AEI Study Shows How FHA Financing Is Destroying Thousands Of Neighborhoods

According to American Enterprise Institute Fellow, Edward Pinto, the FHA mortgage insurance program is helping to destroy the neighborhoods that FHA is most heavily involved in. A detailed study of FHA lending practices and default rates shows that lower income borrowers and home owners with FHA loans are much more likely to default on their loans. And when these borrowers, their home, and their FHA loans are concentrated within a specific zip code, the result tends to be drastically higher foreclosure rates, leading to lower home values and loss of equity across the entire area.

This helps to explain why some cities such as Atlanta and Detroit are still struggling to recover from the housing market melt-down. An excellent overview of the problem, along with maps that show foreclosure rates and FHA participation levels down to individual zip codes can be found at NightmareAtFHA.com There are very high concentrations of FHA loans in many of the most troubled zip codes in the nation. In these areas, even property owners who have their property paid for may suffer a significant loss of equity due to the foreclosure of dozens or hundreds of neighboring homes. In some zip codes the default rate on FHA insured mortgages is as high as 25%. Compare that to a private sector default rate of less than 4%.

(Photo credit: Wikipedia)

The problem is with the high number of loans approved by FHA for borrowers who are not actually able to afford to own and maintain a home or cannot afford the price of the home they have chosen to purchase with an FHA insured mortgage. Lenders have little incentive to curb the use of these loans, because they are insured by the taxpayers. This means that if a borrower with an FHA loan does default, the lender can recover the entire value of their loan from the Federal Housing Administration. (FHA)

Another reason for the much higher rate of default is due to the way in which FHA loans are underwritten, using a benchmark known as the “debt-to-income-ratio”. This ratio uses the gross income amount, and therefore it does not take into account the actual amount of take home pay that is available for a mortgage payment. The result is that FHA borrowers tend to borrow too much money. Buyers are commonly encouraged to purchase “as much home as they can qualify for” rather than thinking about other expenses such as home maintenance and repairs, along with other big unplanned expenses such as an emergency car repair.

FHA mortgages are notoriously expensive, in spite of their reputation as the mortgage of choice for lower income borrowers. There are a number of fees attached to this loan. Even at today’s lower interest rates, FHA loans carrying a 30 year term with a 5% down payment will cost the borrower about 2.5 times the total amount borrowed over the life of the loan.

This means that a $100,000 home with a 95% Loan to Value will cost about $250,000 by the time you pay your last payment in 30 years. Of course, the vast majority of borrowers do not keep their home long enough to pay off a 30 year mortgage with 360 payments. And when they move, they are often shocked to find out how much they still owe on their home loan. In today’s market it can be very difficult to sell a home for enough to pay off an existing FHA loan that was created in the last 10 years.

It takes more than 12 years of monthly mortgage payments before you actually begin to pay more on your loan principle than you pay in interest each month, if you only pay the required mortgage payment. If you are a typical lower income borrower, you’ll pay virtually the entire value of your home in loan interest expense over the first 15 years of your FHA loan.

This is hardly affordable housing, yet the FHA product has been sold as the loan of choice for “affordable housing” for over 50 years. But the high costs of this loan are one of the primary reasons why lower income borrowers are more likely to get foreclosed on. They pay and pay for years with little accumulation of equity in their homes. By the time you add in the up front costs for origination fees, appraisals, taxes and insurance, virtually all 95% FHA loans are in a negative equity situation from day one, even in a normal housing market.

Today we are in a situation where FHA is insuring virtually 90% of all new mortgage loans, even as default rates continue at crisis levels in neighborhoods with a high percentage of lower income FHA borrowers. This is leading to a situation in which FHA could default on it’s insurance obligations, requiring another big bail out for a program that is “too big to fail”. Without FHA mortgage insurance, the housing market would come to a virtual standstill in terms of new loans for the majority of lower income home buyers.

FHA has now been over 3 years without an official director, as congress, the administration and the professional real estate industry fear what would happen if someone actually had to face the problems at FHA. The National Association of Realtors lobbied heavily to push FHA into more lending activity after the housing melt-down destroyed the vast majority of private mortgage insurers and lenders. FHA is under capitalized to the tune of some 46 billion dollars and is headed for a fiscal cliff of it’s own in the near future. For more details and research data, check out FHA Watch.

By Donna S. Robinson

Donna S. Robinson is a real estate investor, author, and housing market analyst located in Atlanta, GA. Follow her on twitter at donnaconsults. Her latest book is now available on Amazon.com. It’s called Basics Of Real Estate Investing

Taken from: http://realtybiznews.com/aei-study-shows-how-fha-financing-is-destroying-thousands-of-neighborhoods/98717580

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SoHo in the Sun: New York Real Estate Developers Flock to Miami in Search of The Next Big Neighborhood

A New York developer is making a big bet on a once-desolate but now artsy and up-and-coming part of Miami, plunking down almost $12 million for 27 apartments — and he thinks he’ll turn a hefty profit when the neighborhood becomes the new SoHo.

Shopping center and Manhattan commercial office space owner Sam Tawfik purchased the one- and two-bedroom and penthouse units in two buildings off Biscayne Boulevard for between $260,000 and $1 million.

Paying $327 per square-foot, the developer likes the short term appreciation in the burgeoning Midtown Miami neighborhood he compares to SoHo of the early 1990s where artists scooped up lofts for $50,000. Those homes today are worth upwards of $3 million.

(Photo credit: Wikipedia)

TOP 10 NYC NEIGHBORHOODS FOR REAL ESTATE INVESTMENT

"This is the time to be a New York seller and a Miami buyer," said developer Sam Tawfik, who owns commercial property in Manhattan and shopping centers in the tri-state area. "The upside is better and competition less intense in Miami. Every hedge fund and international investor wants to buy in New York. Midtown is like a mini-boomtown."

Saddled between the Design District that attracts luxury retailers Hermes and Cartier and the warehouse-heavy Wynwood Arts District area, Midtown has plots of land left to develop and a growing demographic of young artists looking to pay less in home prices than South Beach, typically double in cost.

BEST PLACES TO LIVE IN NEW YORK FOR SINGLES

“I think to be a mover and shaker in Miami with a New York get it done mentality can be very profitable,” Tawfik said. “This area has a cool demographic. It’s chic and sophiticated but not pretentious. You can feel the energy on the streets like it felt in SoHo or Tribeca 20 years ago. Look at those places now.”

Tawfik already rented most of his one and two-bedroom homes ranging from $1,700 to $3,000 per month.

"The goal was to buy units that have the highest end user demand and appreciate in value the quickest," said Chad Carroll, Tawfik's agent and Douglas Elliman Florida director of luxury sales who moved from New York City four years ago to take advantage of Miami opportunities. "The penthouse market is on fire right now in Miami which is why we included a few of those in our package.... We anticipate Sam making a solid 35 percent return on his investment within three years."

Tawfik isn’t the only snowbird flocking to Midtown. Shimon Bokovza, founder and CEO of Samba Brands Management which owns Sushi Samba, opened Sugarcane Raw Bar & Grill a few blocks from Tawfik's purchase.

"Not only will Midtown become a huge housing community for thousands of people, but also a major mid-priced retail market," said Bokovza, who chose Manhattan based-architect and design team Cetra Ruddy to design the space. "The neighborhood is already known for its community feel, art scene and local flavor."

New Yorker Tony Goldman was an original investor in Miami's Design District. One of SoHo's earliest pioneers and property owners, Goldman, recently deceased, is a legendary neighborhood builder. Tawfik feels safe following his lead, and he likes the weather.

"This is American Riviera," Tawfik said. "It's 80 degrees outside. People think this market is all about the foreign buyer. New Yorkers love it here, too."

Big Apple developer iStar Residential has two buildings currently selling in Miami. Ocean House, in the red hot lower South Beach neighborhood of South of Fifth,is a boutique building with four of 18 units remaining. Ranging from 4,500 to 7,000 square-feet, prices are more than $7.5 million for each home.

Paramount Bay, closer to Midtown on the waterfront near Wynwood, is designed by rockstar Lenny Kravitz’s Kravitz Design Inc. with a facade by Miami-based Arquitectonica, the same group who designed the master plan and structures on the Long Island City waterfront for T.F. Cornerstone. Over 316 homes have been sold since last year with 30 remaining units starting in price of about $700,000-plus for a one-bedroom.

“You’re right in the middle of all this new energy at Paramount Bay,” said Anthony J. Burns, senior vice president heading up iStar’s Miami developments. “All of these neighborhoods now have strong infrastructure for residential living. They’re not just barren strips of urban land anymore. South Beach might be the 800 pound with the beach and nightlife, but you can find great value near Midtown.”

By Jason Sheftell / NEW YORK DAILY NEWS

Read more: http://www.nydailynews.com/life-style/real-estate/new-york-real-estate-buyers-flock-miami-article-1.1224639

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Home Sales, Values Rise in Preview; U.S. Real Estate Is Bright Spot

Purchases of new houses probably rose to the highest level in more than two years and the value of existing properties increased, confirming the real-estate market is now a bright spot in the U.S. expansion, economists said before reports this week.

New-home sales climbed to a 380,000 annual rate in November, the most since April 2010, according to the median forecast of 60 economists surveyed by Bloomberg before Dec. 27 figures from the Commerce Department. House prices in 20 cities rose 4 percent in the 12 months ended October, the best year- over-year performance since June 2010, other figures may show.

“We’re going to see large gains in virtually all of the housing measures next year,” said Mark Vitner, a senior economist at Wells Fargo Securities LLC in Charlotte, North Carolina, a subsidiary of the largest mortgage lender in the U.S. “Job growth and the steady decline in the unemployment rate means that more and more workers feel confident about their own economic prospects and they’re willing to move forward with major commitments like buying a home and buying an automobile.”

credit: 666isMONEY ☮ ♥ & ☠)

Homebuilders such as KB Home (KBH) are benefitting from increasing demand after a one-point drop in the jobless rate over the past year helped shore up consumer sentiment and record-low mortgage rates made buying more affordable. Other data may show that the prospect of tax increases and government spending cuts next year began to hurt confidence this month, raising the risk that households will hold back in early 2013.

“Consumers are beginning to focus a little bit on the fiscal cliff and likelihood that there’s not a good outcome there,” Vitner said. Shares Fall

Stocks sank at the end of last week after House Republican leaders canceled a vote on higher taxes for top earners, sending budget talks deeper into turmoil. The House and Senate don’t plan to return until Dec. 27 to address the end-of-year budget issues. That will give them less than a week to reach agreement to avert the more than $600 billion tax increases and spending cuts set to take effect in January.

The Standard & Poor’s 500 Index fell 0.9 percent to 1,430.15 at the close on Dec. 21 in New York. The gauge climbed 1.2 percent for the week.

Record-low borrowing costs are among reasons housing has been able to rise above the budget turmoil so far. The average rate on a 30-year, fixed mortgage was 3.37 percent last week, hovering near the 3.31 percent reached a month earlier that was the lowest in data going back to 1972, according to McLean, Virginia-based Freddie Mac.

Housing Outlook

“While it has been a few years in the making, housing is becoming a bright spot for the economy and the industry is once again positioned to play its historical role of being a job creator and leading the national economy into a full recovery,” Jeffrey Mezger, president and chief executive officer of Los Angeles-based KB Home, said on a Dec. 20 earnings call.

Demand is being spurred by “increased urgency to take advantage of incredible affordability as prices are now on the rise,” he said. Homeownership is cheaper than rent in most markets and “household formation is once again growing as millennials are now starting to leave their parents’ homes and move out on their own as the economy improves.”

S&P/Case-Shiller’s report on October home values in 20 cities is due Dec. 26. The projected gain for the month would follow a 3 percent increase in the year through September.

A report on Dec. 28 from the National Association of Realtors will show pending sales of existing homes climbed 1 percent from the previous month, according to the survey median.

Unemployment Drops

Less joblessness is helping spur demand for housing. The unemployment rate fell to a four-year low of 7.7 percent in November, according to Labor Department figures. It was at 8.7 percent a year earlier and peaked at 10 percent in October 2009, four months after the recession ended.

Payrolls climbed by 146,000 workers in November, near an average 151,450 for 2012 that’s little changed from the previous year’s 153,330.

Measures of consumer confidence are showing mixed results as growing concern about the fiscal outlook is counterbalanced by the decrease in unemployment, gains in housing and a drop in gasoline prices.

Figures due Dec. 27 from the Conference Board will show its confidence index fell to 70 in December from a more than four- year high of 73.7 the prior month, according median forecast of economists surveyed.

Bloomberg’s Consumer Comfort Index climbed to an eight- month high earlier this month, while the Thomson Reuters/University of Michigan consumer sentiment index decreased to a five-month low in December, according to data released last week.

Bloomberg Survey

================================================================
                        Release    Period    Prior     Median
Indicator                 Date               Value    Forecast
================================================================
Case Shiller Monthly MOM 12/26      Oct.      0.4%      0.5%
Case Shiller Monthly YOY 12/26      Oct.      3.0%      4.0%
Initial Claims ,000’s    12/27     15-Dec     361       360
Cont. Claims ,000’s      12/27     8-Dec      3225      3200
Consumer Conf Index      12/27      Dec.      73.7      70.0
New Home Sales ,000’s    12/27      Nov.      368       380
New Home Sales MOM%      12/27      Nov.     -0.3%      3.3%
Chicago PM Index         12/28      Dec.      50.4      51.0
Pending Homes MOM%       12/28      Nov.      5.2%      1.0%
Pending Homes YOY%       12/28      Nov.     18.0%     10.6%
================================================================

To contact the reporter on this story: Michelle Jamrisko in Washington at mjamrisko@bloomberg.net

To contact the editor responsible for this story: Christopher Wellisz in Washington at cwellisz@bloomberg.net

By Michelle Jamrisko 

Taken from: http://www.businessweek.com/news/2012-12-23/home-sales-values-probably-increased-u-dot-s-dot-economy-preview

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How to Get Creative in a Real Estate Transaction

Real estate buyers and sellers often come close to making a deal — but something stands in their way. Multiple offers and counters fly back and forth over the course of several weeks. Maybe the buyer and seller are just a few thousand dollars apart on price. There could be one sticking point that neither of them is able to get past.

When this happens, it’s time to get creative. Here are some ways buyers and sellers can close a stalled real estate deal.

(Photo credit: Wikipedia)

The seller offers to pay HOA dues

A buyer considering the purchase of a condo or a home where there are monthly assessments (or dues) may have trouble swallowing those costs in addition to the monthly mortgage payment. But when buyer and seller are off by only a few thousand dollars, reducing the home’s price won’t do much for the buyer in the long run. For example, a $15,000 price reduction amortized over 30 years would end up saving the buyer just a few dollars per month.

Instead, a smart agent will suggest the seller pays the homeowners association for a year’s worth of dues. This could save the buyer, say, $500 per month. Although that’s a lot less than a $15,000 price cut, it would go a long way toward helping the buyer afford the total monthly expenses.

The seller pays the property taxes

Nobody enjoys paying property taxes, especially when they’re due in April, the same time as state and federal income taxes. If a buyer and seller are off on price, the seller can offer to pre-pay the property taxes, thus removing the burden from the buyer at a time when every penny really counts.

The buyer offers the seller a rent-back

Does the seller need more time in the home, but all parties want to move the deal along instead of doing a three-month escrow? Frequently, the solution is that the buyer allows the seller to stay in the home after the close of escrow for a pre-determined amount of time. In return, the seller pays the buyer a pre-determined among for “rent.” This generally is the buyer’s monthly mortgage prorated for the amount of time the seller stays behind.

You might even consider offering the seller a “free” rent-back. Chances are, you won’t be moving the same day you close. And if you’re renting and your closing date is the middle of the month, you’ll probably have to pay both rent and mortgage for a short period of time. What could amount to no extra expense to you could end up helping the seller in a significant way. Not being rushed out of the home and staying awhile longer for free is bound to appeal to a stubborn seller.

The seller buys down the buyer’s interest rate

Often, a buyer has consulted with his mortgage lender and has been given a ballpark quote for the home he wants to buy, such as a 3.5% rate for a 30-year-fixed mortgage. The buyer does the math and may wonder if he can afford the monthly payment after all or feels compelled to bring it down somehow.

Sometimes, for the cost of 1% of the loan amount, the buyer can get a better interest rate, maybe 3.2%, and lock it in for 30 years. This may be a smart idea if rates are rising and the buyer prefers to pay an out-of-pocket cost upfront as opposed to over time. When faced with a seller who won’t budge on price or a buyer who has hit his monthly cost limit, the seller may offer to buy down the mortgage rate. Again, the cost to the seller will likely be less than a price reduction.

Similar to paying the HOA dues, buying down the interest rate to lower the monthly payment means a lot more than the total price of the home. A few thousand dollars toward buying down the buyer’s rate can save the seller money in negotiations and the buyer on their monthly payment.

Get creative

Agents need to be alert to the possibility that a deal between willing and able buyers and sellers can get derailed in the eleventh hour. When an impasse occurs, the agent should get to the bottom of what’s really going on. Most importantly, everyone involved — agents, buyer, and seller — has no doubt invested a lot of time and energy into the deal already. When it stalls, it’s time to put heads together and come up with a creative compromise.

By Brendon DeSimone, Zillow

Taken from: http://www.foxbusiness.com/personal-finance/2012/12/20/how-to-get-creative-in-real-estate-transaction/

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Top 5 WordPress Real Estate Themes For 2012

WordPress is an affordable option for real estate agents wanting a basic web presence without a lot of maintanence. Dozens of real estate WordPress themes are available to agents, each having something unique and appealing that attracts both viewers and website owners. But for every great real estate WordPress theme, there’s also one that’s not all that inviting.

Whether it’s poor design quality or not providing adequate functionality, there’s no denying that dozens of poorly designed WordPress themes are out there and available for purchase. That’s why it’s important for real estate agents to take time and research all available real estate WordPress themes before making a final decision on which one may be the best fit for your professional website.

After running a quick Google search, I was able to find what I would consider 5 of the best real estate WordPress sites currently available to consumers. Below is a quick summary of why I think these real estate themes made the cut:

WP Pro Real Estate 4 by ThemeForest:

I think what makes this particular real estate WordPress theme so attractive is the theme’s custom background. Website owners have the option of unlimited skins and backgrounds, but as long as you choose a crisp, professional photo, such as the example on the demo, there’s no doubt this theme can really demonstrate a luxury, high-end feel and keep home buyers coming back. In addition, WP Pro Real Estate 4 also has a Drag & Drop homepage builder, which is especially convenient for real estate agents without a lot of web building experience.


Property WordPress Theme from WPdaddy.com:

To me, the best real estate WordPress themes are clean, chic, and have a modern vibe and the Property WordPress theme fits this criterion perfectly. The theme’s main background allows for agents to input custom photos, while the interior background of the theme remains solid white with a variety of clickable options available to home buyers that include a featured listings slider, different areas of specialization, your website blog, or whatever you ultimately choose to display on the homepage.


Loan WordPress Theme from WPdaddy.com:

The Loan WordPress theme is pretty similar to the Property theme also offered at WPdaddy.com in that it has a chic, contemporary feel but some there are some key differences in the sidebar and homepage display. There’s also not an option for a customized background like seen in the Property WordPress theme, which actually has its advantages. For agents with little to no design experience, finding the right background image that fits the feel of your website and maintains a high resolution can, believe it or not, be quite challenging at times.


deCondo by ThemeShift:

I think what makes the deCondo theme so attractive is the image heavy homepage. Along with the top slider that rotates between featured listings, the remaining portion of the homepage is solely dedicated to other nicely displayed featured listing excerpts. So if you’re a real estate agent that does the majority of your business as a primary listing agent, the deCondo theme is an excellent choice for presenting your clients’ properties.


Smooth Pro by Gorilla Theme:

Of my list of top 5 real estate WordPress themes, Smooth Pro is probably the most complete theme in terms of the homepage layout. Along with a featured listings slider at the top, the homepage of this theme also allows for a large real estate search box, plenty of space on the sidebar for social media plugins, an attractively designed blog roll, more space for additional featured listings, and even a spot for some call-to-action buttons. In addition, the theme’s footer has four additional sections that allow you to get creative and input anything you couldn’t find room elsewhere on the homepage. In my opinion, Smooth Pro is probably you best real estate WordPress theme if you plan on making this your primary real estate website.




By  Joe Heath
Joe Heath is a graduate of Indiana University and also holds a Graduate Certificate in Real Estate Development from Drexel University. After working as a Market Research Associate and writing published Market Snapshots for Hanley Wood Market Intelligence in Chicago, Joe now works as a Web Marketing Specialist and is a managing partner at Real Estate Web Creation, LLC.

Taken from: http://realtybiznews.com/top-5-wordpress-real-estate-themes-for-2012/98717462

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The Most Exciting New Cruises of 2013 Revealed

Seasoned cruise passengers will be aware of what kinds of itineraries make the best trips. Some cruise holidays are so unforgettable that they are well worth doing again and again – not least so that you can introduce the experience to other family members or friends of yours.

However, each year, exciting new cruises are brought to the market by cruise lines looking to keep their offering fresh and exciting. We’ve picked out some of highlights that are currently on sale, all of which leave at points through 2013.

Disney Cruise Line’s Mediterranean Cruise.

Disney Cruise Lines' Disney Wonder in Port Canaveral (Photo credit: Wikipedia)

Setting sail in late July 2013, the first port of call on Disney’s new Mediterranean cruise is the Catalan capital Barcelona. The trip will feature shore excursions at most of the ports on call, as the ship continues onwards to France, as well as La Spezia, Rome, Civitavecchia and Pompeii.

There will be short stops at Venice and Croatia, before finishing in Barcelona again. The ship has a wide range of accommodation, from the standard fare to the extremely luxurious staterooms. Deluxe ocean-views with verandas overlooking stunning oceanic vistas are also available.

Princess Cruises’ Glacier Bay Seattle Roundtrip.
For those looking for something a little more adventurous than a cruise around the Mediterranean, then this is a great alternative for the discerning traveller.

Cruise ships in Juneau, Alaska. Photograph by Robert A. Estremo,(Photo credit: Wikipedia)

Setting sail at the end of May from the ‘Emerald City’ of Washington state, Seattle; the Star Princess cruise ship will head to Juneau, Alaska - also known as that state’s ‘little San Francisco’. Here, you’ll be treated to a guided helicopter ride, a drive-in glacier, quality shopping experiences and more.

After a few more Alaskan stops, namely Skagway, the Glacier Bay National Park and Ketchikan, the ship will continue to Victoria, British Columbia, where you can stroll through the legendary Crystal Garden.

Crystal Cruises’ Crystal European & Mediterranean cruise.
Embarkation for this glorious odyssey takes place in the stunning historic city of Istanbul. After a day of exploring this glorious city, you’ll be taken to a few other Turkish locations including Canakkale and Kusadasi.

After cruising in the Mediterranean, you’ll eventually arrive in the island nation of Malta. The trip will conclude after a tour of some Italian cities, namely Palmero in Sicily, Sorrento and finally Rome, where you will disembark from this magical tour.

Hurtigruten’s Scandinavian Journey.
Set sail aboard the MS Vesteralen. This cruise will pass by a large number of scenic Scandinavian locations, like Bergen, Floro, Maloy, Torvik and Alesund to name a few.

There’ll be a stopover in Trondheim, the old capital of Norway, as well as Bodo, where you can take a Sea Eagle safari!

Taken from: http://www.breakingtravelnews.com/focus/article/the-most-exciting-new-cruises-of-2013-revealed/

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America’s Top 5 Cities For Real Estate Investors

Home sales continue to drop around the United States, despite excellent interest rates on thirty-day loans and huge supplies in the housing market. High unemployment and lenders requiring larger down payments also contribute to plummeting real estate market values. This news may be disheartening to some people, but it also provides a great opportunity to those who have the means to invest in real estate, today.

Anyone who does not qualify for a mortgage will still need a place to live. This provides an opportunity for homeowners to rent out their properties while waiting for their investments to appreciate. The question for these investors becomes, “In this see-saw real estate market, where is the best place to buy a property?”

Lake City, Minnesota (Photo credit: Dougtone)

The following list can shed light on this dilemma, as it highlights the top five cities in the United States where rental demand is high and housing inventories are falling.

1. Tucson, Arizona, a city with a median single-family home list price at $170K, this metropolis is now the number-one city for real estate investing in the United States. The investment strategy in Tuscan is to buy a home at a discount in a market where prices have dropped thirty-one percent, hold it, and rent the property out while waiting for its value to appreciate. Collecting rent offers property owners a steady monthly income, which they can use to help pay their taxes, mortgagees or maintenance. Tucson is a college town and popular vacation spot where there is no shortage of renters, since the average Joe in Arizona still cannot qualify for a home loan.

2. Austin, Texas, is next on the list, mostly because the city is one of the newest tech-business hubs in the United States. For 230K, investors can find a home in a city that was immune to the housing crisis, as Austin’s property values remained stable when the rest of the country broke down. This metro-area is also a college community and is well-known for its vibrant nightlife. The student housing demand and yuppies in the area who are looking for a place to live provides a winning mix that has investors finding it hard to lose in the city of Austin.

3. Kansas City, Missouri, home prices were hit hard a few years ago, but property values in this city have now become some of the fastest in the country to recover. At an average increase of four percent per annum, investors can buy a single-family home, condo or co-op for about $135K. However, new home buyers will need to act quickly, as the word is out on Kansas City where housing inventory is down twenty percent from a year ago and is shrinking fast.

4. Baltimore, Maryland, home prices are stabilizing, and according to realtor.com, property values have hit the bottom. The average median list price in this city is $240K with a forecast to increase over three percent a year. Economists also estimate that Baltimore will receive a full economic recovery within the next two years, which is the reason why investors are scooping up properties in this high-demand metropolis. Most likely, an economic recovery will appreciate city’s property values, dramatically.

5. Salt Lake City, Utah, a town where housing inventories have shrunk the most out of all the five cites on the list. Buyers scooped up more than thirty-eight percent of the available units in Salt Lake City after realizing a five-and-half increase in median price in the last year. The small town has become a growing tourist site, and most people residing in Utah still cannot qualify for a home mortgage, which forces them to rent properties.

By Mike Wheatley

Taken from: http://realtybiznews.com/americas-top-5-cities-for-real-estate-investors/98717308/

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Millennials Will Have A Hard Time Entering The Housing Market

In this day and age, the 18- to 34-year-old crowd have lived up to their reputation as perpetual renters. Most blame the trend on the housing crisis, which led so many homeowners to downsize and stunted the home buying power of younger consumers.

But whatever trauma the Great Recession had on the minds of millennials, it hasn't stymied their hopes for owning a home of their own one day, a new study shows.

Image via CrunchBase

Real estate tracker Trulia found more than 90 pecent of millennial renters plan on buying a home in the next two years.

The question is whether they'll find what they're looking for. The housing inventory has been far from stellar lately, down 23 percent since last year and a whopping 43 percent since 2010, Trulia estimates.

"Many [Millennials] think today’s low prices and low mortgage rates will last," says Jed Kolko, Trulia's Chief Economist. "They may be in for sticker shock if the cost of homeownership has returned to normal levels by the time they’re ready to buy.”

image:trulia.com

Then there's the affordability factor to consider. People in their 30s saw their wealth diminished the most during the recession, a recent Pew study found, and the underemployment rate is estimated at more than 15 percent.

It's true that home prices have been slowly rebounding, which will hopefully give sales a boost –– 22 percent of homeowners say they'll likely sell in the next year –– and beef up the offerings. Today, 27 percent feel more positive about owning a home than half a year ago, while 19 percent say they're more negative, according to Trulia.

It's certainly not the overwhelming majority's sentiment –– 72 percent still say homeownership isn't their idea of the American Dream –– but it's a hint that consumers' optimism in the housing market might steadily be returning.

"Millennials have been shaken, not scarred by the housing bust," says Kolko. “Nearly all of them want to own a home some day, if they’re not homeowners already."

By Mandi Woodruff

Taken from: http://www.businessinsider.com/millennials-hopeful-about-homeownership-2012-12

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