California to see Rise in Real Estate Prices

By Laura Reginelli

Real estate across the country has seen tremendous dips in pricing over the past few years. California in particular has seen a 22% drop in home prices in 2009 alone. The state has seen declining home prices for the past three years; however, things seem to be turning the other direction for California’s real estate market. Experts predict that California will see a rise in house prices in 2010.

According to Bloomberg.com “There’s this huge demand on the part of first-time buyers and investors,” Leslie Appleton-Young, chief economist for the Realtors group, said in an interview. “The demand for properties in fairly good condition exceeds the supply.” As prices are decreasing and housing becomes more affordable, it seems as if more and more people have the incentive to purchase property.

The increasing number of properties being seized for foreclosure has allowed Californians to purchase homes at remarkably low prices. As more and more of these homes are being purchased, fewer foreclosed properties are left. Many feel that this will lead to a drop in housing sales in California for the 2010 year. Experts are predicting that home prices will rise over 3% to $280,000.

Many explain that the housing market in California is split in two: a large number of sales in low-end properties while sales in high-end properties dwindle and struggle. It appears that the market may make a change again in the next year as housing prices begin to increase.

Sources: http://www.bloomberg.com/apps/news?pid=20601103&sid=ahkshtPMxRzI
http://www.latimes.com/business/la-fi-realtors8-2009oct08,1,6875575.story
http://www.mercurynews.com/realestatenews/ci_13507318

American Real Estate Loses Appeal Globally

Posted by: Laura Reginelli

Despite plummeting prices, international interest in United States property cooled in the last year, according to an annual survey by the National Association of Realtors, a U.S. organization of property agents.

From May 2008 to May 2009 foreign nationals purchased an estimated 154,000 homes in the United States, down from 170,000 in the previous 12 months, the survey found. Twenty-three percent of the agents questioned reported at least one contact with an international client, down from 26 percent in 2008 and 32 percent in 2007.

But the study also reflected the continued importance of overseas buyers to the U.S. market. International transactions accounted for 9 percent of total business, unchanged from the previous year.

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Flipping Houses in a Bad Economy

By Nicholas Vanikiotis

Flipping houses can be a great use of your time and money, especially when the market is hot. But what about when the real estate market is on a cold streak like it is now? How is an investor supposed to deal with such a bad real estate market and economy? There are a few ways to go about investing in such a market so investors can still have a solid revenue stream.

One of the first steps will be to make sure you have enough cash on hand and to maintain good relationships with real estate agents and lenders. Due to the recent credit crunch lenders are much more strict about whom they lend to, so cash is necessary for investments right now. Fostering good relationships with real estate agents will benefit investors because the agents will find you highly discounted prices, thus benefiting you and the agent.

The main focus for any flipper should be foreclosed properties and those properties with high discounts. This is a hot time to buy due to the fact that everything is so discounted, but investors must be willing to take risks and come up with the cash. Investors must also be willing to tae a hit on their profit margin if they continue to flip during these times. Houses are not selling at the prices like in the early 2000s so the investor must make the house more appealing which includes lowering prices.

An alternative to flipping houses right now would be to purchase homes, renovate them, and then rent the property out instead of selling it immediately. This would ensure a good stream of revenue until the market will give an investor the price he or she would like. Holding property for the long term is most beneficial in these hard economic times.

http://online.wsj.com/article/SB121362492817377367.html

http://rismedia.com/2007-03-16/three-ways-to-flip-houses-in-a-down-market/

http://flipping-real-estate.suite101.com/article.cfm/flip_a_house_in_a_slow_market

Three Ways to Flip Houses in a Down Market

Posted by Nicholas Vanikiotis

RISMEDIA, March 16, 2007-My team and I flip houses in Michigan, where the housing market is currently experiencing a significant slump. Wherever these dips in the market occur, they often discourage investors, particularly novice investors, from flipping, but you don't need to get discouraged. With the right adjustments, you can flip houses profitably in a depressed market.

I suggest three strategies for successfully flipping houses in a down market:

- Focus on foreclosures.
- Look for deeper discounts.
- Buy and hold.

Focusing on foreclosures

When the housing bubble in a particular area bursts or rapidly deflates, neighborhoods are often littered with homes that have had all the equity stripped out of them. While declining property values erode the equity in the property from one end, homeowners borrow against the equity from the other end, until nothing is left. The market now has a glut of properties with little or no equity

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Investors Need to be Cautious When Investing in Real Estate

Posted by: Janielle Viggiano

Real estate investments are back in news, and I don't mean real estate stocks but buying actual real estate purely as an investment. However, the experience of the last two years means that any prospective investor must re-examine the basics of real estate investments afresh. There are a number of developers who are advertising their wares purely as investments and target at would-be investors. There are entire projects being launched-some of them by former high fliers of the sector-which depend entirely on finding enough investors for individual units to enable them to take off. But things have changed since the heady days of 2006 and 2007. At that time, one of the selling points that developers used to lure HNI investors was the supposed safety and stability of real estate investments vis-à-vis stocks. The developers' story basically was that real estate never really lost value and the price that you got in at didn't matter because prices were going to be headed only one way for years and years to come. Today, this story lies in tatters. The last two years have been a nightmare for many of investors. These claimed special characteristics of real estate investments turned out to be largely fictional. Click here to read more!

California Housing Market Making a Comeback?

Posted by: Janielle Viggiano

Who would have thought that the nation’s most populated state would be affected by the recession and that the housing market would suffer? Housing prices in California real estate are heading back downward after a slight summer upswing. Prices are predicted to fall nearly 20% in 2009 for many markets, but there are signs that the environment is stabilizing across the state. According to NuWire, “As California battles back from the brink of economic failure, employment levels will be the most heavily watched single index. Without a growing job base the housing market will sustain further damage with increasing foreclosures, which have set records in just about every part of the state (2009). Hotels are starting to see more tourists and exports are on the rise. Although it may take awhile, signs are pointing in a positive direction for recovery. PR.com believes, “As California’s economy battles back from an economy with the fourth highest unemployment rate in the country more Californians have left the state than in decades --more than one million residents. But the Golden State’s economy will move into the new dawn of a new economy earlier than perhaps any other state (2009).”

While the housing market may be in bad shape, the commericial real estate in Southern California is even worse. According to Alain Sherter, “The Federal Reserve Bank of San Francisco in September cited numbers projecting that commercial property prices will fall around 30 percent from their peaks across all sectors, with loans tied to construction and land development hit especially hard. For California lenders, that is pushing up loss rates on CRE, although for now those remain lower than during the 1991-92 recession (2009).”

Sources: http://industry.bnet.com/financial-services/10003889/in-sign-of-the-times-california-bank-faces-real-estate-crunch/

http://www.nuwireinvestor.com/articles/california-real-estate-continues-decline-53797.aspx

http://www.pr.com/press-release/183228

Extreme Homes

Real Estate has seen some growth from its base of just a place to live. People don't just want a basic home, they want it customized, some more then others. James May of BBC's Top Gear is one of them. He had a house of legos.
Other options are shipping containers. They offer a low cost, and have an unlimited array of configurations. With the economy today there is also a supply of them.
Sometimes you just have a piece of amazing property, but it is not suitable for building on. You have to build around it, like the home above which is built over a stream. There can be many reasons for one of these extreme homes, some practical and some to stand out, but they are all unique and amazing.







Posted by Chris Keeler





http://news.bbc.co.uk/2/hi/entertainment/8269479.stm
http://www.shipping-container-housing.com/
http://www.hgtv.com/home-improvement/extreme-living-homes-that-stand-way-outside-the-mainstream/pictures/index.html

Dubai Real Estate

New York, New York

By Laura Reginelli

New York City. It’s the city of dreams, the city that never sleeps. It has also been the city of unreasonably high rents due to such high demand. A housing bubble on the Manhattan market has caused prices to skyrocket for numerous of years. However when the recession hit, rent prices took a turn for the best for once.

According to Bloomberg.com, “Manhattan apartment prices fell for a second consecutive quarter, helping drive the biggest gain in sales in more than 13 years as buyers seized on discounts.” With prices falling so rapidly, Manhattan residents have been eager to look around, investigate new apartments and acquire a deal that they never thought would be possible. As the unemployment rate rose to over ten percent, prices of apartments fell drastically in response.

Many seem to believe that the housing market is starting to become more stable in New York City. During the recession, three-bedroom apartment’s prices dropped radically in comparison to those of one-bedroom apartments.

Although the recession and the fall of Lehman Brothers sent shock across the nation, not all that came with it was necessarily evil. The Manhattan housing market, one of the most expensive in the nation, saw a decrease in prices that was unheard of. This coupled with the $8,000 tax credit for first-time homeowners has drastically increased the amount of real estate deals going through in New York City.

Sources: http://www.bloomberg.com/apps/news?pid=20601103&sid=a747Z6Y7yhBU
http://www.nydailynews.com/money/2009/10/02/2009-10-02_manhattan_real_estate_sales_stabilizing.html

Has the Manhattan Market Reached a Low?

Posted by Laura Reginelli

NEW YORK, NY October 02, 2009 —If you thought you missed the boat when it comes to buying at the bottom in Manhattan's real estate market, some analysts say, don't worry, you haven't. WNYC's Lisa Chow reports.

REPORTER: Your broker may be telling you housing prices are hitting bottom now, or they already have. Yes, on the whole, prices from the spring to the summer were flat. And there was a big jump in the number of sales, with new buyers coming into the market.

Click here to read and hear more.

Appraisal

Real Estate Appraisal is the process of determining the value of a property, or its market value. It can be valued at market, as used, insurance, investment and liquidation values. The price of a property is not always its market value, it could be higher or lower. An appraisal can be used for:

• Mortgage lending purposes
• Tax assessments and appeals of assessments
• Negotiation between buyers and sellers
• Government acquisition of private property for public use
• Business mergers or dissolution
  
• Lease negotiations

Many realtor's are also appraisers and both are licensed to do so.

Posted by Chris Keeler

http://en.wikipedia.org/wiki/Real_estate_appraisal
http://www.appraisalinstitute.org/
http://www.bls.gov/oco/ocos300.htm

Are you better off buying or renting a home?

Posted by Nicholas Vanikiotis

Homeowners are still tackling the question of whether they are better off buying or renting a home. This is especially true for first time homeowners. With the current state of the economy it is understandable as to why this is such a daunting issue for people. Purchasing a home is one of the biggest commitments people make in their lives and the pros and cons need to be laid out on the table.

There are several issues that need to be addressed when considering whether to purchase or rent. The first is can you handle the monthly expenses that come with purchasing a home. These include maintenance expenses, mortgage payments, property and school taxes, and utilities. Whereas when renting you do not need to pay taxes, thus your costs are dramatically reduced, but you may run into a situation where your landlord is not good at keeping up with property maintenance. So there are other issues that arise besides money. Also, the $8,000 homeowner tax credit is something to consider. This is something that has been a deal breaker for some people when purchasing a home because of the monetary aid the government is giving.

Considering your income level is also very important to see what exactly you can and cannot afford. A lot of time people are irresponsible with their money and overestimate what they can afford. A final thing to consider is how easy it is to move from a rental property. With a home purchase you have to find a seller and incur all kinds of transaction fees.

http://online.wsj.com/article/SB125158404267969691.html

http://www.ginniemae.gov/rent_vs_buy/rent_vs_buy.asp?subtitle=ypth

http://www.nytimes.com/2009/09/12/your-money/mortgages/12money.html?_r=1

Syracuse housing market ranks high in new report on economies of 100 largest metropolitan areas

Posted by Nicholas Vanikiotis

Syracuse, NY -- A report to be released today by the Brookings Institutionsays the pace of economic decline slowed in most of the nation's 100 largest metropolitan areas in the second quarter, but that the differences in overall performance among metro areas remained stark.

"Signs at the national level that job and income losses are slowing continue to mask the highly variable performance of individual metropolitan economies," said Alan Berube, research director of the Metropolitan Policy Program at Brookings, a Washington, D.C., think tank, and co-author of the report.

The Syracuse area's housing market had one of the strongest rankings of any metro area.

Click here for more...

Real Estate Investing

Posted by Chris Keeler

NYC Real Estate Mogul to declare Bankruptcy

By Michael Rivezzo

Kent Swig , who is the the President of Swig Equities, is facing a series of lawsuits over several real estate deals that have gone under, he may be forced to file for bankruptcy if he loses a $28 million dollar judgement against him.

The case is from a lawsuit filed by the hedge fund Square Mile, Swig defaulted on a $21.15 million personal loan he received to help finance a project called Sheffield57, it actually ended up in foreclosure and was auctioned off. Square Mile claims Swig misrepresented his assets when he applied for the loan.

Swig made the mistake of signing for loans to finance his projects with his own name, which essentially means that he personally responsible for the deals. They also say that he lied about some of his assets to help secure the loan, he could face prosecution for fraud.There no word yet on whether when he will file bankruptcy. If he does he will be the biggest major real estate developer to for for bankruptcy since the financial crisis started a year ago.

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Real estate: Exotic-loan resets could hit commercial market

By SANDRA BAKER
Posted By Rico K. Setyo

An increasing number of commercial property loans may go into default in the coming months, as interest-only loans that were issued in the past several years reset, an industry expert said.

"There’s a massive amount of these loans ready to hit market," said Ben Loughry, managing partner of Integra Realty Resources in Fort Worth and Dallas. "The commercial real estate bubble is continuing to grow."

Loughry spoke at last week’s monthly meeting of the Society of Commercial Realtors.

Moreover, commercial sales are down nationwide by 90 percent and locally by 70 percent, he said.

But some investors are pooling funds and sitting on the sidelines waiting for deals, Loughry said.

Commercial property foreclosures are up in North Texas, according to market figures. In addition, the Federal Reserve said during the summer that delinquency rates on commercial loans have doubled from a year ago, to 7 percent.

"Loan performance is deteriorating," Loughry said.

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Short Sales in the Real Estate Market

By Rico K. Setyo

Generally, when people sell, they sell for some type of profit, whether it is big or small. However, the real estate market has not been looking good for a lot of homeowners lately. During these tough economic times, many people have been forced to put their homes on sale. Even though their real estate is for sale, it does not necessarily mean that someone will buy it once it hits the market. Because of the buyer’s unwillingness to purchase homes for their listing price, many homeowners have desperately agreed to short sale their homes. Short sale is “a sale of real estate in which the proceeds from the sale fall short of the balance owed on a loan secured by the property sold” (Lara Jr.) No one really wants to sell their homes for less than what it’s worth but the recession has pushed many families to such decisions.

Short selling homes have been quite common in today’s market but it is debatable whether it is the best choice for homeowners. One issue that always comes up in short selling real estate is the duration of the process. Many buyers are not willing to wait out the short sale approval duration because sometimes it gives the buyer a sense of uncertainty. The duration of approval from the lenders of the mortgage is undeterminable because of the fact that it is all up to the lender. Another issue is the Short Sale Debt, which is the idea that getting debt relieved may not be as easy as it seems. Even though many lenders verbally say that you are approved of the short sale, an article by Benny Kass mentions that “no lender has ever expressly released the borrower from liability on the note in writing”. This can be a problem because to legally prove anything in the United States it requires proper documentation. It is advisable that short sales should not be your first alternative, it should be one of your last choices.

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$1 million going further in many housing markets

Article by: Adrian Sainz
Posted by: Srividya Srinivasan


A million dollars doesn't buy you what it once did. In most U.S. neighborhoods, it now gets you a lot more.

During the housing boom, prices rose so high and so fast that even cookie-cutter homes in the paved suburbs of South Florida and California could cost a cool million. In Santa Clara, Calif., a high-tech hot spot, the median price hit $836,780 in 2007.

That was a long way from the days when a million-dollar home evoked images of marble columns and swimming pools with vanishing edges. Subprime loans allowed more people than ever to buy houses that were once above their means. Higher demand fueled ever-higher prices until the spigot of cheap money was turned off and the housing bubble burst. The recession forced many well-heeled buyers into unemployment lines. And sales of homes over $1 million cratered by more than 50 percent from the peak four years ago.

"Everyone has less money than they once had," said Amy Wright, an agent with The Real Estate Office in Rancho Santa Fe, Calif. "That has certainly affected the nouveau riche, and that's definitely in that $1 million price point."




Click here to read more.

Commercial Real Estate Lagging

Article by : Srividya Srinivasan

The real estate market is suffering even though there are signs that the economy is improving. General Electric’s real estate company made 1.1 billion dollars on commercial property during the first year of the recession. But as far as five years from now, it is estimated that GE will no longer receive any money. So why are losses in commercial property affecting GE now, when the market is stabilizing? Credit tightening, falling prices, and excess spaces will continue long after the recession ends.

As building leases are up for contract renewals, GE is forced to lower the prices other companies are competing to fill vacant spaces due to the recession. However, they will not be able to raise prices again until the contracts end and are stuck with these low rate leases on office spaces that are signed for 5 to 10 years; after the recession GE is affect by being forced to live with low rates despite the fact that market rents are increasing.

Commercial real estate is often the last think to bounce back. With an improving real estate market like Canada, we can see the commercial market still lags behind. Industry reports show that the housing market in Canada had its fourth-strongest sales figure in the second quarter as buyers take advantage of the low interest rates currently. However, the commercial real estate, in the meantime, had a 50 percent decline during the beginning of the year.

Sources:

1. Real Estate Drag on GE

2. Can Commercial Real Estate Sink the US Economy?

3. Getting Personal Canada: Real Estate Lagging

Real Estate in Hong Kong. Expensive??

By Minjune Kim

Hong Kong is the world’s fifth-most expensive residential real estate market, after Monte Carlo, Moscow, London and Tokyo, according to Global Property Guide.

Hong Kong home prices are up 26 percent this year, erasing losses posted between the Sept. 15, 2008, demise of Lehman Brothers and Dec. 31, 2008, according to the weekly Centa-City Leading Index. Mainland Chinese buyers and record mortgage rates lower than London and New York enabled Hong Kong to recover while the other financial centers struggle.

Hong Kong property recovered faster because its banks are healthy and residents save money, said Khiem Do, head of the multi-asset group at Baring Asset Management (Asia) Ltd., which holds $7 billion in assets, including shares of Hong Kong and China developers.

In another demonstration of how the recession is shaking up the global financial order, two luxury Hong Kong apartments have just gone on the market for a stunning $38.7 million each. If the developer, Sun Hung Kai, finds buyers at that price, the three-level penthouse dwellings, perched atop the 93-storey Cullinan towers with sweeping views of Hong Kong's harbor, could well qualify as the world's most expensive apartments. More than 4,000 sq. ft. in size, the apartments, which are still under construction, are selling for $9,677 per sq. ft. That's considerably above the $6,000-per-sq.-ft. price that top-end London flats were fetching in early 2007, when that city was reputed to be the world's priciest housing market.

With the boom in Hong Kong's property market, luxury apartments in the once-unglamorous Kowloon district have suddenly become some of the most expensive properties on the planet, thanks in part to strong interest from mainland Chinese investors.

Peter Churchouse, a director at a Hong Kong investment research and advisory firm, says he doesn't think Hong Kong's housing market is a bubble. But some analysts worry that low interest rates, high liquidity and a tight supply of new apartments could fuel irrational exuberance. Churchouse says: "I could easily see this market developing into a bubble, but it's not a bubble yet." That should be of some comfort for the buyer who just paid $3.16 million for a 590 sq. ft. apartment.

Source 1

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CA Real Estate Recovery: Home Sales Increase for 14th Straight Month, Median Prices for 6th Month

By Professor Mark J. Perry

Posted by Minjune Kim

LOS ANGELES (Sept. 25) – Home sales increased 9% in August in California compared with the same period a year ago, while the median price of an existing home declined 16.9%, the CALIFORNIA ASSOCIATION OF REALTORS (C.A.R.) reported (see chart above). Closed escrow sales of existing, single-family detached homes in California totaled 526,970 in August at a seasonally adjusted annualized rate, according to information collected by C.A.R. from more than 90 local REALTOR associations statewide. Statewide home resale activity increased 9% from the revised 483,400 sales pace recorded in August 2008.The median price of an existing, single-family detached home in California during August 2009 was $292,960, a 16.9% decrease from the revised $352,730 median for August 2008, C.A.R. reported (see chart above). The August 2009 median price rose 2.6% compared with July’s $285,480 median price.
“The statewide median price rose for the sixth consecutive month in August,” said C.A.R. Vice President and Chief Economist Leslie-Appleton-Young. “Recent price gains are consistent with the low inventory levels of the past few months. Levels of distressed properties remain high, but have declined compared with earlier in the year, and are one reason why inventory levels are running below the state’s long-run average of 7.2 months.
C.A.R.’s Unsold Inventory Index for existing, single-family detached homes in August 2009 was 4.3 months, compared with 7 months for the same period a year ago (see chart above). The index indicates the number of months needed to deplete the supply of homes on the market at the current sales rate.MP: In a separate report, DQNews reported that the August increase in California home sales was the 14th consecutive monthly sales increase on a year-over-year basis. Increasing home sales for 14 straight months, increasing median home prices for the last six months, and an unsold inventory index of almost 40% lower than a year ago - if those conditions do not reflect a true, solid real estate recovery in the California real estate market, how would a real recovery be any different?

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Real Estate Oppprtunity in Economic Struggles

By Adam Lindheim

In the wake of the U.S. economic struggles many investors are starting to see opportunity in cheaper real estate listings. Prices have dropped very low, and those who still have money are getting their best deals for their money. Emerging company Index Linked Properties and Russian tycoon Mikhail Prokhorov are two examples of those investing when it is cheap.

Index Linked Properties which is structured in New Jersey is a closed end investment firm who has reportedly bought a 400 million-pound ($ 638 million) property portfolio from Tesco PLC this according to the Financial Times. Index Linked Properties goal is to acquire real-estate assets at low cost during the cycle, and then to transform the property into a more lucrative investment listing.

Mikhail Prokhorov Russia's richest man has signed a provisional deal to buy a majority stake in the New Jersey Nets a professional basektball team in the U.S. Prokhorov is investing $200 hundred million dollars in exchange for 80 % stake in the basketball team as well as a 45 % stake in the Barclays Center which is due to be built in Brooklyn which is to house the team when in moves to the borough. Prokhorov is a huge basketball fan and is anxious to be "the only N.B.A owner who can dunk !" Prokhorov was also offered an opportunity to invest in real estate nearby the arena which is intended to rev up the Brooklyn borough.

Both investment opportunities are at a time where real estate is cheap, and therefore offer lucrative returns for both investors. Those who have extra cash lying around should invest now because of how in expensive it is to find lucrative oppourtunities.


Source 1
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$1 million going further in many housing markets

Posted by Adam Lindheim group 6a
Written by ADRIAN SAINZ

A million dollars doesn't buy you what it once did. In most U.S. neighborhoods, it now gets you a lot more.

During the housing boom, prices rose so high and so fast that even cookie-cutter homes in the paved suburbs of South Florida and California could cost a cool million. In Santa Clara, Calif., a high-tech hot spot, the median price hit $836,780 in 2007.

That was a long way from the days when a million-dollar home evoked images of marble columns and swimming pools with vanishing edges. Subprime loans allowed more people than ever to buy houses that were once above their means. Higher demand fueled ever-higher prices until the spigot of cheap money was turned off and the housing bubble burst. The recession forced many well-heeled buyers into unemployment lines. And sales of homes over $1 million cratered by more than 50 percent from the peak four years ago.

"Everyone has less money than they once had," said Amy Wright, an agent with The Real Estate Office in Rancho Santa Fe, Calif. "That has certainly affected the nouveau riche, and that's definitely in that $1 million price point."

For people who do have the money, however, it's the best time in years to buy luxury real estate.

Rancho Santa Fe is a luxury enclave in San Diego County that has over the years lured the likes of Howard Hughes and Bill Gates. Equestrian trails border golf courses, and the most expensive home on the market is listed for $29.9 million.

To read more