The Zacks Analyst Blog Highlights: Sherwin Williams, La-Z-Boy, USG, Weyerhaeuser and Berkshire Hathaway

For Immediate Release

Chicago, IL – September 22, 2011 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Sherwin Williams (SHW - Analyst Report), La-Z-Boy (LZB - Snapshot Report), USG (USG - Snapshot Report), Weyerhaeuser (WY - Analyst Report) and Berkshire Hathaway (BRK.B - Analyst Report).

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Here are highlights from Wednesday’s Analyst Blog:

Used Home Sales Up, Prices Down

Results by Type of Home

Sales of single-family homes were up 8.5% on the month to a rate of 4.47 million, and are up 20.5% year over year. The median price of a single-family home nationwide fell 5.4% from a year ago to $168,400.

Condo and co-op sales were up 1.8% on the month, and are up 8.3% year over year. The median condo price fell 3.3% from a year ago to $167,400. For all existing homes, the median price was down 5.1% to $168,300.

Results by Region

Regionally, sales were up in all of the four Census regions, both for the month and year over year. The Northeast fared the worst, but that could have been because of the impact of Hurricane Irene, with sales up 2.7% for the month and a 10.0% rise from a year ago. The West had the best month-to-month increase, with sales jumping 18.3% from July and up 20.6% from a year ago.

In the Midwest, sales rose 3.8% for the month and are up are up 26.7% year over year. The South, the largest of the four regions, saw a 5.4% rise on the month, and a 16.9% year-over-year rise.

Median prices fell in all four regions. The big increase in the West seemed to come from houses going on a clearance sale, as the median price plunged 13.0% from a year ago to $189,400. The Northeast is the most expensive region, with the median home going for $244,100, down 5.1% from a year ago. The Midwest, already the cheapest area of the nation to live in with a median price of $141,700, saw a year over year decline of 3.5%. Prices in Dixie dropped 0.8% from a year ago to $151,000.

The median price is not the best measure of housing prices, as it is affected by the mix of houses being sold, but the data is basically consistent with what the better -- but less timely -- measures such as the Case-Schiller index have been indicating. However this drop is steeper than what we have been seeing of late from the Case-Schiller index, and I would guess when the August Case-Schiller data comes out it will also show accelerating declines on a seasonally adjusted basis.

Used Homes Sales vs. New Home Sales

The level of activity in used home sales really is not that important in isolation. It is just the transfer of an existing asset, and does not add a lot to economic growth. The one exception to that is realtors' commissions. Indirectly, it can help as people will often remodel and redecorate a “new for them” house. That can stimulate some sales for paint companies like Sherwin Williams (SHW - Analyst Report) and perhaps it is good for furniture firms like La-Z-Boy (LZB - Snapshot Report), but it pales compared to the economic activity generated by a new home sale.
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New homes not only need new paint on the walls, but they need the walls. That means lots of business for wallboard firms like USG (USG - Snapshot Report), timber firms like Weyerhaeuser (WY - Analyst Report) and roofing and insulation firms like the Johns Manville division of Berkshire Hathaway (BRK.B - Analyst Report).

It also means that those firms have to hire more workers, so the employment effect of new home sales goes well beyond the roofers and carpenters actually on the jobsite. Also, the newly employed construction workers will have money in their pockets to spend, and as they do, that will stimulate other jobs.

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Read the full analyst report on SHW

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Read the full analyst report on WY

Read the full analyst report on BRK.B