Monthly Archives: February 2011

A bright spot in housing’s bad market: Rentals

At a time when virtually all things real estate have been distressed, there’s one corner of the sector that has been fruitful for investors. Many factors working against the residential housing market have actually helped returns on real estate investment trusts.

REITs — which invest in commercial properties from office buildings to shopping malls, as well as rental apartments — have outperformed the S&P 500 since the financial crisis. Total returns for REITs were 28% in both 2009 and 2010, besting the S&P 500, which returned 23% and 15%, respectively, according to the National Association of Real Estate Investment Trusts, the industry trade organization. Though the gains in REITs are still 20.84% below their February 2007 peak, their performance is impressive.

Indeed, a few factors make REITs especially attractive, even with the fragile economic recovery. For one, prices for REITs don’t necessarily move in tandem with the broader stock market. They tend to rise and fall with the commercial property market. And because a REIT (by law) must distribute at least 90% of its income to shareholders, the investments pay relatively high dividends.

The best performers are tied to the residential rental market, such as Campus Crest Communities (CCG) and Camden Property Trust (CPT). In 2010, investments in apartment complexes led gains in the overall REIT market with total returns at 47%, followed by lodging and resorts at nearly 43%, free-standing stores at about 37% and regional shopping malls at about 36% (see also The American mall: Back from the dead). 

The returns from apartment REITs are due in large part to a housing market still in disarray — and they might just continue being a wise investment, given the grave market for buying single-family homes.

 

Via Fortune: Full Story

Existing Home Sales Inch Up

NEW YORK (CNNMoney) — Sales of existing homes recorded modest gains in January, the third straight month of month-over-month increases.

According to the National Association of Realtors, homes sold at an annual rate of 5.36 million in January, up 2.7% from December and 5.3% higher than January 2010 sales. At the same time, the median home price fell 3% to $158,000, compared to a year earlier.

It was the first time in seven months that the monthly sales total was higher than the year before.

“The up trend in home sales is consistent with improvements in the economy and jobs,” said Lawrence Yun, NAR’s chief economist.

The report was slightly stronger than expected. A consensus of experts surveyed by Briefing.com had expected sales to hit 5.23 million.

Yun pointed out that home sales have benefited from unusually favorable conditions: Mortgage rates are still very low; there’s a large supply of homes to choose from; and home prices have fallen to near post-housing bust lows.

One factor holding buyers back is the still tight mortgage lending.

“Buyers have been constrained by unnecessarily tight credit,” said Yun. “As a result, there are abnormally high levels of all-cash purchases, along with rising investor activity.”

NAR reported that all-cash sales went up to 32% of the total, up from 26% a year earlier. It estimated the percentage of investor purchases hit 23%, up from 17% a year ago.

“Unprecedented levels of all-cash purchases — primarily of distressed homes sold at deep discounts — undoubtedly pulls the median price downward,” said NAR president, Ron Phipps.

Whatever the source of the sales, they do have a welcome impact on supply. Inventory dropped 5.1% to 3.38 million units, a 7.6-month supply at the current rates of sales. That was the lowest inventory level in more than a year.

Normally, a five- or six-month supply is considered a good balance between supply and demand. That’s when sellers will start to regain some of the “pricing power” they’ve lost in the bust.

Right now, said Hoffman, “Sellers are desperate to sell and buyers bidding low.”

Full Story on CNN Money

Hire A Bedford NY Realtor To Buy Your Home | Bedford NY Homes

 

HomeGain Survey Finds Home Sellers Fare 50% Better in Getting Their Homes Sold Using a REALTOR® Than Selling On Their Own

HomeGain’s For Sale By Owner (FSBO) vs. REALTOR® survey reveals home sellers’ success rates and satisfaction; Home sellers have greater success and higher satisfaction with the home sale process using a REALTOR® than going FSBO

Emeryville, CA (Vocus/PRWEB) February 24, 2011

HomeGain.com, a leading online real estate resource that connects home buyers and sellers with real estate professionals, today announced the results of its For Sale By Owner (FSBO) vs. REALTOR® survey.

HomeGain surveyed over 1,000 homeowners asking whether they used a REALTOR® to sell their home or whether they attempted to sell it themselves. Eighty-three percent said they used a REALTOR® to sell their home and 17 percent said they tried to sell their home on their own.

Fifty-nine percent of home owners that used a REALTOR® to sell their home were successful vs. 39 percent of FSBO’s, reflecting a 50 percent higher closing rate for those home sellers using a REALTOR®.

Eighty-one percent of homeowners that used a REALTOR® to try and sell their homes said they would use a REALTOR® again for their real estate needs.

Eighty-eight percent of home owners who sold their homes using a REALTOR® said they would use a REALTOR® again.

Seventy-one percent of FSBOs who managed to sell their homes on their own said they would try and sell their home on their own again.

“It is especially striking that homeowners fare significantly better in selling their homes using a REALTOR® than selling on their own,” said Louis Cammarosano, General Manager of HomeGain. “Due to that relative success, the level of satisfaction in the home selling process is also higher for home sellers utilizing the services.

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Downtown Brooklyn Residential Market Is Way Up | Mt Kisco NY Homes – Robert Paul’s blog | Bedford NY Real Estate

 

Brooklyn by robert paul

 

Early last year, Michael Weiss began attending tenant board meetings at the Brooklyner, Avalon Fort Greene and a handful of other luxury residential towers in downtown Brooklyn. In October, Mr. Weiss, director of the MetroTech Business Improvement District, threw the group's first neighborhood block party on Bridge Street, with live music, rides and food. He is now organizing a community stoop sale on Lawrence Street that's scheduled for May.

“We've got to keep our focus on new residents,” Mr. Weiss said. “They're essential to our area's growth.”

True, but that wasn't the intention when the Department of City Planning approved a comprehensive redevelopment plan for downtown Brooklyn in 2004. What it envisioned was a commercial district full of glittering office towers. But downtown has become the borough's fastest-growing residential neighborhood, and local officials are adjusting.

“We were supposed to get the third-largest business district in the city [behind midtown and lower Manhattan],” said Robert Perris, manager for Brooklyn's Community Board 2, which includes downtown. “What we've gotten is a high-rise residential neighborhood.”

Filling up

Since 2004, the area has seen the addition of 23 residential buildings with a total of more than 4,300 units, according to the Downtown Brooklyn Partnership. They range from condominiums in the Williamsburgh Savings Bank building, a mixed-use project co-owned by basketball legend Earvin “Magic” Johnson, to rental apartments in the Brooklyner, which in 2009 became the borough's tallest building. Another 1,000 units are under construction, according to the partnership.

Many projects are filling up quickly. Dklb Bkln, a 36-story, 365-unit rental building on DeKalb Avenue where one-bedroom apartments can fetch almost $2,800, is now 97% occupied, according to a company spokesman. Similarly, only seven of 246 condos remain available at be@schermerhorn, on Schermerhorn Street; two-bedroom units there have sold for as much as $829,000.

“One of the components of a healthy downtown is having a 24/7 community with a vibrant residential sector,” said Joe Chan, president of the Downtown Brooklyn Partnership. “We're delighted.”

Not everyone is thrilled.

City Councilwoman Letitia James, who represents large sections of the downtown area, argued that the boom has excluded low- and middle-income families. She also noted that the neighborhood lacks schools, food stores and other necessary services and amenities.

“We were sold a bill of goods,” Ms. James said. The residential component should have more affordable housing, she added, but what she most wants to see is the thriving commercial center that the city initially proposed.

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Seth’s Blog: 30%, the long tail and a future of serialized content

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30%, the long tail and a future of serialized content

The 1960s and 70s were the golden age of magazines. Why?

  • Lots of people wanted to read them
  • The newsstand could only hold a few of them (barrier to entry permits some to win)
  • The winners had no trouble selling ads because they had motivated readers, in quantity
  • The cost of making one more edition of the magazine was relatively low

Enter tablets. To some, it feels like the dawn of a new golden age. People page through apps like Wired and gasp at the pretty pictures and cool features. Surely, we're going to recreate that moment.

Here's the problem, and here's how Apple is making it much worse:

The newsstand is infinite. That means that far more titles will have far fewer subscribers. There are more than 60,000 apps on the newsstand. Hard to be in the short head when the long tail is so long…

plus, the cost of each issue is far higher, because it costs a lot more to pay a videographer, a video editor, a programmer, etc. than it does to pay John Updike to write 4,000 words…

plus, advertisers are harder to come by, because the number of readers is always going to be lower than it was back then, and the ads are easier to skip.

Of course, the good news is that the publisher doesn't have to pay for paper, so the profit on each subscriber ought to be way higher. Except…

Except Apple has announced that they want to tax each subscription made via the iPad at 30%. Yes, it's a tax, because what it does is dramatically decrease the incremental revenue from each subscriber. An intelligent publisher only has two choices: raise the price (punishing the reader and further cutting down readership) or make it free and hope for mass (see my point above about the infinite newsstand). When you make it free, it's all about the ads, and if you don't reach tens or hundreds of thousands of subscribers, you'll fail.

In a rare glitch, John Gruber got Apple's decision about the 30% subscription task completely wrong. By his logic, Apple would have been just as good for its users if the tax was 60%.

For content to be fabulous, for tablets to be more than game platforms, folks like Apple need to do two things:

  • Reward creators instead of taxing them.
  • Create promotional channels so that curated great stuff (not merely things from big companies) has a chance to reach a mass audience.

The web has been a hotbed of siloed content, of deep dives for small audiences. The large scale stuff, though, has tended to be mostly about gossip and other quick reads that's cheap to produce. Tablets offer a new chance to create content worth paying for. Paving the way for that to happen is a smart move for anyone who cares about the audience and the devices.

Posted by Seth Godin on February 25, 2011 | Permalink

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RealEstateEconomyWatch.com » Home Sellers Regret Going it Alone » Print

 

Homeowners who used a real estate professional to sell their homes reported a 50 percent better closing rate than those who went it alone, according to a new consumer survey by HomeGain.

Fifty-nine percent of home owners that used a real estate professional to sell their home were successful vs. 39 percent of for-sale-by-owners, reflecting a 50 percent higher closing rate for those home sellers using a professional.Eighty-one percent of homeowners that used a professional to try and sell their homes said they would use a professional again for their real estate needs.

HomeGain found that 17 percent of potential sellers would try to sell their homes on their own, a significantly higher number than the 9 percent market share for FSBOs reported in the National Association of Realtors’ 2010 Profile of Home Buyers and Sellers. 

FSBO rates as measured by the NAR Profile over the years has fallen from 14 percent of sales in 2003 to 9 percent last year.  However, the HomeGain data may not represent a rise in actual FSBO transactions.  The NAR study measures actual transactions after they close, while HomeGain surveyed the intentions of homeowners who had not yet put their homes on the market.

In fact, HomeGain found that 24 percent of FSBO sellers eventually enlisted the aid of a real estate professional to help sell their homes.   Only 71 percent of FSBO sellers who managed to sell their homes on their own said they would try and sell their home on their own again.

“It is especially striking that homeowners fare significantly better in selling their homes using a real estate professional than selling on their own.” said Louis Cammarosano, General Manager of HomeGain. “Due to that relative success, the level of satisfaction in the home selling process is also higher for home sellers utilizing the services of a REALTOR® than those who try to sell their homes on their own.”