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Armonk NY Real Estate

Best Places To Invest In U.S. Real Estate | Armonk NY Homes

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In optimizing the relationship of risk and return, many would argue there’s not a better investment right now than U.S. residential real estate, especially in various geographic regions of the country. Aside from directly investing in U.S. real estate, some other strong investment options are homebuilders such as KB Homes (KBH), Lennar (LEN), Toll Brothers (TOL), and Taylor Morrison (TMHC). Silver Bay (SBY) and Blackstone (BX) have also been extremely active in acquiring distressed real estate in various markets and leasing the properties. Last, but not least, one could also go the route of exchange traded funds with iShares Dow Jones US Real Estate ETF (IYR) and the SPDR Homebuilders ETF (XHB).

While the risk / return of U.S. real estate looks extremely attractive right now, the resurgence of residential real estate in the U.S. has been somewhat bifurcated. By applying four filters, this article identifies the best regions in the country for potential appreciation in home prices.

There are many variables that can impact real estate and prices, but one of the more significant variables that has impacted the recent resurgence of U.S. real estate is how various states conduct their foreclosure process. All U.S. states subscribe to either “Title Theory” or “Lien Theory” in how they go about the foreclosure process. “Title Theory” states basically process foreclosures in a more expedited manner using non-judicial proceedings, while “Lien Theory” states tend to have a much more protracted foreclosure process using judicial proceedings. With the Great Recession resulting in so many foreclosures across the country, “Title Theory” states have been able to process these foreclosures much faster than “Lien Theory” states. This has essentially allowed “Title Theory” states to clear their delinquent loans and reduce “shadow” inventory to an insignificant supply. As a function of the free market in these states, supply has been significantly reduced to a point well below equilibrium and thus the basic economic fundamentals of supply & demand have kicked in and prices have and continue to move up. Consequently, most “Lien Theory” states have not been able to process their foreclosures expediently, and hence they still have many delinquent loans and a higher potential for “shadow” inventory. Lender Processing Services provides a very thorough analysis of these differences as well as a state by state analysis, here’s their most recent report.

via seekingalpha.com

Attic insulation for homeowners on a budget | Armonk Real Estate

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Q: I need to insulate my attic since what I have up there is little to nothing. The small brick home is only 1,450 square feet. What is the best stuff to put up there at reasonable cost? What is the best stuff that I can install myself? —Annette Z.

A: One of the easiest and most cost-effective ways to insulate an attic if you’re having a contractor do it is to have him blow in loose-fill fiberglass insulation.

If you’d like to do the work yourself to save some money, I’d suggest blown-in cellulose. It’s a pretty straightforward project, although it is a little messy. Simply open up the bags of cellulose (it’s a gray, papery material, made primarily from ground and treated newspaper) and dump them into the blower. Direct the hose from the blower into the attic, and spray a uniform layer of insulation. Complete instructions, including safety precautions for protecting yourself and creating air spaces around chimneys and other heat-producing fixtures, are included with the insulation.

Blowers and bags of cellulose insulation are available at most home centers and some other retailers that sell insulation. Many home centers and larger retailers will also give you free use of the blower if you purchase a certain minimum quantity of insulation, so there’s a way to save even more.

via inman.com

Americans Exit the Housing Crisis with New Appreciation for Renting | Armonk Homes

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Six years of crisis have changed forever the way Americans think about housing.  It’s good news for rental housing and not so good news for the home ownership industry, according to a massive new study conducted by Hart Research for the MacArthur Foundation.

“Transformational” changes have taken place in the way people think about housing as a result of their often traumatic experiences during the housing crisis.  No longer is owning a home considered more stable than renting, and the stigma associated with renting has dissipated following years of headlines about homes lost to foreclosure and financial security that disappeared with millions of homeowners’ equity.

Though nearly three out of four (72 percent) of the renters among the 1433 adults who took part in the survey still aspire to own a home at some point in their lives, homeownership was the big loser in the study that included a survey and ten focus groups.

Some key findings:

  • There’s been a seismic shift in renting versus owning. Some 57 percent of adults believe that “buying has become less appealing,” and by nearly the same percentage (54 percent), a majority believes that “renting has become more appealing” than it was before, producing a net shift of 60 percent.
  • Nearly half of current owners (45 percent) can see themselves renting at some point in the future.
  • Homeownership is no longer synonymous with the American Dream. Three in 5 adults (61 percent) believe that “renters can be just as successful as owners at achieving the American Dream.” This sentiment is broadly felt, among owners (59 percent) as well as renters (67 percent), and across all regions of the country.
  • Ownership is no guarantee of housing stability. Nearly half of all respondents (45 percent), owners and renters, have experienced a time in their life when their “housing situation was not stable and secure.”

These changing attitudes extend to the way Americans perceive governmental housing policies.  After having been provided with information about U.S. housing policy and demographic and lifestyle changes, more than 3 in 5 self-identified Democrats (69%), Republicans (62%), and Independents (65%) believe the “focus of our housing policy should be fairly equally split on rental housing and housing for people to own.” This balanced approach toward government policies supporting both rental housing and homeownership shows similar support among all races, ages, regions, and income levels.

via realestateeconomywatch.com

Lower Rates Benefit Richer Homeowners Most | Armonk Real Estate

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The Federal Reserve’s policy of buying mortgage-backed securities to keep mortgage rates low may be bolstering upper tier home values rather than helping to make homeownership more affordable for entry-level buyers.

For decades home buying demand has directly reflected mortgage interest rates, but no more. One question that has baffled policy makers for six year is: Why haven’t housing markets responded to historically low mortgage rates?

In fact, record low rates have had an impact, according to a new analysis by three contributing editors of Home Value Forecast, just not the impact that the Fed anticipated.

“It is very likely that the top tiers of the owner occupied housing market are the ones benefiting the most from lower mortgage rates as this group has been less affected by credit score downgrades or more restrictive underwriting,” the economists said.

Since the housing crash in 2008, the economists, James R. Follain, Norman Miller, and Michael Sklarz, argue three factors have made lower mortgage rates relatively useless for lower income buyers.

  • Credit scores for many households have been impacted by defaults, loan modifications, foreclosures, job losses and the breadth of the impact has been sufficient to affect millions of households who now must become or are already renters. Even though buying may be cheaper than renting, such households have little choice but to sit on the sidelines for a few more years.
  • Tight underwriting has increased both the time required to secure a mortgage loan and the challenges for those with less secure income streams. Those paid based on self-reported productivity are being affected more severely since the lenders are now requiring more conservative assumptions on future earnings. Appraisals are also being kicked back if they are not conservative in the selection of appraisal comps, and so the risk tolerance pendulum has swung towards extreme conservatism.
  • The investment appeal of housing and presumption that prices can only go up has lost its shine. Many households had stretched in the 2000-2005 run up and some even invested in second homes or investment properties hoping to flip these units at higher prices. Those late to the party got burned.

The economists analyzed the impact of low rates for fixed rate mortgages on sales in two major markets, Chicago and Phoenix,

“Affordability is definitely improved when mortgage rates are lower and yet the beneficiaries of these more attractive mortgage rates are not evenly distributed among households of all incomes and wealth. It is very likely that the top tiers of the owner occupied housing market are the ones benefiting the most from lower mortgage rates as this group has been less affected by credit score downgrades or more restrictive underwriting,” they concluded.

“At the same time we expect that investors have supported the lowest price tiers and are now bidding up the remaining REO sales in an attempt to lap up what is left of distress. Prices in the bottom housing price tiers are still dealing with foreclosure inventory hangovers in some markets with slow and clogged foreclosure systems. Markets where distress has been dispatched more expediently seem to be recovering the fastest,” they said.

via realestateeconomywatch.com

Florida Shifts into Reverse | Armonk Real Estate

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While the rest of the nation’s housing markets experience various levels of recovery, most markets in Florida seem to be relapsing to the heyday of the Foreclosure Era after a brief period of improvement.

With delinquencies and defaults ranking among the worst in the nation, Florida is also burdened with extraordinary backlogged inventories in this judicial state which is a nexus for foreclosure legal battles that have slowed processing down more than elsewhere. The result is that Florida’s beach resorts and vacation spots are easy pickings for hedge fund investors.

Jack McCabe, a pre-eminent Florida real estate economist, begins a conversation with some frightening numbers:

  • Florida is once again leading the nation in new foreclosures. In February RealtyTrac reported that Florida posted the nation’s highest state foreclosure rate for the sixth consecutive month in February, reporting one in every 282 housing units with a foreclosure filing during the month. Florida cities accounted for seven of the nation’s 10 highest metro foreclosure rates in February, led by the Miami, Orlando, Ocala, Tampa and Palm Bay metro areas in the top five spots.
  • More than 1.1 million of Florida’s 9 million residences, or roughly 11 percent, are in some stage of distress that most likely will result in sales in the next two to three years. To put that into perspective, the entire national visible inventory of foreclosures today is 1.1 million, according to CoreLogic.
  • About 550,000 mortgage holders in Florida have not made a mortgage payment in more than 90 days but have not received a notice of foreclosure. Banks shelved new foreclosure filings for much of 2012 while several lawsuits were pending and previous fraudulent foreclosure filings were adjudicated. As a result, the state’s shadow inventory has ballooned. At the end of 2012, 371,119 foreclosure cases were open in Florida.
  • The current backlog of unsold inventory is nearly half as large as all the foreclosures completed in the state over the past six years. Since 2006, 450,000 foreclosures have been completed in Florida. Banks still own 200,000 real estate owned properties, or REOs.

Florida’s foreclosure problems have blunted the positive rate of price increases achieved the so-called Florida Phenomenon two years ago and only one of the state’s markets, Tallahassee registered a negative media list price compared to last year in Realtor.com’s February report.

One of the most important outcomes of Florida’s chronic foreclosure crisis is the arrival of massively financed hedge funds ready to spend billions to buy foreclosures as cheaply as 50 cents on the dollar in some of the world’s finest resort destinations. Investors played the central role the renaissance in 2011 and now McCabe reports they are very active.

Large investors, including Waypoint Homes of California and Blackstone Group are very active in the state. Blackstone has focused on the Tampa market and erroneous report circulated earlier this year that Blackstone planned to spend a billion dollars in the Tampa market. Now it is reportedly spending a reported $100 million per week to buy single-family homes and has purchased 250 single-family homes in the Sarasota area.

One measure of the impact of hedge funds investors is bulk sales of foreclosures sold before they are marketed as REOs and listed through Realtors on multiple listing services.

“It used to be that Realtors handled 75 to 77 percent of the transactions in a normal marketplace,” said McCabe. “But now I think it’s closer to 60 percent.”

Funds planning to buy, rehab and rent foreclosures have an improving market. The loss in homeownership, damaged credit and job losses have driven rental demand to the highest level on record. In 2005, Florida had a 71 percent-29 percent split between homeowners and renters. That ratio has rapidly changed to 63 percent buyers and 37 percent renters.

via realestateeconomywatch.com

Hedge Funds are Fueling Foreclosure Inflation | Armonk Real Estate

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Though hedge fund purchases on a national level have had minimal impact, in the nation’s hottest foreclosure markets hedge funds, or institutional investors, are contributing to double digit foreclosure price increases and dramatic declines in REO inventories.

A new analysis of 16 of the leading foreclosure markets by CoreLogic economist Sam Khater suggests that institutional investors are driving up prices in six hot foreclosure markets where institutional investors’ purchases increased last year.

“The media has focused attention on institutional investors using cash to invest in single-family residential properties to rent, but relative to the overall market, the scale of their purchases is still very small,” Khater said. He noted that Blackstone, reportedly the largest hedge fund investor, has committed to buy 125,000 properties in 2013. By contrast, small investors purchased sone 600,000 homes using first-lien financing last year.

However, hedge funds are increasing their investments and in a few selected markets their impact was very large last year.

Phoenix saw prices rise 37 percent over 2011, Las Vegas rose 30 percent and in the balance of the six markets foreclosure prices increased by double digit amounts.

“More importantly, the ripple effects are greatly impacting the broader market,” Khater wrote. “Lower end home prices in markets with rising shares of institutional investors are up 15 percent from a year ago, compared to only 6 percent for the remaining markets.”

Khater said the large volume declines of foreclosures in Las Vegas, Atlanta and Phoenix are to do hedge fund activity, where declines in California markers are primarily to do individual investors.

Khater said institutional investors are clearly concentrated in five states: Florida, Georgia, Arizona, Nevada and North Carolina. In Miami last year, hedge funds accounted for 30 percent of REO sales; 23 percent in Phoenix; 21 percent in Charlotte; 19 percent in Las Vegas; and 18 percent in Orlando.

Hedge funds were much less active in California and the Midwest. In the Midwest, REOs remained elevated compared to Florida and Southwestern markets.

“Minneapolis and Chicago are drawing less interest from both types of investors generally, relative to these other markets. Only Detroit is garnering interest from institutional investors,” Khater said.

via realestateeconomywatch.com