Archive for the ‘Real Estate Economics’ Category
Children Being Evicted?
Posted by Sibet B Freides in Real Estate Economics, Real Estate Trends on January 19th, 2012
As the economic downturn bears down on families, an increasing number of grandparents are stepping in to raise their grandchildren, and it’s presenting complicated issues when it comes to age restricted communities.
It’s Not a Minor Issue
The problem seems to be growing.
In one senior community in Florida, 10 cases have been discovered in the past six months where children were living with relatives. These families are faced with a choice of evicting the child or selling their home within a set amount of time.
It’s not surprising that there are more multigenerational households with the current economy, but bending the rules for even one child could get an age restricted community in serious trouble.
Up to 20 percent of residents in age restricted communities can be under the set residency age, but this exception is for adult children who inherit property. The rule is never used to accommodate minors. If a community is found to exceed the 20 percent limit, it could lose its exemption status.
There’s also the matter that senior communities aren’t equipped for children; there are plenty of safety hazards that would have to be addressed, such as golf cart transportation and swimming pool specifications and insurance.
Do you think there should be a policy created that both maintains age-restricted enforcement and considers extreme family hardship? Or should families in these situations have to choose between their homes and their children?
Let us know your thoughts by commenting below or on our Facebook page.
Five Key Issues for 2012 Housing
Posted by Sibet B Freides in Real Estate Economics, Real Estate Trends on January 18th, 2012
While many housing markets rose together during the boom and fell together during the bust, they’re coming out of the downturn at very different speeds, and so it’s no longer a matter of a “national” housing market. We’ve seen recovery happening on a local market level, and at very diverse rates.
With that in mind, here are the five key issues as published by the Wall Street Journal that will determine the housing market in 2012:
1. Confidence and jobs: The housing market still needs the economy to add more jobs to stimulate demand for home purchases and to prevent mortgage delinquencies from rising. The good news is that housing is more affordable than it has been in decades. But many that are considering buying are not striking because they are concerned that the prices will continue to drop. Others don’t want to buy a house until they have more evidence that they’re not going to get laid off or see their hours cut back.
2. Foreclosures: Whether home prices hit a floor this year also relies on how banks manage a huge overhang of foreclosed homes that they haven’t yet taken back and resold. Banks and other mortgage investors own around 440,000 foreclosed properties, but there’s another 3.4 million loans in foreclosure or serious delinquency.
3. Rents: Apartment rents are rising as vacancy rates drop. If low mortgage rates aren’t enough to give urgency to buyers, rent hikes could accelerate their decisions to take the plunge. This is a good thing.
4. Mortgage credit and rates: Federal policymakers have taken extraordinary steps to keep mortgage rates low and federal-backed entities are responsible for backing nearly nine in 10 new mortgages. But it’s still hard for many buyers to get a loan because banks are demanding lots of documentation of borrowers’ incomes, and appraisals are tanking some deals. Banks will need to put their loan problems behind them before there’s much easing in lending standards.
5. Regulation: Many analysts don’t expect Congress to make major changes to Fannie Mae and Freddie Mac during the election year, but several major regulatory changes could significantly reshape the future of the lending landscape in 2012.
Meanwhile, the regulator that oversees Fannie and Freddie is revamping the way that mortgage companies are paid for collecting loan payments.
What other key things do you think will affect the market this year?
Will the Real 2012 Housing Market Prediction Please Stand Up…
Posted by Sibet B Freides in Real Estate Economics, Real Estate Trends on January 3rd, 2012
When you search for housing market predictions 2012 on Google, it returns roughly 1,650,000 results. As you start scrolling through these well-respected sites and their corresponding articles, you are left scratching your head and wondering what to believe. From gloom and doom naysayers to cheery hopefuls saying the worst is behind us, experts are heard quoting a spectrum of possible outcomes.
CBS News strongly feels that the nation’s real estate balance sheet is slowly turning around.
To further quote the positive article, the official unemployment rate dropped to 8.6 percent, even as the labor participation rate dropped to about 62 percent. But the better news is that the U-6, which is the broadest measure of unemployment, fell below 16 percent for the first time since the Great Recession started.
Of course turning around the housing market begins with well-paying jobs so that people can once again afford a mortgage and insurance premiums.
Fannie Mae chief economist feels that people will not undertake the financial obligation of homeownership until they are positive their personal financial situations are on the upswing. But according to their November National Housing Survey homeowners do believe their home value will rise at least 0.2 percent over the next year.
Another positive sign is that interest rates continue to hover at a historic low level, saving homeowners who can refinance hundreds or thousands of dollars per year.
New construction still leads the industry in the slow bounce back. There are even some markets where existing home sales are picking up as well, which benefits agents, appraisers, attorneys, and mortgage lenders.
CBS News also notes that the biggest indication that the housing market might begin to normalize is that the number of homeowners who are seriously delinquent in their loan payments is shrinking.
Does this mean the market will magically shift to normal in 2012? No, but hope remains that it will be a better year overall for real estate.
What do you think? Which news source resonates best with your own personal and professional outlook of 2012?
What Luxury Agents Do for That Sale
Posted by Sibet B Freides in Demographics, Real Estate Economics, Real Estate Sales, Real Estate Trends on November 8th, 2011
According to the LA Times, real estate agents listing an $8-million home in Santa Monica wanted to ensure a good crowd for an open house last month, so they hired a stilt walker, shirtless male jugglers and a contortionist who floated in the pool, encased in a clear plastic bubble.
Nearby, an agent stationed models in front of a new condominium project. Wearing velour robes and flip-flops, the young men and women served free drinks to promote the cocktail hour lifestyle at the development.
Still another went all the way to Spain to drum up business.
When marketing a multimillion-dollar mansion, a plate of cookies and free coffee simply won’t do in today’s new market. Agents have been outdoing themselves to help get through this market.
Aerial Showgirls, Thai foot massages, and Botox treatments… is all this really necessary? Although agents are putting up thousands of dollars for these remarkable parties, they are definitely seeing up to three times the traffic than they would with a simple display ad or a listing on MLS and some generic signage.
Agents are treating buyers seeking homes in the $2-million and more range like royalty, including facilitating their home tour starting with a red carpet.
Sometimes, it can be as simple as putting a new spin on an old standby, such as staging.
A recent agent recruited a well-known interior designer to outfit the home with vintage and contemporary furniture and art, which was then offered for sale at the open house.
He told the LA times that the cost was less than hiring a traditional staging company, the event drew about 200 people and the property received multiple offers, selling at nearly full price within a week of coming on the market.
To get foot traffic, a condo agent put a new “spin” on a sign-spinner by hiring models to hand out fruit drinks on the sidewalk… and beer, wine and mimosas to adults that came in to see the model units. The agent spent about $5,000 but sold four units on the weekend following Thanksgiving.
What’s the bottom line? You may be afraid to spend the money and think outside the box, but this is the time to go above and beyond and really draw attention to your properties. While we don’t think you should pull out all the stops and hire a circus, there are some worthwhile ideas in the shock and awe mindset that might just get you results.
NAHB Releases Improving Housing Markets List – Nearly Doubles in October
Posted by Sibet B Freides in Real Estate Economics, Real Estate Trends on October 27th, 2011
The second edition of the National Association of Home Builders/ First American Improving 
Markets Index (IMI), has been released, showing 23 individual housing markets now qualify as “improving” under the new gauge’s parameters. According the NAHB, this is nearly double the 12 housing markets that made the list last month.
The IMI is designed to track housing markets throughout the country that are showing signs of improving economic health. The index measures three sets of independent monthly data, which are then analyzed to generate a list of improving markets.
The index released earlier this month reveals metropolitan areas that have shown improvement for at least six months in housing permits, employment and housing prices.
Pittsburgh and New Orleans remain the two largest improving markets; however smaller cities in which energy and agriculture are the primary economic drivers indicate that the effects of the recession have been less pronounced, according to NAHB Chief Economist David Crowe. He states that Texas stands out in particular, as it made seven of the 23 entries on the list.
The complete list of improving markets can be viewed here.
What are your thoughts? Do you think this is a sign that the housing recovery is well on its way?
Commercial Space Needs – an Upward Trend?
Posted by Sibet B Freides in Real Estate Economics, Real Estate Trends on October 25th, 2011
According to a recent article in the Atlanta Business Chronicle, space planners for commercial office space provide excellent insight into leasing activity. They help evaluate space needs and functionality and provide future space demand in addition to trends in office design, often leading to new construction.
For the first half of 2011, their activity projected they would have their best year since 2007, as it relates to office space needs. If the trend continues, total projects will be up 30 percent over 2010 and 45 percent over 2009.
Because of the state of today’s market, every company is looking to see how they can lower operating expenses and increase worker productivity.
The real estate market is not an accurate indicator of job growth as it relates to absorbed space but it does create many jobs through projects. Industries experiencing job growth driven by these types of projects include construction, manufacturing, real estate consulting, project management, and design.
It seems as if the latest trends are bringing more adaptive re-use of space rather than ground-up construction. The ABC predicts that this trend will probably continue until at least three to four years into a solid economic recovery.
Rentals on the Rise
Posted by Sibet B Freides in Real Estate Economics, Real Estate Trends on October 11th, 2011
Home sales may still be struggling, but the rental industry is booming. Aside from the housing market woes, more and more Americans are downsizing. It’s no surprise that rentals are on the rise.
Gen Y is not as interested in garden-style apartments. So will high rises gain popularity? Or will they be looking for a new product not yet designed?
We know they will expect wi-fi, iPod docking stations and apartments that truly reflect who they are.
The high foreclosure rate is not the only factor in the accelerated transition toward leasing. Today’s housing demand has actually shifted toward smaller dwellings; with Boomers downsizing to urban centers offering more amenities and the Millennials just hitting their single, urban life stage. Generation X is one of the smaller demographic groups right now, translating to a much weaker demand for traditional neighborhoods with single-family homes.
As the economy is now starting to lift, those who took on roommates or moved back with their parents are just starting to emerge into the real world again. Often the majority of these groups start with a lease.
Apartment developers are already responding to the growing demand for rental housing, but with so many construction firms out of business or in slow recovery there may soon be a rental shortage in many metropolitan areas.
Boomers: Is the Housing Market’s Cavalry Here?
Posted by Sibet B Freides in Demographics, Real Estate Economics, Real Estate Trends on September 22nd, 2011
Being able to easily meet today’s required 20 percent down payment, boomers should be ready and able to bail this generation out of the housing muddle. So why is this not happening?
Unfortunately, the boomers are too busy taking care of the Gen-Xers that CAN’T qualify for a mortgage in today’s restrictive market.
I still think there’s hope for the market to be recovered by this steadfast generation. For one, they did not purchase their first home during the recent housing boom, so this means they will have a larger home equity cushion and the ability to secure a reverse mortgage.
They are also looking for a different lifestyle and product and are ready to buy. According to the NAHB, specifically appealing to boomers are single-story homes and with all living space on one level.
The 55+ demographic actually account for almost a quarter of all new custom-home purchases, so builders should be catering to this group of middle agers. Unfortunately, homebuilders are contending with a huge overhang of existing homes on the market, and having a harder time getting banks to sign off on construction loans.
Do you think the boomer generation will lead the housing revival? We’ve already seen signs, do you think it’s just a matter of when? Let us know by commenting below or posting on our Facebook page!
Green Mortgages?
Posted by Sibet B Freides in Green, Real Estate Economics, Real Estate Trends on August 17th, 2011
There are actually many programs available to help homeowners make energy-saving improvements to their homes without getting an additional mortgage just for the cost of them. The FHA’s Energy Efficient Loan program helps current or potential homeowners significantly lower their monthly utility bills by enabling them to roll the cost of energy efficient improvements into their mortgage.
This Energy Efficient Mortgage can be used by homeowners with both Federal Housing Administration (FHA) and Veterans Administration (VA) loans.
To be eligible for an Energy Efficient Mortgage, the projected energy savings naturally need to be greater than the cost of the work. The savings are calculated using the Home Energy Rating System (HERS) index, which calculates what the average energy usage would be in the home once the improvements are made compared to a similar home that did not have the work done.
Knowing your home energy rating will help you choose smart energy upgrades and investments that will save you in energy costs, improve your home comfort, and protect the environment.
Home Buying Based on the Seasons
Posted by Sibet B Freides in Real Estate Economics, Real Estate Sales, Real Estate Trends on August 10th, 2011
The best time to purchase a home is in the late fall or early winter. For buyers, you want to look for homes when supply is higher than demand, which gives you greater negotiating room. Purchasing when supply is low and demand is high puts you at a decided disadvantage.
Of course, buyers naturally are less inclined to move as they get closer to the holiday season. If the purchase and closing process takes three months to complete, and the house is purchased after Labor Day, the new homeowner could end up with a move-in date right around Christmas. That’s too much stress for most homebuyers. If you can handle the pressure, buying a house in late September may offer you a wider selection of affordable houses.
Conversely, toward the end of February and spring just around the corner, for-sale signs start popping up everywhere. The winter is ending and sellers want to get the house on the market as soon as possible. Likewise, buyers begin contacting real estate agents during the spring so you’ll have more competition for the house you want.
What do you think? When is the best season to buy or sell your home?
