There are several reasons why real estate could once again be considered a good investment, in my opinion. My main theory is that most all other asset classes have rebounded from the "Great Recession"-- except the residential real estate market.
We have seen the stock market double off its recent lows, precious metals (i.e., gold) has spiked, the oil market was recently a political issues as prices rose and the US treasury market has been a safe haven for investors. Can real estate make a come back like some of the other asset classes?
With mortgage rates at historic lows, housing affordability levels reaching a favorable inflection point and an influx of investors snapping up inventory leads me to think the real estate market is poised for positive momentum.
The increase in rents due to increased demand will spur some renters who can afford it to become homebuyers and it will also continue to entice investors, in my view. As mortgage rates rise (it is inevitable), I think those on the "fence" about buying a home will come into the market quickly to take advantage of rates while still favorable.
It is still a "buyer's" market and those who are thinking of buying a home now should take advantage of the low mortgage rates and favorable market conditions, in my view.
As a local Realtor, I am aware of the trends in the US market as well as in many of the communities in which I specialize. If you are thinking of selling or buying a home, please feel free text me or call me at 561-247-3550.
For free home searches, please text me your name, e-mail address and phone number or visit my Web-site at http://homes.MYsouthFLrealestate.com
Michael Friedman
Realtor, Certified Distressed Property Expert (CDPE)
Member of Who's Who in Luxury Real Estate
Lang Realty
561-247-3550
http://MYsouthFLrealestate.com
Referrals are appreciated and welcomed.
Boca Raton FL real estate for sale and surrounding areas including real estate properties for sale in: Belle Glade, Boca Raton, Boynton Beach, Bryant, Canal Point, Dania, Deerfield Beach, Delray Beach, Fort Lauderdale, Hallandale, Hialeah, Hobe Sound, Hollywood, Indiantown, Jupiter, Key Biscayne, Lake Harbor, Lake Worth, Loxahatchee, Miami, Miami Beach, North Miami Beach, North Palm Beach, Opa Locka, Pahokee, Palm Beach, Palm Beach Gardens, Pembroke Pines, Pompano Beach, South Bay, West Palm Beach, Lang Realty
Showing posts with label investor. Show all posts
Showing posts with label investor. Show all posts
Friday, June 29, 2012
Saturday, June 23, 2012
Could A Rental Bubble Be Forming: Homes For Sale: Homes For Renrt
US News & World Report recently wrote an article with the title, "Stage Could Be Set For a Rental Market Bubble." I do not think we are a "bubble" yet, but we could be at the beginning stages as explained below.
The increase in the number of people moving into rental housing increased 4.0% on a year-over-year basis in March 2012, according to Freddie Mac. Christina Aragon of Rent.com calls this increase "significant." I have been writing about how the rental market is very robust and properties move quickly in the South Florida market.
All the while, homeownership is at its lowest levels in 15 years, at about 65%. Not surprising, given the shift to rentals as noted above.
The reasons have been discussed before and will be briefly touched upon: tight mortgage credit market, increased downpayment requirements to buy a home, the increase in distressed properties have shifted previous homeowners into the renting category, etc.
The supply of rental homes is drying up and the cost of renting is increasing. Trulia reports rents were up 6.0% on a year-over-year basis in May 2012. Some markets have had even bigger increases, such as Miami, which was up more than 10.0%, according to Trulia.
All of this has increased the interest of investors. I have touched upon this in previous posts and I have seen this in the current South Florida market.
The argument for a potential "bubble" is that investors are flooding the market and ramping up potential rental inventory levels. The US federal government has announced plans to convert some foreclosures on its books to rental properties to help ease the current situation. Also, if credit standards are eased and more people can move into the homeownership category, that may ease rental demand. The potential increase in supply by investor properties and government owned foreclosures, coupled with homeownership demand could cause a "bubble" to burst.
I do not foresee this happening during the next two years, atleast. Jed Kolko, chief economist at Trulia claims, "most renters are still two or more years away from homeownership." Also, it will take those who owned distressed properties more than two years to fix their credit and be ready to once again be homeowners, in my opinion.
Also, increased home buying should spur demand and prices, which should mitigate the downside for investors. Those that are renting might be willing to buy the homes they are renting from investors, which would allow investors to enjoy the cash flows for several years (presumably at an acceptable rate of return) and then sell the home at a higher price than when they bought it.
As a local Realtor, I am aware of the trends in the US market as well as in many of the communities in which I specialize. If you are thinking of selling or buying a home, please feel free text me or call me at 561-247-3550.
For free home searches, please text me your name, e-mail address and phone number or visit my Web-site at http://homes.MYsouthFLrealestate.com
Michael Friedman
Realtor, Certified Distressed Property Expert (CDPE)
Member of Who's Who in Luxury Real Estate
Lang Realty
561-247-3550
http://MYsouthFLrealestate.com
Referrals are appreciated and welcomed.
Boca Raton FL real estate for sale and surrounding areas including real estate properties for sale in: Belle Glade, Boca Raton, Boynton Beach, Bryant, Canal Point, Dania, Deerfield Beach, Delray Beach, Fort Lauderdale, Hallandale, Hialeah, Hobe Sound, Hollywood, Indiantown, Jupiter, Key Biscayne, Lake Harbor, Lake Worth, Loxahatchee, Miami, Miami Beach, North Miami Beach, North Palm Beach, Opa Locka, Pahokee, Palm Beach, Palm Beach Gardens, Pembroke Pines, Pompano Beach, South Bay, West Palm Beach, Lang Realty
The increase in the number of people moving into rental housing increased 4.0% on a year-over-year basis in March 2012, according to Freddie Mac. Christina Aragon of Rent.com calls this increase "significant." I have been writing about how the rental market is very robust and properties move quickly in the South Florida market.
All the while, homeownership is at its lowest levels in 15 years, at about 65%. Not surprising, given the shift to rentals as noted above.
The reasons have been discussed before and will be briefly touched upon: tight mortgage credit market, increased downpayment requirements to buy a home, the increase in distressed properties have shifted previous homeowners into the renting category, etc.
The supply of rental homes is drying up and the cost of renting is increasing. Trulia reports rents were up 6.0% on a year-over-year basis in May 2012. Some markets have had even bigger increases, such as Miami, which was up more than 10.0%, according to Trulia.
All of this has increased the interest of investors. I have touched upon this in previous posts and I have seen this in the current South Florida market.
The argument for a potential "bubble" is that investors are flooding the market and ramping up potential rental inventory levels. The US federal government has announced plans to convert some foreclosures on its books to rental properties to help ease the current situation. Also, if credit standards are eased and more people can move into the homeownership category, that may ease rental demand. The potential increase in supply by investor properties and government owned foreclosures, coupled with homeownership demand could cause a "bubble" to burst.
I do not foresee this happening during the next two years, atleast. Jed Kolko, chief economist at Trulia claims, "most renters are still two or more years away from homeownership." Also, it will take those who owned distressed properties more than two years to fix their credit and be ready to once again be homeowners, in my opinion.
Also, increased home buying should spur demand and prices, which should mitigate the downside for investors. Those that are renting might be willing to buy the homes they are renting from investors, which would allow investors to enjoy the cash flows for several years (presumably at an acceptable rate of return) and then sell the home at a higher price than when they bought it.
As a local Realtor, I am aware of the trends in the US market as well as in many of the communities in which I specialize. If you are thinking of selling or buying a home, please feel free text me or call me at 561-247-3550.
For free home searches, please text me your name, e-mail address and phone number or visit my Web-site at http://homes.MYsouthFLrealestate.com
Michael Friedman
Realtor, Certified Distressed Property Expert (CDPE)
Member of Who's Who in Luxury Real Estate
Lang Realty
561-247-3550
http://MYsouthFLrealestate.com
Referrals are appreciated and welcomed.
Boca Raton FL real estate for sale and surrounding areas including real estate properties for sale in: Belle Glade, Boca Raton, Boynton Beach, Bryant, Canal Point, Dania, Deerfield Beach, Delray Beach, Fort Lauderdale, Hallandale, Hialeah, Hobe Sound, Hollywood, Indiantown, Jupiter, Key Biscayne, Lake Harbor, Lake Worth, Loxahatchee, Miami, Miami Beach, North Miami Beach, North Palm Beach, Opa Locka, Pahokee, Palm Beach, Palm Beach Gardens, Pembroke Pines, Pompano Beach, South Bay, West Palm Beach, Lang Realty
Sunday, April 29, 2012
Big And Small Investors Entering The Real Estate Market: Homes For Sale: Homes For Rent
The US government's push to sell big pools of single-family homes that Fannie Mae owns has intrigued large institutional investors to begin looking into real estate for investment vehicles. The Fannie Mae and Freddic Mac homes are those that were foreclosed upon and now sit idle. The US government's pilot project will allow for the large-scale sale of these properties.
The combined Fannie Mae and Freddie Mac own more than 200,000 foreclosed homes and RealtyTrac estimates banks own another 600,000 single-family homes. The combination of a red-hot rental market and an over-supply of homes has gotten the attention of some investors who see an opportunity. The potential to purchase undervalued homes and rent them out is the potential play for many investors.
Some high-profile institutional investors are committing money to buying foreclosures, such as Warren Buffet's Berkshire Hathaway, Och-Ziff Capital Management and Starwood Capital, to mention a few. These larege investors have the potential to crowd-out the smaller investors.
Bids for these homes are to begin in April 2012 for the initial round of 2,500 Fannie Mae owned homes in some the United States' larges cities, such as Atlanta, Chicago and Los Angeles. If this is successful, the Federal Housing Finance Agency (FHFA) is considering selling off pools of distressed homes in the future.
Many homes in the initial round of sales are expected to be homes that already have tenants in them. This will give investors a pretty good idea of what the cash flows will be. Some investors believe they can generate an annual yield of 7% from rental income alone. The long-term goal of many institutional companies would be to form publicly traded real estate investment trusts (REITS) that would potentially yield an internal rate of return in the 25% range over a three-year period.
My background in dealing with large institutional investors enables me to work with both large and small investors. I am uniquely qualified as a Realtor, Certified Distressed Property Expert (CDPE) and direct investment experience.
As a local Relator, I am aware of the trends in the US market as well as in many of the communities in which I specialize. If you are thinking of selling or buying a home, please feel free text me or call me at 561-247-3550.
For free home searches, please text me your name, e-mail address and phone number or visit my Web-site at http://homes.MYsouthFLrealestate.com
Michael Friedman
Realtor, Certified Distressed Property Expert (CDPE)
Member of Who's Who in Luxury Real Estate
Lang Realty
561-247-3550
http://MYsouthFLrealestate.com
Referrals are appreciated and welcomed.
Boca Raton FL real estate for sale and surrounding areas including real estate properties for sale in: Belle Glade, Boca Raton, Boynton Beach, Bryant, Canal Point, Dania, Deerfield Beach, Delray Beach, Fort Lauderdale, Hallandale, Hialeah, Hobe Sound, Hollywood, Indiantown, Jupiter, Key Biscayne, Lake Harbor, Lake Worth, Loxahatchee, Miami, Miami Beach, North Miami Beach, North Palm Beach, Opa Locka, Pahokee, Palm Beach, Palm Beach Gardens, Pembroke Pines, Pompano Beach, South Bay, West Palm Beach, Lang Realty
The combined Fannie Mae and Freddie Mac own more than 200,000 foreclosed homes and RealtyTrac estimates banks own another 600,000 single-family homes. The combination of a red-hot rental market and an over-supply of homes has gotten the attention of some investors who see an opportunity. The potential to purchase undervalued homes and rent them out is the potential play for many investors.
Some high-profile institutional investors are committing money to buying foreclosures, such as Warren Buffet's Berkshire Hathaway, Och-Ziff Capital Management and Starwood Capital, to mention a few. These larege investors have the potential to crowd-out the smaller investors.
Bids for these homes are to begin in April 2012 for the initial round of 2,500 Fannie Mae owned homes in some the United States' larges cities, such as Atlanta, Chicago and Los Angeles. If this is successful, the Federal Housing Finance Agency (FHFA) is considering selling off pools of distressed homes in the future.
Many homes in the initial round of sales are expected to be homes that already have tenants in them. This will give investors a pretty good idea of what the cash flows will be. Some investors believe they can generate an annual yield of 7% from rental income alone. The long-term goal of many institutional companies would be to form publicly traded real estate investment trusts (REITS) that would potentially yield an internal rate of return in the 25% range over a three-year period.
My background in dealing with large institutional investors enables me to work with both large and small investors. I am uniquely qualified as a Realtor, Certified Distressed Property Expert (CDPE) and direct investment experience.
As a local Relator, I am aware of the trends in the US market as well as in many of the communities in which I specialize. If you are thinking of selling or buying a home, please feel free text me or call me at 561-247-3550.
For free home searches, please text me your name, e-mail address and phone number or visit my Web-site at http://homes.MYsouthFLrealestate.com
Michael Friedman
Realtor, Certified Distressed Property Expert (CDPE)
Member of Who's Who in Luxury Real Estate
Lang Realty
561-247-3550
http://MYsouthFLrealestate.com
Referrals are appreciated and welcomed.
Boca Raton FL real estate for sale and surrounding areas including real estate properties for sale in: Belle Glade, Boca Raton, Boynton Beach, Bryant, Canal Point, Dania, Deerfield Beach, Delray Beach, Fort Lauderdale, Hallandale, Hialeah, Hobe Sound, Hollywood, Indiantown, Jupiter, Key Biscayne, Lake Harbor, Lake Worth, Loxahatchee, Miami, Miami Beach, North Miami Beach, North Palm Beach, Opa Locka, Pahokee, Palm Beach, Palm Beach Gardens, Pembroke Pines, Pompano Beach, South Bay, West Palm Beach, Lang Realty
Sunday, January 15, 2012
New US Government Plan Could Change The US Housing Market: Homes For Sale: Homes For Rent
We have avocated getting investors more involved in helping to stem the flood of foreclosed properties entering the market. After a dramatic fall in prices, we expect the market to stabilize more quickly with more investor participation in the market.
The Obama administration is very close to announcing a pilot program that would allow the US government to sell foreclosures in bulk to investors as rentals. There are currently a quarter of a million foreclosed properties on the books at Fannie Mae, Freddie Mac and the Federal Housing Administration (FHA) and one million more are coming out soon.
The Lender Processing Service recent reported late-stage mortgage delinquencies at close to two million. Investors who can raise large sums of cash (i.e., institutional investors) will be able to buy properties on a large scale. We think this will help reduce the potential glut of inventory from these newly foreclosed homes.
Large investors will be able to buy 50-500 properties in one single deal. These big investors would be able to finance more than $1 billion in these type of transactions. The reduction in fear of a large wholesale of new inventory blowing on the market and the amount of time for absorbtion could be eliminated under this new plan. We think this is a good thing for the US housing market.
The added benefit might be to have rental prices even out a bit. The rental market has heated up with all of the recent problems in the market place. As a result, rent prices have been increasing along with demand. The additional rental units from this plan might also stabilize rental prices and ease the potential for inflation, in our view.
As a local Relator, I am aware of the trends in the US market as well as in many of the communities in which I specialize. If you are thinking of selling or buying a home, please feel free text me or call me at 561-247-3550.
For free home searches, please text me your name, e-mail address and phone number or visit my Web-site at http://homes.MYsouthFLrealestate.com
Michael Friedman
Realtor, Certified Distressed Property Expert (CDPE)
Member of Who's Who in Luxury Real Estate
Lang Realty
561-247-3550
http://MYsouthFLrealestate.com
Referrals are appreciated and welcomed.
Boca Raton FL real estate for sale and surrounding areas including real estate properties for sale in: Belle Glade, Boca Raton, Boynton Beach, Bryant, Canal Point, Dania, Deerfield Beach, Delray Beach, Fort Lauderdale, Hallandale, Hialeah, Hobe Sound, Hollywood, Indiantown, Jupiter, Key Biscayne, Lake Harbor, Lake Worth, Loxahatchee, Miami, Miami Beach, North Miami Beach, North Palm Beach, Opa Locka, Pahokee, Palm Beach, Palm Beach Gardens, Pembroke Pines, Pompano Beach, South Bay, West Palm Beach, Lang Realty
The Obama administration is very close to announcing a pilot program that would allow the US government to sell foreclosures in bulk to investors as rentals. There are currently a quarter of a million foreclosed properties on the books at Fannie Mae, Freddie Mac and the Federal Housing Administration (FHA) and one million more are coming out soon.
The Lender Processing Service recent reported late-stage mortgage delinquencies at close to two million. Investors who can raise large sums of cash (i.e., institutional investors) will be able to buy properties on a large scale. We think this will help reduce the potential glut of inventory from these newly foreclosed homes.
Large investors will be able to buy 50-500 properties in one single deal. These big investors would be able to finance more than $1 billion in these type of transactions. The reduction in fear of a large wholesale of new inventory blowing on the market and the amount of time for absorbtion could be eliminated under this new plan. We think this is a good thing for the US housing market.
The added benefit might be to have rental prices even out a bit. The rental market has heated up with all of the recent problems in the market place. As a result, rent prices have been increasing along with demand. The additional rental units from this plan might also stabilize rental prices and ease the potential for inflation, in our view.
As a local Relator, I am aware of the trends in the US market as well as in many of the communities in which I specialize. If you are thinking of selling or buying a home, please feel free text me or call me at 561-247-3550.
For free home searches, please text me your name, e-mail address and phone number or visit my Web-site at http://homes.MYsouthFLrealestate.com
Michael Friedman
Realtor, Certified Distressed Property Expert (CDPE)
Member of Who's Who in Luxury Real Estate
Lang Realty
561-247-3550
http://MYsouthFLrealestate.com
Referrals are appreciated and welcomed.
Boca Raton FL real estate for sale and surrounding areas including real estate properties for sale in: Belle Glade, Boca Raton, Boynton Beach, Bryant, Canal Point, Dania, Deerfield Beach, Delray Beach, Fort Lauderdale, Hallandale, Hialeah, Hobe Sound, Hollywood, Indiantown, Jupiter, Key Biscayne, Lake Harbor, Lake Worth, Loxahatchee, Miami, Miami Beach, North Miami Beach, North Palm Beach, Opa Locka, Pahokee, Palm Beach, Palm Beach Gardens, Pembroke Pines, Pompano Beach, South Bay, West Palm Beach, Lang Realty
Tuesday, September 28, 2010
July 2010 Case-Shiller Report: US Home Prices Rise 0.6%
The Case-Shiller home price index tracks single-family homes in 20 major US cities. The index showed a 0.6% rise in prices during July 2010 from June 2010. Prices increased 3.2% on a year-over-year basis.
Prices rose in 12 of the 20 markets on a year-over-year comparison during July 2010. The only South Florida market included in the index is Miami; the market was up 0.4% in July 2010 over the previous year, according to the Case-Shiller home price index.
The 3.2% year-over-year increase for July 2010 compares with 4.2% for June 2010. This poses a question for the direction of the US home market:
Are we seeing continued growth or a trend toward slowing year-over-year growth-- thus, leading towards another downturn?
Individual markets and submarkets are important to follow when you are looking to buy or sell a home. A person who understands these markets is very important when taking on a big decision, such as buying or selling a home.
If you are looking to buy, sell, rent or invest in the South Florida real estate market, please feel free to contact me.
Michael Friedman
Realtor, Certified Distressed Property Expert (CDPE)
Lang Realty
561-989-2100
http://michaelfriedman.rmlsfl.mlxchange.com/?Page=7395217 <--property search link to cut and paste into your Web browser
Boca Raton FL real estate for sale and surrounding areas including real estate properties for sale in: Belle Glade, Boca Raton, Boynton Beach, Bryant, Canal Point, Dania, Deerfield Beach, Delray Beach, Fort Lauderdale, Hallandale, Hialeah, Hobe Sound, Hollywood, Indiantown, Jupiter, Key Biscayne, Lake Harbor, Lake Worth, Loxahatchee, Miami, Miami Beach, North Miami Beach, North Palm Beach, Opa Locka, Pahokee, Palm Beach, Palm Beach Gardens, Pembroke Pines, Pompano Beach, South Bay, West Palm Beach, Lang Realty
Prices rose in 12 of the 20 markets on a year-over-year comparison during July 2010. The only South Florida market included in the index is Miami; the market was up 0.4% in July 2010 over the previous year, according to the Case-Shiller home price index.
The 3.2% year-over-year increase for July 2010 compares with 4.2% for June 2010. This poses a question for the direction of the US home market:
Are we seeing continued growth or a trend toward slowing year-over-year growth-- thus, leading towards another downturn?
Individual markets and submarkets are important to follow when you are looking to buy or sell a home. A person who understands these markets is very important when taking on a big decision, such as buying or selling a home.
If you are looking to buy, sell, rent or invest in the South Florida real estate market, please feel free to contact me.
Michael Friedman
Realtor, Certified Distressed Property Expert (CDPE)
Lang Realty
561-989-2100
http://michaelfriedman.rmlsfl.mlxchange.com/?Page=7395217 <--property search link to cut and paste into your Web browser
Boca Raton FL real estate for sale and surrounding areas including real estate properties for sale in: Belle Glade, Boca Raton, Boynton Beach, Bryant, Canal Point, Dania, Deerfield Beach, Delray Beach, Fort Lauderdale, Hallandale, Hialeah, Hobe Sound, Hollywood, Indiantown, Jupiter, Key Biscayne, Lake Harbor, Lake Worth, Loxahatchee, Miami, Miami Beach, North Miami Beach, North Palm Beach, Opa Locka, Pahokee, Palm Beach, Palm Beach Gardens, Pembroke Pines, Pompano Beach, South Bay, West Palm Beach, Lang Realty
Wednesday, September 22, 2010
More International Home Buyers In South Florida
I market my properties to a worldwide audience as well as work with international buyers. Non-US clients have become a bigger source of home buyers in the South Florida market recently. I believe the weak US Dollar is among other reasons for the increase in foreign home purchases in South Florida.
Our friends from Canada have been frequent buyers of South Florida homes and we are seeing more Latin and European buyers. I recently spoke with a prospective home buyer from England. We work over the phone and via e-mail in an attempt to narrow down the search for an in person visit. This happens frequently with out of town US buyers, such as those in the New York tri-state area.
A recent survey by the National Association of Realtors brought forth this trend.
The survey stated 65% of Florida Realtors have dealt with an international client in the last 12 months.
Florida Realtors in the survey stated international clients have become a larger part of their business in the past two years (33%). Half of the respondents stated international clients accounted for 25% of their business or less.
Almost 40% of the international client based comes from Canada, according to the survey with 15% from the UK and another 14% from Western Europe. Latin America accounted for another 16% and other countries included Germany, Venezuela, Brazil and France.
Marketing properties to international clients is important, as well as working directly with international buyers. Investors from outside the US have focused on the South Florida real estate market. I am working with some and continue to focus on this important customer segment.
If you are seeking to buy, sell, rent or lease your home, please contact me.
Michael Friedman
Realtor, Certified Distressed Property Expert (CDPE)
Lang Realty
561-989-2100
http://michaelfriedman.rmlsfl.mlxchange.com/?Page=7395217 <--property search link to cut and paste into your Web browser
Boca Raton FL real estate for sale and surrounding areas including real estate properties for sale in: Belle Glade, Boca Raton, Boynton Beach, Bryant, Canal Point, Dania, Deerfield Beach, Delray Beach, Fort Lauderdale, Hallandale, Hialeah, Hobe Sound, Hollywood, Indiantown, Jupiter, Key Biscayne, Lake Harbor, Lake Worth, Loxahatchee, Miami, Miami Beach, North Miami Beach, North Palm Beach, Opa Locka, Pahokee, Palm Beach, Palm Beach Gardens, Pembroke Pines, Pompano Beach, South Bay, West Palm Beach, Lang Realty
Our friends from Canada have been frequent buyers of South Florida homes and we are seeing more Latin and European buyers. I recently spoke with a prospective home buyer from England. We work over the phone and via e-mail in an attempt to narrow down the search for an in person visit. This happens frequently with out of town US buyers, such as those in the New York tri-state area.
A recent survey by the National Association of Realtors brought forth this trend.
The survey stated 65% of Florida Realtors have dealt with an international client in the last 12 months.
Florida Realtors in the survey stated international clients have become a larger part of their business in the past two years (33%). Half of the respondents stated international clients accounted for 25% of their business or less.
Almost 40% of the international client based comes from Canada, according to the survey with 15% from the UK and another 14% from Western Europe. Latin America accounted for another 16% and other countries included Germany, Venezuela, Brazil and France.
Marketing properties to international clients is important, as well as working directly with international buyers. Investors from outside the US have focused on the South Florida real estate market. I am working with some and continue to focus on this important customer segment.
If you are seeking to buy, sell, rent or lease your home, please contact me.
Michael Friedman
Realtor, Certified Distressed Property Expert (CDPE)
Lang Realty
561-989-2100
http://michaelfriedman.rmlsfl.mlxchange.com/?Page=7395217 <--property search link to cut and paste into your Web browser
Boca Raton FL real estate for sale and surrounding areas including real estate properties for sale in: Belle Glade, Boca Raton, Boynton Beach, Bryant, Canal Point, Dania, Deerfield Beach, Delray Beach, Fort Lauderdale, Hallandale, Hialeah, Hobe Sound, Hollywood, Indiantown, Jupiter, Key Biscayne, Lake Harbor, Lake Worth, Loxahatchee, Miami, Miami Beach, North Miami Beach, North Palm Beach, Opa Locka, Pahokee, Palm Beach, Palm Beach Gardens, Pembroke Pines, Pompano Beach, South Bay, West Palm Beach, Lang Realty
Sunday, September 19, 2010
Housing Market- A Look At Income And Valuations
There has been so much written and talked about concerning when the housing market will reach the bottom. One way of valuing real estate is to compare it with income.
Ned Davis research and CNBC published a chart recently that looked at valuation ratios of home prices to median income from 11/30/1976 to 3/31/2010. The chart showed a high of about 5.2 times in 2005 and a low of about 3.5 times on during the 1983 recession.
The mean valuation multiple was 4.1 times during the period described above. As of March 2010, the ratio stood at 4.3 times. The recent stabilization can be attributed to the recent federal government intervention.
Does this mean we are near the bottom as we approach the mean valuation multiple?
Well, a few factors should be discussed. One is the federal government has let some of its incentive programs expire, such as the first time homebuyer credit.
Another factor is psychology of the consumer. With unemployement holding steady in the mid-9% range and continued increases in distressed properties could damage consumer sentiment. The most recent US Consumer Sentiment Index hit 66.6 in September from 68.9 in August; this was the lowest level in a year.
With the housing bubble continuing to deflate, unemployment being at sustained high historic levels and tougher lending requirements, it's not unlikely that we will see the valuation multiple dip below the average in the near-term.
Nonetheless, if you are a first time homebuyer and plan to live in the home for a sustained period of time, now might be a good time to purchase a home. If interested, please see our post on the advantages of homeownership versus renting. Mortgage rates are near historical lows and it is still a buyer's market.
Please feel free to contact me about South Florida real estate. I represent buyers, sellers, renters and landlords. I also work with distressed homeowners and investors.
Michael Friedman
Realtor, Certified Distressed Property Expert (CDPE)
Lang Realty
561-989-2100
Ned Davis research and CNBC published a chart recently that looked at valuation ratios of home prices to median income from 11/30/1976 to 3/31/2010. The chart showed a high of about 5.2 times in 2005 and a low of about 3.5 times on during the 1983 recession.
The mean valuation multiple was 4.1 times during the period described above. As of March 2010, the ratio stood at 4.3 times. The recent stabilization can be attributed to the recent federal government intervention.
Does this mean we are near the bottom as we approach the mean valuation multiple?
Well, a few factors should be discussed. One is the federal government has let some of its incentive programs expire, such as the first time homebuyer credit.
Another factor is psychology of the consumer. With unemployement holding steady in the mid-9% range and continued increases in distressed properties could damage consumer sentiment. The most recent US Consumer Sentiment Index hit 66.6 in September from 68.9 in August; this was the lowest level in a year.
With the housing bubble continuing to deflate, unemployment being at sustained high historic levels and tougher lending requirements, it's not unlikely that we will see the valuation multiple dip below the average in the near-term.
Nonetheless, if you are a first time homebuyer and plan to live in the home for a sustained period of time, now might be a good time to purchase a home. If interested, please see our post on the advantages of homeownership versus renting. Mortgage rates are near historical lows and it is still a buyer's market.
Please feel free to contact me about South Florida real estate. I represent buyers, sellers, renters and landlords. I also work with distressed homeowners and investors.
Michael Friedman
Realtor, Certified Distressed Property Expert (CDPE)
Lang Realty
561-989-2100
Tuesday, September 14, 2010
A Few Words On Real Estate Investments
With some signs the South Florida real estate market may be "bottoming out", we take a look at real estate investing. Having experience with investments and learning from the past, we look at a few ideas to keep in mind going forward.
As with most business ventures, one must think about an exit strategy. Seek out properties that will have some sort of utility regardless of market conditions. This will give you options in the future and mitigate downside risk. For instance, does the property have good re-sale features. Could the property be leased quickly or are there lease restrictions.
Do not count on price appreciation as a reason to purchase. Investors should pay close attention to cash flows and not so much on price speculation. Those who build new homes build "on spec" prior to the downturn can attest.
Try to aim for an adequate return on investment. Some have quoted a "rule of thumb" to pay no more than 1.5% to 3.0% of the annual rent. One must also be aware of other factors as discussed in earlier pieces.
Try to limit your use of leverage (i.e., borrowing). The property's purchase price should not exceed 70% of the value of the home in an adequate state of repair. Many investors purchased homes during the past several years and then put in even more money to fix and remodel. The additional costs beyond the purchase price exacerbated a bad situation in what has become a declining market.
I work with owners looking to sell, those buying a first or second home, investors, landlords and those seeking rentals. Please feel free to contact me.
Michael Friedman
Realtor, Certified Distressed Property Expert (CDPE)
Lang Realty
561-989-2100
As with most business ventures, one must think about an exit strategy. Seek out properties that will have some sort of utility regardless of market conditions. This will give you options in the future and mitigate downside risk. For instance, does the property have good re-sale features. Could the property be leased quickly or are there lease restrictions.
Do not count on price appreciation as a reason to purchase. Investors should pay close attention to cash flows and not so much on price speculation. Those who build new homes build "on spec" prior to the downturn can attest.
Try to aim for an adequate return on investment. Some have quoted a "rule of thumb" to pay no more than 1.5% to 3.0% of the annual rent. One must also be aware of other factors as discussed in earlier pieces.
Try to limit your use of leverage (i.e., borrowing). The property's purchase price should not exceed 70% of the value of the home in an adequate state of repair. Many investors purchased homes during the past several years and then put in even more money to fix and remodel. The additional costs beyond the purchase price exacerbated a bad situation in what has become a declining market.
I work with owners looking to sell, those buying a first or second home, investors, landlords and those seeking rentals. Please feel free to contact me.
Michael Friedman
Realtor, Certified Distressed Property Expert (CDPE)
Lang Realty
561-989-2100
Wednesday, August 11, 2010
New Act Expected To Help Bulk Distressed Condominium Buyers in Florida
The large amounts of housing inventory needs to be reduced in order to prices for begin rising, in my opinion. The increased number of distressed properties has been a major reason for the enlarged inventory of properties. Investors with large amounts of pooled funds can help balance the housing inventory level back towards a normal equilibrium.
The Distressed Condominium Relief Act that took effect on July 1, 2010 should help increase the number of sold distressed condominiums throughout Florida. The new Act is primarily focused on condominium investors, as it pertains to bulk condominium buyers, which is defined as seven or more units within the same condominium project.
Below are some of the features of the new Act:
- Condominium purchasers as defined by the Act will no longer assume liabilities of the original developer. For those buyers who qualify, there is no need to set aside reserves for potential litigation.
- The new Act makes foreclosing lenders liable for 12 months of delinquent association fees when they take possession of the condominium; previously the lender was only responsible for six months.
- Condominium Associations will also be able to collect rent revenue from tenants where owners are not paying association fees. In addition, delinquent home owners could have their use of common area suspended subject to notice and a hearing.
The new Act should help both buyers and sellers. Despite the expectation of slightly increased prices due to the elimination of potential litigation reserves, buyers still have the opportunity to purchase condos at historically low prices. Current owners should get help with the burdens of association fees through the added collection of fees. This should allow for better up keep and improve pricing.
I am and working with and have worked with investors in the past. My Certified Distressed Property Expert (CDPE) designation should help in the buying and selling process. Those seeking to buy or sell bulk distressed condominiums please feel free to contact me.
Michael Friedman
Realtor, Certified Distressed Property Expert (CDPE)
Lang Realty
561-989-2100
The Distressed Condominium Relief Act that took effect on July 1, 2010 should help increase the number of sold distressed condominiums throughout Florida. The new Act is primarily focused on condominium investors, as it pertains to bulk condominium buyers, which is defined as seven or more units within the same condominium project.
Below are some of the features of the new Act:
- Condominium purchasers as defined by the Act will no longer assume liabilities of the original developer. For those buyers who qualify, there is no need to set aside reserves for potential litigation.
- The new Act makes foreclosing lenders liable for 12 months of delinquent association fees when they take possession of the condominium; previously the lender was only responsible for six months.
- Condominium Associations will also be able to collect rent revenue from tenants where owners are not paying association fees. In addition, delinquent home owners could have their use of common area suspended subject to notice and a hearing.
The new Act should help both buyers and sellers. Despite the expectation of slightly increased prices due to the elimination of potential litigation reserves, buyers still have the opportunity to purchase condos at historically low prices. Current owners should get help with the burdens of association fees through the added collection of fees. This should allow for better up keep and improve pricing.
I am and working with and have worked with investors in the past. My Certified Distressed Property Expert (CDPE) designation should help in the buying and selling process. Those seeking to buy or sell bulk distressed condominiums please feel free to contact me.
Michael Friedman
Realtor, Certified Distressed Property Expert (CDPE)
Lang Realty
561-989-2100
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