CHICAGO, May 21, 2012 /PRNewswire via COMTEX/ -- The U.S. retail real estate sector witnessed a moderate recovery in the first quarter of 2012 led by retail investment sales, as trades of significant retail properties increased nearly 90 percent over Q1 2011, according to Jones Lang LaSalle's Spring Retail Forecast.
"Improving economic fundamentals continue to drive a modest recovery. However, significant risks remain, with the most critical being the European crisis and uncertainty about fiscal policy," said Greg Maloney, President and CEO of Retail at Jones Lang LaSalle. "While retailers are faring better than we've seen in the past two years, we witnessed a greater number of underperforming store closings this year. In addition, there continues to be a gradual absorption of available space, but rental rates have still not bottomed out nor are they expected to do so for several quarters."
Retail Capital Markets Highlights "Retail real estate sales recorded a fantastic quarter with significant retail property sales totaling $12.5 billion, which represented an 87 percent increase over Q1 2011," said Margaret Caldwell, Managing Director of Capital Markets at Jones Lang LaSalle. "Interestingly, portfolio transactions accounted for more than half of the first quarter's volume, totaling $6.6 billion."
Additional retail real estate investment highlights include:
Average cap rates fell to 7.3 percent, with regional malls experiencing the sharpest decline.
Strip center cap rates rose slightly in Q1 2012, largely as a result of higher-yield buildings in secondary markets changing hands.
Cap rates fell significantly across most major metro areas, secondary and tertiary markets. Secondary markets in particular have seen a revival in transaction volume jumping 27 percent in the last six months. Major metros, on the other hand, only experienced a 16 percent jump in transaction volume while tertiary markets declined by 4 percent.
Distressed properties continue to be a major factor with new inflows totaling $1.9 billion in Q1 2012. Workout activity totaled $2.6 billion, resulting in a $700 million decrease in distress balances. Outstanding distress now stands at $28.3 billion.
The West region led retail property sales for Q1 2012 with $4.14 billion in transactions, followed by the Southeast with $2.4 billion, the Midwest at $1.83 billion, the Southwest with $1.62 billion, the Mid-Atlantic at $1.26 billion, and the Northeast with $1.25 billion.
Retail Leasing Highlights
Vacancy fell 20 basis points year over year, closing Q1 2012 at 6.9 percent. Net absorption was moderate compared to the previous quarter, totaling just over 12.3 million square feet, but consistent with the trend over the past year. Deliveries were relatively lower as well, coming in at 7.2 million square feet. Vacancy rates are approximately 50 basis points below their peak but still 60 basis points higher than their 10-year average, so it is still a tenant's market and should continue to be through 2013.
Additional retail leasing highlights include the following:
Retail properties serving national tenants (i.e., malls, power centers and outlet centers) are seeing the greatest compression in vacancy rates, as these tenants continue to expand their portfolios.
Centers serving "mom-and-pop" stores - such as community centers, neighborhood centers and strip centers - have yet to recover in earnest.
Rents are beginning to stabilize. While aggregate rents continue to fall, the rate of decline has flattened in recent quarters.
Power center rents in major markets fell the most over the year, declining some 5.5 percent.
Though demand levels had been flat initially after the 2011 holiday sales season, many retailers have been modestly increasing their expansion plans.
Retail Trends Affecting Real Estate
"Performance is critical as both retailers and landlords need to maximize ROI for the remainder of the year," said Lew Kornberg, Managing Director of Retail Tenant Solutions at Jones Lang LaSalle. "However, employment levels will remain the leading indicator of what we can expect to see next year in terms of growth in the retail sector."
Trends affecting retail leasing, marketing and performance include the following highlights:
Urban retail and outlet centers should take center stage as more consumers move back into cities and focus on value and off-price purchases.
Store-within-store build-outs should increase as big box retailers seek to more efficiently use excess space and diversify their merchandise to attract more consumers.
Grocery-anchored strip centers continue to perform relatively well compared to other retail property subtypes.
The grocery landscape will also shift as many mid-sized regional chains will close locations while high-end and niche grocers will expand. However, the trend will be toward smaller, less traditional space so the total footprint should contract.
Creative use of big box space may be another major trend as retailers vacate underperforming locations in response to increased competition from online retailers.
Some physical stores are already unintentionally functioning as living catalogs for online merchandise. The evolving trend of "showrooming" will affect how goods are showcased, priced and sold in stores.
The addition of retail health clinics within existing stores continues to gain traction.
Jones Lang LaSalle Retail successfully manages the largest third-party retail portfolio in the country. Our portfolio is comprised of unique clients and a broad range of retail properties including regional shopping centers, lifestyle centers, strip malls, power centers, transportation facilities and universities along with redevelopment and mixed-use projects. Jones Lang LaSalle offers a full array of retail services to our clients including property management, financial reporting, leasing, tenant coordination, specialty leasing, marketing, research, development and receivership. For more information on Jones Lang LaSalle Retail, visit www.jllretail.com .
About Jones Lang LaSalle
Jones Lang LaSalle /quotes/zigman/162927/quotes/nls/jllJLL+1.70%is a financial and professional services firm specializing in real estate. The firm offers integrated services delivered by expert teams worldwide to clients seeking increased value by owning, occupying or investing in real estate. With 2011 global revenue of $3.6 billion, Jones Lang LaSalle serves clients in 70 countries from more than 1,000 locations worldwide, including 200 corporate offices. The firm is an industry leader in property and corporate facility management services, with a portfolio of approximately 2.1 billion square feet worldwide. LaSalle Investment Management, the company's investment management business, is one of the world's largest and most diverse in real estate with $47.2 billion of assets under management. For further information, please visit www.joneslanglasalle.com .
(Source: NAR) – An estimated 15,000 Realtors® converged on the grounds of the Washington Monument today to make their voices heard on behalf of homeowners, real estate investors, and those who aspire to homeownership.
At the Rally to Protect the American Dream, Realtors® from every state in the country joined invited members of Congress to demonstrate their commitment to preserving access to homeownership and robust real estate investment.
“Realtors® know that homeownership is an investment in our collective futures, and we’re here today to protect the American Dream of homeownership,” said National Association of Realtors® President Moe Veissi, broker-owner of Veissi & Associates Inc., in Miami. “Homeownership and investment in real estate impacts families, communities, small businesses and the nation’s economy in a very meaningful way. Today, we’re proud to be showing the country that homeownership matters.”
In the current economic and political climate, Realtors® are working to ensure that people who want to own a home or invest in real estate and can responsibly afford to do so will continue to have the opportunity to do that. Toward that end, Realtors® are advocating better access to affordable financing, reform of the secondary mortgage market, improved liquidity in residential and commercial lending, and preservation of the tax benefits associated with homeownership.
Sen. Johnny Isakson (R-Ga.) and Rep. Steny Hoyer (D-Md.) addressed the crowd of Realtors® at the event.
“I commend the National Association of Realtors® for keeping the issue of homeownership at the forefront when we talk about our economic recovery,” said Rep. Hoyer. “Stabilizing the housing market remains a central issue for Democrats, who understand we will not have robust economic growth without a vibrant housing market and that access to homeownership remains a critical component of the American Dream.”
Sen. Isakson said, “Homeownership always has been, and remains to this day, a part of the American dream. It is the biggest and most important investment that the average American family makes, and that’s why we should remain focused on the value of the housing market and the important role it plays in our country. It is my hope that this rally encourages Congress and the president to move forward with policies that are supportive of housing, which is vital to job creation and the recovery of our economy.”
The rally was part of NAR’s week-long Midyear Legislative Meetings, during which Realtors® and guests meet with members of Congress, federal regulators and industry experts to address pressing real estate issues and public policies in support of private property rights, homeownership and housing issues.
Photos and videos from the rally are available at www.realtorrally.org.
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.
As a prelude to a broader analysis of China’s GDP, and the accuracy of its official GDP figures, I want to start by examining the national real estate statistics for the first four months of 2012. This discussion feeds into the broader GDP picture, but the property story that has been unfolding is important and interesting enough to be worth taking a close look at on its own.
Getting an accurate view of the property sector is complicated by the fact that neither the official price index, nor the Soufun price index, nor the average price/square meter that can be calculated from the investment numbers seem to track very well with each other or with point-of-sale impressions of steep developer discounts over the past eight months. Developers and local governments also enjoy a great deal of discretion in deciding what to count as a “start” or a “completion.” Monthly data releases are never revised, which often gives rise to huge corrections that are simply lumped into the end-year December data release, giving a distorted impression of how trends are unfolding (so, for instance, the 19% drop in property starts in December 2011 probably wasn’t as sudden as it appears, and more likely reflected an unreported decline spread over several preceding months).
All that being said, I’m seeing some rather striking patterns in the data that tell us two main things:
The market is not poised to recover, but will continue to see greater downward pressure on prices; and
Real estate investment is likely to flatten out or start falling, erasing several percentage points of GDP growth.
Last month, many observers took comfort from reports that overall real estate investment in Q1 rose 23.5% (in nominal terms) compared to the same period the previous year. To be sure, this was a comedown from 2011, when property investment rose 27.9%, or 2010, when it rose 33.2%. But it still seemed to reflect resilient growth: hardly a collapse in market, more like the kind of modest slowdown consistent with “soft landing.”
Very few people paused to ask where this investment growth was actually coming from. After all, the market was clearly struggling. Year-on-year sales in Q1, for all real estate, was down -14.6%. The decline was even steeper, -17.5%, in residential property, which accounts for about 80% of the market. Office sales were down -10.2%, while growth in “commercial” (i.e., retail) property sales, which saw a boom in 2011, decelerated to +10.5%. Although many people were touting a month-on-month sales recovery in March, compared to the Chinese New Year period, March sales were still down -7.8% from the year before, for the sector as a whole, and -9.7% for residential properties (by comparison, sales in January-February were a disaster, falling -20.9% overall, compared to the first two months of 2011, -24.7% for residential).
Given this consistent fall-off in sales, it’s not surprising that new property starts began to stall. I already mentioned that the 19% drop in new starts in December may have been a bit of a statistical aberration. Starts (measured in floor space) in Jan-Feb were up 5.1%, although the gains came entirely from office and retail — housing starts were flat. But overall starts fell by -4.2% in March, with housing starts down -9.8%, ensuring that overall starts for Q1 were flat (+0.3%) with residential starts down -5.2%. Land sales for Q1 were also flat, with sales proceeds rising 2.5% but land area sold down -3.9%. In March, they were negative (-3.6% sales revenue, -8.5% area sold).
So if sales were down, and starts were either flat or down, where was the 23.5% investment growth coming from? Developers, burdened by 70% leverage ratios and loans threatening to come due, were rushing to complete whatever projects were already in their pipeline, in order to put those units onto the market and raise cash. Completions (measured in floor space) were up 39.3% in Q1, compared to last year (residential completions were similarly up 40.0%). But, of course, those completed units weren’t selling like last year, so unsold inventories expanded. At the close of Q1, the total amount of floor space “for sale” was up 35.5%, compared to the same date last year, while the floor space of residential units “for sale” grew 47.4%.
(That’s just the floor space that developers admitted was for sale. There are plenty of tricks they can use to hold units off the market, in order to massage the official data and avoid spooking buyers. At the end of 2011, total floor space “under construction” was roughly 4.6 times the floor space sold that year. Assuming it typically takes three years to build a unit, from start to finish, that suggests about a year and a half worth of excess inventory hidden somewhere in the pipeline. The ratio for residential property was 4.0, which suggests that, while there may be about a year’s worth of unsold inventory in the housing market, the overhang in commercial real estate is even steeper. Although in absolute terms, it’s the housing overhang that matters).
China’s developers are playing out a kind of prisoner’s dilemma: rush to complete, in hopes of cashing out. But while supply keeps going up, demand is going down. In late March, a central bank (PBOC) survey reported that only 14.1% of Chinese consumers were looking to buy a house in Q2, the lowest level since 1999. Only 17.7% expected home prices to rise in Q2, and 62.9% said they still consider prices to be too high. So all those rushed completions only add to the glut already on the market, driving prices down further and giving buyers — investors and aspiring residents alike — all the more reason to hold off for a better deal. Perhaps this is why Qin Hong, deputy head of research for the Ministry of Housing and Urban-Rural Development (MOHURD), told the Oriental Morning Post in late March that she doesn’t expect housing prices to rebound significantly for the rest of the year. A strong rebound is impossible, she said, due to the continued property tightening policy and high housing inventory (my italics).
The second implication of the dynamic I’ve just described is that the “resilient” growth in real estate investment that seemed to promise a “soft landing” is not very resilient at all. It’s more like the last gasp of a market that’s running out of steam. Once the surge in completions plays out, the declining number of new starts will become the pipeline, and growth in property investment will flatten or go negative. Property investment accounts for roughly a quarter of gross Fixed Asset Investment (FAI), and net FAI accounts for over half of China’s GDP growth. As I noted in January, in a back-of-the-envelope thought exercise, if property investment plateaus (growth falls to zero), it could shave as much as 2.6 percentage points off of real GDP growth. If it fell 10% (in real, not nominal terms) it could bring GDP growth down to 5.3%.
At the time I first saw this dynamic in the data, when the Q1 numbers came out, I figured it would take several months to begin playing out. But the April numbers suggest it is already happening. In April, overall completions rose only 2.8% year-on-year (down from 39.3% in Q1), and housing completions flatlined at 0.8% (down from 40.0% in Q1). As completions petered out, growth in real estate investment decelerated markedly, to just 9.2%, with residential investment growing just 4.0%. Investment actually fell month-on-month, in absolute terms, by -10.7% overall and -9.5% in housing. It only grew year-on-year at all because of a low base set last April. If you plugged this year’s April versus last year’s May, you’d get a year-on-year drop of -9.1% for property investment overall, and -11.0% for housing. (In this context, it’s worth noting that, according to the Beijing Municipal Bureau of Statistics, overall property investment growth in the capital already went negative in January-February, for the first time in three years, dropping -4.6%).
If there’s one bright side to the plateau in completions, it was that unsold inventories advanced less rapidly over the year before. Floor space “for sale” did rise in April, in absolute terms, but not by much. It’s important to remember, though, all the unsold inventory that remains held back and hidden in the pipeline, as noted before.
Meanwhile, the contraction in sales, new starts, and land sales deepened even further in April. Although the decline in sales appeared to moderate slightly for the sector as a whole (-4.5%) and for housing (-2.9%), this was again largely due to a lower base effect from last April, when sales contracted month-on-month by nearly RMB 100 billion. This year’s April sales also registered a significant month-on-month decline, by -17.2% for all property and -15.5% for housing. The more striking news, perhaps, is that commercial property sales, which have been much more resilient until now, also plunged, with office sales falling -23.4% year-on-year and -34.4% compared to March, and retail property sales falling -9.5% year-on-year and -22.7% month-on-month. April was the first month in which all three categories were in year-on-year decline.
New starts in April fell -14.6% year-on-year and -27.0% month-on-month, for property as a whole. Housing starts fell -14.4% year-on-year and -23.4% month-on-month. Office and retail starts, which had remained quite strong through Q1, also plunged. Office starts fell -21.0% year-on-year in April, and -45.1% compared to March. Retail property starts fell -18.7% year-on-year, and -36.8% compared to March. (The year-on-year April comparisons for office and retail rely on a reverse calculation to isolate April 2011 figures, which NBS did not provide in its earlier releases). In short, the trendline in starts has dipped into negative double digits across all categories.
Land sales, meanwhile, fell off a cliff. Land sale revenues in April (RMB 27 billion) were down -54.7% compared to April last year (RMB 60 billion), and -47.0% compared to March (RMB 51 billion). Total area sold was down -52.5% compared to last April, and -43.4% compared to March (the year-on-year comparison here relies on a similar reverse calculation as before).
It should be no surprise, then, that foreign investors are pulling back from China’s property sector. Foreign funding for property development was down -91.4% in March and -80.8% in April, compared to the same months last year.
I think most readers will agree, this is pretty powerful stuff. At least one major sector of the Chinese economy (10-13% of GDP), which had been a leading growth driver, is undoubtedly in contraction. More importantly, the dynamics behind these numbers suggest that the market has not bottomed out, but is still in the process of unraveling. That is why I told CNN, in late April:
“No one has hit the panic button yet,” Chovanec said. “Everyone is holding out hope that at some point it turns around somehow. But I also think that’s a triumph of hope over reason.”
Let's say you're walking around your neighborhood, or a neighborhood you'd like to make yours, and you spy a house you find interesting. Even if it isn't for sale, you can just whip out your iPhone, take a picture of the home and in less than a minute, you'll have an estimate of its price, plus details on its square footage, number of rooms, similar homes for sale and other facts.
A new iPhone app called HomeSnap can tell you the estimated value of any home just by pointing the phone at it and taking a picture. It even gives you the ratings of local schools or info on similar homes for sale. WSJ's Walt Mossberg gives it a try.
This feat of digital magic, which works all over the country, is performed by a new, free app called HomeSnap, from a Washington, D.C., online real-estate firm, Sawbuck Realty. Despite its parentage, the company says that using the app doesn't send any data to a Realtor, or invite any calls or emails from one—unless you explicitly ask for such a connection. It's just a cool way to investigate houses and if you like, to share your "Snaps"—photo profiles of houses—with HomeSnap users and friends via email, text or social networks.
Why would you want to use it? Maybe you're interested in buying the house if it ever comes on the market, or helping a friend do so. Or, maybe you're just curious, or nosy. Of course, you could be in real house-hunting mode, and HomeSnap gives you even more information if the house you took a picture of is for sale, including interior photos and bid history. There's even the option of contacting a buyer's agent, asking a question or requesting a tour—right from the phone.
You can use the app to flip through Snaps taken by others, either in nearby areas or around the nation. (HomeSnap allows you to keep your own Snaps out of this "stream," if you'd rather your neighbors don't know you've been investigating their homes or you'd rather not tip off potential competing buyers.)
With a picture you take of a home, HomeSnap offers data like the bedrooms and baths it has.
There are many real-estate apps and websites, such as Zillow, that allow you to get similar information. Some real-estate firms have their own. But these typically require you to type in an address, or troll through a list, or study a map and tap on a marker that represents a house of interest. All HomeSnap requires is that you snap the shutter on your iPhone. (Android and iPad versions are in the works.)
I've been testing HomeSnap for a few weeks in two states: Maryland and Rhode Island. In my 17 attempts, the app almost always correctly identified the house I was shooting. In two cases, both in town-house complexes, it wasn't sure and presented me with an aerial photo displaying a few guesses from which I could pick. In two other cases, it couldn't identify the house at all for some reason.
The app doesn't actually perform photo recognition on the house. Instead, it uses the iPhone's GPS capability and its sensors to identify the house and then fetches the details from a server in the cloud.
HomeSnap includes a Stealth mode that lets you take a picture when you aren't right in front of a house—even when you're inside another nearby house—and get an aerial view of homes in the area from which you can choose a property as your Snap. This proved accurate for me. In one test, it worked perfectly when I was only able to shoot the rear of a house.
Sawbuck says it built the app partly because it hopes that if a user likes it, he or she will one day use one of its agents. But it says so far only about 10% of the 150,000 Snaps taken with the app have been of homes that are actually for sale.
You can flip through Snaps by others, either nearby or around the nation.
If a home isn't for sale, HomeSnap draws its information from public information like tax records, school boundaries, and census data. If a home is for sale, it provides much more detailed information drawn from local listing databases.
I found HomeSnap fun and impressive. It's a good tool for investigating possible purchases, learning the estimated value of a house and getting other important information. For example, each Snap includes scores from third-party data vendors that rate the quality of nearby schools and rate the relative appreciation and investment value of a home, over 10 years, compared with the average. Some Snaps reveal previous sale dates and prices.
But its information wasn't always complete or accurate. For instance, in the case of my own home, which isn't on the market, it got the number of bathrooms wrong, and didn't know the number of bedrooms—an omission the company blames on a quirk in the public records available for my area. (My tests elsewhere did include the number of bedrooms.) The app has a feature that allows you to report such errors.
In addition, the app currently doesn't have extra information drawn from listings of homes for rent and can't pinpoint units inside large buildings. The company says it's working on both capabilities.
It marks photos of certain homes with a color-coded banner—green if the home is for sale; orange if it's under contract; and purple if there's an coming open house for the property. If there's a major change in the information on a Snap in your history, the app updates it.
The app keeps a history of your Snaps and the company retains them on its servers, whether or not you choose to make them public. In its licensing terms, the company reserves the right to reuse, or modify, the photos you take, though it promises not to "materially" change them, or to distribute or reproduce photos taken by those who opt to keep them private.
If you're looking for a house or just curious about one and you own an iPhone, HomeSnap is a clever, useful and entertaining tool.
SALT LAKE CITY -- Reflecting a national trend, Utah is seeing a rebound in the development and construction of commercial real estate, according to a national group.
Utah ranked sixth in the U.S. in 2011 for direct spending across all categories of commercial real estate, the Commercial Real Estate Development Association reported.
That's up from Utah's 2010 ranking of No. 26. Only West Virginia saw a bigger jump, from No. 48 to No. 3.
According to the study, $3.6 billion was spent in Utah last year on the development and construction of office, industrial and retail buildings, which supported 77,550 jobs.
"It's not just one thing, it's a bunch of things," said Craig Thomas, senior vice president for the national association, which represents commercial real estate developers, owners and investors. "We have been able to come out of this economic downturn faster."
He attributed the surge in part to the migration of businesses from California to Utah, citing multimillion dollar facilities built here by companies such as eBay, EMCCorp and Adobe.
"(They) can't afford to do business there," Thomas said, adding Utah also offers a young, educated workforce.
Utah is not facing the same problems as other states, he added.
"A lot of cities ... built way too many office buildings," he told KSL. "The developers (in Utah) are a lot like the state. We pay our bills as we go."
The $1.5 billion City Creek development, a mixed-use project in downtown Salt Lake City, also played a major role in the state's commercial growth last year.
Thomas predicted the commercial real estate market would continue to be strong in the state.
"The next 10 years in Utah will be its best ever," he said.
Texas led the survey with $7.9 billion in spending, followed by New York, West Virginia, California and Arizona.
Agents Can Own Exclusive Ad Spots and Generate Phone Leads From Trulia's Most Engaged Home Buyers
SAN FRANCISCO, CA, May 03, 2012 (MARKETWIRE via COMTEX) -- Trulia.com, a leading site for home buyers, sellers, renters and real estate professionals, today announced Trulia Mobile Ads, the first mobile advertising platform designed to help real estate professionals reach transaction-ready buyers who are using mobile devices for their home search. Trulia Mobile Ads allow agents to purchase a share of display advertising space and generate phone leads from consumers using Trulia's top rated mobile applications and mobile website. Currently, Trulia Mobile Ads are available only to existing Trulia Local Ads and Trulia Pro customers. Click here for more information about Trulia Mobile Ads.
Trulia Mobile Ads use local targeting to reach buyers as they use their mobile phones devices to explore neighborhoods and visit listings. In every ZIP code, real estate agents may purchase up to five advertising spots that include a banner ad on the map page, a personalized full screen ad with lead form and the guaranteed top spot in Trulia's mobile lead generator. With Trulia Mobile Ads, consumers can directly call or email agents from the banner or full screen ad. Trulia Mobile Ads are currently displayed in Trulia's top rated iPhone and Android apps, as well as Trulia's mobile website.
"Mobile is clearly the future of the real estate shopping experience and we're excited to help agents connect with our highly engaged audience through the Trulia Mobile Ads platform," said Pete Flint, CEO and co-founder of Trulia. "Consumers using mobile devices for their home search will continue to be a major area of growth, and as a company we will continue to invest heavily in our mobile offerings. We are committed to rolling out first-of-a-kind, innovative products for agents and consumers to make the mobile home search experience amazing for everyone."
Trulia Mobile Ads Include:
-- Branded Banner Ads: The banner ad includes the agent's photo, name and
phone number and appears at the top of map search page as consumers
browse homes in local neighborhoods.
-- Full Screen Ad: When clicking on a banner ad, the full screen takeover
ad appears, including the agent's contact info, brokerage, a "Call
Now" button and lead form.
-- Phone Lead Generation: All ad templates include large buttons and
links allowing consumers to call agents from Trulia Mobile Ads with
just one touch.
-- Premium Ad Placement: Trulia Mobile Ads give agents access to the most
exclusive ad spot on Trulia, in front of the most transaction-ready
buyer audience. Only 5 ad spots are available per ZIP and agents can
own all 5 to block out their competition.
"Our research has shown that consumers using mobile devices are 60 percent more likely to contact a real estate professional," said Georg Gerstenfeld, VP of Business Services at Trulia. "It's our goal to connect agents with buyers who are deeply engaged in their home search and we're excited to know that agents can now use Trulia Mobile Ads to connect with buyers while they are standing in front of a listing."
Additional Assets To obtain screenshots of Trulia Mobile Ads, click here To get more information about Trulia Mobile Ads, click here To access Trulia Pro on Facebook, click here
About Trulia, Inc. Trulia gives home buyers, sellers, owners and renters the inside scoop on properties, places and real estate professionals. Trulia has unique info on the areas people want to live that can't be found anywhere else: users can learn about agents, neighborhoods, schools, crime and even ask the local community questions. Real estate professionals use Trulia to connect with millions of transaction-ready buyers and sellers each month via our hyper local advertising services, social recommendations and top-rated mobile apps. Trulia is headquartered in downtown San Francisco and is backed by Accel Partners and Sequoia Capital. Trulia and the Trulia logo are registered trademarks of Trulia, Inc.
The best real estate investment in the past decade was found at the opposite end from trophy resorts and office towers, in 5-foot-by-5-foot lockers.
Self-storage companies, which rent units to small businesses and consumers under names such as “Uncle Bob’s Self Storage (SSS),” produced the best risk-adjusted return among 10 U.S. real estate investment trust indexes in the past decade, according to the BLOOMBERG RISKLESS RETURN RANKING. They had the highest total return and the third-lowest volatility, for a risk-adjusted gain of 10.6 percent. Owners of offices, hotels and warehouses fared among the worst, hurt by price swings.
A Public Storage rental office is seen in the Bronx borough of New York, U.S.
A Public Storage rental office is seen in the Bronx borough of New York, U.S. Photographer: Andrew Harrer/Bloomberg
Public Storage, CubeSmart, Extra Space Storage Inc. (EXR) and Sovran Self Storage Inc. attracted investors with low debt ratios and steady cash-flow growth in a decade that saw commercial-property values soar to records along with sales of mortgage-backed bonds to finance a wave of takeovers. The debt-to-assets ratio for Public Storage, the largest in the group, is 22.5 percent, half the average 45 percent for REITs, saidMichael Knott, managing director of real estate research firmGreen Street Advisors Inc., making the stock less susceptible to large price swings if the economy worsens.
“Public Storage (PSA) has incredibly low leverage compared to the average REIT,” Knott, whose firm is based in Newport Beach, California, said in an interview. “It’s typically not as volatile.”
Warehouses Trail
The Bloomberg REIT Public/Self-Storage Index (BBREPBST) topped gauges tracking healthcare REITs and regional mall REITs, which returned a risk-adjusted 8.4 percent and 7.5 percent, respectively, in the 10 years through April. Warehouse REITs (BBREINDW), which had the highest volatility and the lowest total return during the period, joined hotels at the bottom, with a risk-adjusted gain of 0.8 percent.
Storage REITs release first-quarter earnings this week. Extra Space Storage said April 30 that first-quarter funds from operations rose 41 percent on higher revenue and cost controls. Sovran is scheduled to release earnings after the market closes today, and the other two companies in the group report tomorrow.
The risk-adjusted return, which isn’t annualized, is calculated by dividing total return by volatility, or the degree of daily price variation, giving a measure of income per unit of risk. A higher volatility means the price of an asset can swing dramatically in a short period of time, increasing the potential for unexpected losses.
Basic Units
The ranking compares 10 of the 11 property index types within the Bloomberg REIT index. It excludes single-tenant REITsbecause that index contains just four mostly smaller members whose business of retail leasing is reflected in broader indexes.
Storage REITs had twice the cash-flow growth of REITs in main property types from 2001 to 2011, according to Green Street. Net operating income for storage facilities open at least one year rose an average 3 percent a year during that period, compared with 1.5 percent on average for other REITs.
Companies such as Public Storage of Glendale, California; Salt Lake City-based Extra Space; and CubeSmart (CUBE), of Wayne,Pennsylvania, rent storage space by the month. The facilities can range from basic 5-foot-by-5-foot (1.5-meter-by-1.5-meter) units to climate-controlled rooms of 25 feet by 25 feet where people can stash goods such as furniture, tools and skis, a salesperson can store product samples, or a small business can keep items as in a mini-warehouse. Demand tends to be driven by life changes, which often entail moving, such as college graduation, job changes, divorce or death.
Cleaning Out
“If you get married, you don’t necessarily throw your couch away, you don’t necessarily throw away the buffalo head, what have you,” said Clemente Teng, vice president of investor relations for Public Storage. “You put it in storage.”
Public Storage has about 1 million tenants at any given point in time, with the average lease of existing tenants running about 36 months, Teng said. More than half its tenants have rented their units for more than one year, he said.
“People always think, ‘I’ll just house it for a couple of months and then get it all out, but the problem is once you get all your stuff in, the last thing you want to do is spend a Saturday cleaning it out,” Teng said.
Rents Rise
Occupancy and rents in the storage business probably will increase over the coming year amid rising demand and virtually no new construction, said Chris Sonne, executive managing director of the self-storage industry group at Cushman & Wakefield Inc. The commercial real estate services firm expects occupancy will increase by 1 to 3 percentage points and rents will rise 3 to 3.5 percent, said Sonne, whose group conducts a quarterly survey of about 7,000 facilities in the 50 largest metropolitan areas.
“Physical occupancy is inching back up so they’re able to really raise rents,” Sonne said.
Median occupancy rose to 81.1 percent in the first quarter from 80 percent a year earlier. The median asking rent for a unit of 10 feet by 10 feet at ground level and not climate-controlled climbed to $90 a month in the first quarter from $88 a year earlier, according to Cushman & Wakefield. Public REITs saw stronger rent growth because their revenue-management tools enable them to increase rents to match demand, said Sonne.
‘Not Cheap’
Public Storage, with a market value of $26 billion, accounts for 81 percent of the BBREIT Public/Self Storage Index. Its shares closed at $145.04 yesterday, for a dividend yield of 3 percent. The company operates in 38 states, with Californiaaccounting for about 25 percent of revenue.
“It’s not a cheap stock,” Knott said. “It should be an outperformer over a long time period, but over the next three, six or nine months, it’s hard to say it’s going to outperform.”
Two-thirds of the 25 analysts who follow Public Storage have “hold” or “sell” recommendations on the stock, which has returned 58 percent since April 2010, according to data compiled by Bloomberg.
Storage wasn’t always so attractive to investors. In the five years through 2006, when the Bloomberg REIT index more than doubled, regional malls and shopping centers topped the ranking. Storage, while second by total return in that period, fell to third when adjusted for risk, because it had the second-highest volatility, after hotels.
‘Low Barriers’
Those price swings coincided with a period where the supply of storage units increased in the U.S. New construction of facilities rose by more than half in the 2000s, with the fastest growth in the beginning and middle of the decade. The U.S. had an estimated 50,048 self-storage facilities last year, up from 29,955 in 1999, according to the Self-Storage Almanac, published by Phoenix-based MiniCo Insurance Agency LLC, which provides insurance and publications for the industry. Storage facilities also got larger, growing to an average of 566 units each in 2011, from an average 243 units in 2000, according to the Self-Storage Almanac.
“During 2001 to 2007, there was a great amount of new supply built because of low barriers to entry and cheap financing,” said Teng of Public Storage. “All that has virtually come to a halt.”
The relatively low capital needs of the storage business became more attractive after the financial crisis, as investors shunned companies with large debt burdens. Storage REITs topped the riskless return ranking since the end of 2009, with the second-lowest volatility and the second-highest total return.Regional malls, No. 2 over that period, had the best total return and the third-highest volatility.
‘No Carpeting’
Storage units are relatively cheap to build and “when we re-rent a space, all we have to do is sweep it out,” said Teng.“We don’t have to change the carpeting, paint the walls” or otherwise make improvements to get a new tenant.
High leverage remains a concern for some hotel REITs, which have trailed in returns because recreational travel hasn’t fully rebounded from the slump caused by the recession in 2008 and 2009. Hotel operators tend to see bigger swings in net operating income than other REITs, reflecting their lower operating margins, according to Green Street.
Hotel REITs returned just 0.8 percent over the past 10 years when adjusting for risk. They had the second-highest volatility and the second-lowest return. Office REITs (BBREOFPY), whose assets include well-known “trophy” properties such as the General Motors Building in Manhattan and Embarcadero Center inSan Francisco, had the fourth-worst risk-adjusted return in the period.
Appealing Exteriors
Increased usage of Internet marketing has helped storage REITs attract more customers from smaller operators during the sluggish economic recovery, said John Murphy, a vice president at Cohen & Steers Inc. (CNS), a New York-based investor in real estate shares that manages almost $45 billion. The storage business is fragmented, with the publicly traded REITs accounting for just 10 percent of the U.S. market, he said.
“They’re able to steal market share in a time like today, when demand is growing but at a slow pace,” said Murphy. “With revenue management, they know which facilities they can increase rents on” week by week.
The geographic diversification and large base of tenants gives the publicly traded storage REITs some protection from economic swings, offsetting the short-term nature of storage leases, said Murphy.
Sovran, which operates under the Uncle Bob’s Self Storage name, has been reducing concessions, or landlord incentives, as the economy came out of recession starting in 2009, said Diane Piegza, a spokeswoman for Sovran Self Storage, based in the Buffalo, New York, suburb of Williamsville. During the recession, Sovran offered as much as six weeks free rent and ran a “name-your-price” promotion to attract renters.
“We’re not recession-proof by any means but we’re a little more resistant than other types of real estate,” Piegza said.
To contact the reporter on this story: Hui-yong Yu in Seattle at hyu@bloomberg.net
Home sales are affected by many things. The economy is indeed the guiding factor for a slowdown, but other problems exist that contribute to the frustration felt by both buyers and sellers. Most of these issues could be eliminated and would bring a level of confidence into the housing market.
Flood insurance: For the past several years, Congress has been approving short-term extensions of the National Flood Insurance Program's (NFIP) authority to issue insurance policies. Without the ability to get insurance the sale of homes and the growth that has been projected in those areas will be severely limited. About 42,000 people that live in a flood plain here in Washington would not be able to sell their homes. Builders are hesitant about constructing in these areas for fear that their homes could not sell. Congress needs to agree to long term extensions.
Short sale process: Owners of non-distressed properties are often challenged by the number of short sales in their neighborhoods which contribute to a longer market time for a lower price. Buyers were originally drawn to distressed properties because of possible “deals.” But, with long delays and uncertainty coupled with banks unwillingness to take deep cuts, buyers are assessing the value of purchasing such properties. Short sales must be expedited. New legislation has been introduced to require servicers to decide whether to approve a short sale within 45 days of completion of the file. Buyers are in limbo for months waiting for a lender reply, forcing some to walk away from a sale.
Loan approvals: Lenders could approve applications quickly based on the new qualifying guidelines. But, many buyers do not get formal approval until a few days before the closing date. This puts contracts at risk of not closing based on change of interest rates or new requirements imposed by the lenders.
Mortgage interest deductions: Looking for ways to cut the national debt, Congress has been debating the elimination of the mortgage interest deduction. One of the advantages of home ownership, this deduction has often been the deciding factor for purchasing instead of renting. The uncertainty of the deduction continuing has led many to re-evaluate proceeding with a purchase. The value of the amount that would be saved would be questioned by the harm it would do to the housing industry.
Tax on loan forgiveness: In a short sale, the difference between the price a home sales for and the actual mortgage amount is considered “income” to the seller and is therefore taxable. Burdening a seller with a large tax bill after going through the pain of a short sale will be problematic. The law that forgives this “income” will expire on December 31, 2012. Extending forgiveness of this portion of the loan amount will unburden sellers and increase the possibility of returning to the market in a few years. It will also eliminate the prospect of a bankruptcy instead of the short sale.
Appraisals: At the height of the market, appraisers sometimes worked with the banks to adjust the true value of the home. In an effort to create an arms-length relationship, laws were enacted to keep a distance between the banks and the appraisers. Unfortunately, this resulted in appraisers working in areas that they were not familiar with. This has resulted in appraisals that were below market value which have stopped many transactions from closing, added additional expense or lost value for the seller.
QRM (qualified residential mortgage): Over the last many months, banks have established new rules and qualifications for obtaining a loan. With those protections in place, the requirement for a 20 percent down payment only results in qualified borrowers, who have the resources to pay a mortgage, unable to obtain one. Statistics show that it would take a borrower up to 14 years to save the necessary 20 percent down payment. Historically, a very high percentage of new home loans were dramatically under that amount. This would have a negative effect on any market rebound.
Addressing these issues will do much to stimulate the housing market. Not fixing these problems will add to the delay of any real recovery.
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Joan Probala is the managing broker for Issaquah Windermere (Windermere Real Estate/East Inc.). She has 30 years of experience in real estate, construction and sales and is president of the Seattle King County Association of Realtors.
Global real estate markets had a forgettable last year, with prices rising a paltry 0.5 percent, leading to gloomy forecasts for 2012. But over the past five years, prices have registered huge gains, sparking fears of an asset bubble and concerns over the impact of high household debt.
We've put together a list of the world's 10 hottest property markets based on research by global real estate consultancy Knight Frank, which ranks countries according to highest average growth in housing prices from the fourth quarter of 2006 to the same period in 2011.
The national five-year averages reflect mainstream housing prices in most major cities in all the listed countries expect China, which only includes home prices in Beijing and Shanghai.
10. Switzerland
5-year price growth: 27.5 percent As home to some of the world's most expensive cities with some of the world's most coveted real estate, Switzerland has seen property prices boom in the past five years.
Ultra-low interest rates meant to put a lid on the surging franc and slowing growth have sparked the surge. A real estate bubble index published by UBS hit its highest level in nearly 20 years in the fourth quarter of 2011. The index rose to 0.80 points, close to 1, when the market is considered risky.
The Swiss National Bank has also repeatedly pledged to stem what it views as excessive mortgage lending. The OECD, meanwhile, warned in January that Switzerland needed to take steps like phasing out tax allowances on interest expenses to rein in credit in order to avoid a housing bubble.
According to Knight Frank, out of 63 cities surveyed worldwide in 2011, Switzerland's St. Moritz, Gstaad, and Geneva were among the 10 most-expensive places, measured by square-meter costs.
The average square-meter price of a prime property in Geneva was $31,900 in the fourth quarter of 2011, while the square-foot cost was $3,000.
9. Malaysia
5-year price growth: 28.5 percent In an attempt to curb spiraling house prices in Malaysia, the government is considering doubling the entry price for foreigners buying property in the country.
Under pressure from middle-class Malaysians who feel priced out of the real estate market by overseas buyers, the government may raise the minimum price of homes that foreigners can purchase from $162,972 to $325,944.
In the third quarter of last year, home prices rose 6.6 percent year on the year, according to Knight Frank. (Fourth quarter prices were not available.) Prime property in the capital Kuala Lumpur cost about $5,000 per square meter or $500 per square foot in 2011.
Economic development in the country, which has seen growth of over 5 percent in 2011, has also wetted the appetite for high-end condominiums that house smaller units but provide amenities like gyms and pools. About 11 high-end condominium buildings were completed in Kuala Lumpur last year, bringing the total supply of apartments to 29,364. A further 2,599 units are scheduled for completion in 2012, according to Knight Frank.
7. Norway (tie)
5-year price growth: 28.7 percent Switzerland and Norway are the only European countries to make the list of the world's hottest housing markets.
Unlike most European nations that face a gloomy economic outlook, oil-rich Norway is set to expand 2.7 percent in 2012. Low interest rates have led citizens to take on debt to buy property contributing to a jump in prices that gained 6.8 percent year on year in March.
Another incentive for Norwegians to buy property is a 28 percent tax deduction on interest payments. An unexpected cut in interest rates to 1.5 percent in March further raises the risk of an already developing housing bubble.
In February, the IMF warned that Norwegian home prices were up to 20 percent overvalued. According to government figures, housing prices are seen to be growing almost twice as fast as wages this year. Housing prices in the west coast city of Stavanger , which is the capital of the country’s oil industry, rose 92 percent between 2005 and 2011.
7. Canada (tie)
5-year price growth: 28.7 percent Canada's housing market has stayed robust over the past few years, unlike its neighbor the U.S., where the housing market is still to recover from the 2008 global financial crisis.
Existing home sales in Canada rose 8.6 percent in February, compared to a year earlier, while housing starts beat expectations in March to 215,600 units, up from 205,300 in February, largely due to a surge in apartment construction.
The country's most populous province Ontario, which has seen heavy investment come into condominiums, had multiple urban starts shoot up more than 50 percent in March, according to the Canada Mortgage and Housing Corporation. The IMF warned in December that Canadian homes were overpriced on average by 10 percent .
Canada's most expensive property market, Vancouver, has also been a big draw for foreign buyers. Despite no official figure on the number of homes sold in the city to mainland Chinese investors , the group is said to be pushing the market up. Often ranked among the world's best places to live, Vancouver saw property prices in prime markets jump 10.4 percent in the third quarter of 2011 from the period last year, according to Knight Frank. (Fourth quarter prices were not available.)
The average price for a residential property in Vancouver was $734,207 in December, compared with the national average of $358,261, according to the Canadian Real Estate Association.
6. Taiwan
5-year price growth: 30.1 percent Taiwan is one of the world’s most densely populated countries. Rapid urbanization has led to crowded housing conditions in its biggest metropolitan center — Taipei.
Despite housing prices rising more than 30 percent on average between 2006 and 2011, Taiwan saw prices dip 4.1 percent in 2011, according to Knight Frank. The decline in prices is a result of tightening measures like the "luxury tax" that the government implemented last year.
A 10 percent tax is now levied on any investment property sold within two years, rising to 15 percent if the property is sold within one year. The tax does not apply to properties the owners live in. However, the length of time it takes to sell a home fell to a six-month low in March, pointing to signs of recovery in Taiwan’s housing market, according to the country’s largest mortgage broker H&B Realty.
5. Colombia
5-year price growth: 39.4 percent Colombia is the only South American country to make the list.
Rapid economic expansion, with GDP growth of nearly 6 percent in 2011 — its highest in four years — has led to an increase in house buying especially among the growing middle-class. Plus a decade-long military offensive against illegal armed groups has made it safer to do business in the country, attracting a flood of foreign investment, which has in turn boosted property prices. Foreign direct investment jumped more than 30 percent in the first quarter of 2012 to $4.2 billion compared to the period last year.
Property prices went up 3.2 percent year on year in 2011, while new home sales were up 19 percent in the first half of last year compared to the period a year earlier, according to government figures.
4. Singapore
5-year price growth: 50.5 percent Singapore is the most expensive real estate market in Southeast Asia. The average price of a prime property in the city-state was $25,600 per square meter or $2,600 per square foot in the fourth quarter of 2011, according to Knight Frank.
The country also ranked as the third most expensive city to rent high-end property in Asia last year after Hong Kong and Tokyo, according to research firm ECA International. Low interest rates and a wave of immigration in recent years have boosted demand for homes.
A regional financial hub, Singapore has a large foreign population that's helping to drive home prices. Foreigners make up more than one-third of Singapore’s 5.2 million people and accounted for 18 percent of new homes sold in the third quarter of 2011, according to Citigroup. Among foreign buyers, mainland Chinese are the largest group , accounting for 30.6 percent of foreign sales in the third quarter of 2011, according to real estate firm DTZ.
Public discontent over soaring property prices has led the government to implement measures to cool the market. In December, the government hit foreign property buyers with an additional stamp duty equal to 10 percent of the property value. This has contributed to property prices marking their first quarterly fall in nearly three years of 0.1 percent in January to March this year.
3. Israel
5-year price growth: 54.5 percent Israel is holding on to its spot as the third-hottest housing market in the world since 2009, when house prices jumped more than 21 percent, followed by 16 percent growth in 2010, according to Knight Frank.
High home prices in Israel led to a series of protests in 2011 with demonstrators asking the government to intervene to cool the market. Thousands of protesters made headlines with tent cities last July to voice concerns over a housing shortage and high rentals. The demonstrations seem to have had an effect on property prices, which fell 1.2 percent in 2011, according to Knight Frank.
However, after an interest rate cut from 3.25 percent to 2.5 percent in February, there appears to be resurgence in property demand, with new mortgages issued by banks jumping more than 14 percent in March compared to the two pervious months.
2. Hong Kong
5-year price growth: 93.7 percent Property in Hong Kong is among the world's most expensive. As a major global financial center, the city overtook London last year as the world’s most expensive office rental market, according to Knight Frank.
In the fourth quarter of 2011, the average price of a home in prime areas was about $47,500 per square meter or $4,400 per square feet — the fourth-highest in the world.
The growing wealth of mainland Chinese, coupled with China’s property restrictions, has led to an influx of mainland buyers into Hong Kong’s residential market in recent years. According to industry estimates, three in 10 deals in Hong Kong’s luxury property markets are done by mainland Chinese buyers.
Protests from locals over high prices and foreign buying led the Hong Kong Monetary Authority to introduce a measure last year that requires buyers whose principal incomes are not in Hong Kong to pay an extra 10 percent in down payment when buying a house.
All this has led to a slowdown in recent months. Housing prices grew only 11.3 percent in 2011, compared with 20.1 percent in 2010, according to Knight Frank. And year-to-date prices have grown by a more moderate 6.7 percent , according to market estimates. Sales of luxury homes valued over $1.29 million also decreased 23.6 percent in February following a 17.4 percent fall in January, according to Knight Frank.
1. China
5-year price growth: 110.9 percent China is the world’s hottest property market. Housing prices in major cities Beijing and Shanghai have surged by over 110 percent in the past five years as the world’s second biggest economy experiences rapid growth.
A home in Shanghai’s prime areas cost $19,400 per square meter or $1,800 per square foot in the fourth quarter of 2011. In Beijing, the same home cost an average $17,400 per square meter or $1,600 per square foot, according to Knight Frank.
Fears of a developing asset bubble have led the government to spend much of the last two years reining in red-hot house prices by limiting multiple home purchases, raising interest rates and hiking bank reserve requirements. The years of tightening measures started showing results in the second half of last year with home prices marking a fifth straight month-on-month drop to 0.1 percent in February.
Despite the recent cooling, the country’s home prices are still far from a reasonable level, according to Premier Wen Jiabao, who has maintained that the government will not relax tightening restrictions this year. China’s average home prices are expected to fall between 10 percent and 20 percent in 2012, according to a Reuters survey.
The country’s property developers, meanwhile, have enjoyed rising sales this year. Vanke, China’s biggest developer by sales, reported March sales rising 24 percent year on year — the second-straight month of gains. While the country’s largest developer by market value, China Land Overseas, saw February sales hit $1.7 billion, up 209 percent from the same month a year ago.
When selling your home, you must market it online because that's where the buyers are, says Scott FladHammer, a Fort Wayne, Ind., real estate investor and president of the Real Estate Investors Association.
"The Web is the best way for sellers to reach buyers," says FladHammer. "It's not shocking to see real estate newcomers harnessing the power of online marketing and even outperforming industry veterans."
Indeed, many sellers have had success using sites such as Trulia, Craigslist and eBay (EBAY) to put their homes in front of buyers. And increasingly, according to FladHammer, some sellers are even choosing to use online platforms in lieu of an agent. But whether you choose to sell solo or work with a pro, marketing your property online takes some work and know-how.
When you're selling a home, it's usually not a question of which site you want to list on, says Rich Urban, a real estate investor in Miami Beach, Fla.
"You're marketing the property, so you want to get in front of as many potential buyers as possible," Urban says.
These days, there are a lot of sites to choose from. Urban prefers Craigslist because it's free and well-targeted to a local area. But other sites have their advantages, too.
No matter where you list, Urban says it's important to consider
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price and presentation. Write a succinct ad that addresses the kinds of details buyers want to see. High-quality photos that showcase the property's best features are also a good idea.
When it comes to marketing a property, some sellers might be inclined to do it alone. That's their prerogative, says Tupper Briggs, a broker who heads the Re/Max office in Evergreen, Colo. But he points out that many clients self-list online first before hiring him because they didn't price or market the property as well as they could have.
The more experience you have with pricing and marketing, the less likely you are to need a broker. If the broker offers online marketing and not much else, Urban says he's not sure that's a bargain.
"Online listings are really inexpensive, and on some sites they're free, so it's not a major selling point for a broker to offer an Internet marketing package," Urban says.
As for pricing, use all the tools, but take the data with a grain of salt. Each platform uses its own methodology for computing comparable listings.
Before you forgo the broker altogether, remember that brokers are likely to be the only people who have firsthand knowledge of the area's listing, according to Briggs.
If you choose to list your property for sale by owner, don't expect to bypass real estate agents entirely.
"You're going to hear from a lot of agents who want the listing," says Hunter Phoenix, a Los Angeles life coach and actress who bought and sold property on Craigslist without an agent.
Sellers can cut off cold calls from agents by including language in their ad that discourages that kind of solicitation. But there's a good chance you'll work with agents anyway, because many buyers bring their own, Phoenix says. Sellers shouldn't avoid buyers who hire agents, Phoenix says, but the buyers should pay the commission.
Listing the property on multiple platforms and creating good marketing materials are the easy part. What comes next is something most sellers don't see their brokers do, and for some people, it can be enough of a hassle to hire a professional.
"Sellers need to be able to sort through the looky-loos to find real, qualified buyers," says Urban. "That's always part of selling a home, and online is no different. But without an agent, the seller needs to field and filter those requests."
Depending on the area and the price that can mean a lot of calls and emails.
Sellers who work without an agent will also need to stage and show their property, says Phoenix. There are a lot of free, online resources that offer tips on doing that.
Many sellers list and market their homes on their own, and then hire a professional to handle the transaction. The reason is simple, says Joshua Marks, a real estate lawyer with JM Law Group in Philadelphia: "There are a number of legal issues that can come up that laymen just aren't equipped to handle."
Often, sellers will push back on the price after an inspection turns up needed repairs. Deciding who should pay, how much, and what kind of warranties come with that work raises issues beyond the reach of most laymen, Marks says. Then there sometimes are questions of easements and other property issues. Sellers who choose to go it alone may unknowingly expose themselves to liability years after the sale, Marks says.
NEW YORK (CNNMoney) -- The real estate market was on fire.
Buyers were snapping up sparkling new condos faster than developers could build them. Investors were grabbing two, three, four apartments each, hoping to cash in on skyrocketing prices.
But then the music ended. Prices started to slide. Developers were stuck with empty buildings. Homeowners saw their wealth begin to slip away.
Sound like the United States in 2007? Nope. It's China in 2012.
After experiencing a red-hot growth in recent years, China's real estate market is starting to falter. Developers are offering discounts to unload their unsold inventory. Spooked by falling prices, would-be buyers are staying on the sidelines, while investors mourn the decline in value.
But will a housing downturn plunge China into its own Great Recession, as it did in America? Experts say it will certainly hurt, but it's not likely to spark the same kind of crisis it did in the U.S.
Buying frenzy
The Chinese, who have only been able to own homes since the late 1990s, have never experienced a sustained slide in real estate before. They have been pouring money into housing over the past decade since they had few other investments to park their savings in.
Also, in response to the global financial meltdown, China's government loosened restrictions on lending to keep the economy growing at a nearly 10% clip. This prompted home prices to rise by 50% over the three years ending in 2010, said Nicholas Consonery, analyst at Eurasia Group, a political risk research and consulting firm.
Just like their American counterparts, the Chinese wanted a piece of the real estate riches. So they bought apartment after apartment, never intending to rent them out, said Patrick Chovanec, associate professor at Tsinghua University in Beijing. Instead, they just wanted to stash their cash and capture the appreciation.
Accurate statistics are hard to come by in China, but various estimates say there are between 10 and 65 million vacant units held for investment.
"Every city in China has a new development district with row upon row of condos that are sold, but empty," Chovanec said.
The Chinese government, concerned by the steep run-up in prices and residents' frustration with the lack of affordable housing, stepped in in 2010 with measures to rein in speculators. These included higher downpayments, tough qualifications for mortgages, residency requirements and limits on investment purchases, Chovanec said.
But developers continued to borrow and build, thinking the government would back down to maintain economic growth. The bubble expanded to new markets in second-tier and third-tier cities.
When officials didn't budge, developers finally had to concede. Last summer, they started liquidating their inventories and slashing prices. That prompted recent homebuyers to protest and even riot in Shanghai, Chovanec said.
Sales collapsed, dropping close to 20% in the first quarter compared to the year prior, said Nicholas Lardy, senior fellow at the Peter G. Peterson Institute. And there is virtually no growth in housing starts these days.
Prices have also fallen, though the estimates vary widely. Official statistics show a drop of only a few percentage points in major cities, but experts have heard developers offering discounts of up to 40%.
Ripple effects
There's little debate that China's real estate boom is fizzling, but experts are somewhat divided on how badly it will rock the country and the world.
There are several important differences between the U.S. and Chinese real estate markets that could cushion the blow for the Chinese. A primary one is that homebuyers in China always had to provide down payments of at least 20%. Owners have 40% to 50% equity in their homes, on average, Lardy said. Default rates are very low.
So they won't be hurt as badly by falling prices as Americans were, though they will see their wealth diminish. Some 40% of wealth in China is in housing, compared to 32% in the United States at its peak a few years ago.
Developers, however, are hurting because they are overleveraged. A handful of small ones have already declared bankruptcy -- a rare occurrence in China -- and others are on life support.
"This is a classic real estate bubble," said Susan Wachter, real estate professor at the University of Pennsylvania's Wharton School, noting it's more similar to America's real estate problems of the early 1990s, which were due to overbuilding. "It will take time for absorption."
Banks could also be in trouble because much of their collateral is real estate. And local governments are suffering because they rely on land sales to repay debt and cover up to 40% of their operating budgets.
The Chinese economy, however, may feel more of the sting as the housing market slows. Around 10% of economic growth in China last year was directly related to real estate development, so it will be hard for the country to keep up its blistering pace if housing investment cools. By comparison, residential real estate construction in the United States peaked at 6.1% of the economy in 2005.
"There's a correction starting and if nothing else happens to offset that, economic growth could slow quite substantially," Lardy said.
And if housing development stumbles, other sectors of the Chinese economy will feel the pinch. Companies that provide building materials, including steel, cement and copper, will experience diminished demand.
A slowdown in China's economy will also be felt around the world. Manufacturers in Ohio, for instance, have been prospering recently as they try to supply China's infrastructure needs.
And Chinese consumers have been spending money on traveling and buying products from America, Europe and elsewhere -- boosting the economies of countries around the world.
Still, the future of China's real estate market remains unclear.
"No one has hit the panic button yet," Chovanec said. "Everyone is holding out hope that at some point it turns around somehow. But I also think that's a triumph of hope over reason."
market for approximately two years. One is our primary home, and one is a second home on the lake. Due to personal issues, we want to sell. Should we take a loss and sell, or hang tight?
A: If you really must sell for personal reasons, then why ask the question? Get the best possible price that you can.
However, if you are still in doubt and uncertain about selling now, then I can try to provide you with some guidance. But this is your decision to make. All that the pundits and the fortunetellers can do is make suggestions; we cannot see into the future.
The economy is moving forward, albeit slowly. Mortgage interest rates remain extremely low, which means people can buy or refinance as long as they can qualify for loans under the current strict mortgage lending policies.
Why do you want to sell? If you sell your primary house, where will you live? Have you considered the alternatives? Will you have a profit on either or both houses or are both underwater? That makes a big difference.
Can you afford to hang in there for perhaps another year, or is the cost of the two properties (mortgage, taxes, insurance and upkeep) hurting you financially?
All these are questions you should consider before taking the plunge. I cannot guarantee anything, but I really believe that within the next year or two, the real estate market will rebound.
I have been telling my clients and my readers for years that buying a house should not be considered an investment but rather a place to live and call your home. Obviously, if you make money by appreciation, more power to you.
Q: I own a single-family rental house in suburban Chicago. I have long-term tenants, and the house needs quite a bit of updates and improvements.
Because of the high taxes, the cost of upkeep and maintenance and in general, the climate of the real estate industry, I'd like to dispose of the property. Unfortunately, selling the house is not a realistic option because houses in the area remain on the market for many months and even years, and I figure that I'd have to dump a ton of money into the property in order to make it presentable and pass the rigid home inspection policies of the city, prior to selling.
Therefore, I'd like to entertain the ideas of either demolishing the property and donating the land to the city or just giving or deeding the property to the current tenants and walking away (there is no mortgage on the property). I've offered to sell the property to the tenants, but they have bad credit and no money.
Are these viable options? What are the legal implications of each option?
A: You have a house free and clear, and it is an investment property. Before you do anything drastic, I would discuss your situation with a tax professional.
There are many options. You can sell it for whatever you can get and take a loss (confirm this with your accountant). I suspect that despite the city requirements, you still have the right to sell your property "as is."
You can donate it to a charity and again take a tax deduction. You can do a Starker (Section 1031) exchange and end up with a better property. And despite the bad credit of your tenants, you can arrange for a land-sales contract, whereby they start making monthly payments toward the purchase and at some point in time you give them the deed to the property. If they don't make the payments, they are in default and you still have the property. This will require your attorney to assist you with the concept and its implementation.
I cannot see any benefit of spending the money to tear it down when there are plenty of other options.
LUBBOCK, Texas, April 19, 2012 /PRNewswire via COMTEX/ -- Strapping back for college as you look at one child and scratching your head as you look to your second and third coming right behind?
Maybe it's time to consider buying a house.
Pardon the whiplash on that last one, but the fact is, many parents are investing in real estate close to campus for their college-bound offspring. Oftentimes, it's preferable to shelling out dormitory fees or apartment rent.
"In Lubbock, that's definitely true. We're right in our peak season for families whose children will be attending Texas Tech University in the fall," said Debora Perez-Ruiz of MoVaDe Realty and president of the Lubbock Association of Realtors. "And, the majority of parents who purchase homes have stair-step children, meaning that once one is in college, future kids from the same family will be attending college within the next few years. The cost savings over the long run - especially for this type of family - are exponential."
And the timing is right, Perez-Ruiz added. Lubbock's real estate market has been continuously in better shape than the rest of the state and nation - but even locally, the last three months have outshined the last year.
"Parents of kids who plan to come to Tech next year have every reason to consider home ownership," Perez-Ruiz said. "The market's stable, homes are available and the cost is good."
As the owner of a campus house, Perez-Ruiz explained, the goals are similar to those of any landlord. You want a property that you can keep fully occupied and that will produce rental income to at least cover your costs (mortgage, taxes, insurance). You also want to be sure you have signed leases and security deposits from every renter.
What scares many parents - and keeps the dorms full - are the unknowns. What if I can't rent it? What if my kid drops out? What if the housing market suddenly flatlines? What if? What if?
"The question should be, how much growth is there in the community?" Perez-Ruiz said. "The ideal situation is a town like Lubbock, where we're not too big and not too small - yet the student population is growing."
Additionally, a house you own and can keep full still beats paying thousands each year for student housing. And, Perez-Ruiz said, don't forget the tax breaks on mortgage interest, property taxes and a percentage of utilities and maintenance (if you collect rents).
It’s a title Vancouver is more than happy to relinquish.
Canada’s hottest realestate market is finally cooling off, new sales figures show, much to the relief of those who have grown weary of talk of a West Coast property bubble.
At more than $761,000, the average cost of a Vancouver home is still higher than anywhere, but was 3.1 per cent lower in March than in the same month last year. Sales activity is slower, too, down 22.3 per cent through the first three months of 2012.
But the data from the Canadian Real Estate Association indicate that Toronto’s sizzling market is still gaining momentum, with average prices in the country’s largest city soaring more than 10 per cent last month, to about $504,000.
The diverging fortunes of the country’s two most important real-estate markets adds to the complexity of the policy decisions facing Finance Minister Jim Flaherty and Bank of Canada Governor Mark Carney. Both have issued repeated warnings about the high level of personaldebt that Canadians are taking on to buy increasingly expensive houses.
But Mr. Flaherty has said he is reluctant to tighten the rules on mortgages again, believing that the market will correct itself, while Mr. Carney is unlikely to raise interest rates any time soon for fear of driving up the currency and hurting other parts of the Canadian economy.
Toronto and Vancouver together account for about one-quarter of all real estate activity in Canada.
The opposing directions of the two cities have resulted in a country-wide average price that’s edging lower, easing economists’ concerns of a U.S.-style crash. And should the trend continue, it may also ease the worries of officials in Ottawa.
“When it comes to housing, Toronto is not Canada, nor is Vancouver,” Douglas Porter, an economist in Toronto at BMO Nesbitt Burns, said in a report.
“For most cities, the market looks well balanced, and is broadly moderating on its own accord.”
Nationally, the average price of a home fell 0.5 per cent to $369,677 in March from last year while sales rose 1.6 per cent.
“The slight decline in the national average price points to a tug of war between Toronto and Vancouver,” Gregory Klump, chief economist for the Canadian Real Estate Association, said in a statement. “The decline in average price reflects the change in Vancouver’s sales mix, not housing price deflation.”
Despite the price drop, few in Vancouver are calling this a correction. The spring of 2011 saw a spike in sales of expensive luxury homes in Vancouver that is now skewing the data for 2012, some argue.
Real estate agent Steve Di Fruscia, who specializes in selling high-end homes, said the Vancouver market, particularly in pricey areas such West Vancouver, are in the midst of a “typical cooling-off period,” after the frenzied activity of a year ago
“We’re still on a very optimistic, greedy part of the year where people are trying to cash in on extra high prices, believing that we will have the same spring as we did last year and prices will continue to skyrocket another 10 to 15 per cent,” he said.
Mr. Di Fruscia markets his clients’ properties in both Canada and mainland China. Some have blamed Vancouver’s high prices on an influx of so-called “foreign” and “speculative” money from foreign investors. However, Mr. Di Fruscia said 95 per cent of his sales of Vancouver homes are to Chinese buyers who are immigrating to Canada as citizens or permanent residents.
There are no statistics on what, if any, impact foreign investors are having on the real estate market in Vancouver, Toronto nor the rest of Canada. Cameron Muir, chief economist of the B.C. Real Estate Association, suggested that in Vancouver, the number of foreign buyers are “much lower” than many people think, accounting for between 1 per cent and 3 per cent of the market.
In Toronto, a low supply of properties is leading to bidding wars that drove up the average price of Toronto homes to $504,117 in March. Toronto’s average home prices have set a new record high in every year since 2000 and 2012 should be no different.
“We’d love to have more inventory to sell because there’s no shortage of buyers looking for good inventory,” said Kevin Somers, the broker area manager for Royal LePage Real Estate Services Ltd. in central Toronto.
“As long as the basic economic indicators and interest-rate outlook remain positive, people will always need a place to live and would rather own than rent in most cases.”
Upkeep is more popular than upgrades these days, says Sal Alfano, editorial director for Remodeling. These are the projects that often recoup the biggest slice of expenses at resale. But prices and returns do vary regionally, he says.
Ever wonder what brings the lowest return when you plant that "for sale" sign? Think high-dollar, high-end and highly personalized add-ons that make you drool. Like a totally tricked-out garage built from the ground up. Or a super luxe master suite addition. Or the home office redo designed just for you.
Here are the six improvements that, in their 2010 report, ranked dead last nationally when it comes to getting those renovation dollars back at resale.
Want to get an idea what today's office-away-from-the-office looks like? Walk into Starbucks.
These days, a home office consists of a multiple-choice combination of wireless laptops, smartphones, PDAs and touch-screen tablets. And that worker bee might be toiling anywhere from a home patio or a favorite restaurant to a park bench.
The standard home office renovation, meanwhile -- complete with plenty of built-in storage and high-tech wiring -- is this year's biggest loser in the resale value sweepstakes. Nationally, homeowners spent an average of $28,888 and can expect to recoup about 45.8 percent at resale, according to the report.
Return on investment doesn't reflect your enjoyment of the space, Alfano says.
He offers two tips for home-office remodelers when they sell. First, opt for something that can be easily converted back into a bedroom or den for (or by) the next buyer.
Second, when you're selling, call it a study, den or hobby room. "There's lots of call for multipurpose space. Don't lock yourself into that one use," Alfano says. Don't use words that invoke images of actual work. Or the office.
Backup power generator
You see a backup generator and imagine all of the comforts no matter what the weather.
But potential buyers hailing from outside your local area may not share that vision. (And a handful of those who do might have watched too many zombie movies.)
On average, when homeowners have a heavy-duty backup power generator installed, they spend about $14,718, according to the report. Going with a slightly less expensive model or having a less complicated installation could cut the costs significantly, Alfano says.
Average amount of the price recovered at resale time: 48.5 percent.
Sunroom addition
Real estate agents will tell you that potential buyers want square footage, pristine condition and lots of light. So a brand-new room that has the word "sun" in it, it has to be great for resale value, right?
Not necessarily.
Your first clue: The word "addition" -- which means expanding the footprint of your home -- indicates that this is not a renovation for the faint of heart (or wallet). "It's one of the more expensive projects," Alfano says.
While it seems simple enough, the national average for a sunroom addition is $75,224, according to the report. Homeowners can expect to recoup about 48.6 percent when they sell.
That doesn't mean that adding a sunroom is always a bad move.
If your home needs another common area, a sunroom could be the answer, says Katie Severance, co-author of "The Complete Idiot's Guide to Selling Your Home." An addition is best considered in the context of the whole home, she says. "The doctor has to treat the whole patient. You have to look at the house and say 'What's out of balance?'"
Upscale master suite addition
Who doesn't want to wake up in a five-star-hotel-quality suite with an attached spa bathroom and a kitchenette that affords you coffee and pastries before facing the world?
Once you see the price tag, it won't just be the coffee keeping you up at night.
For a super-deluxe master suite addition -- which adds square footage and uses only top-dollar materials -- the average cost is about $232,062, according to the report.
That's 460 nights at a posh resort with enough left over to raid the minibar.
In years past, this project was "sort of a trend in vacation homes" that migrated to primary dwellings, Alfano says. Sellers can expect to recover about 52.7 percent at resale.
Your buyer can purchase a newer house with the same features as part of the original floor plan that "probably lays out better anyway," says Loren Keim, author of "How to Sell Your Home in Any Market."
So while the next buyer may appreciate your luxury accommodations (which could even tip their decision in your home's favor), chances are they won't want to pay the full tab for your remodel.
Bathroom addition
Unless you're a hermit who never entertains, you've probably wished for an extra bathroom now and then.
But bathroom additions require serious coin. For a moderately outfitted addition with synthetic stone or plastic laminate surfaces, figure parting with about $21,695, according to the Remodeling report. Go upscale, with finishes like premium marble or fine tile, and you can easily spend in the neighborhood of $40,710.
Either way, you get about the same return: 53 cents on the dollar. "In the buyer's mind, the additional bathroom isn't worth that additional $20,000 to $40,000," Keim says.
Investigate a less-expensive way to get the same result without flushing quite as much cash. While additions usually cost more, pros might be able to reconfigure your existing space to add a bathroom for less, Alfano says.
Upscale garage addition
Instead of cleaning out the garage, how much would you pay to have a new one built from scratch?
This time, it would have all the organizational built-ins, and a durable, easy-to-clean floor to ensure it would never be messy again. And windows for natural light.
Oh yeah, and you could store a couple of cars in there, too.
The price tag for a top-of-the-line detached two-car with all the trimmings is about $90,053, according to the report. You can expect to recover about 53.6 percent of that when you sell.
"This one is completely decked out on the inside," says Alfano. "It's a dream garage."
And that's likely some of the problem with recovering the value at resale. Says Keim, "You've got a very small target audience out there that wants an upscale garage."
You've probably heard many opinions that Chinese real estate is in a bubble. However, much of the prognostication has been backed by hearsay and speculation. Below, I go beyond the hypothetical by illustrating the hard data that demonstrates that Chinese real estate is in a bubble. I will go further by anticipating how investors could potentially profit from the collapse of Chinese real estate bubble.
Most investors value residential real estate using a variety of measures. These include: price-to-incomes, price-to-rents and affordability. Essentially, people buy homes when they can afford the monthly payments.
Comparable sales are also often used, but I think this is the weakest form of property valuation. Arguing an asset is worth $x because a similar asset sold for a $x suffers from pro-cyclicality and becomes a self-fulfilling prophecy.
The first three charts below compare property valuations in the US with those in China and a selection of Chinese cities. According to three measures (price-to-incomes, price-to-rents, mortgage affordability) Chinese real estate is vastly overvalued relative to US housing.
The Chinese housing bubble may already be imploding. Assuming declining home prices drag the Chinese banking sector with it (and with the banking sector, local governments and the credit expansion fueling the Chinese fixed asset investment boom deriving Chinese economic growth) broad-based China-related ETFs, such as iShares FTSE China 25 Index ETF (FXI) or iShares MSCI Hong Kong Index Fund (EWH) could decline in value.
(Click charts to enlarge)
Looking beyond China, investors could consider the affects of a Chinese housing decline on the countries that depend on China: Australia and Canada.
Perhaps coincidentally, the real estate markets in both Australia and Canada have boomed alongside the real estate market in China. The three charts below compare the housing markets in Australia and Canada with that of the U.S. While inexpensive by Chinese standards, Australian and Canadian property is anywhere from 2-5x more pricey than U.S. property.
If China experiences a significant slowdown because of a collapsing property market, a reasonable person might expect Chinese raw materials imports to slow. This would impact Australia and Canada, since they both export raw materials to China.
A decline in demand for raw materials would probably cause the Aussie (FXA) and Canadian dollar (FXC) to fall relative to commodity importers. It could also hit Australian and Canadian commodity producers such as BHP Billiton (BHP) or Potash Corp. (POT) - even if they don't directly do business with China.
Alternatively, one could look directly at the commodities themselves. If Chinese housing collapsed, even gold (GLD) and silver (SLV) may decline alongside the broad commodity complex (DBC).
Finally, if a Chinese housing collapse created a domino affect starting with exporters and ultimately slowing the domestic Australian and Canadian economies, hitting confidence and causing layoffs, the housing bubbles in both these markets could pop.
(Click charts to enlarge)
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Additional disclosure: Data source: Numbeo.com This is not advice. Short selling is risky and could lead to unlimited losses. While Plan B Economics makes every effort to provide high quality information, the information is not guaranteed to be accurate and should not be relied on. Investing involves risk and you could lose all your money. Consult a professional advisor before making any investing decisions.
(MoneyWatch) After weeks of mixed housing news, many Main Street Americans are wondering just what's going on with the housing market. The federal government has stepped in on a number of occasions, but despite all the financial help, the housing recovery has been slow and painful. It leaves many people wondering where we are so many years after the housing bubble burst.
There's no definitive answer - after all, real estate is all about what's happening locally, not nationally. But I want to address some of the most common questions.
Q. What's going on with home prices?
A. As with everything in real estate, home prices are highly dependent on location, location, location. Select markets have seen home values improve, but the overwhelming national trend is a decline in prices. According to the latest S&P/Case-Shiller home price index, prices fell 4 percent year-over-year in the fourth quarter of 2011. (In Atlanta, home prices fell nearly 13 percent last year.)
Prices will probably continue to fall through 2012, due to big banks clearing out their foreclosure inventories. But as the year wears on and the number of REO homes dwindles, I believe prices will begin to rise - modestly - again.
Don't expect anything to happen quickly, though. It took us years to get into this mess and will take us just as long to get out.
Q. Are foreclosures still happening at a rapid rate?
A. Foreclosure activity recently increased due to the big settlement between banks and states, but it's still down from one year ago. According to RealtyTrac's last foreclosure report, foreclosure filings were reported on 210,941 U.S. properties in January. That's a 3 percent increase from the previous month, but still down 19 percent from January 2011.
So, while banks are still foreclosing on homeowners, the velocity has slowed. Foreclosures are not happening at the rapid pace they were a few years ago. We should expect to see foreclosure activity increase a little in the coming months, which is not good news. But it needs to happen. Foreclosures keep home prices down and buyers from jumping into the market. Until we get through them, we can't begin a true housing recovery.
Q. What is the government doing today to help the housing market?
A. The government is actually doing a number of things in hopes of further stimulating the housing market. Many haven't worked (like the original loan modification programs), and others - like the Independent Foreclosure Review - have been poorly publicized. Those which have been touted as the cure for what ails the housing market have mostly failed. The programs I've received the most questions on are:
HAMP/HARP programs
The Home Affordable Modification Program (HAMP) is geared toward helping homeowners who have fallen on hard times. Borrowers must meet certain criteria and complete a trial loan modification of about three months. Ultimately, it's up to the lender whether or not you receive any help; as you might imagine, many borrowers receive nothing.
The Home Affordable Refinance Program (HARP) is designed to help underwater homeowners who are not in financial trouble. In other words, the value of their home has gone down but they can still make payments on time. The loan must be owned or guaranteed by Fannie Mae or Freddie Mac to be eligible for the HARP program.
By most accounts, these programs have been unsuccessful in doing what they set out to do: Keep people in their homes.
Independent Foreclosure Review
The Independent Foreclosure Review has been poorly publicized, and many consumers don't realize it's an option. The review is conducted by an independent agency and gives homeowners the opportunity to request a review of how their lender conducted the foreclosure of their primary residence.
The Office of the Comptroller of the Currency (OCC) recently extended the deadline for submissions until July 31, 2012. More information, including eligibility criteria, is available in my Independent Foreclosure Review post.
Foreclosure Settlement
The nation's largest lenders recently agreed to pay out billions to the states and drastically overhaul their industry after deceptive foreclosure practices and robo-signing caused many homeowners to lose their homes. But what does the foreclosure settlement mean for consumers?
Unfortunately, not much. Only 750,000 Americans, or roughly half of those eligible to receive assistance under the deal, will receive $1,800 checks. That's not enough when you've lost years' worth of mortgage payments.
It's hard to be optimistic about the terms of the settlement. It doesn't offer much to those who have already lost everything, and it's not clear if lenders will actually make significant changes to their practices. And, it's probable the cost of the banks' payouts to the government will somehow be passed onto the consumer.
Q. Is there an end in sight?
A. The housing market will rebound at some point, but it's unlikely we'll see the prices we saw during the housing bubble in the near future. In fact, some would argue we may never see them again.
It's possible there's been a fundamental shift in the way we view housing. James Bullard, president and CEO of the Federal Reserve Bank of St. Louis, makes the argument that current would-be homebuyers see homeownership as not worth the risk.
At a speech in New York, Bloomberg reports, Bullard said:
"My sense is that the housing debacle of the past five years may have scared off a generation of potential homeowners. New home buyers likely see homeownership as a fundamentally riskier proposition than earlier cohorts and therefore may be far more likely to rent rather than own."
With recent reports showing drops in home values and acceleration in foreclosures, it's unlikely we'll see "the end" any time soon. But I want to know what's happening with you. Email me with your questions or concerns about today's real estate market.
Whether shopping for a home or apartment, real estate buyers should rely on more than just their gut-level feelings. NY1's Real Estate reporter Jill Urban filed the following report.
Buying a home is a very emotional process. When buyers attend a showing or an open house, they often look for a gut feeling that the property could "be the one." Teri Rogers, the founder of BrickUnderground, says buyers need to take the emotion out of it and for not-too-obvious clues as to whether the property is a good investment.
"People go to look at a home at an open house and tend to really look at the surface of it, as opposed to peeling back the layers and seeing what kind of story that apartment is telling," says Rogers.
She has some advice on how to get the full story about a listing. First, buyers should judge the building. Checking the condition of the lobby, the elevators and the hallways could give insight into the how well the building is maintained and if one can expect any surprise assessments after purchase.
Once inside the home, look behind anything that may be in the way. Peek behind furniture and wall coverings, lift up rugs and look inside cabinets, anything to get a full picture of what’s for sale.
"Look in places you might not think to look. Look under the sinks for signs of water damage or pests problems. Look at the electrical outlets and if you see a two-pronged outlet instead of a three-pronged outlet. You may need to be upgrading the electric in the apartment," says Rogers. "Also, just to double check on when that renovation was really completed, open the microwave or refrigerator and find the manufacturer date stamp and that will give you an idea when that kitchen was overhauled."
She says buyers should rely on their senses. Do they smell smoke or food from a neighbor? Can they hear noise from the street? Also, they should not always rely on a broker says.
"Be skeptical. Don’t take the broker's word for anything, whether you can install a washer-dryer, or whether dogs are allowed or when that renovation was completed," says Rogers. "Ask for documentation. You may not get the documentation you want at that moment, but the broker’s reaction could give you a good clue as to the answer."
She also suggests chatting up a doorman or neighbors, because they can usually tell more about the building than the broker can.
Don’t forget to look at the amenity spaces, as they can share a lot about the upkeep of the building and maybe even offer some clues to its demographic breakdown.
One area we have yet to discuss in any great detail is the real estate appraisal. Any time a new loan is written for property, the new lender will order a value appraisal of the property. The appraisal is typically paid for by the borrower, either outside of closing or as part of the lender’s fees charged to the buyer at closing. It’s important to understand the role of the appraiser and the positive and negative effects the appraisal can have on the transaction.
In the past, the lender had a list of approved appraisers and would simply choose from that list and order the appraisal directly. That changed in the wake of the market crash. Lenders are now required to order appraisals from a third-party management company (that then contracts the appraisers to conduct the appraisal). There are differing opinions as to the benefit of this change in practice. For most, though, the benefit is clear—there is no danger of an unscrupulous lender exercising undue influence on the appraiser to inflate the value to meet the contract purchase price.
In most cases, appraisers are required to include foreclosed and other distressed property sales in the appraisal report. This means the subject property is competing with other property that is most likely in worse condition or had much lower sales price. Regardless of the opinion of the lender, the buyer or the real estate professional, this is an accurate reflection of the current market. It’s also somewhat of a catch-22 for some neighborhoods.
If an appraisal is conducted and the value is set at a price lower than the contract purchase price, the buyer has at least two options. If an appraisal contingency is part of the purchase agreement, the buyer will typically have the right to ask the seller to reduce the total purchase price to the appraised value. Or the buyer may, if they have the ability, bring the difference to the closing as an additional cash payment. The bottom line is the lender will not write a loan for any value above the appraised value less any required down payments. In most cases, buyers will chose to ask the seller for a price reduction. In some rare cases, the parties to the agreement will not come to terms and the contract might terminate based on the seller’s unwillingness or inability to lower the purchase price or the buyer’s inability to make up the difference at closing. Make sure your real estate professional explains the ramifications of any appraisal contingency before accepting the terms of a purchase offer. In most cases of FHA financing, once an FHA case number has been assigned to the property for appraisal purposes, that appraisal will follow the property for six months and will be binding on any future FHA, and in some cases, other types of loans.
The flip side of this is an appraisal higher than the agreed-to purchase price. In this case, the buyer is said to have positive equity in the property. Of course, the final purchase price that will be recorded is the real value market price at the time of closing. However, the higher than sales price appraisal does tend to cement the confidence the lender has in the new loan.
Recently we have seen appraisals as low as $18,000 under purchase price and as high as $65,000 above purchase price. Those numbers just prove that each appraiser is different—some are more conservative and some are more liberal.
PALO ALTO, Calif. (MarketWatch) — Nearly every retirement portfolio should contain real estate, but most investors can’t buy a building. Fortunately, it’s easy to own property without ever fixing a toilet, or worrying about a roof caving in during a storm.
Even really nice apartments need a little love when it is time to sell. Kelsey Hubbard investigates the art of "staging" an apartment for sale. As it turns out, a few design tweaks here and there can be both cheap and effective.
But first, it’s important to understand real estate as an asset class and its contribution to a portfolio. A property that is well located and leased gives you debt-like cash flow with the opportunity for appreciation like stocks. Leased buildings are valued based upon the stability of cash flow from rents and the cost to replace the building.
Real estate also protects you against inflation, as its value tends to move closely with the costs required to replace it. Think land, bricks, concrete, steel, labor, and fixtures. These costs rise with inflation, and landlords raise rents over time as inflation grows.
Why REITs make sense
You can get a well-diversified real estate portfolio by owning real estate in the form of real estate investment trusts (REITs). These are unique public securities because they pay no taxes and pass through 90% of their income to investors in dividends. From 1970-2009, public REITs returned an average of 9.1% per year. That means money invested in REITs doubled every eight years.
That doesn’t mean real estate won’t have ups and downs. The fair value of the real estate held in the REIT compared to the stock price can easily range between a 20% discount to a 20% premium. Between 2000 and 2009 REITs have been up or down by more than 35%. But while the stocks may swing, you can sleep at night knowing that you own hard, rent-paying assets.
Indexing purists claim that REITs are included in broad-market index funds and if you add REITs to your portfolio, you are guilty of playing sectors. But because so much real estate is still privately held, the economic activity related to the real estate asset class is not adequately reflected in the publicly traded REITs. To truly index global real estate activity requires “boosting” your real-estate holdings by adding REITs.
The best way to own REITs is through an exchange traded fund. The costs are low and you’d be hard-pressed to find an active fund manager with the expertise to consistently pick REITs over many years that will beat a REIT index. In fact, owning REITs through a mutual fund can cost you almost 50% of the yearly dividend you receive, in manager fees.
Instead of paying high fees, buy an ETF that holds all of the REITs that matter. We recommend two SPDR Dow Jones ETFs for REIT exposure: SPDR Dow Jones REIT /quotes/zigman/477654/quotes/nls/rwrRWR-1.44%, which indexes U.S. real estate, and the SPDR Dow Jones International Real Estate ETF /quotes/zigman/477875/quotes/nls/rwxRWX-2.09%, which indexes international real estate.
For investors interested in low-cost ETF portfolios and more. Visit MarketRiders.
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SEATTLE, April 3, 2012 /PRNewswire via COMTEX/ -- Zillow, Inc. /quotes/zigman/5930210/quotes/nls/zZ+2.64%, the leading real estate information marketplace, today announced a renewal of its exclusive advertising agreement with Yahoo!, which creates the Yahoo!-Zillow® Real Estate Network, the largest real estate network on the Web.[i] The companies entered into an advertising agreement in 2011, creating the Yahoo!-Zillow Real Estate Network to give real estate agents and brokers the ability to buy local advertisements on both sites with just one phone transaction.
"We are very proud of our strong relationship with Yahoo! and I'm extremely pleased to extend our advertising partnership," said Spencer Rascoff, Zillow CEO. "We strongly believe that home sellers and real estate agents benefit when they expose their listings to the broadest possible audience of potential home buyers, and with the extension of this partnership the Yahoo!-Zillow Real Estate Network remains the largest real estate network on the Web."
"Yahoo!'s relationship with Zillow has been essential in the Yahoo!-Zillow Real Estate Network's place as the premier advertising space for agents," said Brandon Huff, VP of Yahoo! Commerce. "We look forward to continuing our relationship with Zillow, maintaining our place as the most trusted source for real estate listings online and working together on opportunities to provide additional tools and features for our users in the future."
The Yahoo! and Zillow relationship began in 2006 when Yahoo! Real Estate incorporated Zillow's Zestimate® home valuations of now more than 100 million U.S. homes into its user experience. Zillow also became Yahoo! Real Estate's exclusive provider of for-sale listings. Any for-sale listing that appears on Zillow, including many listings not found on other sites such as for-sale-by-owner listings, automatically appears on Yahoo! Real Estate.
The Yahoo!-Zillow Real Estate Network has been the No. 1 or 2 real estate brand in all of the top 20 local markets in the United States. The network also allows advertisers to reach more U.S. Internet users than the next two largest competitors combined.[ii]
Tens of thousands of industry professionals have reached Zillow's more than 30 million monthly unique users[iii] with advertising programs like Zillow's Premier Agent, which allows agents to target specific ZIP code searches, and with Showcase Ads and Featured Listings, which allow agents and brokers to increase traffic to individual listings. In addition to selling local ads, Zillow sells national display advertising across both sites to new home builders, real estate agents and brokers.
About Zillow, Inc.Zillow /quotes/zigman/5930210/quotes/nls/zZ+2.64%is the leading real estate information marketplace, providing vital information about homes, real estate listings and mortgages through its website and mobile applications, enabling homeowners, buyers, sellers and renters to connect with real estate and mortgage professionals best suited to meet their needs. More than 30 million unique users visited Zillow's websites and mobile applications in February 2012. Zillow, Inc. operates Zillow.com®, Zillow Mortgage Marketplace, Zillow Mobile, Postlets® and Diverse Solutions(TM). The company is headquartered in Seattle.
The Zillow logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=10012
Zillow.com, Zillow and Postlets are registered trademarks of Zillow, Inc. Diverse Solutions is a trademark of Zillow, Inc.
About Yahoo!Yahoo! /quotes/zigman/59898/quotes/nls/yhooYHOO-1.20%is the premier digital media company, creating deeply personal digital experiences that keep more than half a billion people connected to what matters most to them, across devices and around the globe. That's how we deliver your world, your way. And Yahoo!'s unique combination of Science + Art + Scale connects advertisers to the consumers who build their businesses. For more information, visit the pressroom (pressroom.yahoo.com) or the company's blog, Yodel Anecdotal (yodel.yahoo.com).
Yahoo! is the trademark and/or registered trademark of Yahoo! Inc. All other names are trademarks and/or registered trademarks of their respective owners.
(ZFIN)
[i] comScore Media Metrix Real Estate Category Ranking by Unique Visitors, U.S. Data, February 2012.[ii] comScore Media Metrix Real Estate Category Ranking by Unique Visitors, U.S. Data, February 2012.[iii] Internal tracking via Google Analytics.
LONDON (Reuters) - A private equity arm of Goldman Sachs is looking to launch a $3 billion property debt fund in a bid to take advantage of a growing shortage of real estate financing across the UK and Europe, British newspaper the Times said on Monday.
Real Estate Principal Investment Area (REPIA) is exploring options to create a fund that would provide senior and mezzanine loans to property investors, and will target property lending that is riskier but which would offer higher potential returns, the Times said without citing sources.
Mezzanine debt is commonly used to plug the gap between equity and senior debt, usually in the 60-80 percent loan-to-value band. The fund's structure and make up would be similar to another $2.6 billion property debt fund that REPIA set up in 2009 to target U.S. property investors, the newspaper said.
Europe's property industry is grappling with a widening debt funding gap, the shortfall between debt needing refinancing and the money available do so, as more banks slash lending to the sector in a bid to comply with incoming solvency regulations.
Property consultancy CBRE Group estimates that there is about 960 billion euros ($1.3 trillion) of outstanding debt secured across Europe, of which 575 billion must be repaid within the next three years.
Non-bank financiers that have recently launched funds targeting the financing gap include the property units of insurers Prudential Financial and AXA Group while fund manager BlackRock said it was considering making a foray into real estate debt.
Goldman Sachs was not immediately available for comment. ($1 = 0.7509 euros)
Home resales have climbed to their highest levels in nearly five years. In an unusual twist, activity might get a further boost from a recent rise in mortgage rates.
Q. I would like to buy my first home this year, but I’m worried that prices are going to keep dropping. Should I buy now or keep waiting?
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A. There’s certainly no reason to rush out and make a purchase today, but you should at least start getting ready by getting preapproved for a loan to see how much you can borrow as the prime spring home-buying season approaches.
Although sales and prices have dropped in most parts of the country in the past several years, there are recent signs that the nationwide market might be coming back to life. Resales in January and February hit their highest levels since 2007, according to the National Association of Realtors, while permits for new construction — a barometer of future activity and a bellwether of developers’ confidence in the economy — rose to their highest point in more than three years. Average prices for both new and resale homes have climbed modestly.
It’s also worth noting that mortgage-interest rates recently have been climbing as the economy shows signs of improvement. The average rate on 30-year, fixed-payment loans in late March rose above 4 percent for the first time in six months, according to economists at the Federal Home Loan Mortgage Corp.
Traditionally, rising rates tend to push sales lower. But some experts say the recent increase could actually boost activity and prices by prompting more people to jump off the home-buying fence and finally make a purchase.
Q. My wife and I are both 60 years old, and we hope to retire in about three years. We visited a retirement community in another state last month and really liked it, and with prices so low, we are thinking about buying a place there now, then renting it to tenants until we are ready to move into it ourselves. What do you think of our plan?
A. Frankly, not much.
Owning an out-of-state rental property is rarely a good idea, regardless of a person’s age. Managing a faraway rental home can be difficult, but few small investors have the financial wherewithal to pay the stiff fees that professional management companies charge while still turning a profit.
Equally important, your letter states you and your wife plan to retire “in about three years.” That’s a pretty fuzzy time frame, and a lot can happen between now and then. Your retirement-housing choices might change dramatically if you or your spouse become ill, decide to work longer than expected or one of you passes away.
Coping with such issues would only be more difficult if the two of you had purchased a retirement home that you no longer needed. It’s true that house values are low today, but you shouldn’t purchase a property — especially in another state — with plans to lease it out until both you and your spouse pick a firm retirement date that’s only six months or a year away.
Q. We purchased a home last year and had to pay for a private mortgage insurance policy because our down payment was very small. Can we deduct the monthly cost of the insurance on the tax return that we are completing now?
A. Yes, provided you don’t have an above-average income.
Private mortgage insurance, commonly referred to as PMI, is usually required when a borrower makes a down payment that’s smaller than 20 percent of the home’s purchase price. Although the buyer must pay for the coverage, the policy essentially benefits the lender because it will reimburse the bank for some or all of its losses if the loan eventually goes into default.
The deduction was created through the federal Tax Relief and Health Care Act of 2006. It’s gradually phased out for married joint tax filers whose adjusted gross income tops $100,000, and disappears for those who earn more than $109,000.
There are a handful of other minor requirements. For details, get a copy of Internal Revenue Service Publication 936, Home Mortgage Insurance, by calling the agency at (800) 829-3676 or by downloading the document from the www.irs.gov website.
The deduction will expire this year, unless our bickering Congress extends it.
A few weeks back during our series on “The Five Steps to Home Buying,” we discussed in Step 5 the details of the closing process. Probably the most important player at the closing is the closing attorney, sometimes referred to as the closer or title attorney. The slight variation in description is of relative importance, although for our purposes here we will refer to this person as the closing attorney. The main points of consideration are the actual function of the closing attorney and which party to the transaction is represented by the attorney.
The most important point to remember is, in Georgia, the buyer always has the right to choose the closing attorney. The chosen closing attorney represents the lender in cases where a new loan will be written for the purchase. In cash transactions or cases where a traditional or institutional lender is not involved, the closing attorney represents the parties as stated in the terms of the contract for purchase. Some lenders may also provide a list of approved attorneys from which the buyer can choose. Regardless of the details, you can choose an attorney to represent you even in the case where an attorney is representing the lender and a different attorney is representing the seller.
In most cases of foreclosure or distressed property, the seller—typically a bank—retains their own representation throughout the transaction. That attorney will be the party responsible for reviewing the contracts and closing documents on behalf of the seller. That party will typically cooperate with the buyer’s choice of closing attorney either representing the buyer’s lender or the buyer directly in cases of non-traditional financing. Sometimes you might encounter a situation described above where the seller will insist on using their closing attorney. They may do so as long as all parties agree. As real estate professionals, this is not a practice we recommend. We recommend that our buyers seek their own representation, and of course we can and do offer referrals upon request.
Why is the choice of attorney so important for the buyer? Let’s look at a real life situation:
The buyer has identified a property, written an offer and the offer terms have been accepted. The normal course of action is for the real estate professional to forward the binding agreement to the buyer’s lender and the chosen closing attorney. The lender will order the appraisal and begin drafting the borrower’s loan documentation that will be signed at closing. The attorney will typically order title to the property. This is perhaps the most important fact check that will be conducted during the entire process. The property title is essentially the same as a car title or any other instrument granting a party the right of unencumbered use and enjoyment of property. The difference with property title is, because the land is considered indestructible, the chain of title can be traced back for decades. A property cannot and should not be conveyed by an attorney unless a clear chain of title can be traced—meaning no encumbrances, liens, etc. are attached to the property. There are several methods for searching chain of title. The vast majority of attorneys today use an electronic database of records. Of course, an attorney may choose to research the title by physically visiting the courthouse records room in the county where the property is located. The online search method is sufficient; however, the time period searched is of specific importance. Amee Davis, managing attorney at Davis & Associates in Marietta, says, “Attorneys should search title history for a period dating back a minimum of 30 to 50 years.” A 50-year title search is our preference as real estate professionals. We have experience in situations where the attorney only performed a 10-year title history search or even only go back in the chain of title to the two most recent conveyances. Many attorneys rely only on the issuance of a prior title policy to re-insure a property. While the title insurance policy will protect the new lender and the buyer’s interest in the property, the title insurance company may require a title matter to be resolved prior to a subsequent closing. If this were to occur, the current owner would not be able to convey title to the property until the matter is resolved. This could result in a delayed closing while the situation is corrected.
Exercise your right as a buyer to choose the closing attorney. Make sure you understand who actually clears the title for closing. Is it a paralegal working on behalf of the attorney or is it the attorney herself? Does your attorney come as a recommendation of your real estate professional, or is he the “preferred” attorney of the seller? These are important questions that, left unanswered, could have a negative result for the buyer after closing.
Home prices in 20 U.S. cities dropped at a slower pace in January, pointing to stabilization in the real estate market.
The S&P/Case-Shiller index of property values in 20 cities fell 3.8 percent from a year earlier, matching the median forecast of 32 economists surveyed by Bloomberg News, after decreasing 4.1 percent in December, a report from the group showed today in New York. Prices were little changed in January from the prior month, the best performance since July.
Property values are steadying as a strengthening labor market underpins housing demand, which may allow the industry that precipitated the recession to contribute to growth this year. Nonetheless, the recovery in sales may be restrained by foreclosures that are putting more properties onto the market.
“We are starting to see a slightly less-negative picture,” said Sean Incremona, a senior economist at 4Cast Inc. in New York, who correctly projected the decline. “We have seen some slight progress from very depressed levels, but there’s still a long, long way to go.”
Stocks were little changed. The Standard & Poor 500 Index rose 0.1 percent to 1,417.66 at 9:42 a.m. in New York, after yesterday reaching the highest level since 2008.
Home prices adjusted for seasonal variations were little changed in January from the prior month, following a decrease of 0.5 percent in December. Unadjusted prices fell 0.8 percent from the prior month.
Survey Results
Economists’ estimates for the year-over-year change in the home price index for December ranged from declines of 4.5 percent to 3.3 percent, according to the survey. The Case- Shiller index is based on a three-month average, which means the January data were influenced by transactions in November and December.
The December reading was previously reported as a year- over-year drop of 4 percent.
The year-over-year gauge, begun in 2001, provides better indications of trends in prices, the group has said. The panel includes Karl Case and Robert Shiller, the economists who created the index.
Sixteen of the 20 cities in the index showed a year-over- year decline, led by a 15 percent drop in Atlanta. Detroit showed the biggest increase, with prices rising 1.7 percent in January. There were no data available for Charlotte, North Carolina, due to delays in reporting, according to the release.
Eight cities made new post-slump lows, the report said, including Atlanta, Chicago, Cleveland, Las Vegas, New York, Portland, Seattle and Tampa.
Confidence Improving
Recent reports indicate builder confidence is improving even as sales stabilize. The National Association of Home Builders/Wells Fargo sentiment index in March held at the highest level since June 2007 as the sales outlook climbed for a sixth straight month.
Sales of previously owned houses held in February near an almost two-year high, the real-estate agents’ group reported last week. Purchases dropped 0.9 percent to a 4.59 million annual rate from a revised 4.63 million pace in January that was faster than previously estimated and the highest since May 2010.
Even with the decline last month, January and February sales of existing homes marked the strongest start to a year since 2007.
The number of Americans signing contracts to buy previously owned homes fell 0.5 percent in February to 96.5 after a 2 percent increase the prior month, the National Association of Realtors said yesterday in Washington. January’s reading of 97 was the highest since April 2010.
Bernanke’s View
Federal Reserve Chairman Ben S. Bernanke yesterday said that while he’s encouraged by the decline in unemployment, the central bank still needs to keep interest rates low to make further progress.
Recent “better news” on the economy has also included a “slight bit of encouraging news here and there in the housing market” and strength in manufacturing, Bernanke said in response to audience questions following a speech in Arlington, Virginia.
Home foreclosures remain a concern for builders. Filings fell 8 percent in February, the smallest year-over-year decrease since October 2010, as lenders began working through a backlog of seized properties, RealtyTrac Inc. said this month.
More Foreclosures
“February’s numbers point to a gradually rising foreclosure tide,” Brandon Moore, RealtyTrac’s chief executive officer, said in a statement. “That should result in more states posting annual increases in the coming months.”
Delinquencies are hurting sellers of both new and existing homes.
KB Home, the Los Angeles-based homebuilder that targets first-time buyers, fell the most in almost nine months after it reported a decline in orders and government data showed new-home sales dropped in February.
“We are seeing signs that the overall housing market is stabilizing and beginning to recover,” Jeffrey Mezger, president and chief executive officer of KB Home, said in a March 23 statement. “The pace of the recovery is uneven, however. We expect that the housing market in general will gradually strengthen as the economy continues to advance.”
Many factors contribute to the experience and success of buying and selling homes, but even in the digital age of a more transparent real estate market, working with a good real estate agent continues to be one of biggest impacts on either side of the transaction.
But how do you pick the right person to represent you or your home?
Before you just start asking your friends or digging through the fliers in your mailbox or hunting online, here are a few dos and don'ts you should seriously consider when selecting an agent.
Do:
Ask people you trust for agent recommendations, but take what they say with a grain of salt. Did they recently buy a home in your same price range? Have they had a successful time selling their home? Just because this agent worked out well for them does not guarantee the same experience for you.
Find an agent that specializes in what you're trying to do. Don't select an agent who sells $2 million homes to help you find a $200,000 home. Check out current home listings. Do you like the photos, the description? Try contacting the agent to see if they're available for you.
Interview the
agent. What is their specific marketing plan for your home? How will they negotiate so that you can be the winning bidder on your dream home? Why are they the best option for you? Can you call some of their past clients?
Set up expectations. What do you want from them? Outline your needs from the get-go so there won't be any surprises down the road.
Make sure you get along with the agent. You don't need to be best friends, but ultimately there should be some sort of rapport that allows for a successful business relationship.
Don't:
Pick friends or family. You don't want to jeopardize a friendship if the buying or selling process gets difficult. Also, be wary of hiring even a friend of a friend, or someone recommended. If you're serious about real estate, find someone that you can be honest and professional with. Unfortunately, that may not include your cousin or your best friend's spouse.
Pick someone who dually represents the buyer and the seller of the property you're looking at. They may not be able to fully transparent with you.
Be afraid to break up with your agent. Be honest and simply tell the agent it's not working out. List your reasons and be respectful.
If you're not quite ready to be tied down to a particular agent, it's better not to engage one until you've made a formal decision. You can communicate with an agent and ask for advice, but be clear upfront where you stand.
SANTA ANA, CA, Mar 26, 2012 (MARKETWIRE via COMTEX) -- With reduced home prices and interest rates near historic lows, affordability levels in early 2012 reached their highest point in 42 years according to the National Association of Realtors.
Not only are homes at record affordability levels, real estate ownership also opens the door to a wide variety of tax benefits and additional savings.
"A recent poll shows that 75 percent of likely voters think real estate tax deductions are appropriate and reasonable," said Steve DiUbaldo, president of Atlantic & Pacific Real Estate, a full-service real estate brokerage with offices in 22 states. "People understand the value of owning a home and the role played by tax benefits. Combine today's affordability levels with tax advantages and now is a very good time to consider both residential and investment real estate."
So what are the biggest real estate tax breaks? For most owners and investors the list of major tax write-offs looks like this:
1. Property Taxes. Real estate owners can write off the cost of state and local property taxes. For many borrowers this deduction can reduce taxable income by thousands of dollars.
2. Mortgage Interest. The IRS defines a home mortgage as "any loan that is secured by your main home or second home. It includes first and second mortgages, home equity loans, and refinanced mortgages."
Mortgage interest can generally be written off, but not always. The limitation for mortgage interest on a primary and secondary residence is a total of $1,000,000 for acquisition indebtedness and $100,000 for home equity indebtedness. There are lower limits for individuals and those who are married but filing separately.
3. The Standard Deduction. "Everyone is entitled to a standard deduction," said DiUbaldo. "However, write-offs for mortgage interest, property taxes, mortgage insurance premiums and other costs generally allow real estate owners to justify itemizing expenses and thus larger write-offs."
4. Mortgage Insurance Premiums. Mortgage insurance allows purchasers to buy with less than 20 percent down. Qualified borrowers can get FHA financing with 3.5 percent down, conventional loans can require as little as 5 percent down and VA purchasers can borrow with zero down. Closing costs are extra.
"In general," says the IRS, "if you itemize deductions, you may deduct premiums paid for mortgage insurance provided by the Department of Veterans Affairs (VA), the Federal Housing Administration (FHA), the Rural Housing Service (Rural Housing), or private mortgage insurers in connection with a mortgage for the purchase of your main home."
5. Points. A "point" is a fee to the lender equal to 1 percent of the mortgage amount. Borrowers often have the option of paying points at closing rather than a higher interest rate over the life of the loan. Whether it's better to pay points or accept a higher interest rate depends on such issues as the interest rate, the number of points and how long the property will likely be held.
In general, a point paid at closing for acquisition financing is fully deductible in the year paid. If a point is paid to refinance a home, the point is deductible over the term of the mortgage, typically 1/30th per year.
6. Investors can claim Depreciation. Depreciation allows investors to take an additional tax deduction because a real estate "improvement" is believed to wear out over time and will need to be replaced.
"Depreciation is an accounting concept," said Atlantic & Pacific Real Estate's president. "The investor is not actually spending the cash represented by the 'cost' of depreciation and one result is that it's possible to have an investment property which produces a positive cash flow that is partially or wholly not taxable currently. In certain instances, subject to individual taxpayer limitations, it is even possible to show a loss for tax purposes."
7. Sale Profits. When a prime residence has been occupied for two of the past five years it's probable that much or all of the profit will be sheltered from capital gains. With a joint return up to $500,000 can be protected, $250,000 for an individual owner. Example: You bought a home in 1990 for $100,000 and sell it in 2012 for $300,000. There's a $200,000 long-term profit, none of which is taxed.
If you're an investor, sale profits are taxed as long-term capital gains if the property has been owned for at least a year. That means long-term capital gains in 2012 are generally taxed at 15 percent.
8. Tax-deferred exchanges: The National Association of Realtors says investors purchased 23 percent of all existing home in January. One reason for such interest is that it's possible to have tax-deferred real estate exchanges with investment property.
"You can swap one investment house for another, but you can also trade a rental house for a commercial property or a property with four units," said DiUbaldo. "An exchange can allow an owner to defer capital gains taxes for years if not decades, and swaps are one of the reasons investors come to our website ( www.apreus.com )."
The Bottom Line: Whether purchasing as an owner-occupant or as an investor, tax rules can powerfully impact the value of your real estate. For the latest information, details and deductions be sure to check with a local tax professional.
As always, we urge you to consult with your own independent Certified Public Accountant as to the appropriateness of any tax deductions for your specific circumstances.
Looking for real estate bargains? Consider golf courses. Investors from Donald Trump to luxury homebuilder Toll Brothers (TOL) are wagering there’s money to be made buying them. Stand-alone 18-hole golf properties in the U.S. sold for a median price of $3 million in the first nine months of last year, down from $4.5 million in 2006, according to data from broker Marcus & Millichap Real Estate Investment Services. Prices slumped after lenders including the finance arm of General Electric (GE) stopped providing money for building courses and investors in commercial mortgage-backed securities retreated amid losses on deals made at the height of the property bubble. “Lack of financing is really causing a discount to value, and investors are taking advantage,” says Steven Ekovich of Marcus & Millichap. “Golf courses may never be as cheap as they are today.”
The sport’s popularity soared after Tiger Woods won the 1997 Masters Tournament at Georgia’s Augusta National Golf Club. In 2000, when Woods captured the U.S. Open in Pebble Beach, Calif., by a record 15 strokes, an unprecedented 400 courses were opened. Television ratings typically surge by as much as 50 percent when Woods is in contention to win a tournament, according to Nielsen (NLSN) figures. He hasn’t won a regular season PGA Tour event since September 2009, a span during which his career has been derailed by his admission to extramarital affairs and assorted injuries.
Woods’s fortunes aside, golf took a blow when the recession hit. The total number of rounds played in the U.S. annually has fallen more than 7 percent since 2006, according to research firm Golf Datatech. As a result, about 775 golf courses have closed. While new ones continue to open, the nationwide course count has declined by 355 since 2006, to about 16,000, according to the National Golf Foundation. Terry Vanek, an analyst at Marcus & Millichap, estimates that there are about 185 stand-alone golf courses on the market today—with asking prices of $320,000 to $15 million.
Toll Brothers, the largest U.S. luxury homebuilder, is buying private golf clubs until the residential real estate market improves, according to David Richey, president of Toll Golf, a division of the company. Toll plans to buy three golf properties in cash at “distressed prices” of $3 million to $4 million by the end of this year, Richey says.
Peter Nanula, former chief executive officer of Arnold Palmer Golf Management, started Concert Golf Partners in 2010. He has as much as $50 million to buy golf properties that he intends to revamp and sell within five to seven years. Concert Golf made its first course purchase in July, when it bought Heathrow Country Club’s golf course and racquet club for $4.5 million. The club, in north Orlando, sold for $20 million in 1996, the Orlando Sentinel reported, citing Seminole County court records.
Trump is buying the Doral Golf Resort & Spa in Miami out of bankruptcy for $150 million five years after Morgan Stanley (MS) acquired it as part of the $6.7 billion purchase of CNL Hotels & Resorts. The resort features five courses on 800 acres, including the famed Blue Monster, and about 700 hotel rooms. “They built too many courses during the Tiger boom, and now they’re closing and disappearing,” says Trump. “At some point enough will disappear that golf will be a really good business.”
The bottom line: With financing scarce, the median price for a golf course was $3 million in the first nine months of 2011, down 33 percent from 2006.
In 98 of the top 100 housing markets, buying a home is more affordable than renting, according to the online real estate company Trulia. Only Honolulu and San Francisco buck the trend.
Of course, many renters are not in a position to buy. For one, it's hard to get a mortgage these days, despite low rates. And paying rent can push them further away from being able to afford to buy.
"Rising rents make it harder for people to save for a down payment, which is the biggest barrier to buying a home that aspiring homeowners face," Jed Kolko, Trulia's chief economist.
The nation's cheapest buyer's market is Detroit, where purchasing is only 3.7 times more expensive than renting.
Rankings like these, however, can obscure the factors that go into each decision.
Housing markets, even within a single metro area, typically have local submarkets. Take New York City, for example. Renting in Manhattan is more affordable than buying. But in suburban Westchester County just miles to the north, buying is the more affordable option.
The size of the home can also make a difference. In some markets, renting can be a better deal on larger homes, according to Trulia.
In San Francisco, for example, studio and one-bedroom apartments sell for 13.1 times rent, while three bedrooms or larger sell for more than 18 times rent.
The Trulia survey does not take into account home price trends, which are another factor for individuals choosing whether to buy or rent.
"People will pay more for a home if they expect prices to rise and give them a better return on their investment," said Kolko.
Those calculations are about to change, according to Ken H. Johnson, a professor of real estate at Florida International who has studied the buy-vs-rent question extensively. He believes home prices nationally have bottomed.
"The ship has turned," he said. "Markets should slowly start to recover. Housing will return to its traditional role of a safety investment."
If so, that adds an incentive to buy. And investing in many of the most expensive markets may be even safer.
Kolko pointed out that places like Honolulu, San Francisco and Boston have strong long-term growth prospects. They also have little physical space to grow, a factor that tends to keep prices strong.
On the other hand, old areas that aren't growing much -- while cheap -- may not return much in the long run.
"Buying is much cheaper than renting in slow-growing places with high vacancy rates and land to spare, like Detroit and Cleveland, where prices are unlikely to improve much in the future," he said.
Real estate is supposed to rival gold as one of the safest investments you can make. As the late rancher (and multimillionaire) Roy Rogers put it, "Buy land. They ain't making any more of the stuff."
So why does a brief observation of the housing market tell us otherwise? Foreclosure, subprime loans, predatory lending, defaults, homeowner assistance ... all these terms have become part of the national lexicon in the last few years, leading the easily intimidated to think that it's impossible to ever build wealth (or at least not lose it) via real estate. Like most things in life that come with a reward, successful real estate transactions require diligence and discipline. They also require you to steer clear of some easily avoidable pitfalls.
Get Emotionally Involved With a Property You say you "fell in love with" that custom-built 1960s-era, two-bedroom bungalow with the trellis and the orange trees? Good for you. Make sure you let the seller know that, so he can raise his price accordingly. Because monopoly power is a wonderful thing to give to the person you're doing business with. Also, don't think about resale value. The more tailored a piece of real estate is for you, the less appeal it'll have to the public at large. If you ever want to sell it, you will have fewer potential buyers.
When you start thinking in non-financial terms, you're already losing. Yes, a house has benefits (and drawbacks) beyond its price. That's not the point. The point is that every transaction involves tradeoffs, and a slightly less desirable house at a far more agreeable price can make the difference between building wealth and overextending yourself.
You fall in love with people, maybe pets. Which is to say, beings that don't come with inherent economic potential. Real estate is for investing in, not for having an irrational attachment to.
Buy the Pick of the Litter The neighborhood is so-so, but the house in question is radiant. It's twice as big as any other on the block, with decorative water fountains and a regulation basketball court to boot. It stands to reason that such a house will make a better investment over the crumbling shacks adjacent to it, right?
It won't. You might not like this reality, but a house's surroundings have as big an impact on its value as the house itself. The most modest single-family home in Chicago's Gold Coast will appreciate far more than a palace in Hunters Point, San Francisco.
Remember, sticker price is everything A $100,000 house beats a $110,000 house every time, right? How couldn't it?
Interest rates, for one thing. Remember, a typical real estate transaction is different than buying an everyday item. When you purchase real estate, you're not trading a flat sum of your money for a good or service. You're trading what's essentially a reverse annuity (from the seller's perspective) for land and any improvements. That "annuity" - monthly or semimonthly payments from you - is subject to several variables.
Shopping around for a favorable interest rate is at least as important as shopping around for a suitable price tag. Taking out a mortgage loan with a few basic points in your favor can put you in a considerably larger house than you might otherwise have budgeted for. (Or, if you prefer, keep you in a smaller house at a much lower payment.)
Put Down as Little as Possible, Preferably Nothing Why should you have to delay your gratification? That's for suckers! You want what you want when you want it. Saving up 20% of the price of a house for a down payment could take years. Much better to obtain 100% financing, and pay private mortgage insurance until you've got 20% equity in the place. Which could take years, but what fun is it to buy real estate if you're not going to flush at least a little bit of money down the toilet in the process?
The Bottom Line
When you buy a house, you're buying it all: not just four walls and a roof, but decades' worth of mortgage interest and possibly, mortgage insurance. It's helpful to think of the entire purchase as one item, and understand that a $100,000 house can end up costing you over $190,000 among principal, interest and insurance - to say nothing of taxes.
Understand that a desirable property has financial potential. Most people who switch houses, whether they're trading up or trading down, never think to keep the original house and rent it out. "That's unrealistic. I need the cash to buy the new place." What if you rented it out for a premium, and used the difference between the rent charge and the mortgage payment to pay for part of the new house? Or perhaps you could engineer a lease option, whereby a renter can choose to purchase the house after a fixed period if he has the wherewithal?
Yes, a house is a home. But you're missing out if you see it as nothing but. Real estate is a financial instrument that, under the right conditions, can help you generate lasting wealth.
When Slepicka bought the house in 2001, she paid $87,000, but she has since refinanced her mortgage twice. She now owes about $112,000.
When she put the house on the market in October, she priced it at $86,000 but did not get a single inquiry.
In December, on the advice of her real estate agent, she lowered the price to $59,000.
Again she received no offers.
Her mortgage lender, GMAC, sent out an appraiser. A short time later, GMAC emailed her real estate agent and told them to set the price at $50,000. During such short-sale transactions, banks agree to accept a lower amount than the outstanding loan balance.
That reduction in price did the trick. Within a week, a potential buyer offered $48,000. GMAC held firm. It instructed Slepicka's agent to counter again at $50,000.
The buyer agreed, and on Feb. 6 Slepicka's agent sent GMAC a signed contract for $50,000.
Slepicka thought the sale would be finalized in weeks.
Instead, GMAC emailed Feb. 15 to say it no longer would accept $50,000. Now, GMAC required the buyer to pay $54,400.
"I was angry," Slepicka said. "The buyer already went up $2,000. Why did (GMAC) tell us to list it for $50,000?"
Slepicka's real estate agent asked GMAC to reconsider, but as the weeks passed she heard nothing back. Further complicating matters, GMAC scheduled a March 12 court hearing to begin the process of foreclosing on the house.
With the clock ticking and her file seemingly lost amid GMAC's bureaucracy, Slepicka emailedWhat's Your Problem?in late February.
"I'm paying the bills and association payments on a house that's financially draining me," she said. "I am drowning and thought I was being the better person by getting a short sale and not just walking away from a house and letting it slip into foreclosure."
She said communicating with GMAC has been like talking to a brick wall.
"My fear is that we are waiting, and this paperwork is lost in a pile on someone's desk," she said. "No one is providing clear answers."
The Problem Solver spoke to Slepicka on March 7, less than a week before her scheduled court date for the first foreclosure hearing.
"I called the attorneys and I'm scared to death," she said. "I'm trying to do what I can do to sell this house."
She said the uncertainty of the situation was incredibly stressful.
"I am a nice person who is in a heap of financial trouble and trying to make (my) way out of it," she said. "I've never been so disappointed in a system in my life. … Sometimes I end up in tears when I call them."
The Problem Solver contacted GMAC's media relations office on March 8 and forwarded all of Slepicka's information.
Without hours, a GMAC representative called Slepicka's real estate agent and said the mortgage company had decided to approve the short sale at $50,000.
"I'm in tears," Slepicka said a short time later. "I'm overwhelmed in the best possible way you can be overwhelmed."
In an email, Susan Fitzpatrick, a spokeswoman for GMAC, said the mortgage company prefers to avoid foreclosures.
"GMAC Mortgage is assisting the borrower with the investor-required process for completion of a short sale," Fitzpatrick said. "GMAC Mortgage strives to find a sustainable and affordable alternative to foreclosure whenever possible and keep families in their homes."
Short sales "are more beneficial than foreclosure for both us as a servicer and for the investors on whose behalf we service," she said. "We encourage borrowers to explore a short sale as an option when they can no longer afford the property, have failed or been denied a modification."
Slepicka said she and her son will move into an apartment where the rent is considerably less expensive than her mortgage.
"It's a fraction of what we were paying, less than a quarter of what we were paying," she said. "We're bouncing."
Short sales and foreclosure are two things that can cause confusion to many people whenever their real estate properties are going through difficulties.
There are people who say foreclosures are better, while some say short sales are better.
Both have their valid reasons why they think one is better, but in order to give you more detailed information, I will show you the difference between these two very common real estate terms.
» Credit rating: The effect on the credit rating of a person will be negative with both options. However, if you are going to get into a short sale, the reduction in your credit rating will be less compared with a mortgage. It will be easier for you to recover from your loss if you are going to get into a short sale. If you are left with no other choice, a short sale would be better in terms of credit rating.
» Fees: When it comes to the real estate fees you have to pay, foreclosures are better because they have fewer fees, and the amount you have to settle will be lower. Many people aren't getting into this because there are lenders who are asking for large fees after approving the sale. Keep in mind you are going to lose your real estate property because you are experiencing financial difficulties, and why would you even think to pay additional fees?
» Time: The reason people are getting into a short sale before foreclosure is because it will help them buy more time to look for funds they need. People having problems with their finances often need to have more time, and getting into a short sale is one of the best options. In real estate, owners who have their properties listed have 60 to 90 days to gather the funds or sell the property.
» Real estate agent: The problem with short sales is that you need to have an agent who can help you look for a buyer. Since the agent will get less commission for it, most of them would simply hide it from buyers, and focus on selling normal priced properties. This also is a problem when it comes to short sales and is the reason most people are getting into foreclosures. But you can talk to a real estate agent and explain your situation. In most cases, the agent will understand you, and will make an exemption to the rule that they have set for themselves.
Mark Balaban is with the Manitowoc County Board of Realtors. If you have a subject you'd like addressed in this column, email mcbrealtors@gmail.com or call (920) 553-6227.
Real estate executives at last Friday’s Akerman U.S. Real Estate Summit in Miami are more optimistic about the commercial real estate market than in the recent past. In a survey of participants, 82 percent of respondents expressed greater confidence and an improved outlook for the industry, a 6 percent increase over last year, with 50 percent citing the improving U.S. economy as the primary driver for their optimism.
There was broad consensus among survey respondents that the multifamily sector would be the most active in terms of the number of real estate transactions, foreign investment and return to pre-recession development levels in 2012, the organizers said.
“The outlook for the commercial real estate industry in 2012 is bright, but the recent recovery is still tenuous, and could be dampened by a range of factors, including the continued uncertainty in Europe, persistent restraints on debt and equity financing and the threats to the health of the U.S. economy due to rising energy costs,” said Richard Bezold, chaiman of the Akerman National Real Estate Practice Group.
Respondents cited the policies of the current administration (38 percent) and global economic uncertainty (30 percent) as reasons for a lack of confidence in the industry’s outlook for 2012.
Most respondents (43 percent) cited availability of credit as the most pressing issue facing the real estate industry right now. However, that number is down 10 percent from 2011. The belief that uncertainty of government policy is the number one concern for the industry has doubled to 25 percent this year.
The survey included the responses of 150 senior executives.
Read more here: http://www.miamiherald.com/2012/03/15/2696192/survey-commercial-real-estate.html#storylink=cpy
QUESTION: We have never been late on a single mortgage payment and have great credit, but as active-duty military, we can't live in the home because we're being assigned elsewhere. Every refinance option we have explored makes current residency a requirement for the program. Is there any refinance or modification option for an underwater mortgage in which the owner is not currently living in the home?
-MJ
ANSWER: Probably. You are correct that most, if not all, of the government-sponsored programs require that borrowers live in the homes as their primary residences. I am assuming that you are renting the house to a tenant in your absence and that's why you are being turned down.
If the house is sitting vacant while you are deployed, then it still might be considered your primary residence. I suggest that you call your lender and explain the situation. Many lenders have internal programs that may help you to lower your payments through a loan modification.
Also, if you bought the home using your Veterans Affairs loan benefit, you might be able to refinance via the Interest Rate Reduction Refinancing Loan program. There are a lot of programs out there, so I strongly recommend that you keep trying.
Q: My partner owns a condo that is worth much less than the mortgage. I am not on the loan, and we live together but are not legally married. He is retired and on limited income and barely makes ends meet. We hear horror stories about how banks will not talk to you about modifying your loan unless you have not paid for at least two to three months. We would like to stay here but cannot unless our lender reduces our monthly payment. In addition, at our age, we will never live long enough to pay off the mortgage. What can we do?
-Robert
A: Call his lender and try to obtain a loan modification. I have experienced some situations in which a lender has told my client that he or she will not be considered for a loan modification while current on the payments. But I also have negotiated plenty of loan modifications when the borrowers are current. The point is that you have to try to get it done.
Also, even though your partner may not have enough income for a modification, the lender may also consider your income if you are helping to support the household expenses. I would suggest that you try to get the modification while staying current on the payments, if at all possible.
ABOUT THE WRITER:
Gary M. Singer is a Florida attorney and board-certified as an expert in real estate law by the Florida Bar. He is the chairperson of the Real Estate Section of the Broward County Bar Association and is an adjunct professor for the Nova Southeastern University Paralegal Studies program. Send him questions online at http://sunsent.nl/mR20t7 or follow him on Twitter @GarySingerLaw.
The information and materials in this column are provided for general informational purposes only and are not intended to be legal advice. No attorney-client relationship is formed. Nothing in this column is intended to substitute for the advice of an attorney, especially an attorney licensed in your jurisdiction.
Read more here: http://www.kansascity.com/2012/03/15/3492195/real-estate-qa-how-to-refinance.html#storylink=cpy
PARSIPPANY, NJ, Mar 14, 2012 (MARKETWIRE via COMTEX) -- An outsider might think that freeways, fax machines, and Facebook have nothing in common, but real estate agents and brokers know these innovations have played a critical role in advancing the real estate industry since its formal beginnings in the 1800s.
As ERA Real Estate commemorates its 40th Anniversary, it identified what it believes are the Top 40 innovations in history that helped to shape today's real estate industry and will continue to influence the industry for decades to come. Click here to view a slide show of the full list, which is detailed below.
"For 40 years, innovation has been an integral part of ERA Real Estate's DNA," said Charlie Young, president and CEO of ERA Real Estate. "There are many lessons to be learned from history, which is clearly reflected in our Top 40 Innovations list. As we look to the next 40 years, we will continue to monitor the business, technological and social landscape for new ideas we can leverage to drive value to our customers and propel our business forward."
ERA Real Estate, an innovator in its own right, was the first real estate franchise to use the fax machine to transmit listings across the country, the first to expand internationally and the first to post listings online.
According to ERA Real Estate, the Top 40 Innovations in Real Estate History are, chronologically:
1. 1863 - The London Underground, the first subway, opens. Built as a way to reduce traffic congestion in the city, people now don't need to live in walking distance of their jobs, offering expanded choices in where to live. Today, proximity to a train station can increase a home's value in many markets.
2. 1880s - The Multiple Listing Service finds its origins in this decade. The concept upon which it is based -- help me sell my listing and I'll help you sell yours -- serves to unify and connect real estate brokers as a group of professionals.
3. 1889 - The first Land Run took place, providing hearty, would-be land owners with an opportunity to claim unassigned lands in the United States, primarily in Oklahoma. Under the provisions of the Homestead Act of 1862, a legal settler could claim 160 acres of public land, and those who lived on and improved the claim for five years could receive title, paving the way to the economic prosperity long-associated with owning land.
4. 1890 - The first automatic electric fire alarm was invented in 1890, but it was not until 1969 that the first battery operated smoke detectors came to market.
5. 1908 - What would later become The National Association of Realtors(R) is founded as the National Association of Real Estate Exchanges with the purpose of uniting real estate brokers to represent the combined interests of the profession.
6. 1921 - The Federal Highway Act is passed, allowing the Bureau of Public Roads to create paved two-lane interstate highways. Originally intended to provide citizens with evacuation routes from the cities, the 41,000-mile network contributed to city sprawl and the rise of the suburbs as commerce moved from city centers to further afield.
7. 1927 - The electric overhead garage door opener is invented, giving the growing number of car owners an easier way to protect their new investment and adding another must-have amenity to the dream home.
8. 1929 - More than 25 years after the invention of modern air-conditioning, the first self-contained room cooler for homes hits the market. Two years later, central air conditioning becomes available, but it would be another 20 years before mass-produced, low-cost window air conditioning units were available to the public.
9. 1931 - James Truslow Adams coined the term "The American Dream" in his book "The Epic of America," which described the belief that one's abilities and hard work, not birthright, paved the way for opportunity and success. Over the years the belief has expanded to include the ability to own a home, because of the related economic advantages that can lead to prosperity.
10. 1934 - The National Housing Act is passed to spur homeownership during the Great Depression and is considered by many to be the foundation of the mortgage and homebuilding industries. From this act comes the Federal Housing Administration and the now-defunct Federal Savings and Loan Insurance Corporation.
11. 1950 - The first year that more people lived in the suburbs than in the cities, influenced by the development of the skyscraper and sharp inflation of downtown real estate prices.
12. 1954 - The first age-restricted community is established in Youngtown, Ariz. Retirement communities soon gain popularity in Arizona, California, Florida and Texas.
13. 1960 - The first condominium is constructed in Salt Lake City, Utah, creating a new housing option for consumers.
14. 1968 - The Fair Housing Act (Title VIII of the Civil Rights Act of 1968) is enacted, outlawing refusal to sell or rent to any person because of race, color, religion, sex or national origin, providing for the first time actionable recourse for victims of discrimination. Complaints can be filed through a variety of channels including nonprofit fair-housing agencies, the Department of Housing and Urban Development, the Department of Justice and state and local agencies.
15. 1969 - The television show "That Girl" starring Marlo Thomas as an independent, single woman living in New York City ends its five-year run. The sitcom signaled the changing role of women in the era of feminism, which influenced the 1974 amendment of the Fair Housing Act that prohibits lending discrimination based on gender. This watershed development, coupled with the rising ranks of women in the workforce, allows women to independently purchase a home using a mortgage, ultimately creating a significant market niche currently representing 20% of all homebuyers.
16. 1969 - Battery-operated smoke detectors came to market, saving countless lives. TIME magazine named the smoke detector to its "All-Time 100 Gadgets" list in October 2011.
17. 1972 - ERA Real Estate opens its doors for business and becomes the first real estate franchise system to use the fax machine to transmit listings across the country.
18. 1974 - The Good Faith Estimate is introduced as part of the Real Estate Settlement Procedures Act, which eliminated kickbacks that inflated the prices of mortgages. Provided by a mortgage or loan company, the good faith estimate includes a list of the fees and costs associated with a home loan, which cannot change by more than 10%.
19. 1975 - NordicTrack is founded, setting the stage for the increasing popularity of the home gym.
20. 1976 - The construction of mobile homes became regulated with the passage of the National Manufactured Housing Construction and Safety Act. Since the 1920s, mobile homes had served as an inexpensive housing option that also provided great mobility during the Great Depression, allowing families to follow jobs. However, as they gained popularity and became more widely produced, many mobile homes were often poorly constructed, causing harm to their owners. In addition to ensuring safety, the act also recognized mobile homes, now often referred to as modular or manufactured homes, as low-income housing, and made government backed loans available for mobile home buyers.
21. 1978 - Home Depot is founded in Marietta, Ga. helping homeowners' successfully complete do-it-yourself (DIY) projects.
22. 1979 - Government-sponsored telecommuting gains popularity during the OPEC oil embargo of the late 1970s and later gathers momentum in the private sector with the introduction of the personal computer and then the Internet, paving the way for the necessity of today's home office.
23. 1980 - Downtown revitalization takes hold across America's cities, following a period of long urban decline sparked by the popularity of the automobile and the shift of commercial centers to the suburbs. Community Development Corporations (CDCs) are formed to revitalize cities to their former selves.
24. In 1981 - ERA Real Estate became the first franchise network to expand outside of North American with the affiliation of ERA Japan. Today, ERA Real Estate's worldwide presence has expanded into 34 countries outside of the United States.
25. 1982 - The Garn-St. Germain Depository Institutions Act of 1982 deregulated savings and loan associations and allowed banks to provide adjustable-rate mortgage loans.
26. 1982 - The personal computer begins to catch on with consumers -- TIME Magazine names the computer the Machine of the Year.
27. 1983 - The first commercially available mobile phone is introduced, evolving into today's smartphone, providing real estate agents an increased ability to be connected with clients and work from almost anywhere.
28. 1984 - Canon debuts a prototype of the Canon RC-701 analog digital camera at the 1984 Summer Olympics in Los Angeles, paving the way for easy, inexpensive listings photos to increase marketing appeal.
29. 1986 - The Tax Reform Act eliminates the broad deduction of interest on personal loans and creates a tax deduction for mortgage interest to encourage home ownership.
30. 1990 - The World Wide Web is introduced.
31. 1990 - Assisted Living Facilities as they exist today emerged in the 90s, creating an entirely new client niche for the real estate industry.
32. 1994 - ERA Real Estate becomes the first national real estate franchisor to post listings online with HomesAndLand.com giving house hunters a way to search homes with the touch of a finger. A year later, ERAOnline.com is launched as an online listing and marketing platform.
33. 1998 - The U.S. Green Building Council is launched and develops the internationally recognized LEED green building certification system. Demand has increased in recent years for environmentally-friendly homes. Sellers may soon advertise green features the same way they highlight bathrooms, bedrooms and available parking.
34. 2000 - Paperless transactions begin to overtake paper ones. What started with the simple act of directly depositing a paycheck into a bank account has evolved into completely online transaction management for real estate.
35. 2004 - Facebook is launched. While it originally appeals to a college audience, the platform soon expands and becomes a major avenue for building business relationships between Realtors and consumers.
36. 2004 - "Man Cave" hits the urban dictionary, solidifying the popularity of homes with specific space/areas for men to "do their thing."
37. 2005 - YouTube is invented and while many deem it only an avenue for watching the more than 100,000 cat videos that exist on the site, the channel is also a valuable tool for businesses looking to share their story online.
38. 2005 - The first Smart Grid is completed in Italy, shaping the sustainable future of electricity. Consumers are able to purchase smart thermostats and appliances and even control lights from their mobile phone or tablet.
39. 2008 - When the world's first commercial spaceline launched in 2008, Virgin Galactic's bold offering brought us one step closer to space colonization.
40. 2011 - Three years after the launch of the iPhone App Store, which currently houses a half million apps, Augmented Reality Apps are common on handheld devices, changing the way buyers visualize potential homes.
About ERA Real Estate ERA Real Estate is an innovative franchising leader in the residential real estate industry with 40 years experience in developing consumer-oriented products and services. The ERA(R) network includes approximately 30,000 brokers and sales associates and approximately 2,400 offices throughout the United States and 34 countries and territories. Each office is independently owned and operated. ERA Real Estate is a subsidiary of Realogy Corporation, a global provider of real estate and relocation services. ERA Real Estate information is available at: ERA.com.
The economy looks a little stronger. New weekly unemployment claims are falling. More people are going back to work and the GDP is rising. Even consumer confidence took a big jump last month, as a historically warm winter helped everyone feel better -- and spend less on energy.
Then there's the real estate industry, which remains mired in a depression. New home sales remain at or near an all-time low. Pending home sales seem to be trending up, but Realtors say that deals are getting canceled at a historic high rate, thanks to homes failing to appraise out in value and lenders getting nervous twitches in the final moments before a closing.
And then there's the number of Americans who are underwater with their mortgages (that is, their homes are worth less than the mortgage balance that remains).
According to CoreLogic's latest report, 11.1 million residential properties with a mortgage, or 22.8 percent of all such properties, were in negative equity at the end of the fourth quarter of 2011, up from 10.7 million properties (22.1 percent) in the third quarter of 2011.
The study found an additional 2.5 million borrowers had less than 5 percent equity, referred to as near-negative equity, in the fourth quarter. Together, negative equity and near-negative equity mortgages accounted for 27.8 percent of all residential properties with a mortgage nationwide in the fourth quarter, up from 27.1 in the previous quarter.
Nationally, the total mortgage debt outstanding on properties in negative equity increased from $2.7 trillion in the third quarter to $2.8 trillion in the fourth quarter.
"Due to the seasonal declines in home prices and slowing foreclosure pipeline which is depressing home prices, the negative equity share rose in late 2011," said Mark Fleming, chief economist with CoreLogic, in a statement.
"The negative equity share is back to the same level as Q3 2009, which is when we began reporting negative equity using this methodology. The high level of negative equity and the inability to pay is the 'double trigger' of default, and the reason we have such a significant foreclosure pipeline. While the economic recovery will reduce the propensity of the inability to pay trigger, negative equity will take an extended period of time to improve, and if there is a hiccup in the economic recovery, it could mean a rise in foreclosures," he added.
In other words, the "fragile" economy Federal Reserve Chairman Ben Bernanke spoke of recently is subject to all sorts of financial shocks, which many homeowners would feel right in their home equity -- or lack thereof.
CoreLogic reported that Nevada had the highest negative equity percentage with 61 percent of all of its mortgaged properties underwater, followed by Arizona (48 percent), Florida (44 percent), Michigan (35 percent) and Georgia (33 percent). This is the second consecutive quarter that Georgia beat California (30 percent), which isn't a surprise since Georgia home prices dropped more last month than in any other state.
Here's a more interesting statistic: The top five states combined have an average negative equity share of 44.3 percent, while the remaining states have a combined average negative equity share of 15.3 percent. Being even 15 percent underwater isn't a good thing for a homeowner, but it's more likely that a homeowner will be able to climb out than if they're 44 percent underwater.
What isn't often talked about is the dampening effect all these millions of underwater mortgages have had on the economy, and on individual wealth. The "wealth effect," which was used to describe how American homeowners felt about their net worth as housing prices were inflating, has been tamped down.
While some consumers are still buying, many aren't. They're worried about losing their jobs and whether gas prices are going to hit $5 a gallon (we paid $4.43 per gallon in California this week). Knowing that their homes are worth $40,000 or $50,000, or even $100,000 less than what they owe the lender has changed the calculus, making strategic default a realistic possibility.
Should banks write down millions of loans in order to help dig out from this real estate depression? Would it even work? Some real estate observers believe that the only way to move forward is to help these homeowners find a new level, so that homes can be bought and sold, and homeowners can move on with their financial lives.
(Ilyce R. Glink's latest book is "Buy, Close, Move In!" Samuel J. Tamkin is a Chicago-based real estate attorney. If you have questions, you can call Ilyce's radio show toll-free (800-972-8255) any Sunday, from 11a-1p EST. Contact Ilyce and Sam through her Web site, www.thinkglink.com.)
CHANGSHA, China -- In early December, Liu Zhangning was tending her cabbage patch when she saw a tall yellow construction crane in the distance. At night, the work lights made it seem like day.
Fifteen days later, a 30-story hotel towered over her village on the outskirts of the city like a glass and steel obelisk.
"I couldn't really believe it," Liu said. "They built that thing in under a month."
A time-lapse video of the project in Changsha, which shows the prefabricated building being assembled on site, has racked up more than 5 million views on YouTube and left Western architects speechless.
"I've never seen a project go up this fast," said Ryan Smith, an expert on prefabricated architecture at the University of Utah.
In other countries, the most advanced prefab construction methods can reduce building times by one-third to one-half, Smith said. The builders of the Changsha hotel did better, knocking one-half to two-thirds off the normal schedule.
"It's unfathomable," Smith said.
The warp-speed construction is a startling illustration of the building boom in China, where an exodus from the countryside to the cities has swelled the urban population by almost 400 million since 1990.
Skylines are peppered with cranes. Smog-choked streets echo with the pounding of jackhammers. Residential high-rises sprout like weeds in the plains between major cities, creating an endless sprawl along the country's east coast.
The breakneck pace of construction reflects a societal urge to catch up as fast as possible to the developed world after decades of scarcity under Mao Tse-tung, said Zhang Li, a Beijing architect.
The focus on fast construction took root during the economic reforms of the early 1980s, Zhang said. Prefabrication methods, well established elsewhere but just catching on in China, have magnified it.
Raising a 30-story tower in two weeks is possible because most of the work is done in a factory and the foundation has been laid ahead of time. China's abundance of workers also helps.
But a job done quickly is not always a job done well. Zhang said that in their race to the finish line, many Chinese construction companies skimp on the meticulous reviews and inspections that make projects in the West drag on for years.
"Incredible speed also means incredible risk," he said. "But only time will tell how serious the risk is."
The Chinese company behind the Changsha hotel, Broad Sustainable Building, says it cuts no corners on safety. To the contrary, it says, its methods will make China's construction boom safer, cheaper and more environmentally friendly.
In promotional literature, Broad boasts that its technology is "the most profound innovation in human history" and that construction on a third of the world's new buildings will be done this way "in the near future."
The hotel, called T-30, looms over dilapidated concrete homes interspersed with piles of garbage and rows of cabbages and leeks. Dogs and chickens run through muddy alleyways.
In mid-January, a month after the building's announced completion, its interior was a hive of activity. Many of the 500 rooms were finished, with made beds and white sofas. In others, wires protruded from unfinished walls. Paint-splattered workers hauled wooden planks past a grand piano in the pristine marble lobby.
The hotel, which will accommodate visiting clients of Broad Sustainable Building and house some of its employees, is about 400 yards from the cavernous white factory where its components were manufactured. The headquarters of the parent company, Broad Group, is a 90-minute drive away.
"This is the tallest building in this county, and it's also the fastest-built," said Rong Shengli, one of the building's planners, looking over the rural sprawl from a helicopter pad on the hotel's roof. "Next, we're going to build a 50-story building. Then a 100-story one, then a 150-story one. And they're all going to go up fast."
The time-lapse video provides a glimpse of how the hotel was made. Workers in blue jumpsuits are seen assembling "main boards," the building blocks of Broad's structures - 13-by-50-foot slabs containing ventilation shafts, water pipes, electric wiring and lighting fixtures sandwiched between ready-made floors and ceilings.
A counter at the bottom of the screen ticks off the hours as the boards are loaded onto a truck and delivered to the construction site. A crane then stacks them up like blocks. Workers bolt in pylons and piece together staircases; the glass-and-steel exterior rolls up onto the frame like a gleaming carpet.
At 360 hours, the ticker stops.
Building this way costs 20 percent to 30 percent less than traditional methods, said Jiang Yan, a senior vice president at Broad.
It's also safer, said Zhang Yue, chief executive of Broad Group, because factories are typically less risky environments than construction sites.
"The faster, the safer," Zhang said. "It's like crossing the road. If you slowly walk back and forth in the middle of the road, that's not safe."
The China Academy of Building Research has declared Broad's structures earthquake-resistant up to magnitude 9. (The largest recorded quake of the 20th century, which hit Chile in 1960, measured 9.5.) The company says the strength of its buildings comes from their lightweight steel structures and diagonal bracing.
Zhang said he got the idea to manufacture prefabricated buildings after a massive earthquake in Sichuan province in 2008 in which the collapse of poorly constructed buildings killed tens of thousands of people, many of them schoolchildren.
Zhang said it took about 200 of the company's 900 employees to put up the hotel. They are paid $500 to $800 a month, above average for China. Although some company executives acknowledged that many workers put in well over 40 hours a week, Zhang said they do not work later than 10 p.m.
Unlike most Chinese tycoons, Zhang cultivates a reputation as an environmentalist. The company touts its sparing use of concrete to cut down on waste. Its buildings have low-energy lighting, water-saving toilets and elevators that generate electricity on the way down.
Broad Sustainable Building has completed only a handful of projects. Its first was the 15-story New Ark Hotel, which the company built in about six days near Broad Group's headquarters in 2010. Soon afterward, it built a six-story building at the 2010 Shanghai World Expo in less than 24 hours.
Its first international project was a two-story building erected at the United Nations Climate Change Conference in Cancun, Mexico, in 2010. Mexican President Felipe Calderon called it a "revolution of the world's architectural and housing industry."
The company says it is negotiating technology-transfer deals with firms in Brazil, Saudi Arabia, Mexico and India and hopes to establish partnerships in the United States.
Experts say that may not be easy. Broad's buildings may not conform to U.S. fire codes. Labor laws could prevent employees from working the long hours required to construct a building with such speed.
Amy Lelyveld, a professor of architecture at Yale University, described prefabricated buildings in the U.S. as "kind of at the jewelry-making end of architecture" - an expensive niche.
Lelyveld expressed concern about the adequacy of construction oversight on a complicated, hurriedly constructed building like the Changsha hotel.
"I wonder why it was so fast," she said, adding that "if it was slower there might be more opportunities to inspect the work."
Zhang, however, said Broad could adapt to labor and fire safety laws in other countries, and that employees' workdays would drop to eight hours as the company's technology improves. "We will use international standards," he said.
Zhou Weidong, a vice president at Broad Sustainable Building, said the company was developing as quickly as its home country. Looking out the window of a company Buick, he noted that the squat concrete homes, convenience stores and auto repair shops lining the newly paved road between the headquarters of Broad Sustainable Building and central Changsha were at most a year old.
"Three years later, if you come back here, this will be a city," he said. "That's China. It changes overnight."
Have a little extra saved up for unplanned repairs. There will always be little things that need fixing up, tweeking, tightening, or replacing that you didn't plan on when you did your walk throughs and inspections. You will usually find these little quirks and things that need fixing only after having lived in the house for a few weeks and started to really break it in and get into a routine.
BOSTON (TheStreet) -- The U.S. real estate market is in two worlds, with residential housing in the dumps and not yet worthy of consideration for investing. But commercial real estate, in the form of real estate investment trusts (REITs), is prospering.
For example, demand for rental apartments is booming because an uptick in employment has people relocating to areas with job opportunities. While at the same time, home ownership is at 12-year lows and not seen growing significantly anytime soon, and that boosts the earnings outlook for apartment-owning REITs.
And demand for commercial real estate, which includes shopping malls, office buildings and storage facilities, is showing steady growth, aided by years of almost no new construction, limiting supply, while a strengthening economy increases demand.
"Help from the current, very modest recovery has been enough to lift occupancy and rental rates for an industry group that includes office buildings, shopping malls, warehouses, industrial spaces, apartments, and hotels, to name a few," Fidelity Investments said in a research note. "These positive fundamentals have, in turn, boosted net income for REITs."
That recovery has been little noticed by many individual investors, given their still-strong memories of the mortgage-backed securities crisis and the plunge in residential home values, which has poisoned their views on all things real estate.
But REIT securities have been climbing since March 2009. The benchmark FTSE NAREIT Equity REITs Index is up 5.8% this year versus the S&P 500's 9.3%, after gaining 8.3% last year compared to the S&P 500's 2.1% rise. And that was after two straight years of 28% annual increases in the FTSE NAREIT Equity REITs Index.
Industrial property REITs are doing the best this year, with a 15.6% return, while mixed use (office and industrial) REITs are up 13%. As for residential REITs, S&P Capital IQ recently raised its fundamental outlook for the sub-sector to "positive" from "neutral."
"In our view, many Americans may be reluctant to purchase a home until price stability returns," it said. "Moreover, we think the number of potential renters is expanding due to a large cohort of echo boomers entering the workforce. The net result has been low turnover among existing apartment dwellers and strong demand from prospective new renters."
Given the supply and demand forces, S&P said apartment rents should grow 5% to 6% or more on new leases this year, boosting REITs' revenues.
Here are summaries of 10 highly rated residential and commercial REITs that focus on several different markets:
The government has stepped up efforts to open the real estate market of late, by attracting investments in low-income housing for poorer residents; however there is still a lot to be done in this sector.
An apartment building under construction in District 8( Photo: SGGP)
At a discussion on ‘Finance and Real Estate Market in 2012’ organised in Ho Chi Minh City recently, Dr. Vu Dinh Anh, market guru, shared his concerns on cost of housing in the city, which was still fairly high.
According to economic experts, for successful restructuring of the real estate market, the government should support a switch from luxury housing to low-income housing, as well as warn businesses against depending too much on capital from banks.
The development of the real estate market nationwide, particularly in HCMC, has revealed various weaknesses, said vice chairman of the HCMC People’s Committee Nguyen Huu Tin in a conference with related agencies on ‘Proper Solutions for the Housing Programme in HCMC.’
Tin commented on a surplus of housing projects, most of which were unsuitable for the present market demand. In fact, there is a serious lack of accommodation for both white-collar and blue-collar workers as well as low-income groups or for resettlement households.
To resolve the issue, the government decided to buy back commercial housing complexes and sell to people in the social welfare group, another factor that can also help the real estate businesses in freeing inventory.
Recently, the Ministry of Construction has proposed to local authorities in Hanoi to buy commercial housing for public offices and resettlement programmes.
Dang Hung Vo, former vice minister of natural resources and environment, agreed that it was a brilliant idea to resolve the dilemma. However, a strict price assessment is needed to ensure the success of this proposal.
“The act of buying back commercial housing to save the real estate market at the moment is quite proper. Support for major real estate businesses is essential, but means to do so need to be considered carefully as the government has to assist both sellers and buyers,” said Vo.
In response to recommendations of the Vietnam Real Estate Association, the Ministry of Construction has proposed setting up of a Bank for Construction in order to support national housing projects such as accommodation for poor people, students, low-income city dwellers.
It is hoped that this solution will become an effective channel to attract investments for the real estate market, better housing demand, and actively contribute to the development of the country.
However, many have raised their concern whether it is a sensible idea to create a new bank at a time when the country is restructuring the banking system.
According to a bank guru, Vietnam now has quite a few banks, some of which have very weak credit growth, making it very difficult in ensure their liquidity. In this time of economic depression, the government has to check the stability of the whole banking system, which is why it is not smart to found a new bank.
Moreover, there are many banks that are able to grant credit for construction purposes, hence the opening of another bank is quite unnecessary.
Agreeing with this idea, Dang Hung Vo said that it is better to set up a bank at a time of economic growth, when capital can be attracted from various sources. At the moment it is nearly impossible to draw funds from any source, to save the struggling real estate business, which is on the verge of bankruptcy.
Real estate agents should never talk clients into buying a property. But every so often, they talk their folks out of buying one.
Perhaps the would-be buyers don't realize the place is in a tough neighborhood. Maybe the price is just too high for the area. Or possibly the client isn't giving enough thought to the resale value several years down the road.
Whatever the reason, it's not always about the money.
"It's not about the sale to me," says Joan Patterson, of Keller Williams Realty in Rancho Cucamonga, Calif. "It's about integrity. I want my clients happy so I can sleep at night."
Cindy Jones, of the CJ Realty Group in Woodbridge, Va., recently talked a couple out of buying a lot in Fairfax County outside Washington, D.C., where they wanted to build a house. "Many folks would say that's crazy," says Jones. "However, my role as a Realtor isn't about what might put a few bucks in my pocket but about doing what is right."
In this case, the buyer wanted to move forward, even though there were some soil issues.
"The listing agents assured us the lot was buildable, but I had some doubts," the Virginia agent says. So she researched the lot's history and eventually secured a letter from the health department stating that not only did the property not "perc," but that it also wasn't suitable for an alternative septic system.
This didn't deter her buyers, either, so Jones suggested speaking once more with the county to make sure what it said was correct. After "sleeping on it" and meeting with a county engineer in person, they finally decided the lot was too big a gamble.
"My clients thanked me for continuing to dig and for keeping them from making a very expensive mistake," the agent says. "We will keep looking to find the right property for them to build their dream home, and I'll sleep well knowing their money is still safe in their bank account."
Buyers don't always heed their agents' warnings. That's their choice, of course. But often, the results are ruinous. "Sometimes," says Patricia Baker, of Leslie Wells Realty in Parrish, Fla., "the client can be his own worst enemy."
A few years back, Michael Pagliccia, of Premiere Plus Realty in Naples, Fla., represented two buyers who wanted to spend big bucks — $3.3 million in one case, $1.6 million in the other — in a brand-new community by a well-known major builder. But Pagliccia balked.
"My advice was not to spend that kind of money in a community that was not more than 10 percent developed because of the level of uncertainty of how the development would do," he recalls. "In my eyes, waterfront will always hold its value much more so than a golf course community home. My advice was to put the money in something else, either on the water or closer to the water."
Long story short, the buyers went ahead anyway, the developer eventually went belly-up, the community remains largely unbuilt and the homes they bought are now worth $2.2 million and $1 million, respectively.
Despite his misgivings, Pagliccia decided to assist these buyers because if he didn't, there were plenty of other agents who would. But another Florida agent, Mary Diaz, of Re/Max Action First in Tampa, Fla., took a hike a year or so ago when her clients, a couple with two young children, wanted to buy a house with defective Chinese drywall.
"The price was so exciting that nothing else mattered," says Diaz.
After talking about the ramifications of buying a house with this kind of issue — the inability to obtain insurance or financing, resale problems and the possible health questions — Diaz demurred. "I told them I would not be part of a transaction that was so dangerous for their family," she says. "I walked away from the transaction and never saw them again."
When buyers — or sellers, for that matter — listen to their agents, the outcome is often favorable. Take the time Dava Behrens, of Coldwell Banker Valley Brokers in Corvallis, Ore., represented would-be buyers who fell in love with a house, even though high-tension power lines ran over a corner of the property.
Otherwise, the place was "perfect." So, although they were concerned about the possible health issues and the wide easement that allowed for expansion of the lines, the buyers started envisioning living there anyway. They had nearly convinced themselves it was something they could live with when Behrens spoke up.
"Every time you wake up with a headache, every time you are not feeling up to par, are you going to question if it's a side effect of the power lines?" the Oregon broker asked. "And if so, what is your quality of life going to be in this house?"
Behrens realizes that views differ on how power lines affect people's health. But the only opinion that is important, the agent says, is the client's.
Even though Behrens walked away from a big commission, she made a loyal customer who has since done several transactions with her and referred numerous friends and acquaintances.
Valerie Torelli, of Torelli Realty in Costa Mesa, Calif., has advised owners on "multiple occasions" against selling and buyers against buying. And she wishes more brokerages like those mentioned here would allow their agents to discourage buyers instead of teaching them to show three houses and then asking the buyer to make an offer on one of them.
"It would help elevate our profession in the eyes of the consumer," says Torelli.
It also would lead to more happy endings, like the time a few years back when Deb Agliano, of ERA Andrew Realty in Medford, Mass., instinctively knew her clients were settling for a place they weren't really crazy about.
"I told them ... this wasn't the right house for them and we should keep looking," Agliano remembers. "The next week, we found their dream home."
Ferguson Partners Ltd. Survey Reveals 70% Jump in Forecasted Hiring Since 2010; Nearly 70% of U.S. Real Estate companies plan to increase hiring this year
Chicago, IL (PRWEB) February 29, 2012
A global survey of real estate companies conducted by Ferguson Partners Ltd., a global executive recruitment consultancy, finds that 61% of all respondents anticipate adding to their workforce in 2012 - a jump of nearly 70% from two years ago, when only 36% planned to increase hiring.
"The hiring demand is much stronger than most people in the real estate industry anticipated. It looks like most of the growth will be in middle management and entry level positions, which is a reflection of firms rebuilding infrastructure after the 2008 meltdown," said William J. Ferguson, Chairman and Chief Executive Officer of Ferguson Partners Ltd. "From a global perspective, the U.S. is showing some momentum, Europe is unsteady and the impact of China's economic slowdown on Asia is an unknown. Yet, despite ongoing challenges around the globe, an abundance of capital flow is helping to increase demand for investment and other talent."
The 2012 Global Hiring Forecast is based on the responses of over 120 professionals, including CEOs and other senior-level executives from companies active in commercial property investment and commercial mortgage lending, along with a sampling of respondents from investment banks, REIT securities, law firms, corporate real estate groups, and pension funds. Ferguson Partners Ltd. conducted the annual international survey from November 1, 2011 through December 15, 2011 with executives representing real estate firms across North America, Europe and Asia.
The Findings
Hiring optimism makes significant jump since 2010.
Sixty-one percent (61%) of all respondents anticipate an increase in total workforce size in 2012 - up from 56% in 2011 and a significant jump from 2010, when only 36% planned to increase hiring. This constitutes an increase of nearly 70% since two years ago.
Junior professionals in highest demand.
Eighty-one percent (81%) of respondents expect executive hiring to remain flat in 2012. However, in an effort to rebuild the infrastructure that was decimated in 2008, 65% of respondents plan to hire junior-level people to their workforce, while 56% said that they would be hiring mid-level management. This represents an increase of 10% and 8%, respectively since 2011.
By comparison, in the U.S. few will be adding executive talent (about 6%) while 71% of the respondents said that they would be adding junior talent, and another 59% said that they would be adding middle management.
Strongest hiring demand in North America.
Ranked as the top region globally in forecasted demand for 2012, 45% of respondents with operations in North America plan to hire there. In the U.S., 68% of the respondents said they would be adding staff in 2012. This is largely due to the fact that organizations in this region downsized significantly in 2008. Anticipated hiring by real estate companies in Europe ranked second at 30%, slightly up from 25% in 2011. Despite the economic challenges facing the eurozone, companies are still seeing opportunities for growth in this region; big private equity players from the U.S. have been building teams to identify distressed investment opportunities. Tied for second, Asia's anticipated hiring ticks up slightly with 30% of companies with operations in the region planning to hire, compared to 27% in 2011. In contrast, only 16% of companies with South American operations anticipate hiring.
From a geographic perspective, demand was comparable across the United States with the exception of the Midwest, where demand was predicted to be more modest at 28%. The gateway cities appear to be most active. Demand in the South at 44% is higher than anticipated as baby boomers retire.
Professionals who can stabilize value and drive cash flow are in highest demand.
When asked about functional hiring, 44% of the respondents said that they would be adding to their property management/leasing teams, and more than half (51%) said that they would be adding to their asset management/portfolio management teams. And, since equity capital is still abundant, both acquisitions professionals (48%) as well as capital raisers (39%) tend to be in greater demand than other functional groups. In addition, as the lending business becomes more robust, nearly one-third (32%) of respondents will be hiring underwriting and processing employees this year.
In the U.S., demand was comparable to global trends, with property management and asset management personnel in most demand at 52% and 50%, respectively, followed by acquisitions professionals (45%) and capital raising/investor relations specialists (33%). Lending markets continue to be active, with 33% of U.S. respondents planning to hire mortgage originators and 31% planning to hire underwriting/processing professionals.
To view the full survey report, click here.
About Ferguson Partners Ltd.
Ferguson Partners is a global boutique executive search firm that specializes in providing executive, director, and professional search services to a select group of related industries. Our committed senior partners bring a wealth of expertise and category-specific knowledge to leaders across the real estate, asset and wealth management, hospitality and leisure, and healthcare sectors. Together with its sister company, FPL Associates, which provides compensation and management consulting services, the FPL Advisory Group family of companies serves clients across the globe from offices in Boston, Chicago, Hong Kong, London, New York, and Tokyo.
Prequalifying is the first step in the house buying process if you're planning on having a mortgage. Unless you're planning on paying for a house all in cash, you MUST do this. Most realtors will require you to do this before they will take you to see any houses. By getting prequalified it not only lets your realtor know that you are a serious buyer, but it also lets you know what exactly your price range is. Now all banks have the same basic requirements for getting prequalified (some have more requirements than others due to company lending policy). The main items you will definitely need to have ready for the bank are: your last 2 pay stubs, previous 2 years tax returns, and usually 6 months worth of banking records. Like I said depending on certain elements like your job whether you're self employed or not, on commission or on salary, only been working at your job so long, and other factors will also determine what the banks will require you to bring. But like I said, this is the most important step. Having all of this done before looking for houses will not only save you time, but it will give you an advantage should you find that perfect house and have to move quickly on it. If you have any questions on the home buying process please don't hesitate to call or email me. Have a great day!
For all of your real estate needs, make the call... Joel Hall
(Source: NAR) – Pending home sales are on an upward trend, which has been uneven but meaningful since reaching a cyclical low last April, and are well above a year ago, according to the National Association of Realtors®.
The Pending Home Sales Index,* a forward-looking indicator based on contract signings, rose 2.0 percent to 97.0 in January from a downwardly revised 95.1 in December and is 8.0 percent higher than January 2011 when it was 89.8. The data reflects contracts but not closings.
The January index is the highest since April 2010 when it reached 111.3 as buyers were rushing to take advantage of the home buyer tax credit.
Lawrence Yun, NAR chief economist, said this is a hopeful indicator going into the spring home-buying season. “Given more favorable housing market conditions, the trend in contract activity implies we are on track for a more meaningful sales gain this year. With a sustained downtrend in unsold inventory, this would bring about a broad price stabilization or even modest national price growth, of course with local variations.”
The PHSI in the Northeast rose 7.6 percent to 78.2 in January and is 9.8 percent above a year ago. In the Midwest the index declined 3.8 percent to 88.1 but is 10.8 percent higher than January 2011. Pending home sales in the South increased 7.7 percent to an index of 109.1 in January and are 10.5 percent above a year ago. In the West the index fell 4.4 percent in January to 101.9 but is 0.7 percent above January 2011.
“Movements in the index have been uneven, reflecting the headwinds of tight credit, but job gains, high affordability and rising rents are hopefully pushing the market into what appears to be a sustained housing recovery,” Yun said. “If and when credit availability conditions return to normal, home sales will likely get a 15 percent boost, speed up the home-price recovery, and thereby significantly reduce the number of homeowners who are underwater.”
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.
Investment is the key tо a secure future. Having sаid that, it beсоmеѕ extremely important to invest wisely аnd in а manner thаt will defіnіtelу fulfill all уour aims and goals. In аny gіvеn context, investment can be of twо types, short term аnd long term. Similarly, when investing in real estate уоu havе thе choice between thе two. Depending on yоur requirements аѕ well аs ѕevеral оther factors, including funds availability, time span and thе like, yоu cаn choose bеtwеen theѕe two types. It is pertinent tо note thаt wіth real estate investments, thеre іѕ no wrong choice, аs evеrything depends оn what yоu have and whаt уоu need.
Short term investments oftеn yield quick results and therefore, іf yоu аre lоokіng to make quick money оn the real estate front, then you should choose this strategy. However, it iѕ important tо remember that wіth high returns, comеѕ high risks. So, thе ѕamе ѕhould bе takеn іnto consideration before investing. In other words, timing іѕ of great importance, if уоu want tо profit thrоugh ѕuсh investments. One оf the best short term investments strategies іn real estate is flipping, wherе yоu buy a property at a low rate and sell it at а higher one.
In flipping, уou hаve thе choice оf еіthеr gеtting the property fіrѕt or identifying a buyer first. In case of the first option, you mау havе to wait till you find а buyer but with the second, уour property iѕ pre-sold, ensuring thаt уou need nоt wait for making yоur profit. While the fіrst offers а chance tо modify thе property and improve оn it tо increase the price, the lаtter іѕ instantaneous, аnd оften preferred bу thoѕe who arе loоking fоr bеѕt short term investments in real estate.
If уоu are loоkіng fоr sоme passive investments іn real estate, thеn thе bеst short term investments іn real estate are through stocks and bonds. With these, you arе not directly dealing wіth actual properties but оnly in stocks and bonds, whіch саn be easily sold tо make profit wіthоut rеally worrying аbоut thе upkeep оr maintenance of thе property. Most short term investors іn real estate opt fоr suсh stocks оr funds, whісh are floated by real estate investment trusts.
When yоu cоnsider beѕt long term investments іn real estate, thе property thаt уоu purchase wоuld yield profits ovеr a period оf time. Investing in any property, like a house оr а rental apartment, will yield profits in thе long run. However, whilе calculating profits оn ѕuсh long term investments, іt is important tо tаke intо account thе expenses thаt you will incur fоr the maintenance оf the property. Investors oftеn tend tо forget tо include expenses in theіr final profit calculation and hence expect unrealistic profits from ѕuсh long term investments in real estate.
Alternatively, уou could opt for managed premises, which аrе one оf thе bеѕt long term investments іn real estate. These arе investment groups thаt offer theіr services to identify, purchase аs wеll аѕ maintain property or properties, wіth уоur money and іn your name. These properties оften dо not yield profits іn the short term but arе great іn terms оf long term investments. The biggest advantage оf thіs strategy іѕ іn nоt hаvіng tо concentrate on taking care оf yоur property, whilе reeling in thе profits.
What's up in the world of celebrity real estate? Oprah -- or buddy Gayle King -- is selling a modern penthouse, and Patricia Arquette sold her home for a loss.
Despite their best efforts, it's possible to figure out who the real owner of a mansion or penthouse is with a little sleuthing.
Such is the case with a posh Manhattan penthouse for sale. In 2008, it was reported that former news anchor and Oprah Winfrey's best bud Gayle King bought a 3-bedroom, 3.5-bath apartment in the new Midtown tower Place 57.
Who actually lived there is up for debate, but as for now, the penthouse is for sale for $7.9 million and appears to be vacant.
Finished in 2006, Place 57 has condos from $1.47 million to $7-plus million. Oprah's penthouse sits on the 36th floor and features 2,530 square feet of wall-to-ceiling windowed space as well as a 768-square-foot terrace.
The modern space features a "triangle-shaped" living room, high-end kitchen, dining area, and two bedrooms, one with an attached bathroom. The master suite has three walk-in closets, a jetted tub and sleek shower.
Read more about Oprah's penthouse and see more photos here.
You'd think a "Medium" could have predicted the market better.
Celebrity real estate, like regular real estate, usually hits the market in the aftermath of divorce proceedings.
Patricia Arquette and former husband Thomas Jane listed their home for sale in Mid-Wilshire, Los Angeles after they announced their divorce. First listed on the market in June 2011, Arquette's home recently sold for $2.775 million — 20 percent less than the original asking price, according to the Real Estalker.
Arquette, best known for her role in TV's "Medium," which aired 2005 through 2011, purchased the vine-covered home in 2003 with Jane for $2.25 million. Arquette and Jane — of TV series "Hung" — were married in 2006, they divorced in late 2010.
Built in 1929, Arquette's former home is a stucco "Rennaisance Revival" home covered in vines and filled with 1920s details. The 4-bedroom, 5-bath home has hand-painted ceilings and stained glass windows as well as chef's kitchen with inlaid limestone tile. Situated on a one-third acre lot, the home also has a pool and outdoor living area with barbeque.
See more photos of Patricia Arquette's former home here.
There will be an open house this Sunday February 26th at my listing at 197 Hallette Dr. Listed for $229,900 this 3 bedroom 2 bath house with just under 2000 square feet is perfect for almost anyone. Come down and check it out!
RYE, N.Y., Feb 22, 2012 (BUSINESS WIRE) -- Despite a prolonged downturn in the housing market, real estate is still the best long term investment, according to 84% of respondents in OwnAmerica's recent survey on real estate investing. Comparatively, stocks/mutual funds, bonds and savings accounts were ranked best by only 9.9%, 4% and 2%, respectively.
Among the respondents who have invested in real estate, 81.6% say they have made money and 82% expect real estate values to "definitely" appreciate over the next ten years. (53.5% believe property values will definitely increase over the next five years.)
"The most significant outcome of this survey is the overwhelming confidence in a long-term recovery. People understand now, more than ever, that building wealth in real estate takes time." says OwnAmerica CEO Gregory Rand.
Investors cited Florida (15.4%), California (11%) and Virginia (8.8%) as the states in which they are most interested in investing. Others to make the list include: Colorado, North Carolina, New York, New Jersey, Pennsylvania, Nevada and Arizona.
"The unique nature of this market today has created a perfect scenario for investors -- dropping prices and rising rents," notes Rand. "As a result, there are hundreds of cities and towns across the U.S. that have become positive cash flow markets, meaning the rents exceed the costs to own. Investors can buy, earn double digit returns just on the rent and gain the appreciation when it comes."
About:
OwnAmerica.com is the leading provider of investor education, technology and marketing services to the residential real estate industry. CEO, Greg Rand, is the host of Rand on Real Estate on WABC Radio in New York, Where to Invest Now on the FOX Business Network, Dialogue on the Street of Wall Street Multimedia in China, author of Crash Boom! and 20-year residential real estate industry veteran.
Real Estate Professionals Expect 2012 to Mark the End of the Down Real Estate Market, According to ActiveRain Study
Survey of More Than 1,800 Real Estate Professionals by ActiveRain Expects Marginal Increase in Transactions and New Construction Starts in 2012; Agents Also Ranked 10 Best and Worst Real Estate Markets for the Year
SEATTLE, WA, Feb 21, 2012 (MARKETWIRE via COMTEX) -- A recent survey of more than 1,800 real estate professionals has indicated that 2012 might represent the end of the down real estate market and the start of a rebound, with 10 specific local markets expected to lead the way. The biggest challenges facing the recovering market, agents said, will be short sales, loan qualification rules and foreclosures.
Collected from among the more than 220,000 ActiveRain real estate professional community members, the survey highlighted which specific markets across the United States held the most optimism for growth among real estate agents as well as which markets were expected to continue struggling into 2013.
An infographic and deeper summary of the survey's findings can be downloaded at www.activerain.com/real-estate-values .
"Real estate is a deeply local business, so it's no surprise to see such differences in optimism and pessimism between agents in vastly different market conditions," said Nikesh Parekh, chief executive officer for ActiveRain. "But the fact that, as a group, they expect improvement during 2012 is a good sign for the real estate industry and for the economy overall."
Below is a list of real estate markets ranked by real estate agent confidence, according to the survey:
Top Real Estate Markets
1. Fort Myers - Naples 2. Austin 3. Boise 4. San Antonio 5. Miami - Fort Lauderdale 6. Denver 7. Dallas - Fort Worth 8. Nashville 9. Houston 10. Salt Lake City
Worst Real Estate Markets
1. Reno 2. Sacramento 3. Chicago 4. New York 5. Providence, RI 6. Springfield, MO 7. San Diego 8. Los Angeles 9. Cleveland 10. Philadelphia
MOSCOW — A text message woke me up Friday morning: “Masha, Michael Shulman has had his head bashed in. He is in intensive care. Three attackers in view of a video camera — Kashin-style. A neurosurgeon is needed. See Katya’s blog for details.”
“Kashin-style” referred to the November 2010 beating of the reporter Oleg Kashin, who miraculously survived an assault that left him with an amputated finger, a broken leg and a broken jaw. The incident was captured on video, and still no one has been charged with the crime.
Michael Shulman is a neighbor and a fellow writer. We have several good friends in common and have had coffee together a few times, but mostly we bump into each other on the street where we both live. When Michael’s daughter was born three years ago, he discovered that the courtyard of my building was a perfect quiet place to take the baby carriage. The last time I saw him must have been in the fall: I was bicycling to work and passed by him kneeling on the sidewalk, crouching over an old woman who had apparently fallen. “I’ve already called an ambulance,” he said, waving me on.
We are lucky to live where we do: a street in the very center of Moscow, lined with 19th- and early-20th-century buildings. I bought my apartment back in the 1990s; Michael inherited his and has spent much of his life there. In the 2000s Moscow real-estate prices skyrocketed, and the center of the city now makes most European capitals look affordable in comparison.
Few people or businesses have been able to buy into central Moscow in recent years, and so some have attempted to seize valuable real estate without paying for it. Often such “raiders,” as the Russians call them, go after common spaces in an apartment building. The basement of my own building, which legally belongs to the 12 families who own apartments here, has been illegally occupied for years. Years ago I tried to object to this, but, finding no support among the other residents, gave up.
Michael, on the other hand, has waged a spectacular battle for the attic of his building. Over the last six years he has written about his fight extensively on his blog, showing how the raiders used corruption to take possession of real estate on the basis of forged documents. He has been threatened, harassed and maligned — not only by his raider enemies but also by the pro-government youth group called Nashi, which he believes provides them protection.
February was the month of Michael’s triumph. He won an important court victory on behalf of all of his building’s residents. And a few days later, his wife, Katya, gave birth to a boy.
Last Thursday evening, Michael left to run some errands. An hour later, Katya heard screaming in the stairway and ran out to find her husband bleeding. Despite the fact that his skull was cracked in several places, Michael was conscious and able to walk, leaning on Katya, into the apartment. She took him to the bathroom, where, as she later wrote in her blog, she watched his blood flowing into the bathtub where she had given birth to their son three days earlier. When the ambulance came, Katya could not go with Michael; she stayed with their infant and toddler.
The following day, Katya watched the videotape of her husband’s beating: the attackers never tried to conceal their faces, just as had been the case with whoever beat Kashin. (He, too, had run afoul of the Nashi youth movement.) Then Katya gathered up the kids and left town. Michael remains in intensive care in critical condition. Katya is confident he is receiving the best medical care available; she has now asked that anyone who wants to help tell as many people as possible about what happened to her husband.
“If [prices] go much lower, they will be giving them away,’’ said Matt Tarlin, an investor from Needham who has bought three homes in Athol and nearby Orange, where values are similarly depressed, and houses sell for as low as $20,000.
Athol’s real estate decline has been fueled by a glut of foreclosed properties and high unemployment. The median price of a single-family home in Athol has fallen by more than 50 percent since Massachusetts values peaked in 2005, to just above $78,000 - the lowest in the state.
That compares with about a 19 percent decline in values statewide during the same period and a median price of $286,000, according to Warren Group, a real estate tracking firm.
The small town’s predicament illustrates how the housing market’s collapse hit less affluent communities harder than Massachusetts as a whole. Now, even as prices in wealthier parts of the state - including Brookline and Cambridge - move above the market’s ceiling of seven years ago, Athol, Orange, and places like them remain in a malaise.
Many here, including Stephanie Pandiscio, president of the North Central Massachusetts Association of Realtors and a longtime Athol resident, are girding for a lengthy recovery period in a community they value for its close-knit feel, natural beauty, and safe streets. Even then, Pandiscio doesn’t believe prices will ever “come back to what they were in 2005.’’
No doubt, Athol - with a population of 8,265 - faces major economic obstacles. The median household income is $43,071, compared with a $64,509 state median, and the December unemployment rate was 9.5 percent, more than a third higher than the 6.5 percent statewide figure, according to state and federal data.
As the state’s housing boom accelerated in 2004 and 2005, the town attracted a wave of first-time buyers, many of whom borrowed too much money. In a hot market, Athol was still comparatively cheap and loans were easy to come by. And as happened elsewhere, demand quickly drove up values.
“It was crazy. The prices were so high,’’ said Pandiscio.
But when the economy faltered, many newer residents of Athol and Orange had little or no financial cushion. Some were forced to sell at a loss, others couldn’t manage their hefty mortgages and went into foreclosure.
“Less qualified buyers were driving the prices up. They were the ones that ended up in foreclosure,’’ said Rick Healey, owner of Foster-Healey Real Estate Inc. in Athol.
“It’s disproportionately low- and moderate-income families who saw these massive asset losses on their home,’’ said Barry Bluestone, founding dean of the School of Public Policy & Urban Affairs at Northeastern University. “The communities with good schools and good services are going to be able to continually attract upper-income families.’’
In October, 106 Athol homes were in the foreclosure process or bank-owned, placing it at number 11 on the nonprofit Massachusetts Housing Partnership’s list of communities with the highest concentrations of distressed properties.
Bank-owned properties weigh down values of better kept homes in low-priced communities such as Athol and Orange. Some of those homes are neglected and in serious disrepair, while others are on the market for less than $40,000, but require only new carpeting and fresh paint.
According to housing researcher Tim Davis, nearly half of all home sales in Athol last year were bank-owned homes or short sales - meaning a homeowner sells a property for less than the mortgage balance, with the bank’s permission. Like Tarlin, many buyers plan to renovate the houses and offer them as rentals until the market improves.
Real estate agent Anthony Paoletti said most of his Saturday showings require a flashlight and boots to maneuver through darkened homes that were long ago shuttered by lenders.
“There was a day where we used to wear shirts and ties; now we use insulated long johns and boots and hats,’’ Paoletti said. “The homes are vacant and there’s no heat.’’
Prospective investor-buyers understand the region won’t be experiencing a new housing boom anytime soon, according to Paoletti.
“If they fix them up, they are not going to be flipping them’’ at a huge profit, he said.
Pandiscio, who bought a house in Athol in 1976, said it was heartbreaking to see some of her neighbors walk away from their homes when mortgage balances outstripped property values.
“These all were beautiful homes. All of a sudden nobody was there,’’ she said. The bargain hunters at least give her some reason for optimism.
“Thank God there are some people out there getting the lower-end deals,’’ Pandiscio said.
One of them is Scott Parker, 47, who recently bought a three-bedroom house on a placid street in Orange after waiting until the asking price dropped tens of thousands of dollars. Parker paid $36,500 for a property he believes can eventually be resold for about $100,000, after about $15,000 in renovations.
“I don’t think I can lose with what I’m buying,’’ he said. “I’ve done pretty well in a depressed area.’’
Where you live affects who you date—and who will absolutely refuse to date you. In honor of Valentine’s Day, the real estate website Trulia commissioned Harris Interactive to conduct a survey looking at the intersection of attitudes about housing and romance. Are homeowners regarded as “marriage material” more so than noncommital renters? Are people more interested in potential mates if they live alone? Just how bad is your love life impacted if you live with your parents? When it comes to dating and housing, what’s hot and what’s not?
Owners vs. Renters
While owning a home has always been a part of the traditional American Dream, it’s apparently not a deal breaker (or maker) when it comes to dating. Nearly two-thirds (63%) of unmarried U.S. adults said that homeowners had no significant “home advantage” in terms of attracting dates. Only 28% of those surveyed said they’d prefer someone who owned a home. So you can’t really use the fact that you’re a renter as an excuse for why you can’t find a date. Well, perhaps guys can use that more as an excuse than the ladies: While just 19% of men say that they have a preference for dating homeowners, 36% of women prefer dates who own property.
Homeownership = Marriage Material?
Buying a home demonstrates some level of commitment. But for the most part, owning a home is not viewed as a sign that you’re ready, or even interested, in marriage. In the survey, 43% of unmarried U.S. adults said that homeownership is not an indication of a person’s desire to get married or be in a serious, long-term committed relationship. However, young people are more likely to view homeowners as capable of committing to a partner. A higher percentage of millenials equate homeownership to stability and commitment. Baby Boomers, by contrast, are generally past the stage of first-time homeownership, so it matters less to them in terms of viewing the commitment potential of a new partner.
Lose the Roommate
The majority of those surveyed (62%) say they’d rather date someone who lives alone. Location matters too: When comparing the preferences of men and women, Trulia found that more men would rather date someone who lives alone in a big city. On the flip side, more women would go for a date with someone who lives solo in a house in the ‘burbs.
Move Out Already!
Nearly 25 million adults live at home with their parents because they’re unemployed or underemployed, they’re trying to pay off student loans or save money to buy a place, or for any number of other reasons. While calling mom and dad your “roommates” may be a smart financial move, it’s the kiss of death for a healthy dating life. Trulia’s survey found that only 5% of unmarried adults would be open to dating someone who lived with their parents.
Shacking Up to Save
Nearly three-quarters (74%) of unmarried renters said they’d be willing to consider living with their significant other in order to save money. Somewhat surprisingly, more men than women said they’d be very willing to make the commitment of cohabitation.
Everyone Loves Master Bathrooms
Trulia posed the question: “If you were in the market for your first home today, what home amenities would make you fall in love with a home?” The results show that, for the most part, men and women largely want the same things. The top amenity for both sexes is a master bathroom, followed by a walk-in closet. More women (72%) are infatuated with a walk-in closet than men (55%), but there are apparently plenty of metrosexual males in need of closet space, as well as a gourmet kitchen—No. 3 on the list of most-desired home amenities for both sexes. Perhaps men and women aren’t as different as we’ve been led to believe.
By Yinka Kolawole
Nigeria’s economy slowed down marginally in 2011 with real GDP falling to 7.4% in the third quarter of the year compared to 7.7% in the corresponding quarter of 2010. Inflation was unsteady throughout the year – 12% in February, up to 13% in May, and by November at 10.5%. Foreign Direct Investment inflows into the country fell from $8.65 billion in 2009 to $6.09 billion by the end of 2011.
Alitheia Capital Limited, an impact investment firm based in Lagos, noted in a report that by end Q2, real estate transactions and construction borrowing picked up slightly. Sector growth fell (by 0.2%) compared with the corresponding period in 2010. Its contribution to real GDP however increased from 1.62% in the third quarter of 2010 to 1.67% in 2011 arising from increased volume of activities at the low end of the residential market.
The over-supply of the high-end residential housing continued into 2011 as several projects which had stalled due to the economic crisis were completed. It is reported that more than 300 additional residential apartments were delivered in Ikoyi between 2010 and 2011.
This further helped to soften rental prices in 2011, with rates falling by between 10% and 15%. Real estate valuers report that in high-end residential areas of the city such as Banana Island, Ikoyi and Victoria Island, land and property values were stable throughout the year. However, several transactions were consummated at discounts ranging from 10% to 15%.
In emerging middle income neighbourhoods on the city’s mainland, land values increased by up to 30% and in the relatively new gated communities along the Lekki corridor, property prices appreciated by between 20% and 40% (rental rates) and up to 40% on sale values.
There is no information to support the assumption that insecurity issues in the country affected the real estate sector, however, it is noted that a number of large scale projects in partnership with international developers/investors failed to take off in 2011.
Other factors which contributed to inactivity in the sector include a diminished effective demand for housing, insufficient resources available to developers and other operators in the sector, including the lack of debt funding which continued throughout 2011.
Although the construction of large infrastructure projects under PPP arrangements in cities such as Lagos continued in 2011, many government backed programs were adversely affected and many projects have been suspended or had their terms and tenure altered in recognition of the new economic realities.
Research conducted by Alitheia Capital revealed that there are a few events which have taken place that will have an impact on the real estate sector in Nigeria this year. Asset Management Cooperation of Nigeria (AMCON) commenced the purchase of banks assets in 2011 in the process acquiring a real estate portfolio said to be valued at N500 billion.
While it is not clear how AMCON intends to deal with this portfolio, it appears to be working toward the creation of the largest property development/management company. The company recently engaged 70 professional valuers to determine the appropriate value of assets of borrowers transferred to it.
Increasing tariffs and taxes. Lagos State has introduced a tax on rent collected, electricity tariffs have risen by 50%, and more roads are expected to be tolled. The partial removal of the subsidy on fuel and the attendant increase in the cost of goods and services will impact the cost of construction – material and labour.
Increasing PPP activity – as more governments recognise the benefit of private sector involvement in key projects, bringing to bear better implementation discipline, and projects are successfully delivered under such arrangements, we can expect to see significant injection of private funds in government projects.
Housing micro-finance – the emergence of housing products in the micro financial services sector is set to make available relatively small amounts of money to the underserved specifically for home improvement and extensions.
It is expected that as this product develops, larger loans will become available for affordable housing developments in conjunction with NGOs and other institutions that currently focus on this sector but are hampered by a lack of funding.
Further consolidation of banks is expected to go on. It is hoped that with bigger stronger institutions, lending will resume to the real and private sector, including real estate.
Effective mortgage structure – the Federal Government (FG) targets for the sector to contribute 15% to GDP as part of its Vision 2020 agenda as against current contribution of 1.8% It also promises to recapitalise the Federal Mortgage Bank of Nigeria (FMBN) to the tune of N250 million, which should help create a foundation for FMBN to access capital market in the future for subsequent fund raising without having to rely on the FG for funds.
Other factors envisaged to impact the real estate market in 2012 are related to government’s intention to ban the importation of cement (a major component of any construction project) by the end of Q1 in 2012. Current cement consumption is about 17million tonnes per annum, 50% of this requirement is delivered by Dangote Cement.
Based on expansion plans put in place in 2011, it is expected that Nigeria will become a net exporter of cement. However, this may not result in a reduction in cost (a 50kg bag of cement costs 120% more than in South Africa, Gambia or Senegal) as the inefficiencies in the economy including transportation and distribution logistics continue to plague the country. In practical terms, a March date may not be realistic and could result in the price of cement skyrocketing.
A lot of hoopla recently surrounded the Obama administration’s proposal to enable a segment of homeowners who owe more on their homes than they are worth to refinance at today’s rock-bottom rates.
The limitations are that the homeowners must be current on their loan payments and their mortgages must be owned by private financial institutions. Also nothing will come of the proposal unless Congress passes legislation to implement it.
By contrast, it may be a good time to remind the owners of upside down mortgages whose loans are owned or guaranteed by Fannie Mae and Freddie Mac that an expanded refinancing program is expected to become available sometime in March. And it does not require the approval of Congress.
The plan will implement a series of changes to the Federal Housing Finance Agency’s Home Affordable Refinance Program known as HARP. With the changes that are expected to make the program much more effective, the program is being called HARP II by those in the real estate and mortgage industries. Probably the most significant improvement is that it lifts the ceilings on the amount by which the mortgage balance can exceed a home’s appraised market value. Once, the maximum was 25 percent. Now theoretically the sky is the limit. The most important eligibility restriction that remains is that a homeowner with the upside down mortgage must still be making his or her mortgage payments on time.
However the effectiveness of the program will depend on the willingness of lenders to participate. Their participation continues to be voluntary. Greg McBride, senior analyst with Bankrate.com, an online consumer financing service, said the biggest drawback for lenders in the past has been the possibility that if the refinanced mortgage later defaults the guarantor, whether Fannie Mae or Freddie Mac, will require the lender to “buy back” the loan and cover the loss. Harp II removes some of that possible downfall for the banks, McBride said, by insulating them from taking on the risk that there might have been some mistakes in the original underwriting of the loans.
Since Freddie Mac and Fannie Mae either own or guarantee 70 percent of the residential mortgages in the nation, HARP II could have much more significance than the refinancing program for bank-held mortgages that Obama is sending to Congress. And if it works, it could do a lot of good for areas like the Inland Empire, where in the third quarter of last year CoreLogic reported that almost 44 percent of homes with mortgages were under water. Lowering the monthly mortgage payments of such homeowners would reduce the motivation for them to default and let their homes go to foreclosure.
A whopping 64 percent of people surveyed recently by John Burns Real Estate Consulting agreed with the proposition that it is “a great time to buy.” That isn’t exactly startling since the survey was taken of 20,000 people who were visiting a new home community.
Nonetheless, the survey was able to distinguish three top obstacles to buying a home in today’s real estate market: a bad time to sell an existing home, the need for a down payment, and lack of confidence in the market.
As home building rebounds in California, buyers are expected to prefer a more urban lifestyle rather than a continuation of suburban sprawl, according to some real estate experts. The change already has started in California’s older coastal communities, where infill development is transforming vacant or underutilized land into new housing, says Meea Kang, president of Domus Development LLC and president of the California Infill Builders Association.
Kang will be the featured speaker at the Randall Lewis Seminar Series, 5:30 p.m. Feb. 29. She will discuss the benefits of infill development and the barriers that the movement faces in conference room B at UCR Extension, 1200 University Ave., Riverside. The seminar is free; registration is required: http://or.ucr.edu/event/index.aspx.
Most buyers have a lavish and grand idea of what they want their perfect house to look like. All too often though, they soon find out that many of their focal points don't match up with the price points. This is when I tell my buyers to look at the big picture. Step back a minute, and take a good look at the house. What does it have that you love? What does it not have that you want? Do the improvements necessary to make this your perfect house match up with the value it will add to the house? (And remember there are only a few improvements that actually give you 90+ % return on your money... So decide if a 40-70% return on your money will suffice given the added comfort and updates.)
Make sure that points you're focusing on, aren't points that can easily be fixed. Paint, windows, fixtures, knobs and faucets, these can all be fixed and changed with relative ease. Instead only try and worry about big restoration projects such as new roofs, HVAC units, new floors, kitchen/bathroom remodeling... These are the big things that aren't cheap but will definitely hold/add value to your house. Little improvements and repairs can be done along the way. Remember, you're buying a house because you want to make it yours. Just because it might take a little while to get there, don't stress out or give up. If you have any questions, please don't hesitate to call or email.
For all of your real estate needs, make the call... Joel Hall
In past years, becoming a real estate agent was rarely a first-choice gig. For many people, it was a way to pay the bills while trying to break into another field. For some, it was a second career — or maybe a third or a fourth — tackled after the children went off to college, or earlier paths fell off a cliff.
Maxine Fouladi, an intern last summer at CORE Group NYC, said a television channel sparked her interest in real estate.
But more recently the image of the real estate agent has moved away from racks of keys and dingy walk-ups. Sashaying into the limelight by way of reality television and eye-popping sales, the profession started to seem a bit glamorous — and compelling enough that some young people are willing to try it out for no pay.
Please welcome to the bottom of the food chain an ambitious group willing to do anything, earn nothing and wake up early on a Sunday to fluff the couch cushions at your open house: the real estate broker’s interns.
This is the height of the internship application season, and young people — at least those who can afford to work without receiving a meaningful paycheck — are weighing their options. Those who choose to spend the summer in the land of expensive apartments may enjoy these tasks: copying keys, sending out Evites, promoting the boss on Facebook and hiding a seller’s dirty socks when potential buyers come calling.
But there are some perks as well.
“On my second day of work, I was in a $28.5 million apartment,” said John Liss, 18, who was an unpaid intern at Gumley Haft Kleier last summer, and is now a licensed agent with his own listings.
Unfortunately, his cut of that million-dollar-plus commission would have been nothing.
Everyone has heard intern horror stories: A bright young English major spends the summer at a fashion magazine, wedded to a coffee urn, making dentist appointments for her manager without a dime to show for it. And the resistance to endless hours of free labor has lately been picking up steam. Two men who interned on the movie “Black Swan” and one former intern at Harper’s Bazaar filed lawsuits in recent months alleging that their arrangements violated wage laws, and in December, Schneider & Rubin, a law firm that specializes in representing interns, opened its doors.
Federal guidelines require that an unpaid internship (a term that comes from the first year of training that doctors receive after medical school) satisfy six criteria, including that the “trainees” must be taught things they might learn at vocational school or an academic institution, and that they not displace regular paid employees.
Even if training is given, however, some industry professionals consider interning with a broker a peculiar arrangement.
When professional agents start their careers in earnest, “the pay is so infrequent, it’s almost like an internship already,” said Robert Morgenstern, academic director of the continuing education programs at the Schack Institute of Real Estate at New York University.
“Why wouldn’t you just take the licensing course and become a salesperson?” he continued.
According to Ross Perlin, author of “Intern Nation: How to Earn Nothing and Learn Little in the Brave New Economy,” internships have become par for the course in the white-collar work force, but they are especially concentrated in fields like music, movies or media that have an “aura of glamour.”
“They’ve made it basically a requirement that you work unpaid for some period of time,” Mr. Perlin said. Young people, he added, “are told it’s more valuable to be doing something for free in a glamorous profession than it is for them to be working at Jamba Juice.”
Real estate brokers may not be stuck behind a desk, but the profession does have some less enchanting attributes, like being effectively on-call 24 hours a day, and going without one very substantial convenience: a salary. But on television shows like “Selling New York” on HGTV, those drawbacks don’t tend to pop out.
“I’m obsessed,” said Maxine Fouladi, 19, who interned at CORE Group NYC last summer under the managing director Emily Beare for a stipend and a small end-of-summer bonus. “I initially got interested in real estate because I was watching HGTV.”
Freddy James, a senior vice president of program development and production at HGTV, said viewers of “Selling New York” tended to react most strongly to the broker’s commission, prominently displayed in a little bubble on the screen, even more so than they did to the sticker price of a home.
“I see people say: ‘That’s my annual salary! How could they make that in just one sale!’ ” Mr. James said.
Not all broker interns are aspiring superagents. Many, like Mr. Liss, plan to go into real estate development after college and signed up to work for an agent as a way to get to know the business.
Regardless of what has drawn them in, a growing field of real estate professionals stand ready to take advantage of this new labor supply.
A Web site called Intern Profits, based in California, offers instructional videos on what companies can do with interns. “The Single Best Labor Force to Grow Your Real Estate Business!” a headline reads. “Why interns are much better than hiring cheap ‘offshore’ or third world country labor,” a bullet point boasts.
One of the founders, Dreama Lee, said in an interview that the company advocated only internships that provided valuable training in exchange for labor.
And then, of course, there are always opportunities available on Craigslist, where a broker at Bond New York recently placed an advertisement calling for “licensed real estate interns.” (At most firms, agents are independent contractors and are free to do their own hiring.) Inquiries about the advertisement lead to Noah Freedman, one of the company’s founders.
“I don’t know what an intern with a license would be,” said Mr. Freedman, who explained that he had not yet seen the ad. “That sounds a lot like a real estate agent to me.”
WILLIAMSBURG, Va., Feb 6, 2012 (GlobeNewswire via COMTEX) -- In a difficult housing market, buyers and sellers rely upon good, solid real estate counsel to close deals. Many properties in the Virginia real estate market have lost value over the last two years, and sellers are faced with the prospect of short sale or foreclosure.
Elaine VonCannon, a REALTOR with Coldwell Banker Traditions in Williamsburg, is providing buyers and sellers solid solutions and additional help in the sale or purchase of a home to make the transition easier in this climate. VonCannon says, "In the current market, in most cases I have provided a free one-year home warranty to home buyers and home sellers."
To make certain pricing reflects what an appraiser would price the property for, she also offers a free Current Market Analysis to buyers and sellers. "I will continue to provide complimentary CMAs and home warranties until the real estate market is stabilized," said VonCannon. Buyers in this real estate market want assurance they have little or no out-of-pocket home repair expenses during the first year of home ownership. Sellers need to be listing their properties within the guidelines of the CMA.
To complement VonCannon's residential and commercial real estate business, her business partner, John Starke, offers financial and investment services. Starke is offering VonCannon's clients a free asset evaluation. Some other services he provides include insurance, long-term care insurance, estate planning and retirement planning.
In many areas of the United States, including Southeastern Virginia, the housing market is nearing bottom. According to an article by the Wall Street Journal in November 2011, "Bank of America Merrill Lynch economists expect the foreclosure process to speed up in nonjudicial states next year, with liquidations peaking in 2013. This is partly why they expect home prices to drop another 8% on average nationwide over the next 18 months before bottoming."
Currently, property is a good value in several Virginia counties. Investment is highly recommended in real estate in Central Virginia, the Northern Neck, Hampton, Newport News, James City and York Counties. This is mainly due to price reductions over the last two years in these geographic areas.
Elaine VonCannon joined Coldwell Banker Traditions in 2011 because the real estate agency was expanding, and had a reputation for delivering the best client service in Williamsburg, Virginia. VonCannon has built her real estate business model on customer service, so Coldwell Banker's reputation dovetails nicely with her philosophy. This includes keeping in touch with clients, past and present, returning phone calls promptly, and showing homes in the evenings and on weekends and holidays.
Elaine VonCannon believes there is no magic bullet for selling or buying a home. The buyer and seller need to have the right agent who understands the timing of contracts and is a good negotiator. A REALTOR is preferred since he or she will abide by the code of ethics.
Great article I found from inspectors point of view. Thankfully I found myself in common with the last few types of "agents" she talks about.
Many real estate agents don't attend their buyer's home inspection because someone has told them that this increases their liability. I completely disagree. It's their conduct at the inspection that puts them at risk, not their presence. About half of the agents that I regularly work with attend at least part of the inspection, and almost all of my clients attend the entire inspection. I've identified several different types of agents throughout the years, and I''m going to give my two cents as to whether they should attend or not.
The Annoyed Agent These agents act like they're doing their client a favor by selling them a house, and they're obviously annoyed with their client. They moan and sigh every time I talk about something that needs attention. They want to write up an addendum to the purchase agreement and have the client sign it while we're still at the property, before they've even seen my report. Stay home.
The Know-It-All These agents have a background in construction or they know a lot about houses, and they want to make sure everyone knows it. They try to do more talking than I do at the inspection, and they downplay or disagree with items that I say need attention. These agents give bad information, they seem to be working on their own agenda, and they're exposing themselves to a lot of liability. Stay home.
The Critic These are the agents that don't know me, and they're scared as heck because I'm not their 'usual inspector'. They're afraid that I'm going to say something that will blow the deal, they look over my shoulder the whole time, and they try to question everything I say unless it's positive. They utter phrases in an annoyed voice, such as "In all my years as an agent, I've never heard a home inspector say this was a problem." These agents clearly have their own agenda in mind, and they act bitter because the client hired me. Stay home.
The Other Inspector This agent attends the home inspection and tries to point out anything the home inspector might have missed, and tries to be a second set of eyes. This agent has good intentions, but the home inspector shouldn't need another set of eyes to produce a solid inspection. While these agents have their client's needs in mind, they could be giving their client the idea that they're just as qualified to inspect the home. An attorney might tell these agents to stay home - see the note at the bottom of this blog.
The Rookie These agents may have never attended a home inspection, and they haven't sold a lot of houses. They learn a ton about the inspection process, and they use this information to help their current client and their future clients. These agents should definitely be there to learn. Come along.
The Hand Holder These agents show up at the inspection because they're working with first time home buyers that need their hand held throughout the entire process. They introduce me to the client, and they tag along for the whole inspection to provide moral support. They don't get in the way, and their clients appreciate them being there. These agents have their client's needs in mind. Come along.
The Inspectors Assistant These agents attend the entire inspection, and they often ask more questions than the client does. They offer to adjust the thermostat while we're in the furnace room, they go back inside while we're inspecting the exterior to make sure a fan is turned on, and they want to peek their head inside the attic while I'm crawling around up there. These agents have their client's needs in mind. Come along.
The Professional These agents show up because they feel it's their due diligence. They don't tag along with me much, but they want to know about any big issues that come up, and they usually want to understand the issues and see them firsthand. Sometimes, they'll just show up at the end of the inspection to see everything first hand. These agents have their client's needs in mind. Come along.
The first three types of agents that I talked about are the types that either have been sued or could (should?) be sued. They're doing a disservice to their clients by attending the inspection, and they don't have any business being there. Thankfully, those agents seem to be few and far between... or maybe they just never refer me.
Most of the agents that I work with truly have their client's best interest in mind, and I see no reason for them to be afraid to attend the inspection. Maybe I'm too much of an optimist, but I've never subscribed to the phrase "No good deed goes unpunished".
Allstate Corp. (ALL), the largest publicly traded U.S. auto insurer, is investing in energy and real estate as near record-low interest rates squeeze income from bonds, Chairman and Chief Executive Officer Thomas Wilson said.
“For insurance companies or long-term investors, obviously, low interest rates reduce the economic upside we have from investing in America,” Wilson said in a phone interview yesterday after Allstate announced fourth-quarter results. “It encourages people to invest in different things. Sometimes those different things are real assets.”
Insurers invest in fixed-income securities to back policyholder liabilities and generate income. Yields on their portfolios have been under pressure as the Federal Reserve holds its benchmark interest rate at between zero and 0.25 percent.
The central bank last week extended its pledge to keep interest rates low through at least late 2014. About half of Allstate’s $95.6 billion portfolio was in corporate bonds as of Dec. 31, according to a presentation on the Northbrook, Illinois-based company’s website. The insurer also has holdings of Treasuries, municipal debt and mortgage-backed securities.
“When you’re getting less than 2 percent on a 10-year Treasury, or 3 percent on a corporate bond for 10 years, it doesn’t feel like as good of a return relative to the risk,” said Wilson. The insurer has increased investments in oil and gas assets and equity real estate, he said.
I currently have 8 listings in the Shreveport/Bossier areas. 6 of the 8 would be considered investment or rental properties. They are: 7040 and 7044 Amie, 319 Robinson, 6127 Lexington, 6117 Willard, 113/115 E. Herndon. The other single family properties I have listed are 1142 N Kirkwood in the Southern Hills subdivsion listed for $149,900. The other house is a beautiful 3 bedroom 2 bath house with over 1969 sq ft in The Haven listed for $232,000. Call if you're interested!
For all of your real estate needs, make the call... Joel Hall
It seems 2011 was the year for sitting — or perhaps cowering — in your house, not buying a new one.
Lawrence home sales declined by 14.7 percent in 2011 from the previous year, and sales of newly constructed homes plummeted by nearly 45 percent for the year, according to recently released figures from the Lawrence Board of Realtors.
“It is still the economy, and in particular people lost some confidence in the economy and Congress,” said Gary Nuzum, a senior vice president with McGrew Real Estate in Lawrence. “Everything that went on during the year just put people in a do-nothing mode.”
The new numbers also created questions about whether the market is poised to turn around. Sales in December 2011 were down 24.7 percent compared to December 2010 totals. The local numbers are in contrast to national reports. The National Association of Realtors reported that December sales of existing homes were up 3.6 percent compared to December 2010.
Realtors said the local real estate market did deteriorate considerably in the second half of the year.
“The fall was definitely slower than we were anticipating,” said Oliver Minnis, president of the Lawrence Board of Realtors and an agent with Stephens Real Estate. “As slow as the fall was, it is positive that we had the totals that we did. There wasn’t any real sense of urgency with buyers last year, and that feeds on itself.”
In terms of totals, the report found:
• Nearly 200 fewer homes were sold in the Lawrence area than in 2010. Home sales totaled 1,058 for the year, down from 1,240 in 2010 — or a decline of 14.7 percent. The numbers also are down from 2009 totals, when 1,253 sales were recorded.
• Sales of newly built homes continued to reach new lows in 2011. Only 64 newly built homes were sold in 2011, down from 115 in 2010 — or a decline of 44.3 percent.
• The year ended on a sourer note than 2010. At this time last year, real estate agents had reason for optimism. Home sales in 2010 were down just 1 percent from 2009 totals. And sales of newly built homes had shown signs of life, increasing by nearly 20 percent from 2009 totals.
• Lower home sales have not resulted in lower selling prices. The average selling price for 2011 was $185,095, up 2.6 percent from 2010’s mark of $180,339. The median sales price has held steady at $158,000. This data, though, runs counter to what the Douglas County Appraiser’s office is seeing through its sales data. The appraiser is predicting a general decline in appraised values. His office currently is setting those tax values, and change of value notices will be mailed in March.
• It is taking longer to sell a home. The average days on market rose to 94 in 2011, up from 81 in 2010. The median days on market rose to 60, up from 44.
Added all up, the numbers suggest a local real estate industry that is in full weather-the-storm mode.
“The last couple of years have been downturn years, no doubt,” said Bryan Hedges, president of Realty Executives Hedges Real Estate. “You just have to live through them. As far as last year, we’re just trying to forget.”
Real estate agents with several different firms, though, said there are signs of 2012 getting off to a better start. Unseasonably warm weather has helped bring out more potential buyers.
“For some home buyers, spring is already here,” Minnis said. “It seems like the general mood is more optimistic than it has been for a few years. I don’t think we’re going to set any records for 2012, but I think it is going to be better.”
BEDMINSTER — Donald Trump may be a proud New Yorker, but he’s thinking about spending eternity in New Jersey.
The colorful real estate mogul will soon seek the blessing of a state board to build a private cemetery beside the rolling hills and silken greens of his prized Trump National Golf Club in Bedminster.
The 1.5-acre site would become the exclusive final resting place for wealthy club members who pay as much as $300,000 in membership fees. And a section of the lush plot would be carved out for Trump and his next of kin, said Ed Russo, a Trump consultant.
"It’s a very personal decision, but he’s considering it," Russo said. "This is really about members, but we do plan to set something aside for Mr. Trump and his family."
While Trump owns golf courses across the country, as well as in Scotland and Puerto Rico, Bedminster holds a special place in his heart. Whenever asked — and even when he’s not — Trump insists it’s one of the top courses in the world and has lobbied unsuccessfully to have it host the U.S. Open.
This is not the first time the 65-year-old Trump, who boasts an impressive 4 handicap, has flirted with the idea of spending the afterlife nestled by his award-winning course, which opened in 2004. In 2007, he filed drawings with Somerset County township for a family mausoleum that called for a 19-foot-high, classical-style stone structure to be built alongside the first hole at Trump National Golf Club, which features two courses.
The building was to have four imposing obelisks surrounding its exterior and a small altar and six vaults inside. But he withdrew the plan after it drew criticism from local officials in this swath of New Jersey graced by horse farms and imposing mansions who said the memorial was — like Trump himself — gaudy and out of step with the town’s rural character.
"He was uncomfortable with the discussion, so he stepped back," Russo said. "Then I did some soul-searching myself and talked to members who loved the idea of a cemetery, and I was smart enough to bring it to Mr. Trump and he thought it was a great idea."
Russo would not rule out that Trump would once again seek to have some structure on the site.
Golfers, like fishermen, are so passionate — even fanatical — about their pastime that they want their ashes spread out on their field of sport, says Russo, who is thinking of having his own ashes dispersed at a golf course near his home in the Florida Keys.
But family members of golf junkies are often forced to honor loved ones’ wishes in the "dark of night" rather than during a formal service sanctioned by the golf course, Russo said, and Trump wants to change that.
"It’s one thing to be buried in a typical cemetery," Russo said, "but it’s another if you’re buried alongside the fifth fairway of Trump National, where golfers will hold memberships over many generations."
Members who have their ashes spread on the golf course can also elect to have a permanent memorial, such as a bust, at the burial site, Russo said.
Mixing golf and the afterlife — a veritable fairway to heaven — is not a new concept. Only months ago, a funeral home in Washington state opened a golf-themed cemetery featuring a putting green, fairway and sand trap.
Arne Swanson, who conceived the idea, said he was golfing with his son in Seattle two years ago when play stopped to allow a group to spread the ashes of their loved ones.
Gary Rothstein/EPAThe Donald is shown headlining a South Florida Tea Party rally in this 2011 file photo.
"I thought, ‘We are missing something here,’ " said Swanson, a marketing director for Dignity Memorial, a network of funeral homes. "Society is finding all kind of ways to memorialize people, but golf is not one of them. True golfers really find meaning in this kind of memorialization."
While officials in Bedminster still have reservations about Trump’s plans, they gave it their blessing in August with a resolution allowing the plan to be submitted to the state’s Cemetery Board, municipal records show.
Council members expressed concern about the size of possible structures on the site, saying they could be "overwhelming and garish," according to minutes of the meeting.
Bedminster Mayor Robert Holtaway said he feared Trump’s resting place could become a kitschy tourist stop. And according to minutes of the meeting, he even noted that "there is an issue in Austria where a Nazi war criminal was buried in a cemetery that became a cult following and tourist attraction."
Russo said Trump is aware of the concerns and would not let the cemetery intrude on the town’s genteel nature.
He said Trump is about two months from submitting the application to the state — which must approve every new cemetery — as well as to the township’s Land Use Board.
Trump has a powerful friend in Trenton in Gov. Chris Christie, and lavished praise on the governor when he was considering a presidential bid.
"Donald Trump can be buried anywhere," said Michael Drewniak, a spokesman for the governor, "so I guess we should be honored that he’s considering New Jersey."
In swift response to President Barack Obama’s State of the Union address, James Pethokoukis, a columnist for American Enterprise, characterized Obama’s housing proposal as “a housing policy bombshell” for the real estate and banking industries.
The president was sketchy about the details but talked about giving every responsible homeowner an opportunity to refinance at today’s historically low interest rates. He said on average each homeowner who refinances would save about $3,000 a year that could be spent on other needs, thus bolstering the economy. A small fee on the largest financial institutions was also proposed to ensure the mass refinancing plan would not add to the deficit and would give banks that have been rescued by taxpayers a chance to repay a deficit of trust.
Pethokoukis quoted analyst Jaret Seiberg of Guggenheim Washington Research Group as saying such a mass refinancing could harm holders of mortgage-backed securities when prepayment of mortgages accelerate. Also, he said, the move could permanently drive housing financing costs higher because burned investors are likely to demand a higher premium in the future.
Seiberg said he believes the president’s plan would help more than 20 million borrowers refinance their mortgages regardless of whether their loan is backed by the government and whether they owe more on their mortgage than their house is worth.
Seiberg surmised that the Obama’s plan, which Congress would have to approve to become reality, would apply only to borrowers who have been current on their loans for at least six months, possibly as long as a year. So it is meant for borrowers who can afford their mortgage.
Builders’ new official
Steven Schuyler, of Chino Hills, started work today as vice president of government affairs for the Building Industry Association of Southern California. He will be responsible for leading the association’s public policy efforts and will work closely with the regional association’s four chapters on their local issues, according to association spokesman John Frith.
Schuyler, 49, has more than two decades of experience in public policy and government relations, most recently as the principal of The Strategy Center, a home-based business in which he represented a variety of clients on issues including land use and environmental concerns.
He also has been an advocate for the Western States Petroleum Association. Earlier in his career he worked for elected officials including former U.S. Rep. Jay Kim, R-Redlands, Orange County Supervisor Todd Spitzer and former Assemblyman Fred Aguiar, a Republican from San Bernardino County.
“Steven has a rare combination of political and technical competence to lead our efforts in these areas,” association President Bob Yoder said in a statement.
“He is a skilled negotiator who thoroughly understands the needs of our industry and of state and local government officials, and his understanding of environmental compliance issues will be particularly valuable,” added Yoder, who is also Southern California division president for Shea Homes
DENVER, Jan. 24, 2012 -- /PRNewswire/ -- This month, global real estate franchisor, RE/MAX rolls out an entirely new national ad campaign focusing on "all the things that move you." The innovative campaign strikes an emotional note with consumers and features the sentimental Jim Croce song, "I've Got a Name."
(Photo: http://photos.prnewswire.com/prnh/20120124/LA41228)
For All the Things That Move You(SM) includes a full schedule of TV, radio, Internet, print and outdoor ads that will run throughout 2012. Designed to identify with the personal moments that drive decisions by homebuyers and sellers – having a baby, getting married, landing a new job or downsizing – the campaign reinforces the notion that experienced RE/MAX agents know how to help.
"These are the moments that literally move you and because they're significant life-changing events, consumers seek the assistance of a trusted professional," said Mike Ryan, RE/MAX Executive Vice President, Global Communications and Branding. "People see the housing market beginning to improve, so if they've had one of these life changing events, they're starting to think about making a move."
The campaign theme was created by R&R Partners, a Las Vegas-based agency and five TV commercials were filmed on-location in southern California. "Almost everyone has a personal connection to changes in the housing market," said Arnie DiGeorge, Executive Creative Director for R&R Partners. "But one thing that hasn't changed is the American Dream of owning your own home."
RE/MAX is one of the few companies in the industry to maintain a national advertising presence despite the changing market place. In fact, the popular straight-talk ads with RE/MAX CEO Margaret Kelly faced the situation head-on and offered frank advice to consumers.
Kelly is again featured in one 2012 TV spot thanking consumers for naming RE/MAX as provider of the highest overall satisfaction for home sellers and home buyers among national full service real estate firms in the J.D. Power and Associates 2011 Home Buyer/Seller Study(SM).
RE/MAX has enjoyed a dominant advertising position in the real estate industry. For the last few years, RE/MAX national TV campaigns have produced a share-of-voice greater than all competitors combined. 2012 should be no different.
The RE/MAX campaign will include radio spots during the big game on February 5, carried by Westwood One (Dial Global). Television buys include popular prime time network programming, cable shows and regional programs. The 2012 campaign will also take advantage of an extensive social media initiative, constructed around the "For all the things that move you" theme.
About the RE/MAX Network:RE/MAX was founded in 1973 by Dave and Gail Liniger, real estate industry visionaries who still lead the Denver-based global franchisor today. RE/MAX is recognized as one of the leading real estate franchise companies with the most productive sales force in the industry and a global reach of more than 80 countries.
With a passion for the communities in which its agents live and work, RE/MAX is proud to have raised more than $100 million for Children's Miracle Network Hospitals, Susan G. Komen for the Cure® and other charities. Nobody in the world sells more real estate than RE/MAX. For more information about RE/MAX, please visit www.remax.com or www.joinremax.com
SOURCE RE/MAX
Originally published: January 23, 2012 7:38 PM
Updated: January 23, 2012 9:24 PM
By DEREK KRAVITZ. The Associated Press
The nation's five largest mortgage lenders have agreed to overhaul their industry after deceptive foreclosure practices drove homeowners out of their homes, government officials said Monday.
A draft settlement between the banks and U.S. states has been sent to state officials for review.
Those who lost their homes to foreclosure are unlikely to get their homes back or benefit much financially from the settlement, which could be as high as $25 billion. About 750,000 Americans -- about half of those who might be eligible for assistance under the deal -- will likely receive checks for about $1,800.
But the agreement could reshape long-standing mortgage lending guidelines and make it easier for those at risk of foreclosure to restructure their loans. And roughly 1 million homeowners could see the size of their mortgage reduced.
The settlement would only apply to privately held mortgages issued between 2008 and 2011, not those held by government-controlled Fannie Mae or Freddie Mac. Fannie and Freddie own about half of all U.S. mortgages, roughly 31 million U.S. home loans.
Five major banks -- Bank of America, JPMorgan Chase, Wells Fargo, Citibank and Ally Financial -- and U.S. state attorneys general could adopt the agreement within weeks, according to two officials briefed on the discussions. They spoke on condition of anonymity because they are not authorized to discuss the agreement publicly.
The settlement would be the biggest of a single industry since the 1998 multistate tobacco deal. And it would end a painful chapter that grew out of the 2008 financial crisis.
Nearly 8 million Americans have faced foreclosure since the housing bubble burst.
President Barack Obama is expected to tout the settlement in his State of the Union address Tuesday. His administration has put pressure on state officials to wrap up a deal more than a year in the making.
But some say the proposed deal doesn't go far enough. They have argued for a thorough investigation of potentially illegal foreclosure practices before a settlement is hammered out.
New York Attorney General Eric Schneiderman has taken a public stance against halting investigations of fraudulent business practices as part of a national settlement. The deal will not fully release banks from future lawsuits by individual states. Schneiderman had no immediate comment Monday.
Just sold 158 Albany in Broadmoor this past Friday. Congratulations to Jesse and Mary Ann Crook on their first house and also finding out on Thursday that they are expecting a baby girl! Congratulations and thank you so much for the opportunity to let me serve you in this exciting time.
For all of your real estate needs, make the call... Joel Hall
First-time homebuyers face multiple challenges even before they get the house keys: getting approved for a mortgage, finding the right agent, searching for the perfect home and staying within a budget.
With planning, they can avoid mistakes that might jeopardize a deal.
Many decide to buy when they feel ready for a mortgage. But just because they can afford mortgage payments doesn't mean they can afford a home, says New York attorney Rafael Castellanos, a managing director at Expert Title Insurance. "They have an idea of what their mortgage payment is going to be, but they don't realize there's much more to it."
Property insurance, taxes, homeowners association dues, maintenance, and higher electric and water bills are some of the costs first-time homebuyers tend to overlook. "Keep in mind property taxes and insurance have a tendency of going up every year," Castellanos says.
Home buying doesn't begin with home searching. It begins with a mortgage prequalification. Often, first homebuyers "are afraid to get prequalified," says Steve Anderson, owner of Re/Max Benchmark Realty in Las Vegas. They fear the lender may tell them they don't qualify for a mortgage or they qualify for a loan smaller than expected. "So they pick a price range out of sky and say, 'Let's go look for a house.'"
That's a backward approach, says Ed Conarchy, a mortgage planner at Cherry Creek Mortgage in Gurnee, Ill.
"You get preapproved, and then
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you find a home," he says. "That way you'll make a financial decision versus an emotional decision."
He also advises thinking of the house as a long-term commitment. "If you have to switch jobs in a year or two and may have to move for the job, you should think twice," says Conarchy. "Ideally, you should picture yourself living in that house for five to seven years."
If you're new to the home-buying game, you'll need a reputable real estate agent, a good loan officer or broker and perhaps a lawyer.
First-time buyers generally should not try to deal directly with the listing agent, Anderson says.
"If you are getting divorced, are you going to go to your husband's attorney for help? Of course not," he says. "Same here. If you go to a listing agent, he is only going to show you his listings. You must find a buyers' agent to help you."
If you hire an agent without a referral from friends or family, ask the agent to provide references from previous buyers. The same goes for loan officers or mortgage brokers. It's crucial to find a professional who will give you "truly independent advice," Conarchy says.
Sometimes that means hiring a lawyer, says Castellanos.
Spending all or most of their savings on down payment and closing costs is one of the biggest mistakes first-time homebuyers make, Conarchy says. "Some people scrape all their money together to make the 20 percent down payment so they don't have to pay for mortgage insurance, but ... they are left with no savings at all."
Homebuyers who put 20 percent or more down don't have to pay for mortgage insurance when getting a conventional mortgage. That's usually translates into substantial savings on the monthly payment. But it's not worth living on the edge, says Conarchy. "I'd take paying for mortgage insurance any day over not having money for rainy days."
Now, you've prequalified for a loan and found a house. The contract is signed, and the closing is in 30 days. Don't celebrate by buying furniture or a car. In this tight lending environment, lenders pull credit reports before the closing to make sure the borrower's financial situation has not changed since the loan was approved. Any new loans on your credit report can jeopardize the closing.
New York - US stocks rose Wednesday as confidence rose among US homebuilders and the International Monetary Fund said it was seeking additional lending funds.
The National Association of Homebuilders expressed the highest level of confidence since 2007, pushing up shares in builders.
Financial stocks were also pushed up as Goldman Sachs recorded better-than-expected earnings. Profits dropped 67 per cent to 2.5 billion dollars for the year, but results were better in the fourth quarter, returning to the black at 1 billion dollars after a quarter in the red.
Meanwhile, the International Monetary Fund said it hopes to raise its lending capacity by 500 billion dollars, as it works to combat the debt crisis in the eurozone. The fund is examining means to raise the additional money and would not provide further details before it completed consultations with its member countries.
The blue-chip Dow Jones Industrial Average added 96.88 points, or 0.78 per cent, to 12,578.95. The broader Standard & Poor's 500 Index gained 14.37 points, or 1.11 per cent, to 1,308.04. The technology-heavy Nasdaq Composite Index rose 41.63 points, or 1.53 per cent, to 2,769.71.
The US currency slid against the euro to 77.78 euro cents from 78.5 euro cents on Monday. The dollar was also down against the Japanese currency to 76.77 yen from 76.83 yen.
Forecasting and predictions from the National Association of Realtors for 2012, predicting a very small rate of improvement for the year, especially regarding home prices and sales as they are so intertwined with the health of employment levels in America.
A new report from the Midwest Real Estate Data’s Board of Managers forecasts similarly, putting forward a cautiously optimistic face, noting that most of the board believe the market may have hit bottom and that this year could mark improvement in housing.
Tom Guttilla, Owner of Coldwell Banker Today’s Realtors, sees the real estate market improving at a slow but steady pace. “Rates will stay at historic lows and sales volume is improving but is still at lower levels,” said Guttilla. “This, combined with the pent up demand from the last few years, should ensure future sales increases and improving values, but the latter only after inventories are diminished.”
Guttilla recommends agents aggressively market their listings, using technology to best do so affordably. “After the last four years, 2012 will be like a breath of fresh air,” added Guttilla.
Jim Haisler, Chief Executive Officer of the McHenry County Association of Realtors®, sees the outlook for real estate in 2012 as still struggling but improving. “I think signs are showing improvement but the foreclosures will continue throughout the year, even at a slower pace, which will keep prices low,” said Haisler. “Interest rates may become a factor as the economy improves, however.”
Haisler recommends that real estate professionals stay focused on their businesses and education, especially staying current on market trends and changes with lenders. “2012 will be a good year,” added Haisler, “but I think the longer term outlook is even better for the next three to five years.”
Anthony Trotto, Attorney and Managing Broker of Anthony J. Trotto Real Estate, believes there are opportunities despite continuing high levels of REO inventory. “The rental market is strong,” said Trotto. “Now is the time for buyers to really look at picking up some rental investment properties.”
Trotto recommends that real estate professionals educate themselves about the finance and mortgage industry and accept that we are not going back to the great years we experienced from 2001 – 2006. “For those who continue to operate under the premise the housing boom is coming back and home prices are going to sky-rocket again, this year will not be good at all,” added Trotto. “But for those who adapt and learn about where we came from so we don’t go there again, the year should at least be fulfilling.”
“Guarded optimism”
“We share a guarded optimism about real estate in general and our local markets in particular,” Russ Bergeron, Chief Executive Officer of Midwest Real Estate Data (MRED), the Chicagoland MLS told AGBeat. “We are seeing signs of an economy and real estate industry that are turning the corner. Looking at the overall numbers for our entire market shows a slight (+3%) increase in the number of sales in 2011, and a small decrease (-5%) in dollar volume sold when compared to 2010. The last 6 months of the year were even better – with each month showing a 13-26% increase in the number of sales, with 5 of the last 6 months showing a dollar volume increase of 5-16%.”
Bergeron added, “We are still faced with the drag of distressed properties. For example the average sale prices for traditional, short sale, and foreclosure sales respectively in 2011 were $274,000, $155,000, and $97,000. Of course these are generalities and each local market will differ. However, we will all need to prepare to prosper in the ‘new normal’ market. There is no going back to the boom years of the last decade. Regardless, MRED is ready to support its real estate professionals as we progress into this new period of limited growth and continued success.”
Unfortunately, in this day and age, discrimination in housing is still alive in many parts of the country. In California, the Fair Employment and Housing Act makes it unlawful for a landlord, managing agent, real estate broker, or salesperson to discriminate against any person because of the person’s race, color, religion, gender, sexual orientation, marital status, national origin, ancestry, familial status, source of income, or physical or mental disability. The laws in California are more inclusive of the national Fair Housing Act, which only considers race, color, national origin, religion, sex, familial status or handicap.
Just last month, Bank of America finally settled a suit that charged Countrywide, a bank they purchased, with discriminating against Hispanic and African Americans under their mortgage practice. The New York Times writes:
A department investigation concluded that Countrywide loan officers and brokers charged higher fees and rates to more than 200,000 minority borrowers across the country than to white borrowers who posed the same credit risk. Countrywide also steered more than 10,000 minority borrowers into costly subprime mortgages when white borrowers with similar credit profiles received regular loans, it found.
An Ohio landlady put this sign up to deter a black teen from swimming in the complex's pool
In Ohio, a landlady put up a “White Only” sign at her apartment complex pool. AOL Real Estate reports that she wanted to deter a black teenager who was visiting her parents from going swimming, as she was worried that the chemicals in the girl’s hair would make the pool cloudy. Fortunately, the Ohio Civil Rights Commission found her in violation of the Ohio Civil Rights Act, though it doesn’t name what the ramification is. The landlady claims she isn’t racist, but has yet to apologize or express remorse or regret.
“If I have to stick up for my white rights, I have to stick up for my white rights. It goes both ways.”
Please…
In Chicago, an African American radio personality is suing a couple, alleging that they are refusing to sell their house to them because of their race. You would think that in this market, you would just want to sell but that doesn’t seem to be the case, as CBS Chicago writes:
Willborn and his family attempted in January 2010 to purchase an 8,000-square-foot home in the South Side Bridgeport neighborhood owned by Daniel and Adrienne Sabbia for $1.7 million…In Feb. 2010, the federal Housing and Urban Development filed a complaint alleging the Sabbias, who are white, of backing out of an oral agreement to sell their home to the Willborns, who are black.
The house is still on the market.
Have you been unfairly discriminated against? Know your rights – visit the CA Dept of Affairs website to learn more.
After surging in November, foreclosure activity subsided in Riverside and San Bernardino counties last month.
Some analysts, including those at RealtyTrac, the research company that Wednesday released the year-end housing data, said the December results were surprising. But they continued to predict that after a year of delays due to regulator intervention, a larger wave of foreclosures will hit the U.S. and Inland Southern California in 2012.
“I do expect we will see an increase in foreclosure activity across the country, including the Inland Empire, as (financial institutions) begin foreclosure proceedings on seriously delinquent loans,” said Rick Sharga, who recently was an official at Irvine-based RealtyTrac and now serves as executive vice president of Carrington Holding Co., a mortgage and real estate investment firm.
Other experts counter that given the improving economy, they don’t expect an increase in foreclosures this year. “The economy is getting better, employment is picking up, delinquencies are down. There is nothing that points to any giant wave of foreclosures coming down the pike,” said Chris Thornberg, founding economist with Beacon Economics. He added that although he expects the volume of foreclosures will be lower this year than last, it still will be historically high.
Foreclosure activity in December was subdued by the usual holiday foreclosure moratoriums and snowstorms, said Sharga. But the downturn last month was particularly pronounced, nationally reaching a 49-month low in foreclosure-related filings — including notices of default, trustee sales and bank repossessions.
In Inland Southern California, notices of default, the first step in the foreclosure process, dropped 44 percent from November to December.
“I think we are seeing a little of the calm before the storm,” said Sharga. He believes foreclosures would have increased rather than declined last year if the robo-signing controversy had not disrupted the process, prompting banks to pull back until they could make sure they were in legal compliance.
“There were strong signs in the second half of 2011 that lenders are finally beginning to push through some of the delayed foreclosures in select local markets. We expect that trend to continue this year, boosting foreclosure activity for 2012 higher than it was in 2011, though still below the peak …,” said RealtyTrac executive officer Brandon Moore in a statement.
In Riverside and San Bernardino counties, there were a combined 75,559 foreclosure filings in 2011, which was more than a 25 percent drop from 2010 and 40 percent drop from 2009. Since the foreclosure crisis started in 2007, 175,895 homes have been repossessed by lenders in the two-county region, said RealtyTrac analyst Daren Blomquist. Nationwide the number of bank-repossessed homes has reached 4million.
Chapman University Economist Esmael Adibi said he is not expecting a surge of foreclosure activity this year although he expects it will remain roughly as much of a problem as it was in 2011. If the Inland economy continues to revive at the pace it has in recent months, he said, it will help some people avoid foreclosure and help others purchase bank-repossessed homes that come on the market.
Pete Nyiri, a broker of bank-owned homes in western Riverside and San Bernardino counties, said, “We are seeing multiple offers on single-family homes. Right now we are not begging for buyers. We have plenty.” He said sales could be stronger if he had more homes to sell.
When preparing to put your house on the market, take a weekend to take care of the little things that will help your house sell quickly. Go buy paint for touch ups around the house, get extra clutter out of the way and put into storage (no one likes to see a cluttered closet), take a little extra time when cleaning to make sure and clean the parts of your house you wouldn't normally bother with (i.e. base boards, around door frames, doors, and all the little nooks and crannies that aren't regularly cleaned). These are just a few things that can help give your house that extra little advantage when being shown to interested buyers.
For all of your real estate needs, make the call... Joel Hall
Joel Hall and Andrew Cordaro are only 25 years old, but both are making strong head way in the professions of residential (Hall) and commercial (Cordaro) real estate in the Shreveport/Bossier area.
Both alumni of Loyola College Prep, Cordaro is the senior in the business having been in it for 9 more months than Hall. Cordaro began in the summer of 2009 with Coldwell Banker Commercial. He's represented dozens of business owners, private entrepreneurs, and also the Cordaro family business known around town for Kiddie Mia's and they're fabulous spaghetti sauce. With every new year, Cordaro has exceeded previous years numbers and goals. His early success is evident through his constant work ethic and great attitude. His clients always have good things to say about him. And we wish him ever upward success.
Joel Hall didn't waste any time either getting off to a fast start in the career choice of residential real estate. Hall sold his first house within just 4 days of joining RE/MAX. A residential realtor with RE/MAX Real Estate Services on Ellerbe Rd., Hall has made leaps and bounds in his profession each year. Having sold properties in Shreveport, Bossier, Haughton, Keatchie, Mansfield, and Greenwood, Hall has become very knowledgeable with Northwest Louisiana's current market. His success has not gone unoticed, receiving Rookie Of The Year awards his first year from both his office and the Shreveport/Bossier Women's Council Of Realtors.
We wish these young men continued success in their professions.
For Andrew Cordaro and all your commercial real estate needs: 318-455-3661
For Joel Hall and all of your residential real estate needs: 318-464-7003
Ever since the housing market collapsed five years ago, buyers, sellers and investors have been climbing their way out of the rubble. Things have improved a little, but it's clear we're not there yet.
Even so, there are signs of hope. Existing home sales are up by a large margin compared with the close of 2010. And for those with the cash, credit, and determination, there has never been a better time to buy a home or apply for a mortgage or refinance.
Mortgage interest rates are at all-time lows, hovering at or under 4 percent for a 30-year fixed loan. Last Thursday, Freddie Mac reported that mortgage interest rates matched the all-time low.
With some careful planning, a little research and a lot of persistence, you can avoid housing market misery in 2012, and come out on top.
Here are four best real estate moves you'll want to make this year:
1. Surround yourself with experts
No matter your goal - a first home, a refinance, reverse mortgage or the purchase of an investment property - you will need a little help from qualified professionals who can help you navigate the rough real estate waters.
Having a good experience starts with hiring someone who has been around this block many times before. So find yourself a very experienced real estate agent who can list your property or help you find the right new home.
But you'll also need to secure the services of trusted experts who can help you seal the deal. Look for a great mortgage lender, real estate attorney (especially if you're buying a foreclosure or short sale or are selling in a short situation), home inspector and tax advisor (for real estate investors).
Putting together the right team can go a long way toward helping you make sound real estate decisions in the coming year.
2. Know your credit score
As I suggested above, even those with a healthy credit profile can find securing a loan challenging in 2012. The wild days of mortgage lending, where everyone with a pulse got a loan, are over. Lenders are extremely (and perhaps overly) cautious, and your credit score has become a more important tool than ever in deciding upon interest rates and terms.
Start by going online to AnnualCreditReport.com, which is the only site operated by the three credit reporting bureaus (Experian, Equifax, and TransUnion). There, you can get a free copy of your credit report from each of the three credit reporting agencies, as required under federal law. For an extra $9 or so, you can purchase a copy of your credit report.
Or, you can visit a number of websites that will provide a free or low-cost copy of your credit history and score. If you don't like what your credit history or score looks like, you can make the decision to simply put off buying or refinancing and instead work on fixing your credit.
The key thing is to know where you stand before you negotiate.
3. Manage your credit for the long haul
In today's mortgage market, a credit score of 780 or above is considered optimal. But you should be able to get a mortgage if you have at least a 720 credit score.
If you're not there yet, there are certainly a number of steps you can take. Obviously paying your bills on time and in full is a key part of the process, but you should also act now to correct any errors on your report. If you don't have any errors on your credit report, you'll want to work to pay down existing debt as quickly as possible and make sure you don't have too many open lines of credit. (For some suggestions on how to fix your credit history, check out some of my posts on the Equifax Finance Blog.
4. Not all loans are created equal
It may be tempting to sign on the dotted line of the first lender who grants an approval, but don't. Consider that in many cases, a mortgage is going to be a 15 or 30-year commitment, and make sure you're comfortable with the terms for the long haul.
I suggest you talk to at least four or five lenders before making your decision. In addition, vary the type of creditors you're researching: A major bank, a local lender, a credit union, a mortgage broker and online options. Each of these will offer a variety of different loan programs, at different price points.
In 2012, if you want to make the best real estate moves, you'll have to arm yourself with information. In order to negotiate and secure the best deal, it is important to know what the competition will offer.
When Cynthia Nowak was buying her first condo 10 years ago, her Realtor drove her from neighborhood to neighborhood and buffeted her with a huge stack of papers for every property they looked at.
Such was the plight of house hunters in the pre-Internet era. "There was no online database of anything," recalled Nowak, who now works for Zillow, the Seattle-based provider of real-estate data. Had she had the resources buyers have at their disposal today, Nowak would have operated differently. "Now you can do so much more."
Armed with iPads and smartphones, potential buyers can access slews of statistics about properties and neighborhoods before ever meeting with a real-estate agent. For their part, brokers are using social media to market themselves to clients and spread information. Half the real-estate agents surveyed by the National Association of Realtors in 2011 said they were using some form of social media, while 10 percent had blogs.
We asked local real-estate pros what tools they found helpful or felt hopeful about as 2011 drew to a close. Here's what they had to say:
THERE'S AN APP
FOR THAT
"Let's say you're driving through a neighborhood," said John L. Scott broker Mark Mizuno. "You wonder what houses are for sale in it and you open up the app and it shows you which houses are for sale in the neighborhood and all this information on them. If you say, 'I don't want to look at homes over $500,000,' or 'I only want to look at three bedroom houses,' you can do that."
John L. Scott is one of several firms to have launched an app for the iPhone and iPad within the past year. Some brokers are already taking apps a step further: Mizuno, already quite prolific on Twitter, is now working on a personally branded app.
Zillow Marketplace has an app that simplifies the mortgage equation via an iPhone; buyers can figure out how much they'd have to pay for a house while still on the property.
QR CODING
Re/Max broker Bonnie Beddall uses the square black and white bar codes to sync her print advertising with online information. When scanned by a mobile device, the "quick response" code opens to the property's individual website. So long as the codes are well displayed and can be easily scanned, it's easier than inputting the MLS number.
QR codes were "all the rage last year," said David Warren of John L. Scott. "Many still use them, but more brokers seem to be relying on prospective buyers to use home search apps on their mobile devices."
A SOLUTION FROM WINDERMERE
Developed by the Windermere's in-house tech team, TouchCMA allows Realtors to build a competitive market analysis complete with maps and comparables on the iPad to present to clients.
Most appealing is the amount of time it takes — about 10 minutes, according to Brett Eddy, Windermere chief technology officer. "You can do all this sitting in Starbucks," Eddy said. He and Tom Parrish, Windermere's VP of marketing and business development, will unveil TouchCMA at the Inman Real Estate Connect conference in New York City this week.
Windermere hopes to sell the product to other regional brokerages.
RATE-AN-AGENT
Redfin is one of the few companies to publish online reviews of its agents. "A long time ago somebody said I'm a slave to the survey, and those words have stuck," said Redfin CEO Glenn Kelman. "At any time, if we let [clients] down, they're going to let us know, and let the world know. That level of accountability produces a profound shift in our behavior."
SOCIAL SETTINGS
Realtors seek connections with their clients, and nothing connects faster than social media. "When Facebook first came out, I did not know how it was going to help my business," said Windermere broker Mark Corcoran. "I just figured it was one of those things that was a time waster. Then I realized how easy it was to connect with so many people I'd never connect with before this."
What begins as social-media exchanges — direct messages on Twitter, for example — often lead to face-to-face meetings.
"People think it's all virtual interaction, but that's exactly what it isn't," Corcoran said.
Warren estimated that 90 percent of John L. Scott brokers used Facebook. Many also have Twitter and LinkedIn accounts, but a much smaller percentage use them to market listings. "That said, the number is growing as more brokers are getting comfortable with the medium," he added.
THE NEXT BIG THINGS?
"I think video is going to be really, really big," Beddall said. On her YouTube channel, Beddall posts informational videos explaining trickier real-estate concepts such as short sales. But she feels more can be done. Real-estate video-bloggers who drive through neighborhoods and upload dashcam videos have developed huge followings, she said.
In addition, there's Dot, a lens that attaches to the iPhone, allowing users to take 360-degree video in conjunction with the iPhone app Looker.
At Redfin, Kelman and his team are looking at ways technology can recommend new listings to clients based on what they have already seen. "In the same way Amazon can recommend the next book you want to buy, we want to recommend the next listing you want to see," he said
For the second year in a row, the Federal Housing Administration is extending a temporary waiver of its "anti-flipping" rule, meaning homebuyers relying on FHA-insured financing will continue to be able to buy homes that have changed hands in the last 90 days.
The waiver is a boon for investors seeking to rehab and flip properties, because it expands the pool of eligible borrowers to include those relying on FHA-backed loans, popular with first-time homebuyers and others who lack the cash to make large down payments.
In extending the waiver through 2012, FHA said all transactions must continue to be arms-length. In cases in which the sales price of the property is 20 percent or more above the seller’s acquisition cost, the waiver will apply only if the lender can document the justification for the increase in value, FHA said.
FHA instituted the anti-flipping rule in 2003 to protect its mutual mortgage insurance program from losses on homes that were merely flipped, rather than rehabbed. Homes repossessed by Fannie Mae, Freddie Mac, and state- and federally chartered financial institutions were exempt from the rule.
In February 2010, the Obama administration waived the waiting period for resales -- including homes purchased and rehabbed by private investors -- in the hopes of stabilizing home prices and revitalizing communities hit by foreclosures.
It often takes less than 90 days to acquire, rehabilitate and sell properties, the Department of Housing and Urban Development said at the time. Some sellers of rehabbed properties had been reluctant to enter into contracts with FHA buyers because of the cost of holding a property for 90 days, HUD said.
In extending the waiver through 2011, FHA said it insured 21,000 90-day property flip loans worth more than $3.6 billion in 2010 that would otherwise not have qualified for financing.
That number has since grown to nearly 42,000 mortgages worth more than $7 billion on properties resold within 90 days of acquisition.
When leaving your house to allow a realtor to show, remember to leave on some of the lights and have your window shades open. Allowing a lot of natural light into your house provides a warmer feeling to buyers when they initially enter your home.
For all of your real estate needs, make the call... JOEL HALL
Debt, regulatory issues and customer service are the three big concerns
2011 was an eventful year on the realty front. The discomfort was already underway, with Unitech landing up in the second generation (2G) spectrum allocation mess, and if 2010 saw sales slowing down, in 2011, the industry was hit harder. The economy was already struggling, and inflation was high. Following a succession of mishaps, an embarrassing non-performance by the government and overall confusion, 2011 was the year when the customer, finally, ran out of patience— and the realty sector; at least vocally; had to promise amends or at least trying.
This year, the realty sector is to see some major changes. The most important among them being setting up of a real estate regulator. The draft Real Estate (Regulation and Development) Bill is going to be the most keenly watched piece of regulation. It was scheduled to be tabled in the Winter Session, but with the Lokpal Bill not being cleared in the Rajya Sabha, the real estate regulation bill has been deferred. Also most builders have expressed their unwillingness on the issue.
However, Maharashtra is reportedly thinking of setting up its own regulator—which is less stringent than what the Centre is envisioning. Ministers and government officials have admitted that they had left out certain provisions like depositing 70% of payments received to stop diversion of money for buying more land instead of developing existing projects—which leads to delay and raises price.
The other ‘big’ Bill is going to be the Land Acquisition, Resettlement and Rehabilitation Bill, which is aimed at providing fair compensation to displaced land owners. The move came after the Supreme Court quashed Greater Noida Industrial Development Authority’s attempt to acquire more than 150 hectares of land from poor farmers for prominent developers like Supertech and Amrapali.
The Bill on ‘Benami’ properties is also crucial. Benami Transactions (Prohibition) Bill will empower government to seize properties which are proved to be ‘benami’; i.e. properties that are owned by someone but are registered under a different person’s name, mainly to avoid taxes.
These developments are laudable and most optimists have said that ushering in transparency will only change things for the better. However, the industry has reacted testily. Bodies like CREDAI, FICCI and individual developers have accused the rehabilitation and regulator bills of being ‘biased’ against developers; and have even hinted at the possibility of price rise once they are passed.
The penalising of DLF by the Competition Commission of India was an unprecedented event. The news gave hope to property buyers, who are often helpless to counter the realtors on issues like delay in delivery or lack of services. Reportedly, many other complaints have been registered against builders with the CCI, but it is yet to be seen how the body reacts—since it could take on DLF only because it was the market leader.
While everyone is hoping that the economy achieves equilibrium and the rupee appreciates once again, many experts believe that the bleak streak of 2011 will continue. Media reports claim that the realty industry is sitting on a Rs45,000 crore debt. In November, Knight Frank India reported that even in Navi Mumbai and Thane, flats have no takers and 70% of flats costing above Rs75 lakh remain unsold.
According to statistics, gross bank lending to the real estate sector grew 11.6% between October 2010, and October 2011, compared to 15.7% during the year-ago period. Similarly, foreign direct investment (FDI) flows into the sector witnessed a 26% decline on an annual basis.
With banks limiting lending to realtors, the latter have turned to private equity for funding which comes with interest rates as high as 18%-20%. With residential sales showing no signs of improvement and commercial properties going through a crisis, the industry will no doubt support FDI in retail which they hope will provide them with some much-needed relief. Many retailers are struggling with cost, staff and inventory management and have also accumulated huge amounts of debt (Pantaloons has a debt of Rs 4200 crore), yet show no signs of slowing down on their expansion plans.
Jones Lang LaSalle India says that another 15-17 million sq ft of retail space is expected to get operational by end-2012. The major contributor is likely to be Delhi, followed by Mumbai. A total 146 malls opened in seven cities of Mumbai, Delhi, Bangalore, Chennai, Pune, Hyderabad and Kolkata. FDI will definitely allow for a growth in space, but it remains to be seen how that will help the retailers. “We have seen customer sentiment slump,” says an analyst. “For the last two quarters, apart from food and some FMCG products, customers haven’t really been enthusiastic about purchasing even during festive seasons. If customers remain reluctant, malls and retailers will find it very difficult to recover their costs,” he added.
On the residential front, experts don’t see much corrections happening. Ganesh Vasudevan, vice president, Indiaproperty.com says, “I would rather say that prices will have an upward bias. Correction may only happen in luxury segment, depending on additional services and features. However, in 2012, the pent up demand from the last year may play out in the first two quarters.”
Experts are optimistic that sales will pick up in 2012, not only because of robust demand; but other enabling factors. The Reserve Bank of India (RBI) does not seem to be enthusiastic about another rate hike and banks have waived erstwhile pre-payment charges—which will make it easy for the home loan taker.
2012, some industry experts say, will also see the launch of many affordable housing projects—both in the metros and other regional commercial centres. With gap widening between affordability and prices, and increased migration, affordable housing projects have become a must.
The small towns and other urban centres, however, have not suffered so heavily—as the prices have not heated up so much. While completed projects by big builders are unlikely to reduce prices, projects under construction or recently delivered are seeing some reduction. Small builders are also offering discounts and other freebies to offload inventory.
Bangalore is now being touted as the next favourite—thanks to the new metro project. Motilal Oswal, in a brokerage report has said that Bangalore has significantly outperformed other markets with a good absorption rate, reasonable pricing, low speculation and a competitive market. Chennai, too, has put up a stable performance, while Hyderabad, the other favourite, looks likely to stabilise once again as the Telengana issue settles down.
I hope everyone had an amazing and safe weekend! Just wanted to say to all of my friends, family, colleagues, and business associates, I wish you a very prosperous 2012!
For all of your real estate needs, make the call... JOEL HALL
Recent headlines about the national housing market certainly seem to be in conflict with one trumpeting "Good Signs for the Real Estate Market" and another "Home Prices Down in Most Cities." Or how about "New Home Construction Bounces Back - Soars 9.3 percent in November" versus "Home Sales Remain Weak."
And to add to the confusion, the National Association of Realtors just revised its annual home sales report knocking down annual sales 14.3 percent from 2007 through 2010.
The original report showed 4.9 million existing home sales for 2010, and the revised figure is now 4.19 million.
The good news is that the seasonally adjusted annual rate as of November is now at 4.42 million homes which is a 12.2 percent improvement over the 3.94 million pace in November 2010.
For more on the NAR revisions see Saturday's Real Estate Weekly.
New single-family home construction probably will total 440,000 for the year, the lowest level in the 50 years that records have been kept but home construction overall is up as apartment construction has doubled in the last year.
On the national level, the bottom line is that real estate sales are improving, helped in no small part by record low mortgage interest rates. On the other side of the coin, prices continue to fall. According to NAR, the national median price for existing homes was $164,200 in November, down 3.5 percent from a year ago.
The Case-Shiller 20-city index shows home prices fell in September and October and are now 32 percent below the index of five years ago.
On a broader level, the FHFA Home Price Index dropped 0.2 percent in October and is down 2.8 percent for the 12 months ending in October. The index is 19.2 percent below the April 2007 peak.
In Fort Collins and northern Larimer County, 2011 home sales are going to be within a whisker of the 2010 total halting a six-year drop that began in 2005.
This has come about due to a very nice turnaround in the last six months as home sales were down 13.3 percent at the end of June. More importantly pricing remains very stable with the average selling price in 2011 expected to be in the range of $250,000, a 1.5 percent increase from the previous year.
(Page 2 of 2)
Prices reached a peak of $253,406 in 2007 and after dropping 5.5 percent to $239,359 in 2009 have now recovered to within 1.5 percent of the 2007 level.
We had the opportunity this week to discuss the 2011 sales and get some insight into what to expect for the New Year with several leaders of the local real estate community: Chris McElroy, a broker/partner with The Group, Inc., a member of the Colorado Real Estate Commission and a director of the National Association of Realtors; Ken Anderson, a broker with ReMax Alliance who is now in his second go-around as president of the Fort Collins Board of Realtors and Gene Vaughn, broker/owner, ReMax Alliance.
All of us agreed that 2011 has been a good year for local real estate, and we were particularly encouraged by the 11 percent increase in sales over the last six months and the momentum this should bring to sales in the New Year. Here is kind of a compendium of the comments:
» Fort Collins is a great place to live, and we will continue to see national interest and be an attractive destination for a wide range of people from many diversified areas of the country.
» The stability of the real estate market with regard to the number of homes sold, the inventory and the pricing are of comfort when compared to the wild gyrations of many other areas.
» The economic engine that is Colorado State University and its continued growth, research funding and the added bonus of the excitement of the new direction in the athletics department.
» Stable home prices and low mortgage interest rates compared to high rental rates and low vacancies provide incentive to first-time home buyers as well as to investors.
Put another way, owning a home has never been more affordable and there are a multitude of benefits of ownership vs. renting.
The very real prospect of an improving economy, job growth and consumer confidence combine to give more people the opportunity to own their own home.
With more first time home buyers it is time for the move-up market to kick in, bringing more buyers to the higher priced home market.
No one was prepared to go out on a limb with any solid prediction, but the consensus is that we have weathered the recession very well and we can expect to see new growth in the housing market and relatively stable prices.
To put a number on it, we expect to see a minimum of 3,000 homes sold in 2012 which will be somewhere around a 4 percent improvement, and there does not seem to be anything to prevent home prices from gaining another point or two and finishing above the 2007 peak.
So go ahead, file this away and we will expect to hear from you in twelve months. In the meantime, we would like to wish you a safe and Happy New Year.
Prices reached a peak of $253,406 in 2007 and after dropping 5.5 percent to $239,359 in 2009 have now recovered to within 1.5 percent of the 2007 level.
We had the opportunity this week to discuss the 2011 sales and get some insight into what to expect for the New Year with several leaders of the local real estate community: Chris McElroy, a broker/partner with The Group, Inc., a member of the Colorado Real Estate Commission and a director of the National Association of Realtors; Ken Anderson, a broker with ReMax Alliance who is now in his second go-around as president of the Fort Collins Board of Realtors and Gene Vaughn, broker/owner, ReMax Alliance.
All of us agreed that 2011 has been a good year for local real estate, and we were particularly encouraged by the 11 percent increase in sales over the last six months and the momentum this should bring to sales in the New Year. Here is kind of a compendium of the comments:
» Fort Collins is a great place to live, and we will continue to see national interest and be an attractive destination for a wide range of people from many diversified areas of the country.
» The stability of the real estate market with regard to the number of homes sold, the inventory and the pricing are of comfort when compared to the wild gyrations of many other areas.
» The economic engine that is Colorado State University and its continued growth, research funding and the added bonus of the excitement of the new direction in the athletics department.
» Stable home prices and low mortgage interest rates compared to high rental rates and low vacancies provide incentive to first-time home buyers as well as to investors.
Put another way, owning a home has never been more affordable and there are a multitude of benefits of ownership vs. renting.
The very real prospect of an improving economy, job growth and consumer confidence combine to give more people the opportunity to own their own home.
With more first time home buyers it is time for the move-up market to kick in, bringing more buyers to the higher priced home market.
No one was prepared to go out on a limb with any solid prediction, but the consensus is that we have weathered the recession very well and we can expect to see new growth in the housing market and relatively stable prices.
To put a number on it, we expect to see a minimum of 3,000 homes sold in 2012 which will be somewhere around a 4 percent improvement, and there does not seem to be anything to prevent home prices from gaining another point or two and finishing above the 2007 peak.
So go ahead, file this away and we will expect to hear from you in twelve months. In the meantime, we would like to wish you a safe and Happy New Year.
In this series, the RGJ examines key economic indicators for the region in 2012. Find previous stories in the series at rgj.com/business.
The year 2011 was like "The Strange Case of Dr. Jekyll and Mr. Hyde" for Northern Nevada's real estate market.
On one hand, you have
Washoe County posting 4,653 unit sales of existing single-family homes through October -- an 8.4 percent improvement over already strong unit sales during the same period in 2010, according to the Center for Regional Studies at the University of Nevada, Reno.
On the other hand, Washoe also reported a median sale price of $180,000, which represents an 11.4 percent decrease in home values compared to the first 10 months of last year.
Meanwhile, statistics from national data provider CoreLogic show that
49,641 properties in Reno-Sparks -- or 52.2 percent of residential properties with a mortgage -- were underwater or upside down during the third quarter.
For 2011, it could be possible to see upward movement in home values, not necessarily due to an improvement in market conditions but because of stricter foreclosure requirements resulting from AB 284, say some real estate watchers. The stricter law sharply has reduced the number of default notices filed in Washoe County from 612 in September to 13 in October and 15 in November.
Ultimately, the steep drop in notices of default will reduce the inventory of distressed homes entering the market. If continued low interest rates keep home-buying demand strong, then the area might see a potential upward shift in median sales price in 2012. But continued high unemployment could curtail home-buying demand as well.
In addition, although stricter foreclosure requirements could reduce distressed inventory for sale, they also are increasing shadow inventory for distressed homes now waiting on the sidelines. Until the market works through all its distressed inventory, then the residential sector -- and new home sales in particular -- will not be able to truly recover.
Short sale activity also is expected to see an increase as banks try to find other ways to process distressed inventory without having to file foreclosures.
If you've bought a house this year, don't forget to file for your homestead exemptions so you don't have to pay any more on your taxes than necessary! Probably saves you around $1000!
The Houston real estate market hit its sixth consecutive month of positive home sales this year according to the November report from the Houston Association of Realtors November.
"The year-over-year increase in single-family homes sales, along with another rise in pending sales and further decline in months inventory, reflects a market that continues to benefit from a healthy absorption of housing inventory as 2011 winds down," as stated in a HAR press release.
November sales of single-family homes rose 11.4 percent versus one year earlier, according to the latest monthly data prepared by HAR. On a year-to-date basis, sales were up 4.1 percent. All segments of the housing market experienced growth except for the luxury segment-those homes priced from $500,000 and above-whose decline pulled down the overall average price. The median price saw its biggest increase since February of this year.
"The November report contains a lot of positive data that suggests the Houston real estate market is wrapping up 2011 on solid footing," said Carlos P. Bujosa, HAR chairman and VP at Transwestern in the press release. "The Greater Houston Partnership has forecast that our region will add more than 84,000 jobs next year, and as long as that's the case, we would hope to see further strengthening of the local economy, including real estate."
The single-family home median price-the figure at which half of the homes sold for more and half sold for less-reached the highest level for a November in Houston, climbing 2.6 percent to $154,950. The average price declined 4.8 percent from November 2010 to $206,969, but still managed to achieve the second highest level for a November in Houston.
Foreclosure property sales reported in the Multiple Listing Service (MLS) increased 9.2 percent year-over-year in November. Foreclosures comprised 20.2 percent of all property sales, which is consistent with the levels they have maintained since May of this year. The median price of foreclosures in October ticked up 0.8 percent to $80,000.
November sales of all property types in Houston totaled 4,676, up 10.6 percent compared to November 2010. Total dollar volume for properties sold during the month rose 4.4 percent to $942 million versus $903 million one year earlier.
November Monthly Market Comparison
The month of November brought Houston's overall housing market positive results when all sales categories are compared to November of 2010. Total property sales and total dollar volume rose on a year-over-year basis. The median price climbed to a historic high in November for Houston. Although the average price declined, it recorded its second highest level for a November in Houston.
Month-end pending sales for November totaled 3,013. That is up 16.6 percent from last year and suggests another positive month of sales when the December figures are tallied. The number of available properties, or active listings, at the end of November declined 13.0 percent from November 2010 to 45,113. The inventory of single-family homes dropped to its lowest level since January 2010-6.2 months, compared to 7.6 months one year earlier. That means it would take 6.2 months to sell all the single-family homes on the market based on sales activity over the past year. The figure is significantly better than the national inventory of single-family homes of 8.0 months reported by the National Association of Realtors.
The information published and disseminated to the HAR Multiple Listing Service (MLS) is communicated verbatim, without change by MLS, as filed by participants. The MLS does not verify the information provided and disclaims any responsibility for its accuracy. All MLS data is preliminary and subject to change. Monthly sales figures reported since August 1998 include a statistical estimation to account for late entries. Twelve-month totals may vary from actual year-end figures. (Single-family detached homes were broken out separately in monthly figures beginning January 1988.)
Most say 'good time to buy,' few say 'good time to sell'
Most Americans surveyed by the group that provides the data for a widely tracked measure of consumer confidence say it's a good time to buy a home -- but not a good time to sell one.
This will probably not come as a shock.
Interestingly, though, renters are less bullish about buying than homeowners, who generally would have to sell in order to purchase.
Fewer than 65 percent of renters thought it was a good time to buy as of the beginning of this year, compared with about 80 percent of homeowners.
"For homeowners, sentiment in 2011 is at a level similar to the average over the last twenty years," notes author Gary V. Engelhardt of Syracuse University. "For renters, sentiment is somewhat lower now than the past average."
Sentiment about selling is -- naturally -- far more negative than average.
Fewer than 10 percent of homeowners surveyed at the beginning of the year thought it was a good time to sell. That measure was rarely below 40 percent from 1993 through 2006, and surpassed 70 percent at the end of the housing bubble.
Some of those who do think it's a good time to sell seem to mean it in the relative sense: They think prices will continue to fall, so later would be worse.
On the flip side, most of those who say it's a good time to buy offered a variation on "prices are low" or "prices are going to rise." Fewer cited low mortgage rates as their main reason for holding that view.
Oh, and one more nugget: Americans (owners and renters) are almost always more likely to believe it's a good time to buy than for homeowners to think it's a good time to sell. Check out the graph on page 33 of the report (the one labeled Figure 14) to see the years-long trend.
Do you agree it's a good time to buy and a bad time to sell? Some here have made the argument that it's a bad time to buy and a good time to sell (in the "sell now or lose even more value" sense). I've also heard readers opine that it's a bad time for both. I don't think I've heard anyone say it's been a good time to buy and sell in the last few years, except the occasional real estate agent.
But sometimes it's simply the time to move, whether good or bad. Though the level is low, homes still do sell every month.
Paul Purcell of Rutenberg Realty says despite the economy and the continued mortgage issues, things on the sales side held steady in the real estate market in 2011.
“We had a market, and that’s the good news. Some places around the United States didn’t have a market at all,” says Purcell.
The market didn’t see an abundance of new inventory, so things tightened up and prices held strong. That’s thanks in part to an influx of international buyers.
“I think the biggest trend has been a continued influx of foreign investment. Economies like China and Russia that are a little precarious, those people see the United States, particularly New York, as a very solid investment,” says Douglas Heddings of Heddings Property Group.
Foreign buyers still see New York as a bargain compared to other international cities. Heddings says another trend this year was marathon negotiations.
“It’s taking weeks to come to terms on an accepted offer. There is so much uncertainty in the market that buyers don’t want to feel like they are overpaying and sellers don’t want to feel like they are giving their property away,” says Heddings.
One the rental side, inventory dropped and prices exploded, especially on the high end.
“The high end got even hotter, and there were bidding wars on $25,000-a-month apartments,” says Purcell. “We haven’t seen that in a very long time.”
And those high prices trickled down to every level of the rental market. With rental prices so high and mortgage rates so low, the rental market did help jump start things on the sales side.
High rentals could drive the sales market even more in the coming year, which could bring rents down.
Overall, it was a stable year, so what’s in store for 2012?
“I think the overall market in 2012 is going to be healthy,” says Heddings. “It’s an election year, so there will be obvious trepidation about the market. Hopefully we’ll see the mortgage situation loosen up a bit. Prices will remain stable, may even appreciate a little bit, but I think overall 2012 will be a good year for real estate.”
There's no question that to survive in this business, you have to work weekends. It's the unwritten law that you seemingly accept when you begin your career in real estate. It doesn't matter what you want or what you have planned, it's always about the customer. Granted family trips and holidays are exceptions, but for the 90 other % of the year, you're always on alert on the weekends. I personally can't remember the last weekend that I actually slept past 9am. It's just ingrained in you to be ready for someone to call you. Personally, I wouldn't trade it for another job. The alternative amount of freedom being a real estate agent gives you compared to a normal 9-5 job is unparalleled. And you get out of it what you put into it. So most of us get a lot and feel good about helping families achieve the American dream. There's just nothing like it. I hope yall have a great weekend and remember...
Great income property! Currently being repainted on outside. 3 bedrooms and 1 bathroom, with 2 family areas. Large lot! Could possibly put another house on the back part of the lot. Could be able to get $500/month in rent. Great investment opportunity!
Motivated Seller! Willing to do a package deal with 7044 Amie for $60,000 total. GREAT DEAL!
The statistics in this Residential Real Estate Sales Report are compiled by Brad Gosslee, Coldwell Banker J. Wesley Dowlings and Asoc, using MLS, Inc as his data source on 10/14/2011: This column is written by Bobbie Brasher of Coldwell Banker J Wesley Dowling, Shreveport/Bossier City, LA.
318 861-2461.
Quoting Brad, "September 2011 was a better month for home sales compared to September 2010. There were 309 homes sold this September versus 300 same month last year. Prices were up a little too, as the Av. Price per SF was $92.07 in September 2011 versus $91.01 in Sept, 2010.
Year to date home sales are still lagging behind 2010. The market is down 7% in unit sales compared to this time last year. This is 219 less homes sold than last year."
Year to date also compared to 2010, the usual top selling price range in units, $100,000 - $199,000, dropped 14%, with $200,000 - $300,000 dropping just 2%, $300,000 - $399,999 down 11%, but the $400,000 - 499,999 range is down a whopping 27%. Over $500,000, the sales rose 15%. Prices per square foot varied just 1% to -2%.
Mortgage rates are still historically low, so now is still a very good time to buy.
If you are thinking of selling, now is the time to contact your Realtor. Of course the keys to success are getting the pricing right and choosing your Broker wisely.
Ed Shanahan, 91, moved into his upscale Vancouver apartment for seniors a year ago. 'I wouldn't want to live in any other place.'
Photograph by: Ian Lindsay, PNG Files, Vancouver Sun
Ed Shanahan's already found his little piece of heaven. The 91-year-old moved into an upscale Vancouver apartment for seniors a year ago and plans to live out his life among friends with all his needs taken care of.
Shanahan lives close to his wife, who is in a nearby care home, and loves the fact that he has a gym, a movie theatre, plenty of activities, and freshly prepared meals each day.
He's also part of a housing trend that's expected to see sharp growth in the coming decades as baby boomers age and leave their old homes behind.
"I wouldn't want to live in any other place," Shanahan said about his unit at Amica at Arbutus Manor, owned and operated by Amica Mature Lifestyles Inc., which creates and runs luxury housing and services for seniors.
"I'm 65 feet away from the most wonderful dining room [and] it has all the amenities, which are endless," added Shanahan, who pays $3,000 a month for his apartment.
"I'm busy reading, entertaining my beautiful wife, and my family is close by," he added.
"We offer independent living, so residents have to be mobile," Amica's president and CEO Samir Manji said of Shanahan's building, where rents range from $3,400 to $6,000 a month.
"We're focused on independent living, like a high-end hotel for seniors," Manji said of Amica, which has 2,800 rental units in British Columbia and Ontario.
But the Amica brand is just one way companies are addressing an anticipated boom in demand for seniors' or over-50s housing as B.C.'s population ages, although large numbers are also expected to age in their longtime homes if practical.
Greater Vancouver Home Builders' Association president and chief executive officer Peter Simpson said there's a "silver tsunami" on the horizon and that smart builders will pay attention to universal-design features for aging homeowners.
Features include wider doorways and hallways, non-slip flooring, front-loading washers and dryers, lighting that illuminates common walkways, and rollout shelves or drawers in lower kitchen cabinets.
Installing a reinforced piece of lumber at a prescribed height in a shower enclosure so an owner can eventually install a grab bar is "pennies to do," Simpson added.
A Conference Board of Canada report, entitled Retirement Homes - the Future of Canada's Housing Market?, concluded that Canada is entering an era of rapid aging, but there's little discussion about the impact on the housing market.
The report by Pedro Antunes and Alicia Macdonald said that by 2030, over 80 per cent of new housing demand will come from baby boomers in their golden years, a "stark change from today's situation."
Robyn Adamache, senior market analyst, Metro Vancouver, for Canada Mortgage and Housing Corp., agreed, although she noted in the future more seniors may opt to remain in their own homes if they can.
Metro Vancouver municipalities are looking at ways to provide alternative or affordable accommodation, with more seniors' residences, laneway housing and secondary suites viewed as potential solutions.
Another option expected to gain traction is rancher-style townhouses that allow seniors or almost-seniors to age in place on one level.
One example is The Greens at Douglas, an 83-unit Apex Custom Homes luxury project in south Surrey with homes for people 50 and over in the midto-high $600,000 range.
"The reason we bought here is because it's one level, with a [developed] basement," White Rock physician Glenn Anderson, 63, said of his and wife Lorna's new 2,400-square-foot home. "The grandkids need a place to play, so we liked the idea of the extra square footage.
"You could easily move a wheelchair in there and put a lift in to go downstairs if you needed that."
"Demand has been outstanding," the project's marketing agent, Sally Scott said. "One of our buyers has been in a wheelchair [and] we had a unit outfitted specifically for him with wider doors, lower countertops, a wheel-in shower and a lift to [the rancher's] basement."
But Scott said the concept of one-level townhouses means developers can't build as many homes. "Developers are reticent to build [rancher town houses] because of the price, but we're inundated with different developers and it's created a buzz."
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I promise this article will cover commercial real estate, but first I’d like to call your attention to an explosion of confidence that occurred recently. At least, that’s what I think it was.
For most of this year, it’s been observed that consumer spending has been way down since the recession. While there are many reasons for consumers’ reluctance to spend money, it all boils down to a lack of confidence.
Even though the economy has plodded along this year, we witnessed something phenomenal over the four-day Thanksgiving Day weekend. Americans spent $52.4 billion, the highest total ever recorded during the traditional start to the holiday shopping season.
What accounted for this apparent burst of confidence? Was it just pent-up demand?
I haven’t heard a clear explanation for the frenzied sales, but consumers’ optimism might not last long. One consumer research group pointed out that consumer confidence is still far below what is typically experienced during a healthy economy.
What about confidence within the commercial real estate industry? Throughout the year, I’ve conducted my own little personal surveys of local commercial real estate brokerages and asked brokers and agents from other firms how their business was doing. In turn, I’ve been asked the same question by other brokers and by people who are not in our industry.
A common refrain goes something like this: “I’ve been as busy as I’ve ever been, but I have less to show for it than in the past few years. Many businesses are reluctant to make a decision or a commitment.”
The next part of their explanation is that there appears to be some indecisiveness stemming from a lack of certainty as to what will be coming out of Washington over the next year or more.
While there are always pockets of prosperity and some real estate firms seem to be coping better than others, it’s no secret that commercial real estate sales are down nationwide and in Wichita, and that leasing transactions aren’t what they used to be.
From a personal perspective, in the past 15 months, at least half a dozen businesses – in office and retail properties where our firm handles the leasing – decided to limit their lease extensions to six to 12 months, rather than their usual three- to five-year renewals. The reasons they gave included uncertainty whether the government would increase taxes, high unemployment, concerns over the poor economy, what impact the new health care laws would have on their business and whether demand for their products or services would increase.
A couple of these tenants, larger corporations who do business nationally and internationally, said that their business is good, but they didn’t want to commit to a term longer than a year because they want to see what the outcome of the next election will be. So they are accumulating cash, as are many big corporations, because they think they might need a big piggy bank if the election outcomes cost them money.
A recent article in The Eagle reported that the nation’s larger corporations have been setting profit records every quarter for the past four quarters. Corporate profits are now at their largest percentage of national income ever.
So when are they going to start spending all of that money? Some experts attribute the large profits to cost-cutting strategies, including downsizing and trimming personnel. Could it be that they lack confidence in our economy’s near future? Have they been paralyzed by the uncertainty that seems to be permeating much of the business world?
It has been speculated that there are many commercial real estate transactions and potential real estate developments clogged in the pipeline; that the cash supply exists to move forward when real estate investors and developers become confident that the timing is right. Many have indicated that the timing will be right when they are certain that out-of-control government spending is stopped, when the federal government stops borrowing massive amounts of money, when they can be certain that their taxes won’t be raised, and when the creation and imposition of new regulations by governmental agencies ceases.
Another influential factor would be a dramatic improvement in the unemployment rate, which would mean businesses have started hiring again in a dramatic way. Newly created jobs will generate business expansion, which historically leads to more commercial real estate transactions, including sales, leasing, exchanges and development.
Most of us in the industry remain confident that this will happen eventually. The key question is, how long will this take?
Tony Utter is president of Utter Commercial Real Estate, Inc. Contact him at tony@utterproperties.com.
The real estate business should take a turn for the better next year, but expect a slow and halting recovery rather than a swift one.
The Urban Land Institute, a Washington-based urban policy think tank, presented its annual economic outlook to a gathering of Nashville real estate professionals on Tuesday morning at the Frist Center for the Visual Arts.
The publication’s title, “Facing a Long Grind,” captures the crux of the issue nationally.
“The hard reality is businesses have learned they can increase profits using less, while people just can’t afford to live in more,” according to the study, which is the product of 950 interviews around the country with developers, lenders, brokers and others involved in real estate circles.
Underscoring a pattern seen in Nashville, apartment projects are on the rise as the rest of the real estate industry wobbles.
“It’s pretty extraordinary,” said Dean Schwanke, the institute’s senior vice president. “I’ve heard people in big apartment regions say, ‘I’ve been in the business for 30 years and I’ve been waiting my whole life for the market to get this good for apartments.’”
One real estate professional quoted in the study characterized the apartment boom as a race to get off the ground early “before lenders start questioning the demand for all (these) new units.”
Aside from apartment construction, the study found that office buildings in “24-hour” cities is a bright spot. But industrial, retail and most hotel projects have lagged behind.
Nashville ranks in middle
In a ranking of 51 metropolitan areas, Nashville was 27th for forecasted real estate investment and 18th for real estate development prospects.
In homebuilding projections, Music City ranked 20th for forecast single-family home construction.
Austin, Texas, ranked second in investment prospects and fourth in development prospects, according to the study.
In the Southeast, Charlote and Raleigh-Durham, N.C., had a brighter investment outlook than Nashville. But Middle Tennessee’s investment forecast is stronger than those of Memphis and Atlanta.
In a panel discussion after the presentation, commercial developer Bert Mathews, president of the Mathews Co., principal with Colliers International, provided a vivid illustration of the area’s lending environment.
“Six years ago, lenders spent most of their energy scrutinizing particular projects and far less time worrying about the borrower’s track record. Today, the bank spends 80 percent of its time scrutinizing the borrower,” said Mathews, recounting what a banker told him recently.
“If you can get a project financed today with all the hurdles you have to get through, you have a great project,” Mathews said. “I see 2012 as grinding along as the banks take time to heal.”
We asked real estate professionals to share their experiences and tips for selling a home during the holiday season via an online survey. The survey data revealed some interesting results.
The majority of Realtors surveyed (60 percent) always advise a seller to list their home during the holidays because they believe it is a good time to sell. Thirty percent sometimes advise a seller to list their home if the seller is motivated.
When it comes to selling during the holidays, there are definitely some advantages. Seventy-nine percent of real estate professionals surveyed believe more serious buyers are one of the biggest advantages of selling a home during the holiday season. Sixty-one percent think less competition among properties is a plus and 17 percent believe cold weather making homes look cozy is a benefit
Selling during the holidays is not always a winter wonderland, there are some challenges. Sixty-three percent of realtors surveyed shared keeping a home open house ready (clean and staged) was one of the biggest challenges of putting a home on the market during the holidays. Thirty-nine percent revealed winter weather conditions to be one of the hardest things. Another 39 percent think buyer vacation/celebration schedules are a difficulty.
Online listing photos are crucial when trying to sell over the holidays. Eighty-two percent of realtors surveyed believe online listing photos are even more important for homes listed during the holidays.
Of this 82 percent, 53 percent attribute this importance to buyers attending less open houses because of busy holiday schedules. Fifty-one percent believe photos are more critical because sellers offer less open houses during the holiday season.
Selling during the holidays has both advantages and disadvantages, but sellers with great online photos always have the upper hand.
Myth #1. It is better to take a home off the market during the Christmas holidays. Having a home on the market is problematic anytime, but it presents additional challenges during this time of year. Family visitors, decorations and even baking cookies can upset plans to keep the home in perfect condition. If you put these things together, however they can actually have a positive influence on your ability to sale. The buyers braving the weather and taking time away from their own families are the ones that have to make a quick decision. You won’t be bombarded by people just looking. Your home will be seen by the people ready to buy. Buying a home is partly an emotional experience. The decorations, the sounds of Christmas and the aroma of fresh baking can only add to heightening that emotional experience. A house is not going to sell if it is not on the market!
Myth #2. Buying a home out of foreclosure is always a bargain. It is only a bargain if you have done your research. There are many companies that charge for lists of foreclosures and will even represent you at the auction. You can, however, access lists of foreclosures on the King Co Web site or in local newspapers. Access to many of these properties is problematic. Many are not open to the public and if they are one can come in contact with an uncooperative owner.
Many, if not all, foreclosures are in need of repair. If you don’t have the opportunity to see the inside, you will have to estimate the cost of repairs. It is a good rule to only bid 70% of the market value. You will have to rely on your agent to provide those statistics.
There is a hidden danger that most buyers are not aware of. These homes are sold as is. Liens may be on the property and will follow the sale. You may have to pay them off before receiving clear title.
These are but a few of the things that buyers must consider. Are there “deals” to be found at auction? Absolutely. But, the real deals are found by those who have done the research.
Myth #3. Short sales are always a bargain. When we first saw a rise in the numbers of short sales, banks were willing to take their losses and the buyer got a good deal. With so many out there, banks have heightened their expectations and raised the bar on the price they will accept. According to the Northwest Multiple Listing Service (NWMLS), 43 bank or real estate owned homes sold last year on the Sammamish Plateau ranging from $209,000 to $999,900. The median sales price to listing price has been high.
Days on Market
0-30 days
31-60
61-90
91-120
120+
No of listings
14
14
4
6
6
SP % LP
100%
97.89%
92.92%
96.47%
97.39%
There were more than 500 non bank owned homes that sold. This number includes short sales.NWMLS lists the median percent of list price to sale price as 98 percent. Of course, there were exceptions to this, but it is clear that sellers as well as banks are discounting prices a similar percentage. These statistics should help you determine if you are really getting a deal on a short sale.
Myth #4. All real estate agents are equal. Only real estate professionals who are members of the National Association of Realtors® can call themselves Realtors®, use the Realtor® logo and are entitled to any educational designations provided by the Association. So, what does this mean for the consumer?
Realtors must adhere to a strict Code of Ethics which is based on professionalism and protection of the public.
How does the Code of Ethics affect every day real estate practices?
If a REALTOR® represents you, whether you are buying or selling a home, you can count on that REALTOR® to:
1. Be honest with all parties in the transaction – not just with you, as his or her client, but also with the other real estate practitioner and his or her clients..
2. Put your interests ahead of his or her own, at all times.
3. Disclose all pertinent facts regarding the property and the transaction to both buyer and seller.
4. Be truthful in all communications with the public. This ensures that the public understands the REALTOR®’s experience and can make an informed decision when choosing real estate representation.
ATLANTA -- A weak real estate market is acting as a major drag on the economy of the Southeast the president of the Atlanta Federal Reserve Bank, Dennis Lockhart said Friday during a conference to discuss solutions.
At the end of the daylong symposium of brokers, developers, lenders and academics, Fed officials wound up with plenty of ideas but no silver bullets.
“We’ve witnessed over the last few years, especially in the ... Southeast ... some pretty severe stress in the both the residential and commercial real estate markets. That stress spilled over inside financial institutions and in the overall health of the economy of the Southeast,” Lockhart said as the session began. “... The recovery has been slower in the region, and a lot of that has been connected to the recovery in the real estate markets.”
At the wrap-up, Brian Bowling, the Fed’s senior vice president summed up not only the conference but also private meetings on the topic the bank held in recent days.
“The key thing we’re hearing all week is confidence,” he said. “People want leadership. They want clarity to change the psychology in the near term to maybe sustain some kind of recovery.”
Panels of experts on residential and commercial real estate and homeowner’s insurance gave their own arguments for letting the economy work out its own balance between supply and demand.
“I think the cure is time,” said Walter Mercer, executive vice president with SunTrust, a regional bank based in Atlanta.
Mercer predicted that the values of what he called trophy commercial properties would begin increasing but said he and other lenders would be very picky about where they invested. They can afford to with the collapse of the mortgage-backed securities funding source that commanded the majority of commercial development between 2005-07, developments that are mostly under water and maturing in the next three years.
On the residential side, negative equity is also the chief problem, according to the experts.
“You can drop rates as low as you want, but people aren’t going to be able to pass the underwriting,” said Mark Fleming, chief economist with CoreLogic, a firm that compiles property data for lenders.
Reducing the principal owed for homeowners at risk of default may help the overall economy by preventing foreclosures but it is not the remedy for mobility, the ability to take a new job out of town or retire in a new state like Georgia or Florida, Fleming said.
States in the South enjoyed an economic boom since the 1950s fueled by people moving to them from other parts of the country for work or retirement. That flow stopped because homeowners lost their mobility when they couldn’t sell their homes .
October's 93.3 index rating represents a jump of 9.2 percent compared to October 2010, with all U.S. regions climbing on a year-over-year basis.
The NAR index report, updated monthly, also shows that all U.S. regions but the West experienced significant bumps in contracted home sales in October, including a 24.1 percent monthly jump for the Midwest, to 88.7. In the West, the index dropped 0.3 percent to 105.5; however, the region still has the highest index rating, a position it has maintained for the last year, except for March and April 2011.
All four regions showed year-over-year growth in October, with the Midwest showing the greatest jump, up 13.2 percent.
NAR's Pending Home Sales Index is built from a national sample representing about 20 percent of signed, but not yet closed, contracts for existing-home sales. The index is built off the observation that signed contracts track closely with actual closed contracts.
The index is built on data dating back to 2001, a robust year for existing-home sales, and an index of 100 represents the average contract activity for that year.
The Northeast experienced a 17.7 percent month-over-month increase in October to 71.3, up from an annual low of 60.6 in September. The region's index rose 3.4 percent, from 69 at the same time last year.
The South's index grew 8.6 percent in October, to 99.5, up 9.7 percent over last year's measure.
The West, the lone region to experience a monthly drop (down 0.3 percent), settled at 105.5, which still represents an 8.1 percent growth on a year-over-year basis.
Also today, NAR released its December 2011 U.S. economic forecast, which largely mirrors its previous forecast, released in November. NAR's forecasted 2011 U.S. real gross domestic product annual growth rate is 1.7 percent, while 2012 projections stand at 2.5 percent. Actual GDP annual rates rose 3 percent in 2010 and dropped 3.5 percent in 2009.
Existing-home sales are also expected to increase, according to NAR's forecast, by 1.2 percent in 2011 and 5.1 percent in 2012, thanks to a projected strong 2012 third quarter. Median existing-home prices are still expected to drop 4.4 percent to a $165,900 average, in 2011 and recover 2.6 percent to $170,200 in 2012.
NAR's latest economic forecast anticipates 4.97 million sales of resale homes in 2011, with home prices falling from $172,900 in 2010 to $165,200 this year. Those numbers are anticipated to jump in 2012 to 5.22 million sales and a median resale home price of $168,200.
NAR projects 303,000 new single-family home sales this year (down 5.9 percent from 2010), with the new-home median price rising 1.5 percent, to $224,300. The association anticipates new-home sales will climb to 352,000 in 2012, with the median new-home price climbing to $230,100.
NAR projects that 30-year fixed-rate mortgage rates will stay roughly level over the next two years: averaging 4.5 percent in both years (down slightly from 2010's 4.7 percent).
The unemployment rate, according to NAR, will improve gently over the next two years, from 9.6 in 2010 to 9 percent this year and 8.6 percent in 2012.
NEW YORK — Even King Kong might go ape over this possible business deal: The Empire State Building could become part of a publicly traded real estate investment company.
Malkin Holdings LLC., the family-owned company that supervises the portfolio of office properties that includes the iconic Manhattan skyscraper, is weighing that possibility, according to a filing with the Securities and Exchange Commission on Tuesday.inShare
(Richard Drew/Associated Press) - In this May 29, 2008 photo, the Empire State Building rises above the New York Skyline. The company that supervises the portfolio of office properties that includes the iconic Manhattan skyscraper filed notice with the Securities and Exchange Commission acknowledging it was weighing the possibility of becoming a publicly traded company. The filing could pave the way for an Initial Public Offering, making the Empire State Building part of a publicly traded real estate investment company.
The filing, called an 8-K, does not necessarily mean that an initial public offering is imminent or even likely.
Scott Sweet, a senior managing partner at IPO Boutique, said the 8-K filing is rare, and could be an attempt at a trial balloon or simply as a method of informing potential investors and traders. It also might be a means to communicate with shareholders that something is afoot.
“They’re going through the legal channels of announcing there could be something happening and are making it clear what it could be,” he said.
In the one-paragraph filing, the company said it could not disclose further information at this time because of legal reasons.
But the company said in the filing that more information could be forthcoming in about three months.
The company echoed its filing in a statement emailed to The Associated Press.
It declined to answer specific questions about any possible public offering.
The Empire State Building, a 102-story tower completed in 1931, is famous for its rooftop view and for its role as the building that the giant ape scaled in the 1933 film “King Kong.”
Earlier this year, the building announced it was completing a $550 million renovation project with the replacement of its elevators
Nov. 28 (Bloomberg) -- Fewer U.S. new homes were purchased in October than forecast as builders headed for the weakest year on record.
Sales increased 1.3 percent to a 307,000 annual pace, data from the Commerce Department showed today in Washington. The median estimate of 70 economists surveyed by Bloomberg News projected a 315,000 rate. Demand is on pace to reach 301,000 this year, less than the 323,000 in 2010 that was the lowest since data-keeping began in 1963.
An overhang of distressed properties in the foreclosure pipeline that is weighing on prices of existing houses may keep luring buyers away from new construction. A jobless rate that has been hovering around 9 percent or higher for more than two years signals demand will take time to pick up.
“It looks like 2011 will be another year the homebuilders would like to forget,” Michael Larson, a housing analyst at Weiss Research in Jupiter, Florida, said before the report. “Sales remain depressed, lending standards are tight, and pressure on pricing remains due to an ongoing influx of distressed, used homes.”
Stocks rose, snapping a seven-day decline in the Standard & Poor’s 500 Index, after Thanksgiving retail sales climbed to a record and euro-area leaders were said to boost efforts to end the debt crisis. The S&P 500 jumped 3.2 percent to 1,194.82 at 10:03 a.m. New York time. Treasury securities fell, sending the yield on the benchmark 10-year note up to 2.04 percent from 1.97 percent late on Nov. 25.
Survey Results
Economists’ estimates ranged from 300,000 to 375,000. The government revised September demand to a 303,000 rate from a previously reported 313,000.
The increase in purchases was paced by a 22 percent jump in the Midwest and a 15 percent gain in the West, an area where properties tend to be more expensive. Demand in the South, where houses are cheaper, dropped 9.5 percent.
The regional breakdown, with sales rising in the West and falling in the South, probably helped push up costs. The median price of a new house purchased last month climbed 4 percent from October 2010 to $212,300.
The supply of homes at the current sales rate fell to 6.3 month’s worth from 6.4 months in the prior month. There were 162,000 new houses on the market at the end of October, matching the September level as the fewest on record.
Previously-Owned Houses
Sales of previously owned homes, which make up about 94 percent of the market, unexpectedly rose 1.4 percent to a 4.97 million annual rate in October, figures from the National Association of Realtors showed Nov. 21. The median price dropped 4.7 percent from October 2010. Cash deals accounted for 29 percent of the transactions, while distressed properties, including foreclosures and short sales, made up 28 percent.
New home sales, which are tabulated when contracts are signed, have lost their ability to forecast the broader market as demand shifts to previously owned houses. Purchases of existing houses are calculated when a deal closes about a month or two later.
Builders have held back on starting new projects this year. Housing starts fell 0.3 percent to a 628,000 rate in October, and have averaged a rate of 592,000 so far this year, Commerce Department data show. That compares with last year’s tally of 587,000, the second-fewest on record after 2009’s record low of 554,000.
With falling home prices continuing to weigh on household wealth and consumer spending, some Federal Reserve officials have called for more accommodative policy.
Fed on Housing
Fed Bank of New York President William C. Dudley said this month that if the central bank opted to purchase more bonds to lower interest rates and stimulate the economy, “it might make sense” for much of those purchases to consist of mortgage-backed securities, which would have a “greater direct impact on the housing market.”
The lack of demand this year came as a shock to builders like Atlanta-based Beazer Homes USA Inc., making them reluctant to forecast the outlook.
“Even though I do believe that national housing starts are likely to be higher in 2012, we have not assumed any improvement in national housing activity as part of our financial planning for the year,” Allan Merrill , Beazer’s chief executive officer said during a Nov. 15 call with analysts. “Our predictions about improving national housing starts for fiscal year 2011 proved to be substantially too optimistic, so I’m reluctant to go on the record with any more macro predictions.”
Property risks are “overshadowing” China’s economic outlook as a slowdown in sales threatens to trigger developer collapses, the Organization for Economic Cooperation and Development said.
“While the exit of small developers would not pose a problem, the failure of large promoters could put some bank lending at risk, perhaps triggering negative chain reactions,” the Paris-based OECD said in a report today. “A key risk is an overly quick liquidation of unsold property.”
China’s economy, the world’s second biggest, will expand 8.5 percent next year even as export growth is pulled down by weak demand and a decline in the nation’s competitiveness, the report said. Government housing projects can help to support construction and moderating inflation may allow Premier Wen Jiabao’s government to cut interest rates from the middle of 2012, the OECD said.
Vice Premier Li Keqiang said Nov. 25 that the property market is at a “critical stage” and indicated that curbs should be maintained even as sales fall. October housing transactions declined 25 percent from September and prices fell in 33 of 70 cities, according to government data.
Most Chinese builders face delays in payments from developers, Credit Suisse Group AG said previously in a report, citing a survey.
“Individuals have been holding back from purchasing houses and developers carry a rising level of unsold inventory,” the OECD said. A property slump could hurt migrant workers relying on construction work and purchasers facing losses, it said.
Japan, the region’s second-biggest economy, risks seeing a spike in government bond yields unless it controls a debt load set to approach 230 percent of gross domestic product in 2013, the OECD said.
“The delay in fiscal consolidation and the continuing rise in the public debt ratio compound the risk of a run-up in long- term interest rates,” the report said.
Yields on benchmark 10-year notes touched 1.065 percent yesterday, the highest level since Sept. 2, after Standard & Poor’s and the International Monetary Fund last week warned about the country’s mounting debt. The government should weigh forming a panel to assess its policymaking progress and put a “stronger legal foundation” under its fiscal targets, the OECD said.
While the economy is recovering from the March 11 earthquake, the initial boost after the disaster has started to wear off, the OECD said. Reconstruction demand will help drive growth through the middle of 2012, it said.
Australian Rate Cuts
Elsewhere in Asia Pacific, Australia has scope to cut interest rates should Europe’s sovereign-debt crisis stall global growth, the OECD said, a scenario investors already are betting on.
If downside risks to the international economy materialize, “monetary policy should be eased significantly to sustain demand in the context of moderating inflation,” the OECD said. Australia’s government could also boost spending, it said, though that would delay a pledged return to a budget surplus in 2012-13.
Australia’s central bank responded to heightened global risks and weaker inflation pressure by lowering its benchmark rate by a quarter percentage point to 4.5 percent on Nov. 1, the first reduction in 31 months. Swaps traders wager policy makers will need to cut again and reduce borrowing costs by more than 1.5 percentage points over the next year, a Credit Suisse Group AG Index shows.
Among those working this Thanksgiving holiday weekend will be some hardy real estate agents.
The struggling economy and uncertainty about jobs have changed the home selling scene, shifting more house hunting to hours and days off. The long weekend is a time when buyers are likely to have free time — an opportunity that agents feel is too good to pass up.
"I'm showing houses at 8 a.m and 6:30 in the evening," said Shelly Palmer, an 11-year agent with Snyder Sutton Real Estate in Topanga. "People have so little time off work that they have to combine everything that they need to get done on holidays."
Historically, holidays or days of major sporting events would be too slow to expect much from an open house, she said, but not anymore. Palmer is planning one Sunday at an ocean view listing in Malibu priced at $1.85 million.
Less than half the usual number of open houses can typically be expected over the Thanksgiving weekend, said Angela Sassounian, marketing director for Prudential California Realty in Glendale for the past decade. If the weather is bad, she said, expect even fewer.
The reasons for the decreased number aren't unexpected — some buyers and sellers will be traveling, and others will be gathering with family for the entire four-day weekend, she said. Agents will be entertaining family as well or don't want to interfere with people's gatherings, she added. "It's not just a one-day holiday anymore."
The agents who will be working expect smaller crowds at holiday weekend open houses.
"We'll see about 40 to 50 clients on a given day — at most 150," said Adam Brett with Re/Max North Orange County. "On holidays, it will be 30 to 40."
But potential buyers looking during holiday weekends are often the most motivated.
"It's like shopping for a car in the rain," said Megan Spargo of Podley Properties in Pasadena, who will be showing buyers properties in the area this weekend.
Darryl Rosen of Shorewood Realtors will spend the weekend after Thanksgiving holding an open house at a home with an ocean view listed at $3.499 million in Manhattan Beach's Hill Section.
"There are people who are seriously looking for homes," Rosen said, "and those are the people who are going to be coming."
The fact that families are together at Thanksgiving makes for an ideal house-hunting scenario, said Drew Mandile of Sotheby's Beverly Hills office.
"Thanksgiving is a festive time, when mom and dad have time off and they can drive around," said Mandile, who is holding an open house Sunday at a Spanish-style home in Bel-Air priced at $3.525 million. "I mean, how much can you eat before you want to take a drive?"
For sellers still occupying their homes, preparing an open house while juggling the demands of a holiday weekend would seem to be an added hassle.
Homeowner Diana Fernandez of Costa Mesa isn't concerned.
"I'm already up for it. I took care of all the little details when the house was listed," said Fernandez, whose about 1,750-square-foot custom home priced at $585,000 will be open to the public Sunday afternoon.
She is already prepared for showings on little notice. "When somebody comes to see it, I don't have to do much."
It has become somewhat of a family joke that if Todd Hays of Podley Properties tries to go to Michigan to visit his parents at Thanksgiving he'll end up selling a house.
Sam Schneiderman, Broker-owner of Greater Boston Home Team, shares his first impression of home buying reality shows.
Since I deal with the often-stressful work of advocating for buyer and seller clients every day, the last thing that I do to relax is watch TV show about home buying.
Recently, my wife stumbled across the channel that features such shows and I had time to check out a couple of real estate home buying reality shows. Here are my first impressions:
It appeared to me that the buyers in the first show were being shown property by the seller's agent until I later realized that she was actually the buyer’s agent. I was confused because of her abundant salesman-type comments about various aspects of the home and virtually no critique about the home’s weak points.
During both shows, I noticed that the agents offered very little insight to the buyers about the properties price and condition in relation to its price point and there was no on-screen discussion about the buyer’s other options. At least the agent in the second show took the initiative to show several other properties in the buyer’s price range so that they could see what they could get for their money.
I didn't see any discussion about agency disclosure, which is required in most states, to help buyers understand if they are working with a buyer’s agent, seller's agent, dual agent, designated agent or facilitator. (Those are the options in Massachusetts, where one of the episodes took place.) Hopefully, disclosures were handled before the show was taped.
When it came time to make the offer, the buyer’s agent did not offer an opinion about the value of the home. She didn't even indicate whether she thought it was priced high, low or fairly. She let the buyers play into the idea of how much they were going to get off of the asking price instead. Frequent readers of this blog know that asking price often has nothing to do with the value of real estate and therefore a discount off of the asking price can still result in overpaying.
The home inspection I saw revealed several obvious issues that I certainly would have pointed out to my buyers at the first viewing of the home.
In one of the episodes I saw a lame excuse for negotiation and guidance. An offer was made. The seller barely came down in price, and the agent did not counsel the buyers on any other option other than accepting the reduced price. It looked to me like there was money left on the table. I never got that far with the second show. I was disgusted by that time.
While the shows satisfy viewers desire to look at other people's homes, it doesn’t teach them much of anything about buying real estate. I also think that viewers see this and think the process is much easier than it looks. Anything looks easy when it’s compressed into 20 minutes.
If this is where buyers are learning about homebuying and agency, now I understand why some have distorted views of how the process works. In real life, the good agents spend time helping people choose a house in a consistent way, the agent provides a CMA, the agent really advises on negotiation, they inspector looks for things that are harder to find, and it takes more than 20 minutes.
If this is what you think agents do, you don’t know what a good agent can do. Did you have an agent like the ones on this show, in real life? Or did you have a good agent that provided some real service?
Louisiana voters overwhelmingly approved an amendment that permanently bans so-called real estate transfer taxes.
The conveyance tax would have been imposed when real estate was sold anywhere in the state.
The amendment was the only statewide measure on Saturday's ballot.
Currently, New Orleans has such a transfer tax, assessing a $325 fee when a home, business or land is sold. Saturday's vote does not affect New Orleans' tax, but does ban any other municipal or parish government, as well as the state legislature, from imposing such assessments elsewhere in the state.
Across the country, 37 states impose such taxes already.
Louisiana now joins Arizona, Missouri and Montana as the four states with constitutional prohibitions against such taxes.
On Friday, Lafayette City-Parish President Joey Durel issued a statement urging voters to vote "yes" on the amendment.
Louisiana voters will weigh in on Saturday on another change to the state Constitution. The proposal, called Amendment No. 1, according to the Public Affairs Research Council of Louisiana, a private, independent, nonprofit research organization, "Would prevent new taxes and fees on the sale of real estate."
There has been some confusion, based on the wording of the amendment. A yes vote for the amendment PAR says "would prohibit the levy of new taxes or fees upon the sale or transfer of immovable property after November 30, 2011." In other words, vote yes if you don't want to give the legislature the ability to levy any new taxes.
And just who's behind the effort? PAR President Robert Scott says, "I think the real estate lobby has been very open about the fact that they want to see this bill, they want to see it passed and they want to see it passed this weekend."
The reason that the real estate lobby may be pushing this amendment may be due to the fact of what PAR states opponents objections are; "There are other ways to lower closing costs without adversely affecting local revenue, such as lowering real estate commissions or attorney fees."
They state on their web site that a vote against the amendment, or a no vote "would leave the Constitution silent on the issue, meaning that the Legislature could pass statutes to create new real estate transfer taxes in the future."
Right now according to PAR "the Constitution allows the Legislature, by a two-thirds vote of both chambers, to pass statutes creating new statewide taxes. The Constitution also lets the Legislature pass laws permitting local governments to levy taxes."
Currently among local governments in the state, PAR says, "Only the City of New Orleans levies such a tax or fee on the transfer of immovable property. New Orleans charges a flat $325 'documentary transaction tax' on all property transfers. In 2010, this tax generated approximately $3.6 million in revenue and is expected to generate $4.4 million in 2011."
Scott says the New Orleans transaction tax will not be affected by Saturday's vote, as the current amendment only seeks to stop any new taxes or fees.
<a href="http:\Click here for more info, and then click "Condensed analysis available for amendment on November 19 ballot "">http://www.la-par.org/</a>
Here are the pros and cons of Amendment No. 1, according to PAR:
"Some proponents of RETT (a real estate transfer tax) restrictions contend that taxes and fees on real estate transactions inhibit sales and make property purchases less affordable. Higher taxes would weaken an already troubled housing market and hamper economic recovery. Additionally, supporters argue that because property taxes and fees fluctuate with the housing market, they are not a solid foundation on which to build government budgets. The proposed amendment would prohibit RETTs while protecting those fees necessary to compensate parish and court offices for the job of record keeping and administering property transfers. Proponents assert that the elimination of RETTs is a growing trend across the nation.
"Some opponents argue that the amendment will prevent transfer taxes if they are needed in the future to generate revenue. Parishes, municipalities and other forms of local government may need RETTs to prop up budgets in lean years. The amendment further increases local authorities’ dependence on state government. Also, there are other ways to lower real estate closing costs without adversely affecting local government revenue, such as lowering real estate commissions or attorney fees. Additionally, critics might argue that the Constitutional amendment is overkill because already a two-thirds vote is needed in the Legislature to pass a new state tax by statute. So the proposed amendment just further clogs the Constitution with unnecessary provisions."
(Reuters) - Watching the U.S. home market struggle to rebound is like listening to children in the back of a car. No, we're not there yet.
The National Association of Realtors reported that ten real estate markets are "leading the nation toward a general recovery and stability of the housing sector," but myriad problems are going to weigh down the housing market for months to come.
The lingering malaise in the economy has triggered a new wave of defaults and foreclosures. After five straight quarterly drops, foreclosures nationwide shot up 14 percent from the second to third quarter this year, according to data released by Realtytrac, the foreclosure information service (see link.reuters.com/kaw94s), in October.
While RealtyTrac doesn't foresee that the latest foreclosure wave will equal the severity of the 2007-2010 pattern -- in which three million borrowers lost their homes -- it's going to slam on the brakes where areas are getting hit the hardest.
In theory, it should be a good time to buy a home. In the worst-hit areas, properties have lost more than half their value.
Yet as the average 30-year mortgage rate has slipped below 4 percent, the combination of employment insecurity and unusually tight standards for lending are discouraging buyers en masse. Lenders are asking for extensive income verification and tax returns. One lender I contacted for refinancing even wanted me to get an accountant to certify that I wasn't lying to the IRS.
Here are some of the biggest roadblocks:
--Even in bruised cities where price appreciation is evident, unemployment is still too high. Six out of 10 of the "top turnaround towns" listed by Realtor.com (see link.reuters.com/maw94s) for the third quarter had jobless rates above 10 percent. People can't buy homes if they're not working or soon to lose their jobs. Those cities, which include four of the largest cities in Florida, still have a long way to go to recover from the housing bust.
--Although at a record low, the home mortgage rate may still be high relative to home prices. This may sound counterintuitive, but research from the Leuthold Group in their November newsletter shows that a "real" mortgage rate -- which factors in the falling market value of the home prices -- is 8 percent. Leuthold says that real cost of buying must include the 4 percent interest rate and the 3.9 percent average home prices decline over the past 12 months. That cost is still scaring away buyers.
--The combination of unemployment, high housing inventory and foreclosures is hurting places where there wasn't an excessive price run-up. Realtor.com found that the largest year-over year median listing price decreases through October were in cities like Chicago, Detroit and Atlanta. This three-punch combination will continue to ravage markets where there's a sluggish economy
Possible solutions to the housing blockage range from the radical to the necessary. A group called Remortgage America (www.remortgageamerica.com/) is calling for the government to loan Americans mortgages at 1 percent to finance a new or existing residence.
Others would like to see Fannie Mae and Freddie Mac take the foreclosed homes they own and either auction them off or offer them in a huge fire sale.
The seized mortgage agencies account for up to one-third of foreclosed homes -- about 250,000. American taxpayers are pouring tens of billions into propping up these two wards of the state, which were taken over by the U.S. Treasury in late 2008. The Obama Administration has yet to announce what it wants to do with the companies. Will they be restructured, liquidated or privatized?
A third option, which may have the least impact on a battered market, is to offer foreclosed homes in rent-to-own deals. Prospective homeowners get a place to live under reasonable leases and can build equity toward a purchase.
It's estimated that some 3.4 million foreclosed homes will be on the books of banks and mortgage companies by the end of this year. As regulators, banks, mortgage companies and state attorneys general move sheepishly to unblock mortgage modifications, refinancings and resales, only one certainty prevails: The open market will not be able to properly price every property until all government restrictions are lifted on their sales and re-financing.
--
The author is a Reuters columnist. The opinions expressed are his own.
The Canadian housing market continues to defy those who have long predicted its collapse.
It was just another set of numbers, but if anything the market seemed to pick up steam with October sales across the country the best they have been since January.
The upward push caused the Canadian Real Estate Association to slightly revise its predictions for 2011. The group now says sales will be up 1.4 per cent from a year ago, instead of 0.9 per cent.
"The continuing strength of home sales activity in the face of ongoing financial volatility speaks volumes about the confidence of Canadians in our housing market," said Gary Morse, president of CREA.
Even going into 2012, CREA doesn't see much changing in the marketplace with interest rates near record lows. It's calling for a relatively minor 0.5 per cent reduction in sales next year.
The industry continues to have plenty to gloat about as annual sales have held steady in the $450,000 range for the past three years. Prices have also shown a steady upward trajectory and are now forecast to reached an average of $362,700 in 2011, which would be a seven per cent jump from the year before. Next year, prices are expected to remain flat - something most people in the real estate industry see as an accomplishment in the present economic environment.
"Home sales activity over the past couple of months suggests buyers are confident that the Canadian economy will remain relatively unscathed by global economic risks, since every home purchase is a homebuyer's vote of confidence in the future," said Gregory Klump, chief economist with CREA, adding there is strong feeling the government's fiscal policy would be coordinated to give housing any support it should need in the event of a pullback.
So far, the industry seems to be getting all the support it needs from a low interest rate environment that has kept people in the market. Variablerate mortgages tied to prime are still available as low as 2.7 per cent while a five-year fixed rate closed mortgage is now being discounted down to 3.19 per cent.
Toronto continued to carry the national market in October with sales up 14.3 per cent from a year ago. The activity in Canada's largest city helped boost overall sales activity, which rose 8.5 per cent from a year earlier. Prices across the country continue to be moderate with the 5.5 per cent year-over-year increase the smallest it has been since January.
The consensus among economists is that the housing industry might not have much more to give in terms of price increases or sales but they also are not predicting a massive decline either. "The fact that prices are overvalued today does not necessarily mean they will crash tomorrow," said Benjamin Tal, deputy economist with CIBC World Markets.
He thinks a "violent market meltdown" would need a catalyst like the a sub-prime crisis or a jump in interest rates like the industry saw in 1991. "We do believe the housing market in Canada will stagnate in the coming year or two," Tal said.
That housing market has become a key component of the country with a report from TD Economics saying the construction industry was second fastest growing industry in the country and accounts for 10 per cent of GDP. "While the industry's performance over the last decade has been astonishing, some of the recent strength is likely to taper off in the coming years," the bank said.
Home Buyers, Sellers, and Real Estate Agents Benefit from Greater Speed, Convenience, and the Freedom to Sign Important Documents from Anywhere, Anytime, On Any Device
SAN FRANCISCO, Nov 15, 2011 (BUSINESS WIRE) -- DocuSign, the global standard for electronic signature, today announced that Redfin, a technology-powered real estate brokerage that seeks to change the real estate game in the consumer's favor, has launched DocuSign's electronic signature solution to streamline the home sale and purchase process for sellers, buyers, and agents. With DocuSign, real estate transactions are now fully automated, making buying and selling homes easier and faster than ever for consumers. The news comes on the heels of DocuSign announcing that the nation's largest real estate brokerages and property management firms have standardized on DocuSign for eSignature.
DocuSign's electronic signature solution enables home sellers and buyers to sign and return real estate and other documents with ease, anytime, anywhere with any Internet-enabled device. Consumers no longer need to wait near a fax or drive to an office to sign an offer.
"The DocuSign Global Network gives home sellers and buyers freedom and peace of mind like never before," said Tom Gonser, founder and chief strategy officer at DocuSign. "Instead of being tethered to an office or a fax machine, consumers can sign one of the most important, legally-binding documents in their lives from literally anywhere. All it takes is an Internet connection and DocuSign."
"The premise of Redfin is to use technology to help customers buy or sell a home in a convenient, comfortable, and secure way," said Jim Lamb, senior product manager at Redfin. "Our customers asked for a twenty-first century solution for negotiating and closing transactions, and that's what we're happy to give them. With DocuSign, Redfin customers can complete their entire transaction on their own terms, at their own convenience. These are documents that should be signed to the sound of corks popping, not fax machines beeping."
With its DocuSign implementation, the innovative real estate company further differentiates itself as a customer-centric and tech-savvy provider of real estate services. Because Redfin operates in thirteen states and the District of Columbia, the company deals in many types of contracts, each tailored to state-specific real estate law. DocuSign templates provide agents with the ability to create contracts in just a few clicks, so they save time in preparing and managing the signature process.
"As a technology-focused real estate brokerage, my clients expect to benefit from the latest technology during all parts of the transaction," said Anna Nevares, San Diego area manager for Redfin. "Now that we have implemented DocuSign to automate the signing of purchase agreements and legal disclosures, we're able to eliminate the errors or missed signatures that potentially hold up a deal. With DocuSign, our clients can close over the dinner table rather than a conference table."
"As one of the top international architecture firms, it's important to us that we reflect our reputation for innovation in the design, construction, and materials of our properties across our entire business," said Chris Pardo, partner and co-founder of PB Elemental Design. "DocuSign and Redfin both reinforce the modern simplicity we design into our projects while enhancing our ability to serve our clients around the world."
In addition to accelerating real estate transactions, DocuSign is helping Redfin to streamline its internal operations. New hires at Redfin sign contracts and policy documents with DocuSign and Redfin real estate agents use the DocuSign Global Network to renew and transfer licenses. Both reinforce the company as an innovator, embracing the same technology internally that offers security and convenience to its customers across the country.
About DocuSign Inc.
DocuSign(R) is the global standard for eSignature. DocuSign helps customers decrease transaction times, reduce costs, and enhance customer satisfaction with the easiest, fastest, most secure global network for sending, signing, tracking, and storing documents in the cloud. For more information, visit www.docusign.com or call 0800 098 8113. Visit the DocuSign blog at www.docusign.com/blog and follow DocuSign on Twitter, LinkedIn and Facebook.
Acadiana voters faced several state and local ballot propositions on the Oct. 22 ballot. When they return to the polls Nov. 19, most will see only one — an important one.
The ballot summary of the proposed constitutional amendment reads this way: "To prohibit the levy of new taxes or fees upon the sale or transfer of immovable property, including documentary transaction taxes or fees, or any other tax or fee, by the state or any of its political subdivisions after November 30, 2011."
In plainer words, the amendment would ban new fees or taxes on real estate sales beginning Dec. 1. We hope you'll vote yes, which would prevent the Legislature from stunting growth in the real estate industry by imposing, or allowing local governments to impose, another needless tax.
Currently in Louisiana, only Orleans Parish imposes such a fee, a flat $325, which wouldn't be affected. Livingston Parish tried to enact such a fee in 2004 but was forced to repeal it after a state attorney general's opinion said parishes, even with home rule charters, lack the power to impose such a tax without the approval of the Legislature.
But an attorney general's opinion is no legal guarantee. Do we really want the possibility of a tax like that hanging over our heads with no assurance that it will be wisely spent? And with no assurance that the tax would go to a worthy purpose, such as education or infrastructure improvements?
Current fees related to real estate transfer tend to be levied in order to pay for a service related to real estate sales, which makes sense. But there's no way to know a new tax on real estate transfers wouldn't be used to generate general revenue. So a general fund burden would be placed on a relatively small group of people: those who buy real estate.
The real estate industry is pushing hard for the ban, and what the industry really fears is some sort of tax or fee based on a percentage of the sale price. If, for example, a 1 percent tax is instituted — and other states charge as much as 3 percent — the buyer of a $100,000 home would be forced to come up with another $1,000.
A study performed last year for the Louisiana Real Estate Association found that a 1 percent tax could push a new home out of reach for 5,550 Louisiana people, based on a $183,000 average home price, a 20 percent down payment and conventional financing. Real estate transfer taxes also are regressive in that they hit hardest at the low end of the income scale of people buying homes.
Local real estate agents who appeared at our editorial board meeting last week say our real estate market is hanging in there, but they think a tax would be the last thing the market needs.
There are legitimate concerns about cluttering the constitution with another amendment and about needlessly restricting the ability of governments to deal with budget difficulties. But these concerns are far outweighed by the potential damage to an industry vital to local economies.
The Obama administration is expected to soon announce details of changes to a federal program aimed at helping borrowers refinance instead of face foreclosure.
Q. I saw a report on the nightly news that said President Barack Obama has approved some changes that would make it easier for people like me to refinance a home mortgage. I tried to refinance last year when interest rates dropped, but my application was rejected because my home is worth less than I paid for it about five years ago. Will the new changes finally allow me to refinance and lower my payments?
A. They may, provided that you meet a few basic requirements. Several readers have sent letters that ask about Obama’s new refinancing program, so I’m devoting this entire column to answering some of the most common questions.
Q. How does the new refinancing program work?
A. Actually, it’s not a new plan. It instead reflects changes to the Home Affordable Refinance Program, commonly called HARP, which the Obama administration launched more than two years ago in an effort to help owners refinance their loans so they could lower their payments and avoid foreclosure.
Administration officials initially thought the program could help as many as 5 million homeowners refinance when it was introduced in 2009, but only about 900,000 have qualified for a replacement loan as of today. A key factor behind the disappointing start was that lenders were hesitant to refinance borrowers who owe more than their property is worth — a figure that had reached nearly 15 million households earlier this year.
Details of the changes are slated to be released Nov. 15. Obama has said a cornerstone of his plan will be to waive some current legal liabilities that banks can have if a loan turns sour, which in turn should prompt more lenders to issue refinance loans even if a home is worth much less than the borrower paid for it.
In other words, if you owe $125,000 on your loan but your house is worth only $100,000, the changes may still let you refinance at a lower rate if you meet the program’s other requirements.
Q. Will all home mortgages be eligible for the changes in HARP?
A. No. HARP is only available to homeowners whose mortgages are owned or backed by Fannie Mae or Freddie Mac, the two housing finance giants that were bailed out by the federal government in 2008 as they teetered near bankruptcy.
Together, Fannie and Freddie own more than half of all mortgages in the United States. But many borrowers don’t realize that their loan is owned by one of the two agencies because they typically are required to keep sending their monthly payments directly to the lender that originally issued the mortgage.
Your bank’s customer-service department probably can tell you whether your loan has been sold to Fannie or Freddie, thus making you eligible for HARP relief. Or, you can call Fannie Mae at (800) 732-6643 or Freddie Mac at (800) 424-5401 to see if you’re eligible for HARP or one of the other mortgage-related relief programs.
Q. I have already confirmed that my loan is owned by Fannie Mae, even though I still send my monthly checks to the bank that originally gave me the loan. So, what are some of the other benefits that I can get if I refinance through HARP? Also, what are the other loan requirements that I would have to meet?
A. One benefit is that both Fannie and Freddie will “streamline” the application process by eliminating some paperwork that was previously needed, which should speed up the refinancing process. It also eliminates the need for appraisals in many cases and additional fees that, until now, prevented cash-strapped homeowners from applying for HARP help.
Of course, borrowers must still prove they have enough income or savings to make their monthly payments at the reduced interest rate. Qualified applicants also must have been current on their payments for the past six months and had no more than one missed payment in the past 12 months.
Q. Will these changes be enough to make home prices go up again?
A. No, at least not immediately. But by making refinance loans easier to get, the HARP changes could stem the rising tide of foreclosures that have crippled property values across most parts of the nation and eventually lead to a rebound in prices a year or two from now.
Q. Where can I get more information?
A. Start by calling your current lender to see if you are qualified for HARP or other mortgage-relief programs. Also call Fannie Mae and Freddie Mac at the phone numbers listed earlier, or visit their outstanding websites, www.fanniemae.com and www.freddiemac.com.
• For the booklets “Straight Talk About Living Trusts” and “Free and Clear: Getting the Mortgage Monkey off Your Back,” send $4 for each and a self-addressed, stamped envelope to David Myers/Trust, P.O. Box 2960, Culver City, CA 90231-2960.
SEATTLE, WA, Nov 10, 2011 (MARKETWIRE via COMTEX) -- A recent survey of more than 1,700 real estate professionals has identified a consistent set of best practices and habits that make up and separate the nation's most successful real estate agents from those barely getting by, as well as tools and practices that make little difference in determining success or failure.
Collected from among the more than 220,000 ActiveRain real estate professional community members, the survey highlighted areas including technology usage, select social media participation, active customer relationship management (CRM), marketing strategies, and investing dollars against these and other initiatives as the primary factors that make today's real estate professional successful.
An infographic highlighting the survey's findings as well as a copy of the full survey can be downloaded at www.activerain.com/rich-real-estate-agent .
"It's no surprise that today's most successful real estate professionals are working harder, making better use of technology, and investing more capital in their own success," said Steve Murray, publisher of REAL Trends and a 30-year veteran of the real estate industry. "Smart agents should study this report and not only emulate the focus areas of the best agents, but strongly reconsider the non-performing activities that clearly are not leading to a higher income."
Highlights of the study include:
-- Successful real estate agents are six times more invested in
technology to support and run their business, which includes a
top-notch IDX Web site, email marketing campaigns and lead management
systems
-- Successful real estate agents are 54 percent more likely to use
proactive email marketing campaigns with their prospective, current
and past customers
-- Top performing real estate agents maintain a blog, and are
particularly making use of YouTube, Twitter and LinkedIn to build and
convert their network of prospective clients
-- Nearly twice as many rich agents are using online video on YouTube as
a medium to market themselves, their listings and business vs.
low-performing agents
-- Top-performing agents spend ten times more money each year to market
and advertise their business
-- Successful real estate agents are three times as likely to use an
agency or an assistant to manage their search engine optimization
(SEO) and lead generation efforts, and twice as likely to buy internet
leads
NEW YORK (CNNMoney) -- Las Vegas has suffered through the housing bust like few others places and still has further to fall. But these days many real estate investors and home buyers are betting that it's poised to stage a comeback.
Sin City's metro area led the nation in mortgage defaults for 22 straight months through August and home prices plunged a whopping 60% from their 2006 peak, according to RealtyTrac. And prices still have further to fall. Financial analytics company, Fiserv, projects home prices in Las Vegas could fall another 16% by next June.
But to investors and home builders, there are enough positive signs to start betting on Vegas now.
Home sales, especially of bank repossessions, have picked up significantly. Nearly 36,000 homes have been sold so far this year through September 30, an 11% increase compared with the same period in 2010, according to Lawrence Yun, chief economist for the National Association of Realtors.
As a result, inventory of both new and existing homes has shrunk significantly over the past year. Currently, there are about 10,000 single-family homes on the market, according to David Tina, general manager of Realty One Group, a Las Vegas real estate broker. With the current sales pace near 5,000 units per month, that's just a two-month supply. Typically, those are inventories seen in extremely healthy markets.
"I think the turnaround will be slow, but new home pricing is close to its bottom," said Tina.
And things are looking up. The metro area added 200,000 new residents since the bust first hit in mid-2006, an 11% jump or more than twice the national growth rate.
Part of the recent influx is due to job growth. The local economy has recorded job gains in several industries, including the hotel and restaurant trades, health and education, business services and retail, according to Metrostudy, a financial analytics firm. In September, the unemployment rate fell to 13.6% from 15.6% 12 months earlier, the ninth biggest decline among U.S. metro areas.
Still, there is a steady stream of foreclosures coming onto the market and dragging prices lower. Yet, investors remain unfazed.
Glenn Plantone, a Vegas-based broker and investor who deals mostly in foreclosed properties these days, said he's seen an influx of foreign buyers,especially from Canada and China. Last year, he brokered 25 sales but this year he's already up to 65.
"I'll triple my business this year," he said.
In fact, the beaten down prices are exactly why investors are starting to nab the properties now, explained Ken H. Johnson, a professor of real estate at Florida International University. Homes cost about one-third less in Vegas than the national average based on median prices compared with median incomes.
For investors who are willing to stick it out there's a lot of potential.
"Las Vegas has been hammered, but as the [economy] recovers, the upside in the market there will be significant," said Adam Coffey, a business executive who bought a second home in town last year.
Las Vegas' low cost of living, warm, dry climate and its attractions, make it a destination, especially for retirees and people looking to buy vacation homes. "For adults, Las Vegas represents Disney World," said Coffey, "It's the place where adults go to have fun."
The biggest headwind the Vegas housing market faces is that nearly two-thirds of all homeowners owe more on their mortgage than their homes are worth.
According to CoreLogic data, 63.3% of homeowners there are underwater on their mortgages. As a group, Las Vegas mortgage borrowers owe about 20% more on their mortgages than the value of their homes. Many will lose their homes to foreclosure.
But for all of those who lose their homes, there are others who see it as an opportunity. More than 50% of all sales in town are foreclosures, said Plantone.
Recently, he had a client who made bids on 40 different bank-owned properties. He was outbid each time. The investor wound up buying four new 1,400 square-foot homes in North Las Vegas for $140,000 each instead. He rents them out for $1,495 a month apiece, which give him immediate returns on his investment.
Once the housing market recovers he could sell the properties for a healthy return, too. It's hard to beat those kinds of odds.
Professionals Realty Group USA Helps Brokers and Agents Stay Ahead of the Rental Market Curve
Scottsdale, Ariz. (PRWEB) November 07, 2011
Professionals Realty Group USA (ProsUSA), a real estate franchising company known for offering the first fixed-cost membership model nationally, is addressing the housing market's shift to a more renter-heavy society. Leveraging sister-company Australian-based Professionals Real Estate Group's over 35 years of active property management expertise, ProsUSA is equipping real estate brokers and agents in the United States for "Housing 2.0: The New Rental Paradigm" (a Morgan Stanley study released Oct. 27, 2011).
"In other parts of the world buying rental properties is commonplace, particularly in Australia and New Zealand where our sister-company is based," says Glenn Melton, president of ProsUSA. "Professionals in Australia is bringing its property management best practices, as well as overseas homebuyer investor network, to the U.S. so our agents and brokers can glean from it and stay ahead of the rental market curve. In addition, we will help our brokers in the marketing of their properties to the overseas investor through our offices in Australasia."
According to the recent Morgan Stanley report, there are roughly 40 million rental housing units in the country representing $6 trillion in asset value, half of which are single-family homes. The study explores how investors can participate in these opportunities and position themselves for the "change" (i.e. the shift in increased rental market demand).
Australian-based Professionals Real Estate Group specializes in investment properties, along with traditional real estate transactions, and thus its network of over 350 offices throughout Australasia include real estate investment and property management services as part of their business portfolio.
The Australian-based company is supporting ProsUSA with its best practices, tools and training so ProsUSA's brokers and agents can add property management - or what the Australian company calls, "an investment grade realty sales practice and licensed property management business" - to their real estate practice. Although there are tight restrictions on the use of investment related language in connection with real estate transactions in the U.S., there are no similar such restrictions for real estate offices overseas.
"Not only does the addition of offering property management services make a real estate professional more attractive to consumers, the equity in the real estate broker and agent's practice is significantly increased by including such services because of contracts in place together with repeat customers and recurring revenue," adds Melton.
For more information about Professionals Realty Group USA and its property management program, visit www.ProfessionalsRealty.com or call (480) 374-1260.
About Professionals Realty Group USA
Professionals Realty Group USA (ProsUSA) is a real estate franchising company which brings a brand new franchise business model to the United States real estate industry that has been successful overseas for nearly 35 years - a fixed-cost "membership" organization. ProsUSA is the sister-company of prominent Australian-based Professionals Real Estate Group founded in 1976 which has a global network of more than 350 offices in Australia, New Zealand, Indonesia, Thailand, Papua New Guinea, Vanuatu and Fiji. Professionals Realty Group USA is headquartered in Scottsdale, Ariz. and officially launched on June 17, 2011, for more information visit www.ProfessionalsRealty.com or call (480) 374-1260.
It’s a “different kind” of housing bubble in China, and it is popping slowly in most cities, with the exception of Shanghai, mainland China’s most expensive.
Chang Zhi, chief analyst of Century 21 China Real Estate, told the paper that he expects more real estate companies in the second- and third- tier cities to follow in the footsteps of the big realtors and cut real estate prices under the current policy. “A new round of home-price declines may come in one or two months,” Chang said.
China’s government has been faced with rapid appreciation of residential real estate in tier one cities like Shanghai and Beijing. Hong Kong, another entity altogether and rather autonomous from mainland China, has housing prices on par with, or even more expensive than New York City as Hong Kong continues on its path to becoming the Wall Street of Asia.
Sky rocketing housing prices in the main cities on the mainland has exacerbated inflation and increasing income inequality in the country. The government demanded lower prices by developers.
Despite pressure from existing homeowners, market analysts are expecting more price-cuts as declining sales and increasing inventory are putting more strain on property firms.
In September and October, only 10,743 homes were sold in Beijing, down 46 percent from a year ago. New home sales in the first ten months totaled 69,079 units, down 17.8 percent year-on-year, while second-hand home sales dropped 35.8 percent to 101,188 units, according to the paper.
According to the Centaline Property Agency, a supply of 9,152 new homes in October has added Beijing’s total house supply to 118,000 units, a new high since June 2009. It would take 22 months to consume the inventory even if there were no new supply, the agency told the paper.
The China Daily article did not consider recent housing prices.
A September report by China’s National Bureau of Statistics did say, however, that comparing with the previous month, among 70 medium and large-sized cities, the sales prices of newly constructed residential buildings declined in 17 cities but remained stable in 29 cities. Comparing with the August, the sales prices of second-hand residential properties in September dropped in 25 cities, and remained flat in 21 cities, suggesting China still has a battle on it’s hands when it comes to real estate inflation.
According to the Bureau’s price index of new residential real estate prices, Beijing, Shanghai and Guangzhou, some of the most expensive eastern seaboard cities in China, were flat month over month for properties of all sizes, but are up as much as 6% year over year. Real estate prices fell September and August in cities like Nanchang and Xiamen. Housing prices are up by as much as 10% in some cities, excluding the major urban centers, year over year.
The trick for China will be to create the regulations needed to curb real estate price increases while not having to resort to higher interest rates at a time when the economy is slowing.
In the Insurance Information Institute's Insurance Pulse Survey, released earlier this year, nearly half of respondents thought the amount of homeowners insurance they need is dependent on the real estate value of their home. One in three respondents reported buying less homeowners insurance to save money.
That's a mistake, says Loretta Worters, vice president of the Insurance Information Institute. "The real estate value of a home — that is, the price you can buy or sell it for —has absolutely nothing to do with the amount of insurance needed to financially protect the homeowner in the event of a fire or other disaster," she adds.
If you reduce your homeowners insurance coverage and need to file a claim, you may be surprised to discover that it doesn't cover the full cost of rebuilding your home.
"In fact," points out Mark Schussel, vice president of public relations for Chubb Insurance, "a home may cost even more to replace (than it did to buy) because of economic pressures."
Upgrades like custom fixtures, special trim or historic materials also increase your home's replacement cost.
J.D. Power's 2011 homeowners insurance survey indicates 16 percent of policyholders surveyed do not carry adequate coverage to rebuild their homes. Instead of lowering your homeowners insurance coverage, here are four other strategies to make sure you're getting the coverage you need at a cost you can afford.
Increase your deductible. Although a higher deductible increases your upfront costs if you file a claim, it can lower your premiums (assuming you can afford to pay that higher deductible should you need to).
"Insurance is designed to protect you against significant financial harm," says State Farm spokesperson Dick Luedke. "It's not as well-designed to protect against smaller losses that you can afford and not significantly change your financial position."
Worters says increasing the deductible from $500 to $1,000 could save you up to 25 percent on premiums.
Maximize your credits. Many insurance companies offer credits for safety features like central station alarm systems, temperature monitors or sensors that detect water or gas leaks. If you live in a gated community or recently renovated your home, your insurer may offer credits for those, so make sure your insurance company knows about any renovations or new features. (Luedke points out that if you use an insurance agent, he or she should make sure you're getting all the credits you're eligible for.) Or consider adding these features to increase your credits.
"For a relatively modest price, you can add smoke detectors, heat sensors, or temperature monitors to that central system," says Schussel. "It may cost you a little bit of money upfront, but it can save you substantially more money in the long run."
Bundle multiple policies under one provider. Purchasing multiple insurance policies (for instance, car and homeowners insurance) from the same provider can lower insurance costs. The savings vary depending on the company and the state, but Worters says bundling insurance policies could save about 10 percent versus purchasing policies from different companies.
Look for guaranteed or extended replacement cost coverage. Although it's best to have an accurate assessment of your home's replacement cost, if you own a historic home or are concerned about the limit on your home insurance coverage, guaranteed or extended replacement cost coverage could be a smart idea. Although it can cost about 10 percent more to buy a guaranteed versus actual cash-value policy, Worters says it's worth the extra cost in many cases.
For instance, Chubb offers extended replacement cost coverage on its homeowners policies (uncapped in most states), meaning the policy would cover repairs or replacement of your home even if it exceeds the policy's cost limits. "Let's say the property limit on your policy is $500,000, but it costs $700,000 to replace your house," explains Schussel. "Extended replacement costs would cover it regardless of that policy limit, which is particularly key if you have an older home. You may be required to upgrade to the current building code: the electrical systems, the plumbing systems. That could be a substantial cost that you may not have anticipated."
While homeowners insurance protects against the possibility of fire or other catastrophic damage (and as mentioned above, the real estate value and replacement value are not interchangeable), a new insurance product is aimed at protecting homeowners against fluctuating real estate values of their primary residence should they need to sell. Released earlier this year in Ohio with plans to expand into several other states, Home Value Protection covers up to 25 percent of the protected home value.
After the first two years (during which claims are subject to a deductible), if the local real estate market has declined and the house sells for less than the protected value, the policy covers the difference between the actual sale price and the protected home value. "Most people insure things they cannot afford to lose," says Scott Ryles, CEO of Home Value Protection. "And a lot of people cannot afford to lose money on their homes."
The bottom line. Even if you're tightening the purse strings, it may be time to revisit your insurance coverage and consider how you're protected in the event of real estate fluctuations, fire or other disasters.
For the first time in more than 50 years, Cubans will now be able to buy and sell private property, a month after the government of Raul Castro legalized the purchasing of cars. And while one of the most integral pillars of a communist society might have just been thrown out the window, Castro says that only citizens and permanent residents of the Caribbean island will be allowed to own property, meaning all you wealthy boomers looking for cheap sea-side real estate ought to look elsewhere, for now. Until now, the Cuban government had provided housing for the bulk of the population, and any transfer of property usually involved bartering or under-the-table payments so as to get around laws against selling real estate. Legalization of real estate is just one of a smattering of reform measures undertaken by Raul Castro after succeeding his older brother, Fidel, in 2008.
One of the coolest things about investing in real estate or buying your first home is that everything is negotiable. This is particularly true when it comes to a real estate agent's commissions. Although the traditional real estate agent's commission is 6% of the selling price of the house, this number is not fixed in stone. Although some agents will not negotiate with you, many will. In this difficult real-estate environment, negotiating a real estate agent's commission is becoming more and more popular.
Pricing Your Home to Sell
The first thing to remember is that the real estate agent does not get paid unless the house sells. This may seem like common sense, but it's critical to know when negotiating the commission. Real estate agents like to represent homes that are priced to sell in their particular marketplace. Therefore, taking the real estate agent's advice on how to price your home should allow it to sell quickly.
Priced to Sell If your real estate agent knows you are a serious seller with a properly priced home, he or she will be more likely to lower the commission in order to get your listing. This is for two reasons: first off, the real estate agent knows a properly priced home will sell faster with less effort than one that is overpriced. This allows the real estate agent to accept lower commissions since it will likely be easier and take less work to sell the home. Next, getting paid something is better than not getting paid anything. If the real estate agent understands you want to sell your home quickly, they are likely to lower their commission instead of risking you taking the listing to another agent who will.
The same thing applies to the buyer's side with a buyer's agent. Be ready to move on a house by being prequalified for a mortgage or have cash to quickly deploy on a good deal. Your buyer's agent will be more likely to lower their commission if they realize you are a serious buyer.
How to Approach the Negotiation
Now that you understand why a real estate agent will lower his or her commission, what is the best way to go about having this happen? Well the only way is to ask. Remember to ask in a tactful and respectful manner. Don't act like a know-it-all, particularly with a popular and successful agent. The general tact is to ask for a 1-2% discount on the commission. Explain to the real estate agent that you want to sell fast and need to save the extra money for your needs. If the real estate agent balks at your offer, simply find another successful agent who is open to what you wish to pay.
Always remember that there are various flat-fee real estate agents in every marketplace. If you are truly interested in paying the least amount of commission and are willing to give up some hand holding or other services, these flat fee brokers may make the most sense for you.
The Bottom Line A real estate agent's commission is entirely negotiable and it is becoming more and more popular to do so. However, not all real estate agents are willing to negotiate. If you follow these steps you'll have a good chance of getting the most for your money.
Quick! How much do homes typically appreciate per year? If you answered "7 percent," then you have plenty of company but you're also wrong.
Real estate website Zillow.com conducted a survey and 42 percent of respondents thought homes went up in value 7 percent a year. Doh! The real answer is 2 to 5 percent a year -- in normal times -- and these are not normal times.
Real estate values overall have actually declined for five straight years. If you'd like to test your knowledge some more, check out Zillow's Home Buying "IQ Quiz" here.
I'm not actually hear to browbeat you if you got the answer wrong. Rather, I've got one word of caution and one of encouragement.
Caution: If you're not planning to stay in a house at least five to seven years, don't buy because you need some time for the house to appreciate and at least cover your closing costs.
Encouragement: If you are planning to settle down, then the fact that prices have declined a lot is a grand opportunity for you.
I believe in the power of home ownership, as long as it's done right, which means getting back to basics: put 20 percent down and stay for a nice chunk of time. Do it this way and here are some of the fringe benefits home ownership brings:
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Real estate website Zillow.com conducted a... View Full Size
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Real estate website Zillow.com conducted a survey and 42 percent of respondents thought homes went up in value 7 percent a year, when the real answer is 2 to 5 percent a year.
Make money with somebody else's money: The best part of buying a house is, what other investment enables you to use somebody else's money to make money? That's exactly what happens when your house appreciates in value and you sell it for a profit.
Even though you still owe money on your mortgage, the people at the mortgage company don't make you share the proceeds with them, now do they? What a deal. And to make this profit, you don't have to overhear a brilliant stock tip or try to comprehend bond rates. All you have to do is pay your mortgage.
Take in the tax benefits: Don't forget that home ownership comes with lucrative tax benefits. The first benefit starts the moment you move in. The IRS allows you to deduct the interest you pay on your mortgage from your federal income taxes.
It's the government's way of supporting home ownership. Here's another tax treat, courtesy of Uncle Sam. If you make money on a business or a bond, you have to pay capital gains taxes on the profit. But if you sell your house at a profit, the gain is tax free up to $250,000 for individuals and $500,000 for couples.
Most mortgages don't go up: By buying a house, you are locking in your monthly housing payment. By contrast, rent is almost guaranteed to go up. Since 1990, rents have risen more than 3 percent a year, according to Reis Inc., a real estate forecasting firm. If you buy a house and choose a 30-year, fixed-rate mortgage, your housing payment is set for decades.
Even an adjustable rate mortgage payment can stay steady for up to 10 years. By buying instead of renting, you are beating inflation at its own game by guaranteeing your payment.
With perks like this, I say, take a gamble on a possible gain. What's the worst that could happen? You might lose money on a house? Well, if you keep paying rent, you will definitely lose money.
Go for the potential earnings instead of the sure loss. Just don't expect your new house to go up 7 percent a year.
Even five consecutive years of home value declines haven’t been enough to give people a sense of reality about the value of home ownership as a wa of growing wealth, according to findings of a recent survey by Zillow, an online real estate information service.
In polling prospective home buyers, Zillow discovered that 42 percent believe home values typically appreciate by 7 percent a year. This is an unrealistic expectation, Zillow says because historically home values in a normal market appreciate by two to five percent a year.
“It’s troubling that we’re still in the midst of one of the worst housing recessions in history, and yet prospective buyers continue to have such high expectations for home value appreciation,” Stan Humphries, Zillow’s chief economist, said in a statement. He said that because a home purchase is one of the biggest financial decisions in most people’s lives, it is “important they understand how that investment will appreciate after they sign the papers. Over-estimation of the appreciation potential will lead many to buy real estate when the time in which they plan to live in the house may make renting a better strategy.”
LOS ANGELES-The multifamily market will remain the hottest property type for the coming year, according to panelists at the ULI Fall Meeting here Thursday at the Los Angeles Convention Center. That's not a surprise, but the ULI's annual Emerging Trends survey shows that even B and C quality rental properties may hold promise for investors in the coming year.
The multifamily outlook was just one facet of the commercial real estate markets that ULI panelists explored Thursday in a number of sessions that drilled down into the details of the Emerging Trends report, which was discussed in more general terms Wednesday in a webinar at the ULI meeting, as reported by GlobeSt.com.
In a panel discussion that looked at the capital markets portion of the Emerging Trends report, speakers pointed out that the report shows that low-income housing remains the only type of multifamily development expected to attract few investors or lenders.
Industrial real estate also appears to be headed for a surprisingly strong performance during the long recovery, and panelists seemed optimistic, but not giddy, about the improvement in both the office and hospitality sectors. Distressed assets in secondary markets however, do not look promising in the short term.
Charles DiRocco, a director at PricewaterhouseCoopers, noted that gateway cites on both coasts and in Texas dominate the action, including Boston, Dallas, Denver, Houston, New York, San Francisco and Washington, DC. Formerly weak performers like Philadelphia and Seattle have sunnier outlooks. Those cities are “where the affluence of our country is, and there are value-added plays available“ according to DiRocco.
San Francisco was singled out for praise for being a 24-hour city, as well as “one of the most walkable places” in the country, according to the report. Los Angeles, in contrast, is a “self-sustaining market” primarily of interest to local investors, according to DiRocco.
Port cities may also be good places to invest and develop: The widening of the Panama Canal, with completion expected in 2014, appears likely to ramp up development activity along with shipping that previously went entirely to West Coast ports. Ports located along the Gulf of Mexico and the southeast coast could see explosive growth from Asian shipping activity. Houston is one potential winner from the Panama project, while Atlanta, which is near the port city of Charleston, also stands to benefit, according to the report.
Outside of the so-called gateway cities, however, “it’s probably better to be an owner or a seller than a buyer right now,” DiRocco said.
The presentations by DiRocco and others on capital markets and other facets of the Emerging Trends report were part of a full day of sessions at the ULI Fall Meeting, where speakers and panelists from every corner of the development and real estate worlds have been presenting their views on the industry's future this week. The ULI event also includes presentations that assess the overall economic factors affecting the industry, like the economic research presented in sessions earlier in the week, as reported byGlobeSt.com.
(Reuters) - U.S. commercial real estate investors believe occupancy and rental rates in most U.S. markets will stay soft in 2012, but competition to buy property in a handful of promising areas could get dangerously hot, according to an influential survey released on Wednesday.
Almost three years after the U.S. economy hit bottom, a recovery seems to be nearly stalled. There is no driver of jobs to create demand for office space, boost consumer spending at malls and shopping centers, and raise demand for warehouses to store goods.
"Tenants hold all the cards and instead of expanding, some shrink their space requirement," one investor said during an interview compiled for the Emerging Trends in Real Estate 2012 survey.
The report by PricewaterhouseCoopers and the Urban Land Institute, involves a survey of 950 of the most influential U.S. real estate investors and executives in order to gauge their outlook for next year.
Investors risk overpaying for top properties in leading markets such as New York, Washington, and San Francisco, and certain secondary cities such as Austin.
Even as loans and equity become more readily available to finance purchases next year, investors are wise not to overpay or use too much borrowed money, the survey said. Instead they are advised to chose projects that meet their realistic cash flow projections.
Investors who buy well-leased stable buildings are expected to reap single-digit income returns, according to the survey. Some potential buyers of those properties may drop out of bidding fearing that pricing has outpaced the potential for cash flow.
Those who buy risker properties -- with high vacancy rates or in need of renovations -- may have to ratchet down their forecasts.
"Even projections of returns in the mid-teens look like a stretch," the report said. Investors expect buyers to become less enthusiastic and sellers' interest to peak.
"Investors who bought near market bottom in 2009 and 2010, consider cashing in some gains," the report said.
Investors remain sweet on apartment buildings, the focus of demand from those unable or unwilling to purchase a home. Lenders including Fannie Mae (FNMA.OB) and Freddie Mac (FMCC.OB), as well as insurance companies, are expected to be more than willing to underwrite new construction of apartment buildings, the survey said.
They remain interested in new warehouse investment near ports and international airport hubs.
Investors expect the hotel recovery to begin to wane, except in leading markets.
Another best bet is first-class well-occupied downtown office buildings, the survey said. Most types of commercial real estate, even shopping centers, that are located in dense areas where it is prohibitively expensive or impossible to build should increase in value.
Outside the United States, U.S. investors remain attracted to Canadian cities such as Vancouver and Toronto, seeing them as the most stable property markets in North America, with high occupancy rates, predictable rent flows and high barriers to new players.
Investors see Brazil maturing into a more stable core market. In Rio de Janeiro and Sao Paulo, for example, vacancies at top properties are going to be difficult to find.
But in Mexico, drug violence is expected to send investors fleeing.
U.S. commercial real estate prices rose 2.4% in August, its fourth consecutive monthly move up, Moody's Investors Service said.
Much of the recent bump up was attributed to a reduction in distressed transactions. Repeat sales of those properties dropped to 22% of repeat sales activity, down from 28% in the preceding month.
"Although distressed sales may be near their high-water mark for this cycle, we don't foresee any significant increase in commercial real estate prices over the near term," said Tad Philipp, Moody's director of commercial real estate research.
He said spreads for commercial-backed securities have widened substantially in recent months, weakening the ability of firms to make acquisitions.
Major assets in major markets have largely cooled off over the past year, though they rose 0.8% in August. Transaction volume remained high, at 207 repeat-sales observations, above the monthly average for the year of 185.
Long before you begin searching for a mortgage, you should know where you stand in the credit score department. After all, a bad credit score can bump up your mortgage interest rate several percentage points or leave you with no approval at all. Be sure you check your credit early on (several months in advance) in case any changes need to be made to get it back up to snuff.
2. Applying for New Credit Alongside the Mortgage
In this same vein, be sure to avoid applying for any other type of credit before and during the mortgage application process. Whenever you apply for new credit, you're seen as a greater credit risk, at least initially. If you happen to apply for a credit card or auto loan around the same time you apply for a mortgage, your credit score might get dinged enough to kill your eligibility or bump up your interest rate.
A mortgage payment consists of principal, interest, taxes, and insurance (PITI). A common mistake made by prospective home buyers is not factoring in their property taxes and insurance premium into their overall mortgage budget. The debt-to-income ratio (DTI ratio), used to determine if a borrower will qualify for a certain mortgage payment, is calculated by dividing the proposed cost of PITI by gross monthly income. A $1,200 homeowner's insurance policy would add $100 per month to an escrowed mortgage payment.
4. Not Seasoning Your Assets
The bank or lender will want to see that you can actually pay your mortgage each month. But without seasoned assets, those that have been in your own account for at least a couple months, you could be out of luck entirely. Some borrowers seem to think they can transfer funds from a relative's account days before applying, but this simply won't fly once the underwriter uncovers the paper trail.
5. Job Hopping
Another key to mortgage approval is steady employment and income. An underwriter will want to know that the income you bring in every month is consistent and expected to continue into the foreseeable future. So don't jump from job to job too much before applying for a mortgage. If it's in the same field, it shouldn't be a deal killer, but a career change will lead to problems. If you're thinking about jumping ship, wait until you've closed your mortgage first.
6. Not Getting Pre-Approved
Good preparation is the key to a good mortgage. Before shopping for a home, make sure you can actually qualify for financing by getting a pre-approval. A mortgage pre-approval is more robust than a simple pre-qualification because the bank pulls your credit and looks at your income, assets, and employment. Your DTI ratio will also come into play to ensure you know exactly how much you can afford. With this pre-approval, you will also get a written commitment from the lender that will show home sellers you're serious about the purchase.
7. Not Shopping Around
But just because you're pre-approved with one bank doesn't mean you need to obtain financing from them. Be sure to shop around with multiple banks and lenders and even consider a mortgage broker. A broker can shop your rate with a number of banks concurrently and find you the lowest rate with the best terms. Don't be one of the many consumers who obtains a single mortgage rate prior to applying. Comparison shop as you would for anything else you buy. And don't forget to factor in closing costs!
8. Chasing Exotic Loan Programs
Shop around for the lowest rate and closing costs, but not at the expense of your mortgage. Anything that sounds too good to be true most likely is. If the payment seems too low, you might be paying interest-only or even negatively amortizing, meaning your mortgage balance is growing each month. It's best to keep it simple and go with a loan program you can get your head around, like a fixed-rate mortgage.
Keep in mind that a mortgage rate means very little if it's not locked-in. If you're happy with your rate, lock it. Mortgage rates change daily and sometimes several times daily. All those mortgage quotes you obtain are just quotes until you actually tell the bank, lender, or broker to "lock it in." Once locked, your rate is guaranteed for a certain period of time, be it 7 days, 15 days, or a month. But never assume your rate is locked until you get it in writing!
10. Not Reading Your Loan Documents
Finally, it's your responsibility to read and accept the terms of your new mortgage. Sure, it might be a pain to go through all the loan documents at signing, but it's a bigger pain to sign up for something you don't want or agree with. Take the time at closing to ensure you understand everything you're signing, and thereby agreeing to. And don't be afraid to ask questions! Otherwise, you could wind up with a mortgage with predatory terms and no place to turn.
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Joel Hall
