We recently compiled a list of the 10 Best Performing Real Estate Stocks to Buy According to Analysts. In this article, we are going to take a look at where UMH Properties, Inc. (NYSE:UMH) stands against the other real estate stocks.
US Real Estate at a Glance
While uncertainty looms over the United States under the new admin in terms of tariffs, the real estate sector and especially new construction is expected to face some consequences. According to the chief economist at the National Association of Home Builders, the new tariffs could raise builder costs from $7,500 to $10,000 per home. With a third of the lumber utilized in US homebuilding coming from Canada, homebuilders will be impacted significantly by lumber cost increases. Paul Jannke, principal at Forest Economic Advisors, reiterated the adverse effects of these tariffs, stating:
“With the re-imposition of the 25% tariff on Canadian goods shipped to the U.S., we expect Canadian producers will stop shipping lumber to the U.S. Meanwhile, dealers, who have been hesitant to buy given uncertainty around the tariffs, will need to step up purchases ahead of the coming building season. This will drive prices higher.”
Danielle Hale, chief economist at Realtor.com, also discussed the potential impact of these tariffs on real estate as he said:
“Rising costs due to tariffs on imports will leave builders with few options. They can choose to pass higher costs along to consumers, which will mean higher home prices, or try to use less of these materials, which will mean smaller homes”
Amidst tariffs, the housing market is already ‘in a deep freeze’ as mentioned by Mark Zandi, Moody’s Analytics chief economist, in his interview with CNBC. Although inventories are up, they continue to be extremely low by historical standards. According to Zandi, the market is not going to come back to life to any significant degree unless the mortgage rates come closer to 6% or even into the 5% range.
Our Methodology
In order to compile a list of the 10 best performing real estate stocks to buy according to analysts, we first used a stock screener to make an extended list of the relevant companies that have gained over the past year, as of March 4. After shortlisting the stocks with the most significant gains over the past year, we shortlisted the top 10 stocks with the highest upside potential, as of March 4. The 10 best performing real estate stocks to buy according to analysts have been arranged in ascending order of their average upside potential. Additionally, we have mentioned the hedge fund sentiment around each stock, as of Q4 2024.
Why are we interested in 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Aerial view of a residential neighborhood with manufactured homes and developed homesites.
UMH Properties, Inc. (NYSE:UMH)
Average Upside Potential: 14.42%
Gain Over Past 1 Year: 16.42%
Number of Hedge Fund Holders: 10
UMH Properties, Inc. (NYSE:UMH) owns and operates manufactured home communities. The REIT has a portfolio of 139 manufactured home communities comprising approximately 26,300 developed homesites. These communities are situated in states including New Jersey, New York, Ohio, Pennsylvania, Tennessee, Indiana, Maryland, Michigan, Alabama, South Carolina, and Georgia.
With a robust portfolio of manufactured home communities, higher mortgage rates incentivizing homeowners not to move, a limited supply, and the average cost of a manufactured home lower than that of a site-built home, UMH is positioned well in the manufactured housing market. The firm’s communities continue to experience strong demand thereby driving strong home rental occupancy and increased sales revenue. Furthermore, UMH is even better positioned for growth with 3,300 existing vacant lots to fill and more than 2,400 vacant acres on which to build nearly 9,600 future lots.
The business fundamentals of UMH Properties, Inc. (NYSE:UMH) tend to be solid and have set the stage for a strong performance in 2025. The company made substantial progress on different fronts during the year 2024. Major accomplishments include delivering a total shareholder return of 30% as well as increasing same property NOI by 10%, normalized Funds from Operations by 27%, and sales of manufactured homes by 8%.
Overall UMH ranks 10th on our list of the best performing real estate stocks to buy according to analysts. While we acknowledge the potential of UMH 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 time frame. If you are looking for a deeply undervalued AI stock that is more promising than UMH but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
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