Nationwide Markets

Investing in Areas With Rising Rents

Posted on July 21, 2007. Filed under: Equitable Investments, Nationwide Markets, Out of Town Buyers |

Rents are up 2% in both New York and Seattle, where sales have remained strong this year.

However, in many “bubble markets” that once saw new investors quitting their jobs and “flipping properties,” adjustable rate interest mortages are rising, and they are all lowering their rental rates to outcompete each other.

This seems to be the case in Palm Beach, where rents declined 0.5% in the second quarter. “In Florida, so many apartment buildings were converted to condos over the course of the housing boom that there’s now a large shadow inventory, or shadow market [of condos being rented out],”  (Source: Business Week; July 18, 2007)

However, if rents keep rising and prices keep falling (and the NAR says the national median existing-home price will slip 1.4% this year, to $218,800), fearful buyers could slowly become bargain hunters. Investors: would you like to see the 10 cities where Business Week says rents are rising the fastest? Click here.

Interested in investing in areas where rents are still low but rising? Business Week Magazing has outlines the biggest metro areas with the lowest rental rates which have rising trends.

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10 Housing Markets Projected to Rise

Posted on July 14, 2007. Filed under: Equitable Investments, Nationwide Markets |

A December 2006 study published by Fortune Magazine reports ten housing markets which are predicted to rise through 2007, and into 2008. Four of the hottest U.S. home markets forecast for next year are in Texas. Also on the list are two markets in upstate New York — Syracuse and Rochester, as well as Albuquerque, New Mexico.

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Hot Spots. Cold Spots for Real Estate Investments Nationwide

Posted on July 14, 2007. Filed under: Nationwide Markets |

Click here to access an interactive demo by Moody’s and Fiserv Lending Solutions, who crunched the numbers for the top 100 markets in the United States. Rollover the metro area rankings on the map for more information about each city.

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Home Prices Fall in More Than Half of the Nation’s Biggest Markets

Posted on July 14, 2007. Filed under: Nationwide Markets, Out of Town Buyers |

Excepts of the New York Times article are reprinted below:  

According to a recent study by the National Association of Realtors, the biggest declines were in Florida — Sarasota-Bradenton (down 18 percent),  Palm Bay-Melbourne (17 percent) and Cape Coral-Fort Myers (11.7 percent). The declines in prices were especially steep for condominiums.

 “You have two kinds of weakness here: there is the traditional economic-driven weakness in parts of the Midwest, and there is the bubble-bursting weakness,” said Jan Hatzius, chief United States economist at Goldman Sachs. “That’s what is bringing down the national home price appreciation rate.”

Sales increased in six states — Alaska, Mississippi, Kentucky, Texas, Arkansas and Illinois — and were flat in Utah. The Realtors did not have enough data on sales in Idaho, New Hampshire and Vermont.

In addition to weaker sales and declining prices, the number of homes on the market has been climbing. That suggests, economists say, that prices may have to fall further for sales to pick up and the overall housing market to recover. In the fourth quarter, the vacancy rate for owner-occupied homes was 2.7 percent, up from 2 percent a year before and the highest it has been since the Census Bureau started compiling the data in 1956.

“That means we have got a while before this thing fully adjusts,” said Edward Leamer, an economist at the University of California, Los Angeles. Mr. Leamer noted that individual sellers often preferred to wait rather than cut the price to a level that would be agreeable to most buyers.

Somewhere in the middle is the rising and direct need for real estate marketing.

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Dark Side of the Boom

Posted on July 14, 2007. Filed under: Foreclosure Research, Nationwide Markets, Out of Town Buyers, Pre-Construction Contracts, Real Estate Marketing |

Miami’s rapid appreciation and new development arrived with highter taxes and huge increases in resale values spurred by out of town buyers.  It didn’t take long before the cost of purchasing a home in that area far surpassed the average income per family based on the tourism-fueled job market in the area.  

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Developer Faces Class Action, Lawyer Says, “Just Two Years Ago, People Were Waiting in Line”

Posted on July 14, 2007. Filed under: Insurance and Taxes, Nationwide Markets, Pre-Construction Contracts, Real Estate Marketing |

Under a purchase agreement, developers for the 337-unit Two Midtown Miami in the Wynwood neighborhood just north of downtown Miami agreed to “substantially complete construction” no later than two years after purchasers signed the contracts in May and June 2004.

Now a class action lawsuit been filed which contends units were not substantially completed within two years, as required in the contracts. According to this July 12, 2007 article by the Miami Herald, the developer’s law firm, Greenberg Traurig, responded with letters that said the two years is subject to legally defendable delays – in this case general construction delays in South Florida and materials and labor shortages.

An increasing number of buyers nationwide, many in South Florida and the Gulf Coast, are scrutinizing contracts to see if they can get out of deals as the residential market cools. Law firms are gearing up teams of attorneys to deal with the litigation.

“It is a growing problem that I expect will persist for at least the next three years,” said Jack McCabe, CEO of Deerfield Beach-based McCabe Research & Consulting. “It will be interesting to see if the courts will rule that delays in materials or shortages of labor rank like hurricanes as an act of God for developers who have run over their contractual two-year construction deadline.”

chlesinger said the current craze over canceling condo contracts is a byproduct of “a miscalculation of the Miami boom.” According to the suit, pre-construction units sold within 48 hours in May 2004. About 700 people were on a waiting list for units.

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Home Resale Values Have Not Dropped in Orlando

Posted on July 14, 2007. Filed under: Foreclosure Research, Insurance and Taxes, Nationwide Markets |

Orlando, FL is showing evidence that the tail end of its real estate boom is arriving.  It’s market is down as far as the number of houses that are selling and the amount of days required to go to contract, however, prices drops have not yet occured on home resales in established neighborhoods. 

Meanwhile,  this July 3rd article in the Orlando Sentinel reports that foreclosure rates in Lake county have quadrupled.  Actually, the article reports a 24 percent increase in new home sales, but also comments that may not happen again anytime soon, even though prices are still rising on lakefront property.

Condos are expected to become most troubled Central Florida to area to watch.  Quoting local property appraiser Bill Donegan, the article reports, “Next year, eight major condominium projects will come on line, but condo prices could suffer. The condo market is one that I think that you’re going to see somewhat of a price break because so many were bought by investors,” Donegan said. “People said: ‘I’ll buy it and flip it tomorrow.’ So many of them bought it and they can’t flip it.”

Overall the news for Central Florida underscored a trend that began in about 2005, when high insurance and unbridled property taxes curbed buyers’ appetite for coastal properties.

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