Housing-related stocks are expecting a recovery of the housing market and as a result real estate stocks are on a roll. When Realogy Holdings went public for $27 a share in early October 2012, its initial public offering (IPO) went through the roof closing at $33.60 by Friday of the first week. Realogy is the parent of Coldwell Banker and Century 21. Apollo Global Management bought the company in a leveraged buyout in 2006 for $6.8 billion and immediately after the acquisition had to fight with bondholders to keep the control of the company. The company was successful in extending the debt repayment until 2016 and the IPO raised $1.1 billion. Yet, Realogy still has $4.5 billion debt load. The successful IPO of a real estate related company is not limited to Realogy. Earlier this year, Zillow and Trulia had successful IPOs. Housing related other companies such as Sherwin-Williams, Pulte Group, Whirlpool, and Lennar are also doing better. Why a surge now?
The existing-home sales are expected to rise between 8 to 9 percent this year. Additionally, experts expect a 5 percent price increase for housing this year. Existing-home sales are running at 4.8 million units a year and there is lot more room to grow.