Is the Real Estate Recovery Really Here?

According to Louis Basenese at Wall Street Daily, the answer is a resounding "yes."

He gives 11 signs that the real estate recovery is here, and it's here to stay:

1. Housing starts: The annual rate of housing starts for February (698,000) came in 14.7% higher than for 2011, 18.9% higher than 2010, and 25.9% higher than 2009.

2. Building permits: February's building permits were the highest since October 2008.

3. Dwindling inventory: January's new home inventory fell, making it the 12th consecutive month of year-over-year declines.

4. Bidding wars: Online brokerage firm Redfin reports that agents saw multiple bids on 50% of offers in Seattle, Boston, Oregon, and Washington, D.C., through March 15.

5. A bottom in new home sales: February's new home sales were 11.4% higher than a year ago.

6. A rebound in existing home sales: Over the last year, existing home sales have increased 8.8%.

7. Prices: According to Case-Shiller indexes, prices in Miami and Phoenix -- two hard-hit areas -- were up in January by 1.2% and 2%, respectively.

8. Rising confidence: Builder confidence has climbed for the sixth month in a row in March, at the highest level since 2007.

9. Historic affordability: The National Association of Realtors Housing Affordability Index hit a record high in January.

10. Employment: The labor market is undeniably improving, making it easier for many to buy a house.

11. An influx of smart money: Many big names on Wall Street are now investing in homebuilders. The names include SAC Capital, Blackstone, Caxton Associates, Cerberus, Canyon Partners, and CQS U.K. (via Wall Street Daily).

If these signs are all indicative of a real recovery in place for the housing market, how do you position yourself to profit? For ideas, we ran a screen on homebuilders.

Business section: Investing ideas
We screened residential construction companies trading on U.S. exchanges, and we screened them for those seeing the most significant net institutional purchases over the last quarter. This indicates that institutional investors such as hedge fund managers and mutual fund managers expect these names to outperform.

Do you think these names are positioned well for a housing recovery? (Click here to access free, interactive tools to analyze these ideas.)

1. D. R. Horton (NYS: DHI) : Operates as a homebuilding company in the United States. It has a market cap of $4.45 billion and its stock is priced at $14.71 per share. Net institutional purchases in the current quarter stand at 14.2 million shares, which represents about 5.14% of the company's float of 276.53 million shares.

2. Lennar (NYS: LEN) : Operates as a homebuilder and provider of financial services in the United States. It has a market cap of $4.97 billion and its stock is priced at $26.43 per share. Net institutional purchases in the current quarter stand at 7.7 million shares, which represents about 4.76% of the company's float of 161.65 million shares.

3. MDC Holdings (NYS: MDC) : Engages in homebuilding and financial services businesses in the United States. It has a market cap of $1.16 billion and its stock is priced at $24.49 per share. Net institutional purchases in the current quarter stand at 4.7 million shares, which represents about 12.3% of the company's float of 38.20 million shares.

4. Meritage Homes (NYS: MTH) : Engages in designing and building single-family attached and detached homes in the Southern and Western United States. It has a market cap of $855.10 million and its stock is priced at $26.03 per share. Net institutional purchases in the current quarter stand at 2.0 million shares, which represents about 6.84% of the company's float of 29.25 million shares.

5. PulteGroup (NYS: PHM) : Engages in homebuilding and financial services businesses primarily in the United States. It has a market cap of $3.17 billion and its stock is priced at $8.23 per share. Net institutional purchases in the current quarter stand at 15.6 million shares, which represents about 4.62% of the company's float of 337.47 million shares.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.

At the time thisarticle was published Kapitall's Alexander Crawford does not own any of the shares mentioned above. Institutional data sourced from Fidelity.Motley Fool newsletter serviceshave recommended buying shares of Meritage Homes and MDC Holdings. The Motley Fool has adisclosure policy.
We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.