Out of Town Buyers

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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80% of New Homes are Found Over the Internet and 83% of Buyers Cited Pictures as the Most Important

Posted on July 14, 2007. Filed under: Internet for Real Estate, Media for Real Estate, Out of Town Buyers, Property Web Presence, Real Estate Marketing |

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Left, Lucie Thompson; right, Robert Bradley

PLAYING THE ANGLES Lucie Thompson, an agent at the Corcoran Group in Palm Beach, Fla., photographed a house on Jupiter Island, left. The company later hired a professional photographer, Robert Brantley, to shoot the same house. The results, right, speak for themselves.

The above photos and captions are reprinted from The New York Times article, “Making Every Pixel Count.” It reports, “In real estate, a picture can be worth more than a thousand words. Much, much more. When selling properties online, agents and Web designers say that the pictures buyers see of houses and apartments for sale are often the first — and sometimes the only — chance for a seller to make a good impression. Less-than-flattering pictures can turn buyers off and lead to lonely open houses.”

Indeed,

“Good photos will grab people’s attention and help you sell a home,” said Jacky Teplitzky, an executive vice president of Prudential Douglas Elliman Real Estate in New York. “Bad pictures will absolutely give you trouble, because you won’t have any calls on it, and nobody will come to see it.”

Eighty percent of people across the country who bought a new home last year used the Internet while house hunting, and they rated photographs as the most useful tool in their search, according to a survey of buyers and sellers by the National Association of Realtors. The survey also found that 24 percent of home buyers got their first glimpses of their new homes on the Web, up from a mere 2 percent in 1997.

In many cases, it is the agents themselves who are snapping the pictures and posting them on the agency Web site. Because of this, it is important that sellers choosing an agent know who will take and pay for the pictures and whether a professional photographer is available.

“It’s so important to have photos that are professionally presented,” said Rosalind Clarke, a senior sales associate with the Corcoran Group in Palm Beach, Fla.

She added that she uses only pictures taken by professional photographers, because “if things look shoddy or unprofessional, not only are buyers going to find the property unappealing, they’re going to associate you with being shoddy and unprofessional.”

But there is little point in having good photographs or beautifully written prose describing a home if you don’t have a Web site that is easy to find and easy to use — and this holds true whether you’re using a broker who will list your home on an agency Web site or you’re trying to sell your home yourself and are creating your own Web site or listing your home on a site like Craigslist.

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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:  
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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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This is the Motivation of the Out of State Buyer

Posted on June 29, 2007. Filed under: Internet for Real Estate, Media for Real Estate, Out of Town Buyers, Real Estate Marketing |

I encountered a commercial mortgage broker on a streetcorner in San Francisco, CA.  After learning of my backround in real estate investment, he said these words, and I will never forget it:

“Well, I haven’t got a lot of money, but I have got just over one hundred thousand dollars in ready funds available for cash, and I would like to learn how to get a higher rate on investment through real estate.”

Now consider his market and the context of his statement. The city he lives in has a median home price of $736,800, and is the 4th most overpriced real estate market in the country, according to a recent study by Forbes.com.

No wonder he has become a cash buyer looking to invest his dollars elsewhere. How many of you would appreciate a cash buyer for your listing who could close on the property within a week without the hassle of financing contingencies?

 I thought, wow, you could buy several cash-flow properties in rapidly appreciating markets for that kind of money, or you could just privately lend that money secured by equity for a higher rate of return against real estate investment.

Thus, the emergence of today’s need for classified, media, internet, and just generally out of state campaigns for real estate.

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