Lowe’s says pandemic-fueled home improvement demand could cool in 2022

Lowe’s says pandemic-fueled home improvement demand could cool in 2022

by Home Improvement

An employee organizes buckets for sale inside a Lowe’s Cos. store in Burbank, California.

Patrick T. Fallon | Bloomberg | Getty Images

Lowe’s sales outlook disappointed investors on Wednesday and raised concerns the pandemic-fueled boom in do-it-yourself and decorating projects is cooling.

The company’s shares dropped by as much as 4{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} in premarket trading. Then, the stock rose later Wednesday as new data from homebuilders showed a huge appetite for housing — even during a typically slow season and a period of inflation. That backdrop coupled with Lowe’s executive comments about the possibility for market share gains, help the stock bounce back.

Shares rose 2{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} to close at $257.54 on Wednesday. The company’s stock is up about 60{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} this year, bringing its market value to $173.52 billion.

During an analyst meeting, Chief Financial Officer Dave Denton said the retailer anticipates its sales will outpace competitors and it will win more business from home professionals. Still, he acknowledged that Lowe’s is preparing for a “modest sector pullback in 2022” when compared with a year of such high demand and sales fueled by government stimulus.

Lowe’s sales have gotten a lift from Americans who fixed up their yards, tackled DIY projects and redecorated rooms during the Covid pandemic. Even as some of those “nesting trends” recede, however, its sales have been buoyed by the strong real estate market.

The company projected that same-store sales could drop by as much as 3{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} or be roughly flat in fiscal 2022 compared with this fiscal year. Total same-store sales will range from $94 billion to $97 billion in its upcoming year. That fell below analysts’ estimates of $97.64 billion, according to Refinitiv.

Lowe’s is estimating overall sales of about $95 billion for this fiscal year, which is one week shorter than next fiscal year.

For fiscal 2022, Lowe’s expects to earn between $12.25 and $13.00 per share. On average, analysts were expecting Lowe’s to earn $12.93 per share, according to Refinitiv.

CEO Marvin Ellison said the company can keep driving growth by launching new private labels, expanding its e-commerce business and becoming a one-stop shop for supplies to help older adults age in their own homes. For example, he said it is debuting a modern decor brand called Origin 21. He said it is speeding up deliveries of big and bulky purchases, such as appliances, with a new pilot in Florida and Ohio. That more efficient process is boosting profits and customer satisfaction, he said.

Together, he said, those efforts will “expand our share of wallet with both the DIY and pro customers.”

Ellison said the retailer will benefit from a favorable backdrop, too, including more money in consumers’ savings accounts, historically low interest rates, rising home values and an aging inventory of U.S. homes. About two-thirds of the company’s sales are driven by repairs and maintenance, he said.

Plus, Ellison said the pandemic has inspired people to invest more in their homes, from millennials who are buying first homes to baby boomers who are adapting an older home.

“There’s been a longer-term shift in the consumer mindset about the importance of the home,” he said. “Our view of the home is a sanctuary that may need to serve several multiple purposes: residence, office, school, gym, and a gathering place for indoor and outdoor entertainment. And given the extension of remote work, we’re expecting a permanent step up in repair and maintenance cycle.”

Separately, the company said it plans to buy back about $12 billion in shares both this year and next year.

Billionaires Double Down On Singapore Prime Property Buys As Demand For Luxury Homes Surge

Billionaires Double Down On Singapore Prime Property Buys As Demand For Luxury Homes Surge

by Luxury Real Estate

Billionaires Kwek Leng Beng and Gordon Tang are buying S$965 million ($704 million) worth of prime properties in Singapore, doubling down on their investments in redevelopment sites in and around the city’s financial district amid soaring demand for luxury homes.

City Developments—controlled by Kwek and his family—said late Thursday it agreed to buy Central Square from Far East Hospitality Trust, a unit of Robert and Philip Ng’s Far East Organization, for S$315 million. The Singapore-listed developer said it plans to combine Central Square with its adjacent Central Mall and redevelop the two sites (with combined area of about 21,400 square meters) into a mixed-use office, hospitality, serviced apartments and potentially a residential component.

Developers have been stepping up the redevelopment of older properties in land scarce Singapore to tap into the soaring demand for housing in one of the world’s most expensive real estate markets. Some 4,267 new residential units were sold in the third quarter, up 23{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} from the previous three months, latest data from the government showed.

The acquisition of Central Square is expected to be completed in the first quarter of 2022. City Developments said it will pay Far East Hospitality an additional S$18 million if it gets government approval to add a residential component in the project.

“The strategic acquisition of Central Square crystallizes our master plan to shape the precinct’s transformation into a new and vibrant lifestyle hub,” Sherman Kwek, group CEO of City Developments and eldest son of Kwek Leng Beng, said in a statement. “This rare placemaking opportunity augments our role in rejuvenating the Singapore River precinct and aligns with our enhancement strategy to unlock the latent value of our matured assets.”

The redevelopment of Central Mall and Central Square is the latest project City Developments is undertaking to rejuvenate the central business district. In partnership with CapitaLand, City Developments is redeveloping the site of the former Liang Court commercial complex into a mixed-used residential, commercial, hotel and serviced apartment development. The duo sold 83{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} of the 696-unit Canninghill Piers, which would be the tallest residential structure along the Singapore River when completed, after launching the project last month.   

City Developments is among the most active developers of luxury homes in the CBD, having completed the construction of The Sail @ Marina Bay residential skyscraper in 2008, one of the first residential buildings in the new Singapore downtown. The company is also redeveloping the former Fuji Xerox Towers in the Tanjong Pagar district into a mixed-use property with office, retail, residential and serviced apartment components.

The strong demand for luxury homes in the CBD has also attracted other developers, with a consortium led by Chip Eng Seng and SingHaiyi—both controlled by billionaire couple Gordon & Celine Tang—agreeing on Friday to buy Peace Centre/Peace Mansion near the Orchard Road shopping district for S$650 million. The consortium plans to transform the 7,118 square meter site into a mixed-used commercial and residential development, subject to regulatory approvals.

The transaction comes on the heels of the acquisition in May of Maxwell House by Chip Eng Seng, SingHaiyi and Chuan Investments for S$276.8 million. The property in Tanjong Pagar will also be redeveloped into a mixed-use commercial and residential project, subject to regulatory approvals.

Sales of older properties for redevelopment have been picking up in Singapore, fueled by rising demand for housing, low interest rates and limited supply of land across the city-state. In October, a joint venture between UOL Group and Singapore Land—both controlled by billionaire banker and developer Wee Cho Yaw—won the auction for the Watten Estate Condominium in the prime Bukit Timah district in western Singapore with a bid of S$550.80 million.

Real estate market will continue to move in ‘fast direction’ amid pent-up demand: Century 21 CEO

Real estate market will continue to move in ‘fast direction’ amid pent-up demand: Century 21 CEO

by Real Estate News

Century 21 President and CEO Michael Miedler argues the real estate market is still hot right now likely because ‘a lot of buyers are trying to rush in and beat any more increases in the mortgage rate.’ 

Century 21 President and CEO Michael Miedler argued on Monday that the real estate market is not “ready to taper right now” and will continue to move in a “fast direction” amid pent-up demand. 

Miedler told “Mornings with Maria” that the market is still currently hot because “a lot of buyers are trying to rush in and beat any more increases in the mortgage rate.”

He made the comments on “Mornings with Maria” shortly before it was revealed that existing-home sales rose 0.8{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} in October from the month before to a seasonally adjusted annual rate of 6.34 million, marking two straight months of growth, according to the National Association of realtors.

The association also noted that the median existing-home sales price increased 13.1{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} compared to the same time last year to $353,900 and that inventory of unsold homes decreased 12{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} to 1.25 million, which is equivalent to nearly 2 and a half months of the monthly sales pace. 

NAR’s chief economist Lawrence Yun said in a news release that Monday’s data proves that “home sales remain resilient, despite low inventory and increasing affordability challenges.” 

Miedler agreed with that sentiment on Monday telling host Maria Bartiromo that he continues “to see the market moving in a very kind of fast direction as folks have a lot of pent-up demand in trying to buy homes here in this country.” 

Macro Trends Advisors founding partner Mitch Roschelle says he expected existing home sales would ‘slow down’ amid ‘uneasiness in the market,’ however ‘the fact that interest rates could be going up is getting people to race to the goal line.’ 

Lawrence also noted in Monday’s news release that “inflationary pressures, such as fast-rising rents and increasing consumer prices, may have some prospective buyers seeking the protection of a fixed, consistent mortgage payment.”

Earlier this month it was revealed, U.S. consumer prices accelerated at the fastest annual pace in more than 30 years as supply chain bottlenecks and materials shortages persisted. 

The consumer price index climbed 6.2{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} year over year in October, the Labor Department said. The increase marked the largest annual gain since November 1990. Prices rose 0.9{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} month over month. 

The cost of shelter ticked up 0.5{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} last month and was 3.5{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} above year-ago levels. 

Miedler also pointed out on Monday that “on the building front, we are way behind.” 

LITTLE ROCK, ARKANSAS REAL ESTATE: WHAT YOU CAN GET FOR $1.2 MILLION

“From the downturn that happened in 2008 to where we are at now, we are at historic lows on where folks are building,” he told Bartiromo.

“Here is the truth of the matter; Between 2012 and 2021 there were close to 12 million new household formations and we only put 7 million homes built in this country so we have to double the pace in the next five years to catch up with the demand that’s out there,” he argued. 

However, that may prove to be difficult if supply chain disruptions linger. Earlier this month, the National Association of Home Builders CEO Jerry Howard noted that those bottlenecks are creating unprecedented issues, telling “Varney & Co.” they are causing “unusual circumstances” as it pertains to new homes.

National Association of Home Builders CEO Jerry Howard describes how supply chain issues are affecting consumers who are building new homes. 

Howard acknowledged that the issues are not impacting sentiment, but did stress that the “supply chain is still a headwind.”  

He also told host Stuart Varney that “demand is so strong and the supply is so low” for new homes and argued if the supply chain can get “fixed” some “real good years” for the market are ahead.

Howard offered insight into the industry on the same day it was revealed homebuilder confidence rose in November as low inventories and strong buyer demand helped boost confidence despite the ongoing supply chain disruptions. 

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The National Association of Home Builders/Wells Fargo Housing Market Index this month rose three points to 83. Analysts surveyed by Refinitiv were expecting homebuilder sentiment to hold at 80. 

The index can range between 0 and 100 with any print over 50 indicating positive sentiment. Any reading above 80 signals strong demand.

Miedler told Bartiromo that currently “all the regions across the marketplace” are seeing an increase in new construction, but noted that there is “a hot market in the south” where there is “a little bit more building” taking place in cities including Raleigh and Wilmington, North Carolina as well as Jacksonville, Florida and parts of Texas. 

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FOX Business’ Jonathan Garber contributed to this report. 

Soaring demand for high-end properties raises rental prices, off-plan sales | The Guardian Nigeria News

Soaring demand for high-end properties raises rental prices, off-plan sales | The Guardian Nigeria News

by Investment Property

Next gradual return of workers to workplaces and worldwide travel resumption, Nigeria’s significant-end houses are in higher demand, which have prompted rise in rental rates and maximize in off-system profits.

The Guardian learnt that the progress has sent key lettings sector into a frenzy, pushed up rental income and demand by customers of luxurious apartments across neighbourhoods this kind of as Ikoyi, Victoria Island in Lagos and Asokoro as very well as other prime locations in Abuja.

Two well-liked estate businesses- Knight Frank Nigeria and Sam Eboigbe and Firm confirmed the report. A residence advancement corporation, Cruxstone Limited embarking on a joint undertaking task with Lagos Governing administration in the heart of Victoria Island announced just lately that its luxury residences have been sold out for the duration of off-program advertising.

The undertaking recognized as the Iconic Towers contains 4 blocks of towers of 12 floors. Each block is developed as a twin tower model consisting of just one bedroom apartments, two bed room residences, 3 bedroom apartments and 4 bedroom penthouses. The cost tag are as follows: a person bed room N70 million, two bed room N100 million, two bedroom with boys quarter N110 million, 3 bedroom maisonette (kind 1) with boys quarter N140 million, 3 bed room maisonette (style 2) with boys quarter N165 million and four bedroom penthouse with boys quarter N350 million.

The promoters have predicted a two-calendar year funds acquire on investment decision on The Iconic Towers is estimated at 40 per cent, which presents an excess of N20 million to N35 million in projected income.

In accordance to a individual report from Residence Corporation, MDS Houses Limited’s current studies of a sample pool of 428 apartments in Victoria Island house marketplace, displays that in excess of 369 units have been bought.

Even further investigation of the units marketed, reveals that they comprised of 38 for each cent of a person-bed room flats, 43 for every cent of two-bed room apartments and 19 for every cent of 3-bed room flats. No much less than 10 top real estate builders and brokers running within just the Victoria Island precincts also acknowledged a significant uptick in desire.

According to Senior Companion/Main Government Officer (CEO) for Knight Frank Nigeria, Frank Okosun, “the recent craze of demand is fueled by the versatility it offers investors and the resaleability of asset type.

“Most importantly it offers extraordinary rental produce in comparison to other apartment types in these site. The development is also buoyed by the need for short permit condominium for transient pros in Fintech and the expatriate neighborhood.”

His views was verified by the MDS report, which states that the return of expatriates is also impacting the revenue market place, as corporate entities are seeking additional at accommodating their expatriates in shorter continue to be homes exactly where they can pay weekly, regular monthly and quarterly as opposed to annually rents.

“This has minimized the demand from customers of annually rentals by these firms by 40-45 per cent and in switch shifted the concentrate of traders to 1 and two bed room flats for brief-allow or shorter keep flats.”

The Co-Founder and Govt Chairman, Sam Eboigbe and Company, Mr. Sam Eboigbe, mentioned there is surge in need for luxury flats, especially in Ikoyi, Lekki and Victoria Island and can be substantiated with proof available out there in the market place place.

“We are reasonably knowledgeable there has been ongoing diversification of financial investment into household assets portfolio by intelligent investors because the COVID- 19 pandemic, which introduced about modifications in the life of the men and women. The functioning from household society is typical example where household apartments also supply work spot chances.

“Most men and women expend a good deal of their time at house than office sites. Also, we see most industrial or office environment premises have voids as they really do not have require for the whole lettable spaces any more while the need for residences is on the increase in intellectual locations.”

Eboigbe said that the massive reduction in journey strategies in the tourism sector is a situation in stage. “The holiday break makers not able to journey throughout the lockdown created some good selections based mostly on huge discounts and may well have opted to deploy these assets to receive luxurious residences for financial investment uses. You can consider once-a-year personal savings from household holiday makers overseas staying channeled to the house sector,” he additional.

He mentioned: “The investors are inspired as there is demand for luxurious apartments and this is in line with financial basic principle of desire and offer. Once more, foreign inflows occasioned by the exchange amount are a further aspect. The social media and on the net variable have simplified the consummation of transactions, including the overall process of viewing, because of diligence on the title and payment. So, we have huge investments of diaspora investors. Also, the price of returns on these lessons of listings is deemed worthwhile.”