see other residential real estate stocks that hedge funds are eyeing, we recognize AIV’s potential as an investment, but are convinced that AI stocks can deliver higher returns in a shorter time frame. If you’re looking for AI stocks that have more promise than AIV but are trading for less than five times their earnings, check out our report. Cheapest AI Stocks.
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Disclosures: None. This article originally appeared on Insider Monkey.
