We recently compiled a list of the 12 Best Real Estate and Realty Stocks To Buy Now. In this article, we are going to take a look at where AvalonBay Communities, Inc. (NYSE:AVB) stands against the other real estate stocks.
Real Estate So Far in 2025
As the US housing market headed into 2025, it witnessed good as well as bad news. Although the supply has increased with active listings in November 12.1% higher over the year, Redfin revealed that the majority of those homes had been on the market for at least 60 days without going under a sales contract, marking the highest share for any November since the year 2019.
While mortgage rates have averaged over 6% for the past 24 months, home buyers are not expecting mortgage rates to decline substantially. As the year ended, a rise in mortgage interest rates toward the end of December ended up impacting the mortgage demand. According to the Mortgage Bankers Association’s seasonally adjusted index, total mortgage application volume for the two weeks ended December 27 declined 21.9% as compared with the week before that period. Mike Fratantoni, chief economist at the Mortgage Bankers Association, reiterated the bitter impact of the mortgage rates moving higher through the last week of 2024 as he said:
“Not surprisingly, this increase in rates — at a time when housing activity typically grinds to a halt — resulted in declines in both refinance and purchase applications.”
Bess Freedman, Brown Harris Stevens CEO, pointed towards a troubling trifactor encompassing rates, inventory, and prices for this year. She expects the new year to be turbulent and volatile for the real estate although the public does have certainty with the president now which is good. Bess also talked about the US demographics and how first-time home buyers are older than ever, nearing 40s which is a bad sign indicating young people not being able to afford. While the situation around Trump’s tariffs and rates potentially going up remains unclear as of yet, homeownership continues to be an American dream in her opinion.
Our Methodology:
In order to compile a list of the 12 best real estate and realty stocks to buy now, we first use a stock screener to make an extended list of the relevant companies with the highest market caps. Moving on, we shortlisted the top 12 stocks from our list which had the highest number of hedge fund holders. The 12 best real estate and realty stocks to buy now have been arranged in ascending order of their hedge fund holders as of Q3.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
An aerial view of a bustling metropolitan area with high-rise buildings and busy streets.
AvalonBay Communities, Inc. (NYSE:AVB)
Number of Hedge Fund Holders: 35
Avalonbay Communities, Inc. (NYSE:AVB) is a leading multifamily real estate investment trust that develops, redevelops, acquires, and manages distinctive apartment homes in the best US markets. The company focuses on metropolitan areas with a vibrant quality of life, less housing affordability, and strong employment growth. The firm owned or held a direct or indirect ownership interest in 305 apartment communities comprising 92,908 apartment homes in 12 states and the District of Columbia, as of September 30.
Avalonbay serves as the largest publicly traded multifamily REIT and has demonstrated 30 years of growth as the industry leader. The company continues to evolve to deliver superior growth as it optimizes its portfolio increasing allocation to suburbs and expansion regions and advances towards a $10 million incremental NOI for 2024. While the firm’s same-store portfolio performed well through the peak leasing season, the outlook for 2025 remains favorable supporting a healthy same-store revenue growth outlook.
While Avalonbay Communities, Inc. (NYSE:AVB) has beat the consensus estimate in each of the last four quarters, it is to reveal its fiscal fourth-quarter earnings for 2024 on January 29. Regarding the upcoming results, analysts tend to be positive and expect the company to report a profit of $2.82 per share on a diluted basis, up 2.9% from the year-ago quarter. Previously, the firm’s third-quarter FFO and revenue surpassed Wall Street estimates.
Overall AVB ranks 9th on our list of the best real estate and realty stocks to buy now. While we acknowledge the potential of AVB as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued AI stock that is more promising than AVB but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None. This article is originally published at Insider Monkey.
