Home builders not cheap enough to buy: Winer

NEW YORK (Reuters) - After a deep fall this year, the stocks of home building companies are starting to look more attractive but they would have to fall a bit further to be good value plays, real estate value investor Michael Winer said on Monday.

Winer, the portfolio manager of Third Avenue Real Estate Value Fund, reopened his fund to new investors in July. He said on Monday he did so partially as a way to raise capital to increase his holdings in home builder stocks.

"We thought there might be an opportunity to start investing in home builder stocks if they got cheap enough ... but they are not there yet," Winer said on Monday at the Reuters Investment Outlook 2007 Summit in New York.

The Dow Jones U.S. Home Builders index .DJUSHB> is off about 20 percent year-to-date as the sector has struggled with oversupply and slow sales.

In July when Winer reopened his fund the home builder's index was at its lows of the year, but it has rebounded by about 14 percent since then as fears of a worse-than-expected U.S. housing downturn have subsided, keeping shares a bit too pricey for Winer's taste.

"Home builders' stocks appeared to have been taking it on the chin," Winer said. "There may be some bargains out there."

Winer's $3.3 billion fund currently has a very small exposure to home building stocks, and instead is invested about 60 percent in real estate operating companies and about 30 percent in real estate investment trusts.