I was perusing the internet and came across the article below, written by Christine Hancock, about lofts and the craze that is permeating major cities across the US. Since I live in this type of dwelling, I had to stop to read the article and found that, what I have is actually in high-demand and hard to find in Tampa!
I always think of the movie, Ghost', and how beautiful the loft was in that movie. That is what I feel is a REAL loft, characterized by big windows, high ceilings and lots of urban charm! I guess my passion for this type of dwelling is gaining popularity around the country!
The space I own is unique. Featured on HGTV's Re-Zoned on August 1, 2007, it is probably the most famous loft in Channelside and maybe all of Tampa Bay! The loft was also featured in Tampa Bay Illustrated Magazine in Oct 2004.
I have actually put this home on the market. It is big and absolutely beautiful and even has a garage, which is totally uncharacteristic of the 'loft' condos available in Channelside. The home has the best of everything but the best of it is that I own the dirt underneath as a Fee Simple residence. That means a LOT when property values for a building lot in Channelside are running about $3.5M. The footprint for my loft currently represents about a $14.3M development potential to the wise investor.
If you are interested in this property or any other exciting loft, townhome or condominium in Channelside, please feel free to call me. The Urban living lifestyle is really my passion and I love to take people around and show them what is available and what their investment at this time will mean for them in years to come. Channelside is definitely one of the best places in Tampa Bay to buy, as reflected in the ever-increasing cost to live here. This market has gone almost unscathed with the real estate lull we have been in. Homes here are still closing and property values are still increasing. This is definitely one of the most exciting places in Tampa to live!
Here is the article that prompted me to write - enjoy!
The Loft Craze
by: Christine Hancock
Proximity to transportation corridors, urban centers, and local attractions draw land-loving young professionals to high-density loft-style condominiums. If your looking for a Condo with a twist, a loft may be just the home to You.
Lofts vary in price depending on what city you are in, units in the Chicago area start around A $200, 800 square feet and top $1 million for 2,500 square feet.
A true loft, for most, is a conversion of a vintage factory or warehouse, having a harder edge of either concrete construction, or "mill" construction of exposed brick and original wood posts, beams and floors. Ceilings should be over ten feet high at least. This is increasingly very important for loft purchasers, as developers are now building condos with slightly higher ceilings than in the past. It is the height that helps give a loft the feeling of air and space. Larger windows and open concept layouts also help. Ceilings are unfinished and pipes and heating ducts are exposed. Do not expect to find a 1,000 square foot loft divided up into two bedrooms and a den. It will much more likely have a kitchen and a bathroom with the rest of the space left as one large open room, which you can work with and use according to your own functions and needs. Some people think a loft means you have a second mezzanine level overlooking the floor below, but this is simply one style of loft.
Beware of another type of loft -- the newly constructed loft (or "soft lofts"), which are for the most part "Condos With High Ceilings", and are examples of Chicago condo developers trying to cash in on the popularity of lofts. They are still great units, just not "true" lofts.
Less traditional lofts have a kitchen and living room on the lower floor and an open second floor for bedrooms.
Chicago, Houston, New York, San Francisco, and Tampa have strong loft markets. The public cannot get enough of them. “Atlanta’s loft supply and demand has increased so much that there’s a separate listing for lofts in the newspaper.”
Tuesday, November 20, 2007
Thursday, October 25, 2007
Solid Fundamentals Support Commercial Real Estate
WASHINGTON, September 18, 2007 -
Most commercial real estate markets are enjoying relatively low vacancy rates and healthy rent growth from a fundamentally sound economy, according to the latest COMMERCIAL REAL ESTATE OUTLOOK of the National Association of Realtors®.
NAR Senior Economist Lawrence Yun said, “Commercial real estate responds to economic growth and job creation, which have been fairly strong over the past two years and have created the need for additional commercial space,” he said. “These fundamentals will continue to support commercial real estate markets in 2008. There has not been much overbuilding in the commercial sectors, and investors are more diverse.”
Yun said pricing for some commercial real estate has been at a record high, and capitalization rates have been at historic lows. “Normalization of prices may be occurring, but it isn’t clear what the definition of normal might be in the current market given the repricing of risk in the capital market. In short, the difference between the cash flow on a typical property and its price is close to a maximum, indicating prices may even out.”
A record $257.0 billion was invested in commercial real estate in the first seven months of 2007, up from $146.7 billion in same period in 2006; that total does not include transactions valued at less than $5 million, or of investments in the hospitality sector.
Cindy Chandler of Charlotte, N.C., chair of the Realtors® Commercial Alliance, said there have been some problems recently regarding the availability of capital. “Over-reaction to credit concerns in the financial markets could limit the availability of capital needed by private investors, but overall the situation does not appear to have significantly impacted institutional-grade commercial properties,” she said. “We're returning to the fundamentals and deal structuring of the mid 90s, and may see some dampening in investment activity, but there is a lot of momentum in commercial real estate.
“We see the commercial sectors holding at a healthy level of activity in most of the country, although there could be some slowing as a result of postponed transactions and delays in decision making.”
The NAR forecast in four major commercial sectors analyses quarterly data for various tracked metro areas. The sectors are the office, industrial, retail and multifamily markets. Metro data were provided by Torto Wheaton Research and Real Capital Analytics.
Office MarketThe office sector is the most favored by investors, with strong rent growth this year. The cost of steel and other factors have helped minimize speculative construction in most markets. The demand for space is expected to remain strong into 2008, and areas with strong job growth are benefiting the most. Older vacated space is lagging on the market in some cities.
Office vacancies are projected to edge up to an average of 12.9 percent in the fourth quarter from 12.5 percent in the fourth quarter of 2006, and then dip to 12.4 percent by the end of 2008. Annual rent growth in the office sector is forecast at 6.1 percent in 2007 and 3.1 percent next year, after rising 5.2 percent in 2006.
Projections for the third quarter show areas with the lowest office vacancies include New York City; Ventura County, Calif.; Seattle; Los Angeles; Honolulu; and Long Island, N.Y., all with vacancy rates of 9.4 percent or less.
Net absorption of office space in 57 markets tracked, which includes the leasing of new space coming on the market as well as space in existing properties, should total 53.8 million square feet this year and 65.1 million in 2008, compared with 78.0 million last year.
Office building transaction volume in the first seven months of this year totaled $147.0 billion, a record for the period, which is 53 percent higher than the same period in 2006. Equity funds accounted for 43 percent of office building purchases, followed by private investors at 21 percent.
Industrial Market Although the main driver for the industrial market continues to be the need for warehouse and distribution space, particularly in ports and distribution hubs, the rebirth of the technology sector is fueling demand for flex space, with a marked increase in markets such as San Jose, Calif.; Portland, Ore.; Seattle and Phoenix.
Much of the new industrial supply has been on a build-to-suit basis, and building obsolescence remains a factor for distribution facilities. With tightening availability in many primary markets, users are starting to show greater interest in secondary markets.
Vacancy rates in the industrial sector are likely to average 9.6 percent in the fourth quarter and 9.4 percent by the end of 2008, compared with 9.4 percent in the fourth quarter of 2006. Annual rent growth will more than double to 3.9 percent by the end of this year, and is estimated at 3.7 percent in the fourth quarter of 2008, up from a 1.4 percent annual rise at the end of last year.
The areas with the lowest industrial vacancies include Los Angeles; Albuquerque; Tucson; Orange County, Calif.; Portland, Ore.; and San Francisco, all with vacancy rates of 5.4 percent or less.
Net absorption of industrial space in 58 markets tracked will probably total 125.0 million square feet in 2007 and 165.6 million next year, down from 202.8 million in 2006.
Industrial transaction volume in the first seven months of 2007 was $26.8 billion, up 13 percent from the same period in 2006. Private investors accounted for 36 percent of industrial purchases, followed by equity funds at 25 percent.
Retail MarketRecovery in the retail market has been held back by high levels of new supply, but developers appear to have gotten the message. The majority of new space on the market today is in non-regional malls, but new available space should see marked declines in 2008. Credit problems have not yet impacted retail sales, but will be watched closely.
Vacancy rates in the retail sector are expected to rise to 9.3 percent in the fourth quarter from 8.1 percent at the end of 2006; vacancies are forecast at 8.9 percent by the end of next year. Average retail rent is projected to rise 2.9 percent in 2007 and 1.0 percent next year, following a 3.9 percent increase in 2006.
Retail markets with the lowest vacancies include San Francisco; Orange County, Calif.; San Jose, Calif.; Ventura County, Calif.; Washington, D.C.; and Las Vegas, all with vacancy rates of 5.1 percent or less.
Net absorption of retail space in 53 tracked markets should be 12.1 million square feet this year and 19.0 million in 2008, up from 10.7 million last year.
Retail transaction volume in the first seven months of this year totaled $37.4 billion, up from $22.3 billion in same period in 2006. Private investors accounted for 35 percent of transaction volume, followed by institutional investors at 22 percent and foreign investors, 18 percent.
Multifamily MarketThe apartment rental market – multifamily housing – anecdotally appears to be impacted by an influx of single-family homes being offered for rent, cutting into the demand for apartment rentals. In addition, condos are being converted into rental units, particularly in markets such as Washington, D.C., and several areas of Florida.
At the same time, potential first-time home buyers are hesitant and staying in the rental market, supporting multifamily fundamentals until the lure of homeownership returns, the housing cycle changes and more buyers enter the housing market.
Multifamily vacancy rates are likely to average 5.9 percent in the fourth quarter, the same as the fourth quarter of 2006, and then ease to 5.6 percent by the end of next year. Average rent is expected increase 2.9 percent this year and 3.8 percent in 2008, after a 4.1 percent rise last year.
Multifamily net absorption will probably total 209,200 units in 59 tracked metro areas this year, down from 229,400 in 2006, but increase to 234,400 in 2008.
The areas with the lowest apartment vacancies include Northern New Jersey, Salt Lake City, Philadelphia, Pittsburgh, Los Angeles, Minneapolis and Nashville, all with vacancy rates of 2.7 percent or less.
Multifamily transactions in the first seven months of this year totaled $46.3 billion, compared with $41.5 billion in the same period in 2006. Half of the purchases were by private investors, while condo converters accounted for only three percent of acquisitions.
The COMMERCIAL REAL ESTATE OUTLOOK is published by the NAR Research Division for the Realtors® Commercial Alliance. The RCA, formed by NAR in 1999, serves the needs of the commercial market and the commercial constituency within NAR, including commercial members; commercial committees, subcommittees and forums; commercial real estate boards and structures; and NAR affiliate organizations.
Organizations in the RCA include the CCIM Institute, the Institute of Real Estate Management, the Realtors® Land Institute, the Society of Industrial and Office Realtors®, and the Counselors of Real Estate. The RCA also provides commercial products and services.
Nearly 140,000 NAR members offer commercial services, and 73,000 of those are currently members of the RCA.
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing more than 1.3 million members involved in all aspects of the residential and commercial real estate industries.
http://www.realtor.org/press_room/news_releases/2007/solid_fundamentals_support_commercial_market.html?&WT.mc_t=LS102407&WT.mc_n=Comm
Most commercial real estate markets are enjoying relatively low vacancy rates and healthy rent growth from a fundamentally sound economy, according to the latest COMMERCIAL REAL ESTATE OUTLOOK of the National Association of Realtors®.
NAR Senior Economist Lawrence Yun said, “Commercial real estate responds to economic growth and job creation, which have been fairly strong over the past two years and have created the need for additional commercial space,” he said. “These fundamentals will continue to support commercial real estate markets in 2008. There has not been much overbuilding in the commercial sectors, and investors are more diverse.”
Yun said pricing for some commercial real estate has been at a record high, and capitalization rates have been at historic lows. “Normalization of prices may be occurring, but it isn’t clear what the definition of normal might be in the current market given the repricing of risk in the capital market. In short, the difference between the cash flow on a typical property and its price is close to a maximum, indicating prices may even out.”
A record $257.0 billion was invested in commercial real estate in the first seven months of 2007, up from $146.7 billion in same period in 2006; that total does not include transactions valued at less than $5 million, or of investments in the hospitality sector.
Cindy Chandler of Charlotte, N.C., chair of the Realtors® Commercial Alliance, said there have been some problems recently regarding the availability of capital. “Over-reaction to credit concerns in the financial markets could limit the availability of capital needed by private investors, but overall the situation does not appear to have significantly impacted institutional-grade commercial properties,” she said. “We're returning to the fundamentals and deal structuring of the mid 90s, and may see some dampening in investment activity, but there is a lot of momentum in commercial real estate.
“We see the commercial sectors holding at a healthy level of activity in most of the country, although there could be some slowing as a result of postponed transactions and delays in decision making.”
The NAR forecast in four major commercial sectors analyses quarterly data for various tracked metro areas. The sectors are the office, industrial, retail and multifamily markets. Metro data were provided by Torto Wheaton Research and Real Capital Analytics.
Office MarketThe office sector is the most favored by investors, with strong rent growth this year. The cost of steel and other factors have helped minimize speculative construction in most markets. The demand for space is expected to remain strong into 2008, and areas with strong job growth are benefiting the most. Older vacated space is lagging on the market in some cities.
Office vacancies are projected to edge up to an average of 12.9 percent in the fourth quarter from 12.5 percent in the fourth quarter of 2006, and then dip to 12.4 percent by the end of 2008. Annual rent growth in the office sector is forecast at 6.1 percent in 2007 and 3.1 percent next year, after rising 5.2 percent in 2006.
Projections for the third quarter show areas with the lowest office vacancies include New York City; Ventura County, Calif.; Seattle; Los Angeles; Honolulu; and Long Island, N.Y., all with vacancy rates of 9.4 percent or less.
Net absorption of office space in 57 markets tracked, which includes the leasing of new space coming on the market as well as space in existing properties, should total 53.8 million square feet this year and 65.1 million in 2008, compared with 78.0 million last year.
Office building transaction volume in the first seven months of this year totaled $147.0 billion, a record for the period, which is 53 percent higher than the same period in 2006. Equity funds accounted for 43 percent of office building purchases, followed by private investors at 21 percent.
Industrial Market Although the main driver for the industrial market continues to be the need for warehouse and distribution space, particularly in ports and distribution hubs, the rebirth of the technology sector is fueling demand for flex space, with a marked increase in markets such as San Jose, Calif.; Portland, Ore.; Seattle and Phoenix.
Much of the new industrial supply has been on a build-to-suit basis, and building obsolescence remains a factor for distribution facilities. With tightening availability in many primary markets, users are starting to show greater interest in secondary markets.
Vacancy rates in the industrial sector are likely to average 9.6 percent in the fourth quarter and 9.4 percent by the end of 2008, compared with 9.4 percent in the fourth quarter of 2006. Annual rent growth will more than double to 3.9 percent by the end of this year, and is estimated at 3.7 percent in the fourth quarter of 2008, up from a 1.4 percent annual rise at the end of last year.
The areas with the lowest industrial vacancies include Los Angeles; Albuquerque; Tucson; Orange County, Calif.; Portland, Ore.; and San Francisco, all with vacancy rates of 5.4 percent or less.
Net absorption of industrial space in 58 markets tracked will probably total 125.0 million square feet in 2007 and 165.6 million next year, down from 202.8 million in 2006.
Industrial transaction volume in the first seven months of 2007 was $26.8 billion, up 13 percent from the same period in 2006. Private investors accounted for 36 percent of industrial purchases, followed by equity funds at 25 percent.
Retail MarketRecovery in the retail market has been held back by high levels of new supply, but developers appear to have gotten the message. The majority of new space on the market today is in non-regional malls, but new available space should see marked declines in 2008. Credit problems have not yet impacted retail sales, but will be watched closely.
Vacancy rates in the retail sector are expected to rise to 9.3 percent in the fourth quarter from 8.1 percent at the end of 2006; vacancies are forecast at 8.9 percent by the end of next year. Average retail rent is projected to rise 2.9 percent in 2007 and 1.0 percent next year, following a 3.9 percent increase in 2006.
Retail markets with the lowest vacancies include San Francisco; Orange County, Calif.; San Jose, Calif.; Ventura County, Calif.; Washington, D.C.; and Las Vegas, all with vacancy rates of 5.1 percent or less.
Net absorption of retail space in 53 tracked markets should be 12.1 million square feet this year and 19.0 million in 2008, up from 10.7 million last year.
Retail transaction volume in the first seven months of this year totaled $37.4 billion, up from $22.3 billion in same period in 2006. Private investors accounted for 35 percent of transaction volume, followed by institutional investors at 22 percent and foreign investors, 18 percent.
Multifamily MarketThe apartment rental market – multifamily housing – anecdotally appears to be impacted by an influx of single-family homes being offered for rent, cutting into the demand for apartment rentals. In addition, condos are being converted into rental units, particularly in markets such as Washington, D.C., and several areas of Florida.
At the same time, potential first-time home buyers are hesitant and staying in the rental market, supporting multifamily fundamentals until the lure of homeownership returns, the housing cycle changes and more buyers enter the housing market.
Multifamily vacancy rates are likely to average 5.9 percent in the fourth quarter, the same as the fourth quarter of 2006, and then ease to 5.6 percent by the end of next year. Average rent is expected increase 2.9 percent this year and 3.8 percent in 2008, after a 4.1 percent rise last year.
Multifamily net absorption will probably total 209,200 units in 59 tracked metro areas this year, down from 229,400 in 2006, but increase to 234,400 in 2008.
The areas with the lowest apartment vacancies include Northern New Jersey, Salt Lake City, Philadelphia, Pittsburgh, Los Angeles, Minneapolis and Nashville, all with vacancy rates of 2.7 percent or less.
Multifamily transactions in the first seven months of this year totaled $46.3 billion, compared with $41.5 billion in the same period in 2006. Half of the purchases were by private investors, while condo converters accounted for only three percent of acquisitions.
The COMMERCIAL REAL ESTATE OUTLOOK is published by the NAR Research Division for the Realtors® Commercial Alliance. The RCA, formed by NAR in 1999, serves the needs of the commercial market and the commercial constituency within NAR, including commercial members; commercial committees, subcommittees and forums; commercial real estate boards and structures; and NAR affiliate organizations.
Organizations in the RCA include the CCIM Institute, the Institute of Real Estate Management, the Realtors® Land Institute, the Society of Industrial and Office Realtors®, and the Counselors of Real Estate. The RCA also provides commercial products and services.
Nearly 140,000 NAR members offer commercial services, and 73,000 of those are currently members of the RCA.
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing more than 1.3 million members involved in all aspects of the residential and commercial real estate industries.
http://www.realtor.org/press_room/news_releases/2007/solid_fundamentals_support_commercial_market.html?&WT.mc_t=LS102407&WT.mc_n=Comm
Friday, October 19, 2007
Fed President Calls This Housing Cycle Very Unique
Daily Real Estate News October 19, 2007
The current U.S. housing cycle diverged from past experience because the boom was driven by the growth of the subprime market and securitization of it, St. Louis Federal Reserve President William Poole told a monetary policy conference.
"[It] all worked as long as house prices were rising — and it all collapses when house prices stop rising," Poole said. "Obviously, this segment of the market, it is going to be a long time before it comes back."
Poole is a voting member of the Fed's interest-rate setting committee this year.
"I think this housing cycle is ... in many respects is quite different from previous housing cycles, and has unique characteristics from the housing cycles from the postwar period," he said. "And [it] is unlikely to give us much insight into the housing market for the longer run."
Source: Reuters News (10/18/07)
See original article at http://www.realtor.org/rmodaily.nsf/pages/News2007101906
The current U.S. housing cycle diverged from past experience because the boom was driven by the growth of the subprime market and securitization of it, St. Louis Federal Reserve President William Poole told a monetary policy conference.
"[It] all worked as long as house prices were rising — and it all collapses when house prices stop rising," Poole said. "Obviously, this segment of the market, it is going to be a long time before it comes back."
Poole is a voting member of the Fed's interest-rate setting committee this year.
"I think this housing cycle is ... in many respects is quite different from previous housing cycles, and has unique characteristics from the housing cycles from the postwar period," he said. "And [it] is unlikely to give us much insight into the housing market for the longer run."
Source: Reuters News (10/18/07)
See original article at http://www.realtor.org/rmodaily.nsf/pages/News2007101906
Thursday, October 18, 2007
Is This The Time To Buy?
The Long View
by Lawrence Yun, Vice President, NAR Research
“How much have real estate investors lost due to the housing market bust?”
That was the (highly loaded) question posed to me recently by a producer of one of the major evening news programs. The show wanted to run a story about the "pains" being felt in the market.
Hmm. Well, exactly how much real pain are we talking about? Let's look at a couple of examples. An investor who bought a property in Las Vegas five years ago would be ahead by $150,000; up $200,000 in Miami. The average investor nationwide – up $54,000. Only the recent buyers (flippers) who bought last year in few specific markets would have encountered a loss.
Not All Losses Are Created Equal
I’m not discounting the discomfort of those who lost big, especially lenders and hedge funds who had large exposures to subprime loans. Investors in homebuilder stocks have certainly experienced pains. But nearly all real estate investors who have a reasonable holding period are doing quite fine. Some of these fortunate buyers who got into the market several years ago will still consider a modest give back as a loss without considering the large gains reaped during the housing boom. That’s the nature of the human mind. A gain of $190,000 in Miami feels like a $10,000 loss considering that the gain had been $200,000.
A Home is Not a Stock Certificate -- Thank God!
Foreclosures are rising and construction workers are being laid off. REALTORS® are feeling the pinch as well. The median income of a typical REALTOR® has been falling due to the correction in sales transactions. However, consumers and homeowners who are in it for the long-term are once again coming out well ahead.
Because of the power of leveraging, $10,000 used for a down payment on a typically priced home in the United States at a typical appreciation rate of 5 percent will return $110,000 after 10 years. The same $10,000 invested in the stock market appreciating 10 percent annually will result in $23,600. No wonder the data from the Federal Reserve show consistent results year-after-year of the staggering difference in net worth between homeowners and renters. A typical homeowner had $184,400 in net worth versus only $4,000 for a typical renter.
The Spooky Thing
The lack of buyer confidence to enter the market has been the one principal reason in holding back home sales. Many would-be buyers are spooked of a possible home price decline. And the media is fueling that fear. Some of the most popular market gurus who offer their advice on television and other media say so. Caution is in order, however. As a recent Barron’s article pointed out, stock picks made by one such expert actually underperformed the market.
Opportunities to Seize
It’s also important to point out that times of crisis often turn out to have been times of opportunity in hindsight. With over four million net new job additions in the past two years– the time frame during which home sales have steadily fallen – a significant pent-up demand has developed. Home sales and home prices will be higher in 2008 compared to 2007. And, as with any investment, look longer term. Those investing in a home and keeping it for a typical holding period of six to ten years will likely see their investment pay off; those homes will have been a good investment.
As for stocks, they are not the enemy of real estate. Many REALTORS® own stocks. (So do many economists!) The latest NAR research on vacation-home buyers reveals that many of them rely on stock market wealth to fund that second-home purchase. Stocks and real estate both promote the importance of private ownership.
Where to Throw the Darts
Of course, with housing figures down, all eyes at looking to the stock market. Indeed, the stock market is at an all-time high. That's terrific in and of itself and reflects confidence in the U.S. economic outlook. Just be careful about taking specific advice from any hyper-emotional TV personality. Darts should not be thrown at publicity posters of any "mad money" host. You’ll likely have just as good of luck by reining in your emotions (and money) and throwing them randomly on the financial pages of your newspaper for your next stock pickings.
Copyright NATIONAL ASSOCIATION OF REALTORS®
Headquarters: 430 North Michigan Avenue, Chicago, IL. 60611-4087
DC Office: 500 New Jersey Avenue, NW, Washington, DC 20001-2020
1-800-874-6500
by Lawrence Yun, Vice President, NAR Research
“How much have real estate investors lost due to the housing market bust?”
That was the (highly loaded) question posed to me recently by a producer of one of the major evening news programs. The show wanted to run a story about the "pains" being felt in the market.
Hmm. Well, exactly how much real pain are we talking about? Let's look at a couple of examples. An investor who bought a property in Las Vegas five years ago would be ahead by $150,000; up $200,000 in Miami. The average investor nationwide – up $54,000. Only the recent buyers (flippers) who bought last year in few specific markets would have encountered a loss.
Not All Losses Are Created Equal
I’m not discounting the discomfort of those who lost big, especially lenders and hedge funds who had large exposures to subprime loans. Investors in homebuilder stocks have certainly experienced pains. But nearly all real estate investors who have a reasonable holding period are doing quite fine. Some of these fortunate buyers who got into the market several years ago will still consider a modest give back as a loss without considering the large gains reaped during the housing boom. That’s the nature of the human mind. A gain of $190,000 in Miami feels like a $10,000 loss considering that the gain had been $200,000.
A Home is Not a Stock Certificate -- Thank God!
Foreclosures are rising and construction workers are being laid off. REALTORS® are feeling the pinch as well. The median income of a typical REALTOR® has been falling due to the correction in sales transactions. However, consumers and homeowners who are in it for the long-term are once again coming out well ahead.
Because of the power of leveraging, $10,000 used for a down payment on a typically priced home in the United States at a typical appreciation rate of 5 percent will return $110,000 after 10 years. The same $10,000 invested in the stock market appreciating 10 percent annually will result in $23,600. No wonder the data from the Federal Reserve show consistent results year-after-year of the staggering difference in net worth between homeowners and renters. A typical homeowner had $184,400 in net worth versus only $4,000 for a typical renter.
The Spooky Thing
The lack of buyer confidence to enter the market has been the one principal reason in holding back home sales. Many would-be buyers are spooked of a possible home price decline. And the media is fueling that fear. Some of the most popular market gurus who offer their advice on television and other media say so. Caution is in order, however. As a recent Barron’s article pointed out, stock picks made by one such expert actually underperformed the market.
Opportunities to Seize
It’s also important to point out that times of crisis often turn out to have been times of opportunity in hindsight. With over four million net new job additions in the past two years– the time frame during which home sales have steadily fallen – a significant pent-up demand has developed. Home sales and home prices will be higher in 2008 compared to 2007. And, as with any investment, look longer term. Those investing in a home and keeping it for a typical holding period of six to ten years will likely see their investment pay off; those homes will have been a good investment.
As for stocks, they are not the enemy of real estate. Many REALTORS® own stocks. (So do many economists!) The latest NAR research on vacation-home buyers reveals that many of them rely on stock market wealth to fund that second-home purchase. Stocks and real estate both promote the importance of private ownership.
Where to Throw the Darts
Of course, with housing figures down, all eyes at looking to the stock market. Indeed, the stock market is at an all-time high. That's terrific in and of itself and reflects confidence in the U.S. economic outlook. Just be careful about taking specific advice from any hyper-emotional TV personality. Darts should not be thrown at publicity posters of any "mad money" host. You’ll likely have just as good of luck by reining in your emotions (and money) and throwing them randomly on the financial pages of your newspaper for your next stock pickings.
Copyright NATIONAL ASSOCIATION OF REALTORS®
Headquarters: 430 North Michigan Avenue, Chicago, IL. 60611-4087
DC Office: 500 New Jersey Avenue, NW, Washington, DC 20001-2020
1-800-874-6500
Thursday, October 11, 2007
Realtors® Applaud House Passage of Mortgage Cancellation Tax Relief
WASHINGTON, October 04, 2007 - The National Association of Realtors® praised the U.S. House of Representatives for today’s passage of the Mortgage Cancellation Tax Relief Act, H.R. 3648, by a vote of 386 to 27. Since the early 1990s, NAR has advocated for repeal of the current law, which forces individuals to pay an income tax when they have had a loan forgiven or have had to foreclose because of their inability to pay their mortgage.
“Congress made a good decision today that will affect many Americans who find themselves in a truly bad situation,” said NAR President Pat V. Combs, of Grand Rapids, Mich., and vice president of Coldwell Banker-AJS-Schmidt. “Changing the IRS code is an issue of fundamental fairness. It would relieve a tax burden at a time when an individual or family has experienced a true economic loss arising from the sale or loss of their home. These families are already in financial distress and are most likely unable to pay additional taxes.”
NAR has expressed its commitment to continue efforts to make the horror of losing a home less burdensome for families. “This is not only about the subprime turmoil we are currently experiencing. This is also about families who have lost their home or a need to sell that home for less than the amount owed on their home mortgage because of job loss, divorce, health issues, a decrease in the value of the home or other unfortunate circumstances. Clearly it is unfair to tax people on phantom income when they most likely have no cash with which to pay the tax,” said Combs.
The current tax code requires a lender who forgives debt to provide a Form 1099 to the IRS stating the amount the borrower has been forgiven. This disclosure applies whether it is a short sale, foreclosure, deed in lieu of foreclosure or any similar arrangement that relieves the borrower of the obligation to pay some portion of their debt. If the property is sold at foreclosure or is sold for less than was borrowed, that difference is considered income and is subject to the tax.
H.R. 3648 would ensure that any amount forgiven on mortgage debt secured by a principal residence will not be taxed. The legislation has a provision to safeguard against abuses. That provision is similar to one that already exists for commercial real estate owners and would treat commercial and residential property equally.
“Realtors® are about building communities, not just selling homes. We must work together to prevent the dream of homeownership from becoming a nightmare” said Combs. “This is just one step that will help families get on with their lives and begin rebuilding their economic security.”
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing more than 1.3 million members involved in all aspects of the residential and commercial real estate industries.
© Copyright NATIONAL ASSOCIATION of REALTORS® I Headquarters: 430 North Michigan Avenue, Chicago, IL 60611
DC Office: 500 New Jersey Avenue, NW, Washington, DC 20001-2020 I 1-800-874-6500
“Congress made a good decision today that will affect many Americans who find themselves in a truly bad situation,” said NAR President Pat V. Combs, of Grand Rapids, Mich., and vice president of Coldwell Banker-AJS-Schmidt. “Changing the IRS code is an issue of fundamental fairness. It would relieve a tax burden at a time when an individual or family has experienced a true economic loss arising from the sale or loss of their home. These families are already in financial distress and are most likely unable to pay additional taxes.”
NAR has expressed its commitment to continue efforts to make the horror of losing a home less burdensome for families. “This is not only about the subprime turmoil we are currently experiencing. This is also about families who have lost their home or a need to sell that home for less than the amount owed on their home mortgage because of job loss, divorce, health issues, a decrease in the value of the home or other unfortunate circumstances. Clearly it is unfair to tax people on phantom income when they most likely have no cash with which to pay the tax,” said Combs.
The current tax code requires a lender who forgives debt to provide a Form 1099 to the IRS stating the amount the borrower has been forgiven. This disclosure applies whether it is a short sale, foreclosure, deed in lieu of foreclosure or any similar arrangement that relieves the borrower of the obligation to pay some portion of their debt. If the property is sold at foreclosure or is sold for less than was borrowed, that difference is considered income and is subject to the tax.
H.R. 3648 would ensure that any amount forgiven on mortgage debt secured by a principal residence will not be taxed. The legislation has a provision to safeguard against abuses. That provision is similar to one that already exists for commercial real estate owners and would treat commercial and residential property equally.
“Realtors® are about building communities, not just selling homes. We must work together to prevent the dream of homeownership from becoming a nightmare” said Combs. “This is just one step that will help families get on with their lives and begin rebuilding their economic security.”
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing more than 1.3 million members involved in all aspects of the residential and commercial real estate industries.
© Copyright NATIONAL ASSOCIATION of REALTORS® I Headquarters: 430 North Michigan Avenue, Chicago, IL 60611
DC Office: 500 New Jersey Avenue, NW, Washington, DC 20001-2020 I 1-800-874-6500
Friday, October 5, 2007
The Latest Information on the Phantom Tax Law Revisions
We've all be waiting to see what would transpire and finally it appears that the vote against the phantom tax to prevent mortgage lenders from issuing a W4 for the loss they accept in a short sale, foreclosure or rescindence of deed in lieu of foreclosure has passed. As stated below in the National Association of Realtors Daily Real Estate News, homeowners who are in financial crisis will not be faced with unfair tax liability. Up until now, homeowners who lost their homes to foreclosure and short sale would be faced with a W4 for the difference in the mortgage balance and the amount actually settled on resulting in an income tax obligation. This is the best news I've heard with regard to these pressing issues caused by the reduction in property values we have experienced in the past two years combined with the increase in foreclosures across the country.
Daily Real Estate News | October 5, 2007
House Votes to Eliminate 'Phantom Tax'
The U.S. House of Representatives voted on Thursday to get rid of a tax burden for home owners who have had a loan forgiven or foreclosed on their home because they were unable to make their mortgage payments. The Mortgage Cancellation Tax Relief Act, H.R. 3648, passed by a vote of 386 to 27. Similar legislation is making its way through the Senate.
Since the early 1990s, NAR has supported such measures to eliminate the "phantom tax" on financially-strapped home owners.
“Congress made a good decision that will affect many Americans who find themselves in a truly bad situation,” says NAR President Pat V. Combs. “Changing the IRS code is an issue of fundamental fairness. It would relieve a tax burden at a time when an individual or family has experienced a true economic loss arising from the sale or loss of their home. These families are already in financial distress and are most likely unable to pay additional taxes.”
The current tax code requires a lender who forgives debt to provide a Form 1099 to the IRS stating the amount the borrower has been forgiven. This disclosure applies whether it is a short sale, foreclosure, deed in lieu of foreclosure or any similar arrangement that relieves the borrower of the obligation to pay some portion of their debt. If the property is sold at foreclosure or is sold for less than was borrowed, that difference is considered income and is subject to the tax.
H.R. 3648 would ensure that any amount forgiven on mortgage debt secured by a principal residence will not be taxed. The legislation has a provision to safeguard against abuses. That provision is similar to one that already exists for commercial real estate owners and would treat commercial and residential property equally.
"This is not only about the subprime turmoil we are currently experiencing," Combs says. "This is also about families who have lost their home or a need to sell that home for less than the amount owed on their home mortgage because of job loss, divorce, health issues, a decrease in the value of the home or other unfortunate circumstances. Clearly it is unfair to tax people on phantom income when they most likely have no cash with which to pay the tax."
In other news, another bill has been sent to the House Judiciary Committee that would revise the bankruptcy code to allow judges to order mortgage lenders to ease terms for home owners in bankruptcy proceedings. Currently, mortgage lenders can foreclose against a home owner in default 90 days after the filing of bankruptcy.
— REALTOR® Magazine Online
Daily Real Estate News | October 5, 2007
House Votes to Eliminate 'Phantom Tax'
The U.S. House of Representatives voted on Thursday to get rid of a tax burden for home owners who have had a loan forgiven or foreclosed on their home because they were unable to make their mortgage payments. The Mortgage Cancellation Tax Relief Act, H.R. 3648, passed by a vote of 386 to 27. Similar legislation is making its way through the Senate.
Since the early 1990s, NAR has supported such measures to eliminate the "phantom tax" on financially-strapped home owners.
“Congress made a good decision that will affect many Americans who find themselves in a truly bad situation,” says NAR President Pat V. Combs. “Changing the IRS code is an issue of fundamental fairness. It would relieve a tax burden at a time when an individual or family has experienced a true economic loss arising from the sale or loss of their home. These families are already in financial distress and are most likely unable to pay additional taxes.”
The current tax code requires a lender who forgives debt to provide a Form 1099 to the IRS stating the amount the borrower has been forgiven. This disclosure applies whether it is a short sale, foreclosure, deed in lieu of foreclosure or any similar arrangement that relieves the borrower of the obligation to pay some portion of their debt. If the property is sold at foreclosure or is sold for less than was borrowed, that difference is considered income and is subject to the tax.
H.R. 3648 would ensure that any amount forgiven on mortgage debt secured by a principal residence will not be taxed. The legislation has a provision to safeguard against abuses. That provision is similar to one that already exists for commercial real estate owners and would treat commercial and residential property equally.
"This is not only about the subprime turmoil we are currently experiencing," Combs says. "This is also about families who have lost their home or a need to sell that home for less than the amount owed on their home mortgage because of job loss, divorce, health issues, a decrease in the value of the home or other unfortunate circumstances. Clearly it is unfair to tax people on phantom income when they most likely have no cash with which to pay the tax."
In other news, another bill has been sent to the House Judiciary Committee that would revise the bankruptcy code to allow judges to order mortgage lenders to ease terms for home owners in bankruptcy proceedings. Currently, mortgage lenders can foreclose against a home owner in default 90 days after the filing of bankruptcy.
— REALTOR® Magazine Online
Thursday, October 4, 2007
GREAT News for a Sluggish Real Estate Market!
Historically when the real estate market goes down, the stock market goes up and vice versa.
I was so pleased last night, to see that Lennar Homes had an increase in their stocks up 7.25 (mol). This is some of the first signs of a shifting market as the market actually fell as a whole by almost 76 points.
I have been saying for the past few weeks that it is imperative to buy now - well, here's some proof that what I've said is true! It is important to act now before the rest of the world jumps on board and the market becomes a seller's heaven again - and it will, rest assured.
If you have been waiting for the bottom to fall out, it has already happened. The real estate market is starting to come back and it is crucial to make your deals NOW before everyone else gets the message that they don't have to take a low offer and that there are more buyers than there were.
If you are looking for a home in Tampa Bay, I am a 20-year resident of the area and welcome the opportunity to find you the home of your dreams. If you are looking for a keen investment, now is the time to act! Don't wait for the rest of the world to jump on board or you will have passed up the best opportunites!
The market may end up slow to recover but as soon as word is out that we are on the recovery end, there will be a stampede of buyers who have been waiting for their golden opportunity.
Even though this very encouraging news is in my face, I keep seeing articles in the media that contradict this. The following article entitled "How to Play the Real Estate Bounce-Back" was printed in the October 2007 issue of Business 2.0, which states on the cover that it is their "final issue". You can read the article by going to http://mag1.olivesoftware.com/am/getBookEnc.asp?Path=QlNOLzIwMDcvMTAvMDE=&BookCollection=BSN_AM&ReaderStyle=BSNMag&browserWindowWidth=1430&browserWindowHeight=850
The article states that there are 10 cities that represent the strongest investment potential and Tampa is not listed. This may be the way it was when the article was written but our Tampa market is already experiencing an recovery so all the media had better be prepared.
I was so pleased last night, to see that Lennar Homes had an increase in their stocks up 7.25 (mol). This is some of the first signs of a shifting market as the market actually fell as a whole by almost 76 points.
I have been saying for the past few weeks that it is imperative to buy now - well, here's some proof that what I've said is true! It is important to act now before the rest of the world jumps on board and the market becomes a seller's heaven again - and it will, rest assured.
If you have been waiting for the bottom to fall out, it has already happened. The real estate market is starting to come back and it is crucial to make your deals NOW before everyone else gets the message that they don't have to take a low offer and that there are more buyers than there were.
If you are looking for a home in Tampa Bay, I am a 20-year resident of the area and welcome the opportunity to find you the home of your dreams. If you are looking for a keen investment, now is the time to act! Don't wait for the rest of the world to jump on board or you will have passed up the best opportunites!
The market may end up slow to recover but as soon as word is out that we are on the recovery end, there will be a stampede of buyers who have been waiting for their golden opportunity.
Even though this very encouraging news is in my face, I keep seeing articles in the media that contradict this. The following article entitled "How to Play the Real Estate Bounce-Back" was printed in the October 2007 issue of Business 2.0, which states on the cover that it is their "final issue". You can read the article by going to http://mag1.olivesoftware.com/am/getBookEnc.asp?Path=QlNOLzIwMDcvMTAvMDE=&BookCollection=BSN_AM&ReaderStyle=BSNMag&browserWindowWidth=1430&browserWindowHeight=850
The article states that there are 10 cities that represent the strongest investment potential and Tampa is not listed. This may be the way it was when the article was written but our Tampa market is already experiencing an recovery so all the media had better be prepared.
Tuesday, October 2, 2007
Happenings this month in Channelside District, Tampa
I found this article at Fangoria.com about an upcoming event that will be taking place in Channelside soon for Halloween! I hope you find it interesting!
October 1: Founder talks FL Halloweenpalooza horror fest
Festival founder and coordinator Rick Danford of Enigma Films contacted Fango to give us the details on his Halloweenapalooza 2007/Halloween Horror Picture Show, which runs October 19-20 in Tampa, FL. Produced in partnership with Channelside Cinemas and IMAX, the first annual Halloweenpalooza and fifth annual independent horror film festival will feature celebrity guests (including scream queen Tiffany Shepis and screenwriter/actor Trent Haaga) doing the signing-and-picture thing, trick-or-treating, a scavenger hunt, vendors, live music and more.
Danford says of the festivities, which kick off at 6 p.m. on Friday the 19th at Channelside Cinemas (615 Channelside Drive), “Every year, we try to bring to the Central Florida area the very best the indie horror world has to offer. We’ve featured films from all over the world, and many have made their festival debut with us. Our basic function is to provide an outlet for the indie horror filmmaker to screen his or her work in front of the fans and to also give them a chance to meet, greet and network with those fans, as well as other filmmakers.”
Films screening this year at HHPS07 include Marcus Koch’s killer-clown pic 100 TEARS (with the director set to introduce), Alan Rowe Kelly’s THE BLOOD SHED, Anthony Falcon’s 99 PIECES, Alex Orr’s BLOOD CAR, THE BUNKER (including a Q&A with Miami-based director Joe Monks), DEATH ON DEMAND (introduced by star Krista Grotte), GIMME SKELTER, GHOST MONTH, HOODOO FOR VOODOO (debut of a re-edited version), the titillating-sounding strippers-vs.-the-undead flick ZOMBIES! ZOMBIES! ZOMBIES!, a short film program and more.
“I am just a huge fan of the genre,” says Danford of his approach to the festival, “and I love giving as many of these hardworking filmmakers their chance to get some feedback and to allow their films to be seen by the people who appreciate them most. They deserve it.” For more info, visit the fest’s official site linked above. —Sean Decker
October 1: Founder talks FL Halloweenpalooza horror fest
Festival founder and coordinator Rick Danford of Enigma Films contacted Fango to give us the details on his Halloweenapalooza 2007/Halloween Horror Picture Show, which runs October 19-20 in Tampa, FL. Produced in partnership with Channelside Cinemas and IMAX, the first annual Halloweenpalooza and fifth annual independent horror film festival will feature celebrity guests (including scream queen Tiffany Shepis and screenwriter/actor Trent Haaga) doing the signing-and-picture thing, trick-or-treating, a scavenger hunt, vendors, live music and more.
Danford says of the festivities, which kick off at 6 p.m. on Friday the 19th at Channelside Cinemas (615 Channelside Drive), “Every year, we try to bring to the Central Florida area the very best the indie horror world has to offer. We’ve featured films from all over the world, and many have made their festival debut with us. Our basic function is to provide an outlet for the indie horror filmmaker to screen his or her work in front of the fans and to also give them a chance to meet, greet and network with those fans, as well as other filmmakers.”
Films screening this year at HHPS07 include Marcus Koch’s killer-clown pic 100 TEARS (with the director set to introduce), Alan Rowe Kelly’s THE BLOOD SHED, Anthony Falcon’s 99 PIECES, Alex Orr’s BLOOD CAR, THE BUNKER (including a Q&A with Miami-based director Joe Monks), DEATH ON DEMAND (introduced by star Krista Grotte), GIMME SKELTER, GHOST MONTH, HOODOO FOR VOODOO (debut of a re-edited version), the titillating-sounding strippers-vs.-the-undead flick ZOMBIES! ZOMBIES! ZOMBIES!, a short film program and more.
“I am just a huge fan of the genre,” says Danford of his approach to the festival, “and I love giving as many of these hardworking filmmakers their chance to get some feedback and to allow their films to be seen by the people who appreciate them most. They deserve it.” For more info, visit the fest’s official site linked above. —Sean Decker
Friday, September 28, 2007
Small Investors Gain an Edge in Properties
By Kemba J. Dunham From The Wall Street Journal Online
For small investors who've been shut out of the commercial-property market in recent years, there's a bright side to the mortgage meltdown: It's much easier for them to compete.
When Andrew Brooks first offered $15 million for a medical-office building in Valencia, Calif., in early August, the seller turned down the 44-year-old orthopedic surgeon.
But just three weeks later, the seller called back Dr. Brooks, who lives in Los Angeles. The two large real-estate investment trusts that had knocked the doctor out of the running with their bids were no longer interested. Dr. Brooks believes that the companies were unable -- or unwilling -- to come up with the cash.
Related Link Join a reader discussion on the U.S. housing market.
That left Dr. Brooks, who buys medical-office buildings (in addition to performing surgeries related to sports injuries), as the sole player. He quickly put down a "substantial" nonrefundable cash deposit to buy the property for $800,000 less than he had originally offered, and is waiting for the deal to close. Though the marketplace for health-care-related properties has been extremely competitive over the past few years, "if you've got some cash to spend, there's a tremendous opportunity," Dr. Brooks says.
Over the past few years, more investors have wanted to add small apartment complexes, office buildings and shopping centers to their portfolio. Retirees, well-off individuals and the self-employed -- who often lack corporate pensions and retirement plans -- have traditionally used these types of investments to amass long-term wealth and fund their retirement.
But as prices soared, both individual players like Dr. Brooks and small companies that buy such properties, which are typically priced between $1 million and $20 million, found themselves outbid and outmaneuvered by better-capitalized firms, including investment banks and publicly traded real-estate investment trusts, or REITs.
Now, with the capital markets roiling, once-active big firms are being more prudent about making deals. That's opened a window of opportunity for smaller investors who want to buy these properties. "Right now, everyone is trying to figure out how to make these deals work, so while we're in that transition period, the institutional investors are taking a wait-and-see approach," says Mark Larson, national director of Grubb & Ellis's private-capital investment group.
The Upper Hand
Small investors now have an edge in bidding for certain commercial properties. Here's why:
• They often pay with cash, while larger firms typically borrow funds.
• They are more likely to buy properties in need of renovation.
• Bigger firms have become more risk-averse because of the credit crunch.
Tools For Investors
• iiProperty.com is an online property management tool for investors (registration required). Visitors to the site can use the tool to track property expenses, rents collected and cash flow. The site's basic suite of tools are free, however, other tools -- such as automatic tenant invoicing range in costs from $12.99 a month to $64.99.
• Rentometer.com gives apartment landlords (and renters) the chance to compare the rent for a particular unit against other rentals in an area with a simple-to-understand graphical meter.
• Goodmortgage.com provides a calculator to help investors forecast the possible financial outcome of purchasing and renting an investment property based on data such as purchase price and mortgage terms, monthly rental rates, expenses and expected growth in property value.
• About.com offers a downloadable spreadsheet to track the performance of a commercial real-estate investment, as well as definitions and how-tos for mathematical calculations used by real-estate investors.
--Lauren Baier Kim
Smaller investors -- a universe that includes individuals, partnerships, and local and regional investment companies -- can cut deals faster than bigger players, which appeals to sellers fed up with the growing number of deals that are falling through. They're also more willing to buy properties that need improvement, which can be a lucrative but are often deemed too risky for institutional investors and REITs, says Harvey Green, chief executive of Marcus & Millichap Real Estate Investment Services, based in Encino, Calif.
Another big advantage smaller investors have: Many of them pay primarily with cash. That's a plus in an environment where debt has become more difficult to get, or at least more expensive. "So many investments just don't make sense -- unless you have the cash," says Marsha Slotten, a commercial real-estate broker in Las Vegas.
Despite the Federal Reserve's move last week to cut its overnight interest rate by half a percentage point to 4.75%, many experts believe that small investors still have an advantage when it comes to buying smaller commercial properties. But that advantage could be short-lived if institutional players wade back into the market, which could drive prices up and leave smaller players priced out of the market.
William Hutchinson owns a small Dallas company called Dunhill Partners that buys shopping centers priced between $10 million and $50 million, mostly in Texas, Oklahoma and Louisiana. He says his competitors for these properties until recently often included midsize to large REITs. But these days, Mr. Hutchinson is finding that these firms aren't making as many bids.
He chalks it up to the fact that the shopping centers sometimes include mom-and-pop tenants who don't always have the best credit ratings. In today's credit-sensitive environment, larger investors, particularly ones who have to answer to shareholders, aren't willing to take chances on properties that may seem too risky, he says.
H. Alan Welles, a commercial real-estate broker in West Palm Beach, Fla., acts as a "sponsor" to groups of individual investors who pool their money to buy retail, industrial or office properties, entrusting Mr. Welles with handling the entire transaction, including acquisition, leasing and management. His clients include professionals and retirees in their 50s with a lot of cash.
A few weeks ago, one of Mr. Welles's groups beat out several offers on a $4 million medical-office and retail building in West Palm Beach because they were able to offer all cash and the ability to close with no financial contingencies.
"With us there is no red tape, but the procedures for getting stuff done are so much slower with the larger groups," says Mr. Welles, who deals with commercial properties valued at up to $15 million. "A lot of sellers have gotten burned while trying to hold out for the top dollars, so now they're just looking for fewer headaches."
Leslie Evans, a Palm Beach-based attorney, invests in some of Mr. Welles's groups and will occasionally negotiate their contracts. Because of the opportunities for individual investors right now, he says that more professionals have been calling about investing their money in a group, and the number of these groups has been expanding.
Mr. Evans says the current commercial real-estate market is perfect for the doctors and other professionals in the group who have a high net worth and are taken aback with the stock market's recent volatility. "This is definitely the better opportunity right now for those who are looking to be able to sleep at night a little bit better," he says.
Some smaller investors are even being approached by the larger players for partnerships. John Crossman co-owns a small Orlando, Fla., company that buys area shopping centers priced at between $3 million and $15 million. Not only has he seen the number of bidders on properties drop from around 15 to five in recent weeks; he also says institutional investors are asking him to team up on projects because of his knowledge of the local market.
At a time when taking risks is frowned upon, these larger investors, particularly those making purchases from outside the region, don't want to buy properties without having inside information about the area's rent and job growth and about the local tenant base. "When people get concerned about things, they rely more heavily on the local markets," Mr. Crossman says. "We're seeing an unbelievable amount of people who want to be our operating partner because we have that knowledge."
Mr. Crossman says his experiences were echoed by other smaller investors at a recent conference held in New York by the International Council of Shopping Centers, an industry trade group. "I was in the elevator with a few other small guys like me, and while the speakers at the conference were talking about all these concerns, every single one of us talked about how excited we were about the market because there are opportunities for us," he says.
But the advantage that smaller investors have could be brief as their bigger brethren find solutions to the credit crunch and look to make deals again. "I don't think institutional investors and REITs are going to sit out of any major market any longer than three to maybe six months," says David Illsley, a commercial real-estate broker in Scottsdale, Ariz. "They'll figure out a way to be in the game."
For small investors who've been shut out of the commercial-property market in recent years, there's a bright side to the mortgage meltdown: It's much easier for them to compete.
When Andrew Brooks first offered $15 million for a medical-office building in Valencia, Calif., in early August, the seller turned down the 44-year-old orthopedic surgeon.
But just three weeks later, the seller called back Dr. Brooks, who lives in Los Angeles. The two large real-estate investment trusts that had knocked the doctor out of the running with their bids were no longer interested. Dr. Brooks believes that the companies were unable -- or unwilling -- to come up with the cash.
Related Link Join a reader discussion on the U.S. housing market.
That left Dr. Brooks, who buys medical-office buildings (in addition to performing surgeries related to sports injuries), as the sole player. He quickly put down a "substantial" nonrefundable cash deposit to buy the property for $800,000 less than he had originally offered, and is waiting for the deal to close. Though the marketplace for health-care-related properties has been extremely competitive over the past few years, "if you've got some cash to spend, there's a tremendous opportunity," Dr. Brooks says.
Over the past few years, more investors have wanted to add small apartment complexes, office buildings and shopping centers to their portfolio. Retirees, well-off individuals and the self-employed -- who often lack corporate pensions and retirement plans -- have traditionally used these types of investments to amass long-term wealth and fund their retirement.
But as prices soared, both individual players like Dr. Brooks and small companies that buy such properties, which are typically priced between $1 million and $20 million, found themselves outbid and outmaneuvered by better-capitalized firms, including investment banks and publicly traded real-estate investment trusts, or REITs.
Now, with the capital markets roiling, once-active big firms are being more prudent about making deals. That's opened a window of opportunity for smaller investors who want to buy these properties. "Right now, everyone is trying to figure out how to make these deals work, so while we're in that transition period, the institutional investors are taking a wait-and-see approach," says Mark Larson, national director of Grubb & Ellis's private-capital investment group.
The Upper Hand
Small investors now have an edge in bidding for certain commercial properties. Here's why:
• They often pay with cash, while larger firms typically borrow funds.
• They are more likely to buy properties in need of renovation.
• Bigger firms have become more risk-averse because of the credit crunch.
Tools For Investors
• iiProperty.com is an online property management tool for investors (registration required). Visitors to the site can use the tool to track property expenses, rents collected and cash flow. The site's basic suite of tools are free, however, other tools -- such as automatic tenant invoicing range in costs from $12.99 a month to $64.99.
• Rentometer.com gives apartment landlords (and renters) the chance to compare the rent for a particular unit against other rentals in an area with a simple-to-understand graphical meter.
• Goodmortgage.com provides a calculator to help investors forecast the possible financial outcome of purchasing and renting an investment property based on data such as purchase price and mortgage terms, monthly rental rates, expenses and expected growth in property value.
• About.com offers a downloadable spreadsheet to track the performance of a commercial real-estate investment, as well as definitions and how-tos for mathematical calculations used by real-estate investors.
--Lauren Baier Kim
Smaller investors -- a universe that includes individuals, partnerships, and local and regional investment companies -- can cut deals faster than bigger players, which appeals to sellers fed up with the growing number of deals that are falling through. They're also more willing to buy properties that need improvement, which can be a lucrative but are often deemed too risky for institutional investors and REITs, says Harvey Green, chief executive of Marcus & Millichap Real Estate Investment Services, based in Encino, Calif.
Another big advantage smaller investors have: Many of them pay primarily with cash. That's a plus in an environment where debt has become more difficult to get, or at least more expensive. "So many investments just don't make sense -- unless you have the cash," says Marsha Slotten, a commercial real-estate broker in Las Vegas.
Despite the Federal Reserve's move last week to cut its overnight interest rate by half a percentage point to 4.75%, many experts believe that small investors still have an advantage when it comes to buying smaller commercial properties. But that advantage could be short-lived if institutional players wade back into the market, which could drive prices up and leave smaller players priced out of the market.
William Hutchinson owns a small Dallas company called Dunhill Partners that buys shopping centers priced between $10 million and $50 million, mostly in Texas, Oklahoma and Louisiana. He says his competitors for these properties until recently often included midsize to large REITs. But these days, Mr. Hutchinson is finding that these firms aren't making as many bids.
He chalks it up to the fact that the shopping centers sometimes include mom-and-pop tenants who don't always have the best credit ratings. In today's credit-sensitive environment, larger investors, particularly ones who have to answer to shareholders, aren't willing to take chances on properties that may seem too risky, he says.
H. Alan Welles, a commercial real-estate broker in West Palm Beach, Fla., acts as a "sponsor" to groups of individual investors who pool their money to buy retail, industrial or office properties, entrusting Mr. Welles with handling the entire transaction, including acquisition, leasing and management. His clients include professionals and retirees in their 50s with a lot of cash.
A few weeks ago, one of Mr. Welles's groups beat out several offers on a $4 million medical-office and retail building in West Palm Beach because they were able to offer all cash and the ability to close with no financial contingencies.
"With us there is no red tape, but the procedures for getting stuff done are so much slower with the larger groups," says Mr. Welles, who deals with commercial properties valued at up to $15 million. "A lot of sellers have gotten burned while trying to hold out for the top dollars, so now they're just looking for fewer headaches."
Leslie Evans, a Palm Beach-based attorney, invests in some of Mr. Welles's groups and will occasionally negotiate their contracts. Because of the opportunities for individual investors right now, he says that more professionals have been calling about investing their money in a group, and the number of these groups has been expanding.
Mr. Evans says the current commercial real-estate market is perfect for the doctors and other professionals in the group who have a high net worth and are taken aback with the stock market's recent volatility. "This is definitely the better opportunity right now for those who are looking to be able to sleep at night a little bit better," he says.
Some smaller investors are even being approached by the larger players for partnerships. John Crossman co-owns a small Orlando, Fla., company that buys area shopping centers priced at between $3 million and $15 million. Not only has he seen the number of bidders on properties drop from around 15 to five in recent weeks; he also says institutional investors are asking him to team up on projects because of his knowledge of the local market.
At a time when taking risks is frowned upon, these larger investors, particularly those making purchases from outside the region, don't want to buy properties without having inside information about the area's rent and job growth and about the local tenant base. "When people get concerned about things, they rely more heavily on the local markets," Mr. Crossman says. "We're seeing an unbelievable amount of people who want to be our operating partner because we have that knowledge."
Mr. Crossman says his experiences were echoed by other smaller investors at a recent conference held in New York by the International Council of Shopping Centers, an industry trade group. "I was in the elevator with a few other small guys like me, and while the speakers at the conference were talking about all these concerns, every single one of us talked about how excited we were about the market because there are opportunities for us," he says.
But the advantage that smaller investors have could be brief as their bigger brethren find solutions to the credit crunch and look to make deals again. "I don't think institutional investors and REITs are going to sit out of any major market any longer than three to maybe six months," says David Illsley, a commercial real-estate broker in Scottsdale, Ariz. "They'll figure out a way to be in the game."
US Congress Moves a Step Closer Towards Amending Tax Code to Relieve Those in Foreclosure As the Ways & Means Committee Approves Mortgage Forgiveness
WASHINGTON – The House Committee on Ways and Means unanimously approved H.R. 3648, the Mortgage Forgiveness Debt Relief Act of 2007, today in response to some of the tax issues that have arisen as a result of problems in the subprime mortgage market. Under current law, debt forgiven following mortgage foreclosure or renegotiation is considered income for tax purposes, resulting in tax liability for individuals and families.
The legislation advanced by the Committee today would provide relief to those families by permanently excluding debt forgiven under these circumstances from tax liability. The bill would also help would-be homeowners secure their investments through a long-term extension of the tax deduction for private mortgage insurance, and would ease restrictions for qualifying as housing cooperative corporations.
Finally, the bipartisan bill would tighten requirements taxpayers must meet to exclude gain from the sale of certain homes that have been used as a vacation home or rental property.
Families dealing with the pain of a foreclosure should not have the double whammy of a large tax bill for terminating their mortgage through no fault of their own," said Ways and Means Committee Chairman Charles B. Rangel. I am pleased the Committee joined together to unanimously pass this critical legislation and I look forward to bringing this measure before the full House."This proposed legislation is supported by both the National Association of Realtors and the Mortgage Bankers Association.
The legislation advanced by the Committee today would provide relief to those families by permanently excluding debt forgiven under these circumstances from tax liability. The bill would also help would-be homeowners secure their investments through a long-term extension of the tax deduction for private mortgage insurance, and would ease restrictions for qualifying as housing cooperative corporations.
Finally, the bipartisan bill would tighten requirements taxpayers must meet to exclude gain from the sale of certain homes that have been used as a vacation home or rental property.
Families dealing with the pain of a foreclosure should not have the double whammy of a large tax bill for terminating their mortgage through no fault of their own," said Ways and Means Committee Chairman Charles B. Rangel. I am pleased the Committee joined together to unanimously pass this critical legislation and I look forward to bringing this measure before the full House."This proposed legislation is supported by both the National Association of Realtors and the Mortgage Bankers Association.
Wednesday, September 26, 2007
Property values still going down? Why?
If you wonder why property values are still 'adjusting' - there's actually a pretty good reason and it's not what you think!
When an owner wants to sell their property and contacts an agent, the agent does what is called a "Comparable Market Analysis" in which they compare the values of properties on the market to the owner's home to determine a fair price for it.
There are however two approaches to this - one is ethical and one is not. Many agents these days, in an effort to get the property sold quickly, drop the asking price on the home below that of all the other homes being sold in the area. Then when an offer comes in, they do everything they can to get the seller to agree to the offer, even if it is far below the low asking price! This, of course, is not the right way to sell a home!
This is happening all over the country! Agents, in an attempt to get the homes sold, are not educating their sellers and explaining that the sale needs time to mature and that they have to be willing to hold out for a fair offer. Instead, they are 'throwing the baby away with the bath water' and pressuring the sellers to agree to the lower price instead. This in turn is causing other listing agents, who are following the same tactics to lower the asking prices even further.
The problem is that the sellers don't understand the importance of time. It is imperative that all sellers stick it out and sell their properties for what is fair - not what is fast. By agreeing to market a home lower, it inevitably hurts the property values in the entire community thereby making it more difficult for everyone concerned to get a fair price for their home.
Agents who undercut other agents in an effort to sell a home quicker are working from a lack of experience, lack of ethics and general lack of concern for the market, their customers and the community. It is important to shop for an agent that is willing to market a home for what it's worth and it is important for the seller to understand that taking less for their home is not the best choice over taking their time.
The reason property values continue to spiral downward is because agents are not using skill, care and diligence as they agree to on their listing agreement, to ensure that their seller is going to get the right price for their home. Instead they are selling the seller short and cutting their losses because they lack the experience to explain to a seller how important it is to wait for the right buyer. If agents and sellers alike adopted this philosophy, the market would be strengthened in the seller's favor and the buyers would have to be more reasonable again.
I have seen many too many buyers take advantage of misinformed sellers and unqualified agents. It is not an agent's job to sell a house - it is the agents' job to market a home and get the fair market price for the home and also create a win-win situation between buyers and sellers. It is unethical and unreasonable to expect a seller to suffer a tremendous loss in order to sell their property. It is time for the sellers to understand how important it is for them to stick to their guns but unfortunately unless all sellers collectively do this, the home that is priced below all the rest is still going to be the home that sells first and the agent who lacks the wherewithal to sell the home correctly will get a shorter paycheck but will be paid ahead of everyone else. Ultimately this is the motivation of an agent who undercuts the value of a seller's property to get it sold. It is all about the money!
When an owner wants to sell their property and contacts an agent, the agent does what is called a "Comparable Market Analysis" in which they compare the values of properties on the market to the owner's home to determine a fair price for it.
There are however two approaches to this - one is ethical and one is not. Many agents these days, in an effort to get the property sold quickly, drop the asking price on the home below that of all the other homes being sold in the area. Then when an offer comes in, they do everything they can to get the seller to agree to the offer, even if it is far below the low asking price! This, of course, is not the right way to sell a home!
This is happening all over the country! Agents, in an attempt to get the homes sold, are not educating their sellers and explaining that the sale needs time to mature and that they have to be willing to hold out for a fair offer. Instead, they are 'throwing the baby away with the bath water' and pressuring the sellers to agree to the lower price instead. This in turn is causing other listing agents, who are following the same tactics to lower the asking prices even further.
The problem is that the sellers don't understand the importance of time. It is imperative that all sellers stick it out and sell their properties for what is fair - not what is fast. By agreeing to market a home lower, it inevitably hurts the property values in the entire community thereby making it more difficult for everyone concerned to get a fair price for their home.
Agents who undercut other agents in an effort to sell a home quicker are working from a lack of experience, lack of ethics and general lack of concern for the market, their customers and the community. It is important to shop for an agent that is willing to market a home for what it's worth and it is important for the seller to understand that taking less for their home is not the best choice over taking their time.
The reason property values continue to spiral downward is because agents are not using skill, care and diligence as they agree to on their listing agreement, to ensure that their seller is going to get the right price for their home. Instead they are selling the seller short and cutting their losses because they lack the experience to explain to a seller how important it is to wait for the right buyer. If agents and sellers alike adopted this philosophy, the market would be strengthened in the seller's favor and the buyers would have to be more reasonable again.
I have seen many too many buyers take advantage of misinformed sellers and unqualified agents. It is not an agent's job to sell a house - it is the agents' job to market a home and get the fair market price for the home and also create a win-win situation between buyers and sellers. It is unethical and unreasonable to expect a seller to suffer a tremendous loss in order to sell their property. It is time for the sellers to understand how important it is for them to stick to their guns but unfortunately unless all sellers collectively do this, the home that is priced below all the rest is still going to be the home that sells first and the agent who lacks the wherewithal to sell the home correctly will get a shorter paycheck but will be paid ahead of everyone else. Ultimately this is the motivation of an agent who undercuts the value of a seller's property to get it sold. It is all about the money!
Tuesday, September 25, 2007
Something Home Buyers Should Consider
This article was just emailed to me. I researched the links and added them to the article for your convenience. It gives a good account of what is actually happening and why sitting on the fence, as I discussed recently, may not be the wisest decision:
Something New To Tell Your Reluctant Homebuyers
By Blanche Evans
September 21, 2007
The government is working hard to make homebuying more affordable for buyers, from Congress working to expand Federal Housing Administration insurance to raising loan buyback limits for Fannie Mae and Freddie Mac. The Federal Reserve has lowered short-term target borrowing rates, which impacts consumer interest rates on credit cards, car loans, and mortgage loans among others. Housing is being widely and unfairly blamed for slowing the economy (the real issue is salaries) until recession has taken over inflation as a national worry. In other words, home buyers are getting what they asked for -- so what are they waiting for?
While mortgage applications have risen modestly on lower mortgage interest rates, many buyers are still being rendered inert by new headlines. "Fed's Bernanke Predicts Further Mortgage Turmoil", posted on MarketWatch, found that "more delinquencies and foreclosures can be expected in the subprime, adjustable-rate mortgage market as borrowers face interest-rate resets," Federal Reserve Chairman Ben Bernanke said Thursday.
To buyers, Bernanke's stance could easily translate as "wait to buy! As more homes come on the market, you could get a better deal!"
Or try this one. "Bush Cites 'Unsettling Times' in Housing Market", an AP story covering President Bush's most recent speech addressing the economy. "President Bush on Thursday cited "some unsettling times" in the U.S. housing and credit markets as he sought to assure jittery Americans that the economy is holding up well despite worries about a recession" read the opening paragraph of the story. The story goes on to say that Bush was asked "about concerns by some economists that the housing slump and higher mortgage costs could lead to a recession even in spite of action earlier this week by the Federal Reserve to cut short-term interest rates by a half-percentage point." He responded, ""There is no question that there is some unsettling times in the housing market and credits associated with the housing market," the president said. "But he said he didn't see that spreading to the broader economy, wrote the AP.
If you were a homebuyer, would you feel reassured?
Then there's this one: "Fed Rate Cut No Quick Cure For Housing Mess" found on MSNBC. "And while the Fed’s rate cuts may have provided a psychological boost to the markets, many analysts and builders think it will take more cuts -- and more time -- before the housing market recovers," writes Senior producer, John W. Schoen.
"Maybe we should wait for more interest rate cuts," thinks the wily buyer.
It's easy to imagine that many buyers may continue to bench themselves in the hopes that interest rates and housing prices will go down, and they can make a killing.
Buyers will behave that way if they believe that the Fed lowered mortgage interest rates, which is not what happened at all.
"Mortgage interest rates are tied to mortgage backed securities or mortgage bonds," explains David Reed, real estate author and Realty Times contributor. "Not the Fed." What makes mortgage interest rates go up or down is the prospect of inflation, not lower borrowing costs for banks. If that were true, why are cash advances on credit cards being charged at 28 percent by Chase and other banks?
"We've had a 48-hour window of lower rates, but they're right back where they were two days ago," says Reed. The reason is that when the Fed dropped short-term interest rates 50 basis points, the mortgage industry responded with an 1/8 of a percent cut in mortgage interest rates, but since then, "everybody sobered up and realized that's also a potential for inflation. Money's cheap, people buy more things, and prospects for inflation go up and that leads to higher rates."
While Reed says he believes rates will drift lower on a slower economy, that's not necessarily a good reason for buyers to wait. "Nobody can predict the future."
So here's what you can tell your buyers:
1. Interest rates may not come down at the right time for you.
2. Interest rates are at near-historical lows now. The only thing that will make them go lower is a recession and nobody wants that.
3. Interest rates may not get low enough for you to buy the home you want. If you want to buy, you should buy in a range that you can get with a fixed-rate loan, unless you know you are going to sell within two to five years. If you get an adjustable rate loan, pay extra on the principal with the savings you achieve on the interest rate. That's about $25 for every 1/8 of a point between the adjustable rate and the fixed rate you could have gotten.
4. There's no guarantee that the home you want will be available at the same time as the lowest interest rate is available to you.
5. Interest rates could sink to all-time lows, making you a genius. But that doesn't mean the home you want won't cost more in the meantime.
Copyright © 2007 Realty Times. All Rights Reserved.
------------------------------------------------------------------------------------
So if your goal is to 'buy low' remember that, although I have a crystal ball on my desk, it is merely to prove the point; there is no way to predict what the market will do. So if you like the house, go for it! The time is now before the people who saw the house you love place an offer and you lose out. Sellers can only go so far on their pricing and it appears they have tolerated all that they will tolerate. Any buyer in today's market that feels that pricing will continue to drop is not using common sense. I have seen communities where homes were given away and the only homes you can buy there now are the ones that weathered the storm and are at a reasonable price. If you love the home, buy it. The difference of a few thousand dollars to buy a home that you don't like as much as the one around the corner is not worth the monthly payment difference. People are settling for less just for the price, but they miss the point that after the negotiations are over, they have to live in the house every day for years to come!
Have a great day!
Denise
Something New To Tell Your Reluctant Homebuyers
By Blanche Evans
September 21, 2007
The government is working hard to make homebuying more affordable for buyers, from Congress working to expand Federal Housing Administration insurance to raising loan buyback limits for Fannie Mae and Freddie Mac. The Federal Reserve has lowered short-term target borrowing rates, which impacts consumer interest rates on credit cards, car loans, and mortgage loans among others. Housing is being widely and unfairly blamed for slowing the economy (the real issue is salaries) until recession has taken over inflation as a national worry. In other words, home buyers are getting what they asked for -- so what are they waiting for?
While mortgage applications have risen modestly on lower mortgage interest rates, many buyers are still being rendered inert by new headlines. "Fed's Bernanke Predicts Further Mortgage Turmoil", posted on MarketWatch, found that "more delinquencies and foreclosures can be expected in the subprime, adjustable-rate mortgage market as borrowers face interest-rate resets," Federal Reserve Chairman Ben Bernanke said Thursday.
To buyers, Bernanke's stance could easily translate as "wait to buy! As more homes come on the market, you could get a better deal!"
Or try this one. "Bush Cites 'Unsettling Times' in Housing Market", an AP story covering President Bush's most recent speech addressing the economy. "President Bush on Thursday cited "some unsettling times" in the U.S. housing and credit markets as he sought to assure jittery Americans that the economy is holding up well despite worries about a recession" read the opening paragraph of the story. The story goes on to say that Bush was asked "about concerns by some economists that the housing slump and higher mortgage costs could lead to a recession even in spite of action earlier this week by the Federal Reserve to cut short-term interest rates by a half-percentage point." He responded, ""There is no question that there is some unsettling times in the housing market and credits associated with the housing market," the president said. "But he said he didn't see that spreading to the broader economy, wrote the AP.
If you were a homebuyer, would you feel reassured?
Then there's this one: "Fed Rate Cut No Quick Cure For Housing Mess" found on MSNBC. "And while the Fed’s rate cuts may have provided a psychological boost to the markets, many analysts and builders think it will take more cuts -- and more time -- before the housing market recovers," writes Senior producer, John W. Schoen.
"Maybe we should wait for more interest rate cuts," thinks the wily buyer.
It's easy to imagine that many buyers may continue to bench themselves in the hopes that interest rates and housing prices will go down, and they can make a killing.
Buyers will behave that way if they believe that the Fed lowered mortgage interest rates, which is not what happened at all.
"Mortgage interest rates are tied to mortgage backed securities or mortgage bonds," explains David Reed, real estate author and Realty Times contributor. "Not the Fed." What makes mortgage interest rates go up or down is the prospect of inflation, not lower borrowing costs for banks. If that were true, why are cash advances on credit cards being charged at 28 percent by Chase and other banks?
"We've had a 48-hour window of lower rates, but they're right back where they were two days ago," says Reed. The reason is that when the Fed dropped short-term interest rates 50 basis points, the mortgage industry responded with an 1/8 of a percent cut in mortgage interest rates, but since then, "everybody sobered up and realized that's also a potential for inflation. Money's cheap, people buy more things, and prospects for inflation go up and that leads to higher rates."
While Reed says he believes rates will drift lower on a slower economy, that's not necessarily a good reason for buyers to wait. "Nobody can predict the future."
So here's what you can tell your buyers:
1. Interest rates may not come down at the right time for you.
2. Interest rates are at near-historical lows now. The only thing that will make them go lower is a recession and nobody wants that.
3. Interest rates may not get low enough for you to buy the home you want. If you want to buy, you should buy in a range that you can get with a fixed-rate loan, unless you know you are going to sell within two to five years. If you get an adjustable rate loan, pay extra on the principal with the savings you achieve on the interest rate. That's about $25 for every 1/8 of a point between the adjustable rate and the fixed rate you could have gotten.
4. There's no guarantee that the home you want will be available at the same time as the lowest interest rate is available to you.
5. Interest rates could sink to all-time lows, making you a genius. But that doesn't mean the home you want won't cost more in the meantime.
Copyright © 2007 Realty Times. All Rights Reserved.
------------------------------------------------------------------------------------
So if your goal is to 'buy low' remember that, although I have a crystal ball on my desk, it is merely to prove the point; there is no way to predict what the market will do. So if you like the house, go for it! The time is now before the people who saw the house you love place an offer and you lose out. Sellers can only go so far on their pricing and it appears they have tolerated all that they will tolerate. Any buyer in today's market that feels that pricing will continue to drop is not using common sense. I have seen communities where homes were given away and the only homes you can buy there now are the ones that weathered the storm and are at a reasonable price. If you love the home, buy it. The difference of a few thousand dollars to buy a home that you don't like as much as the one around the corner is not worth the monthly payment difference. People are settling for less just for the price, but they miss the point that after the negotiations are over, they have to live in the house every day for years to come!
Have a great day!
Denise
Monday, September 24, 2007
Rainy weekend slows the Real Estate Market
Rain throughout the weekend combined with Sunday football seems to have slowed the shopping this weekend. Buyers are not in a hurry as they have demonstrated for the past two years. The streets of Channelside were quiet and although I had an open house at one of my lisitngs at 205 N 12th Street, visitors were limited. This is a gorgeous property though and the people who saw it were impressed! If you are looking this is actually a loft that was featured on HGTV "Rezoned" on August 1, 2007. Worth seeing! This unique property is very valuable and being sold below market for a quick sale. It is worth a lot more!
Short sales are everywhere and buyers have the opportunity to take advantage of the unique opportunity to buy a home for less than the seller owes the bank!
I will be posting short sale information often to allow others to learn about this important opportunity available to both buyers and sellers.
A short sale is an arrangement in which the seller approaches their mortgage lender and notifies them that they wish to sell their home but it is not worth what their loan balance is. This situation arises frequently when home owners who recently took advantage of the low interest rates and refinanced their homes just before the market started to soften and the property values decreased. It is common these days for a homeowner to owe more than their home would appraise for and it is wise for these homeowners to wait out the slow market until they can recover the value in their property.
There are always circumstances that force a homeowner to sell their property even in the worst market. Relocation, rising interest from Adjustable Rate mortgages, increases in taxes, illness, losing a job, and many other issues can force a seller to sell their home at a time that is not conducive to their making any money on such a transaction. It is in this situation that a seller may be forced to sell their home and they discover that their home is not worth the money they owe on it.
If a seller is faced with this situation, they can approach their mortgage holder and ask for consideration to sell the house for its current value and to take less for the payoff. This type of arrangement generally involves a good amount of paperwork and proof to the lender that there are extenuating circumstances.
The bank will request the following information from the homeowner applying for a short sale approval:
Approval from the lenders for short sales:
1. Hardship letter – the sadder the better – Death, lost jobs, sickness
2. Recent bank statements showing no income
3. Last 2 years tax returns or some kind of financial statement even from a CPA
4. Listing Agreements
5. Comparable Market Analysis for each property
6. Current pictures – if any have been vacant showing sign of distress is good too.
7. HUD statement from a title company for estimated closing costs
Much of this is accomplished by hiring a licensed Real Estate Professional. Someone who knows this type of transaction is best - but the opportunity is there to sell a home for less than it is currently mortgaged for.
If you would like to know what consequences are of doing a short sale and how it effects the seller's finances, please check back soon!
Have a great day!
Denise
Short sales are everywhere and buyers have the opportunity to take advantage of the unique opportunity to buy a home for less than the seller owes the bank!
I will be posting short sale information often to allow others to learn about this important opportunity available to both buyers and sellers.
A short sale is an arrangement in which the seller approaches their mortgage lender and notifies them that they wish to sell their home but it is not worth what their loan balance is. This situation arises frequently when home owners who recently took advantage of the low interest rates and refinanced their homes just before the market started to soften and the property values decreased. It is common these days for a homeowner to owe more than their home would appraise for and it is wise for these homeowners to wait out the slow market until they can recover the value in their property.
There are always circumstances that force a homeowner to sell their property even in the worst market. Relocation, rising interest from Adjustable Rate mortgages, increases in taxes, illness, losing a job, and many other issues can force a seller to sell their home at a time that is not conducive to their making any money on such a transaction. It is in this situation that a seller may be forced to sell their home and they discover that their home is not worth the money they owe on it.
If a seller is faced with this situation, they can approach their mortgage holder and ask for consideration to sell the house for its current value and to take less for the payoff. This type of arrangement generally involves a good amount of paperwork and proof to the lender that there are extenuating circumstances.
The bank will request the following information from the homeowner applying for a short sale approval:
Approval from the lenders for short sales:
1. Hardship letter – the sadder the better – Death, lost jobs, sickness
2. Recent bank statements showing no income
3. Last 2 years tax returns or some kind of financial statement even from a CPA
4. Listing Agreements
5. Comparable Market Analysis for each property
6. Current pictures – if any have been vacant showing sign of distress is good too.
7. HUD statement from a title company for estimated closing costs
Much of this is accomplished by hiring a licensed Real Estate Professional. Someone who knows this type of transaction is best - but the opportunity is there to sell a home for less than it is currently mortgaged for.
If you would like to know what consequences are of doing a short sale and how it effects the seller's finances, please check back soon!
Have a great day!
Denise
Sunday, September 23, 2007
Condos, Townhomes and Lofts in Tampa Florida
Tampa Florida has been cited as one of the best places to invest in real estate. Right now the words "Real Estate" seem to raise fear and apprehension in the average person. The market has softened tremendously over the past two years, but the Tampa Florida market is about to take the trip back up at astonishing speed!
Financial Analyst Lawrence Yun, of the National Association of Realtors, has predicted that Tampa is prime for a 'V' market. It has dropped dramatically but we are poised for a very strong recovery, which has already begun. The Fed dropped interest rates by 1/2% this week - which means that buyers need to get moving! If you have been on the fence about buying, the time has come! If you see a few thousand adjustment down over the next three months, it would be a lot - you will be experiencing a minimum of 10% increase in property values in 2008 - at least this is what the experts predict!
I live in the Channelside District of Tampa Florida. The downtown condo/townhome market is the best investment in all of Tampa at this time! With communities like Grand Central at Kennedy, Ventana, The Place, Victory Lofts, the Towers at Channelside, and so much more, the buzz is to get in on it before you miss it! If you are considering a purchase in Tampa, please contact me and I will give you a tour of the city that has been my home for the past 20 years. I know Tampa, St. Petersburg and Clearwater and can help you find just what you want!
I have helped my buyers earn tremendous returns on their purchases with my keen sense of value and my extensive knowledge of real estate and the market. I look forward to hearing from you! You can reach me at www.EXITAlternative.com or you can call me direct at 813-267-5818.
Financial Analyst Lawrence Yun, of the National Association of Realtors, has predicted that Tampa is prime for a 'V' market. It has dropped dramatically but we are poised for a very strong recovery, which has already begun. The Fed dropped interest rates by 1/2% this week - which means that buyers need to get moving! If you have been on the fence about buying, the time has come! If you see a few thousand adjustment down over the next three months, it would be a lot - you will be experiencing a minimum of 10% increase in property values in 2008 - at least this is what the experts predict!
I live in the Channelside District of Tampa Florida. The downtown condo/townhome market is the best investment in all of Tampa at this time! With communities like Grand Central at Kennedy, Ventana, The Place, Victory Lofts, the Towers at Channelside, and so much more, the buzz is to get in on it before you miss it! If you are considering a purchase in Tampa, please contact me and I will give you a tour of the city that has been my home for the past 20 years. I know Tampa, St. Petersburg and Clearwater and can help you find just what you want!
I have helped my buyers earn tremendous returns on their purchases with my keen sense of value and my extensive knowledge of real estate and the market. I look forward to hearing from you! You can reach me at www.EXITAlternative.com or you can call me direct at 813-267-5818.
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