Barron's Recap: Home Prices Ready To Rise

This weekend in Barron's online: where home prices may go in the next three years, and the prospects for Coca-Cola, Air France-KLM and more. Cover Story "Betting on the House" by Jonathan R. Laing. U.S. home prices are climbing again, points out this week's cover story in Barron's. But they are rising at more measured rates than during the most recent boom. After talking to various industry experts and analyzing disparate data, Barron's thinks that home-price appreciation should continue for years, albeit at that slower pace. The article admits that the experts' three-year projections for home prices varied a lot. Barron's conservative estimates put home price growth at single-digit percentages for the next three years, due in part to empty-nest baby boomers who put their houses on the market to unlock trapped home equity. "The U.S. is clearly in a home-price up-cycle that has a lot of room to run," one expert is quoted as saying. Many factors come into play making this forecast, including the shadow inventory of foreclosed or soon to be homes, changes in the rate of new home construction, the willingness of lenders to lend, and where mortgage rates may go in light of the Federal Reserve's tapering of its quantitative easing measures. The article includes a breakdown of the top 50 real estate markets in the United States, in terms of average home prices, recent changes in home prices, and a three-year forecast. It also includes a look at which of the S&P/Case-Shiller 20-City Home Price Index have rebounded the most strongly since the recession. Feature Stories "Why Coke Could Regain Its Fizz" by Jack Hough suggests that a revival in earnings and steady dividend growth could pique investor interest in Coca-Cola KO in the year ahead. Could it offer a 3.6 percent yield by 2016? Jonathan Buck's "Air France-KLM: Ready for Takeoff" points out the cost cutting and the restructuring that the Franco-Dutch airline has made in an effort to end years of losses. See why CEO Alexandre de Juniac could be the Sergio Marchionne of airlines. In "Fayez Sarofim: A Lion in Winter," Andrew Bary shares why, after more than five decades in the investment business, this fund manager remains bullish on U.S. stocks. The lesson to be learned: Buy quality stocks and hold them forever. Readers are invited to "gaze into their crystal balls" and predict what the future holds for investors in 2014 in by taking the 17-question quiz in "Test Your Wall Street Wizardry" by Andrew Bary. Questions cover the stock market, the economy and more. "Our Small-Cap Picks Smoked the Market" by David Englander says that Barron's 37 small-cap stock picks for 2013 are up more than 20 percent, compared with about a 14 percent return for their benchmarks. See which of their picks are still attractive. In Michael Shari's "On the Road to Riches in Biotech," Joseph Edelman is profiled. Edelman shares how he outperforms with his fund, Perceptive Life Sciences. "If we think there is a higher probability that a drug will work than the Street does, we may have a long on that position," he says. Fixed-income guru Rick Rieder is profiled in Reshma Kapadia's "BlackRock Bond Manager Finds the Silver Lining." Rieder discusses what he currently likes in the United States, the developing world and emerging markets. In "Smoothing Out the Wrinkles" by Dyan Machan turns the CEO spotlight on David Pyott, who turned Allergan from a small eye care business to a global specialty pharmaceutical and medical device company. See how he made Botox a best seller around the world. "More Than a Sugar High?" is an editorial commentary by Frederick "Shad" Rowe that includes eight pointers to a promising new economic direction for America. See also: Four Of 2013's Most Disappointing Stocks Columns Columns in this weekend's Barron's discuss:

• The performance of stocks Barron's has knocked
• China's many hidden real-estate-linked stocks
• Being aware of the risks in 2014
• Why 2014 could be another record year
• Blue chip tech stocks that could suffer in 2014
• Ranking prognosticating bloggers
• The best way to take control of digital photos
• Hedge funds' fresh risk plays for 2014
• The year ahead in exchange traded funds
• The prospects for political compromise in 2014

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