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Friday, August 31, 2012

July Pending Home Sales in U.S. Rebound to Highest Levels in Two Years, Says NAR

BRAC will cause hardships, expanded HAP could ...
BRAC will cause hardships, expanded HAP could help 090629 (Photo credit: familymwr)
According to the National Association of Realtors, pending home sales rose in July to the highest level in over two years and remain well above year-ago levels.

The Pending Home Sales Index, a forward-looking indicator based on contract signings, rose 2.4 percent to 101.7 in July from 99.3 in June and is 12.4 percent above July 2011 when it was 90.5. The data reflect contracts but not closings.

Lawrence Yun, NAR chief economist, said the index is at the highest level since April 2010, which was shortly before the closing deadline for the home buyer tax credit. "While the month-to-month movement has been uneven, more importantly we now have 15 consecutive months of year-over-year gains in contract activity," Yun said.

Limited inventory is constraining market activity. "All regions saw monthly increases in home-buying activity except for the West, which is now experiencing an acute inventory shortage," Yun added.

The PHSI in the Northeast increased 0.5 percent to 77.0 in July and is 13.4 percent higher than a year ago. In the Midwest the index grew 3.4 percent to 97.4 in July and is 20.2 percent above July 2011. Pending home sales in the South rose 5.2 percent to an index of 111.7 in July and are 15.6 percent above a year ago. In the West the index slipped 1.7 percent in July to 109.9 but is 1.3 percent higher than July 2011.

Existing-home sales are projected to rise 8 to 9 percent in 2012, followed by another 7 to 8 percent gain in 2013. Home prices are expected to increase 10 percent cumulatively over the next two years.

"Falling visible and shadow inventories point toward continuing price gains. Expected gains in housing starts of 25 to 30 percent this year, and nearly 50 percent in 2013, are insufficient to meet the growing housing demand," Yun said.

By Michael Gerrity

Taken from: http://www.worldpropertychannel.com/north-america-residential-news/pending-home-sales-in-july-national-association-of-realtors-pending-sales-pending-home-sales-index-lawrence-yun-homes-for-sale-realtor-mls-listings-6018.php
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New Real Estate Tax in Effect in 2013 and More Sales

A new 3.8% tax on some real estate transactions will go into effect in January, 2013. The tax was passed by Congress in 2010 to generate income for healthcare. The tax will be imposed on capital gains from real estate sales for individuals who earn more than $200,000 and couples who earn more than $250,000. For individuals there is a tax exemption of $250,000 in gains and for couples, only gains above $500,000 will be subject to the 3.8% tax.

We asked local attorney Keith Schutzman for an explanation and here is what he shared:

I think the tax will have a small effect on the residential market in Scarsdale. The tax, intended to provide additional funding to the Medicare trust, applies only to taxpayers whose adjusted gross income (AGI) exceeds $200,000 for individuals, and $250,000 for married couples filing jointly. It applies to certain types of investment income, dividends and capital gains. The main reason I believe the tax will have a minimal impact is that with respect to sale of a principal residence, the existing exemption is $250,000 of gain for individuals and $500,000 of gain for married couples filing jointly. That exclusion eliminates the vast majority of sellers from any liability for the tax. Clearly there are potential sellers in this area who will have potential liability. There are some long time homeowners that will have that type of gain. However, my feeling is that even for those homeowners, the amount of tax (3.8% of the gain over $500,000) is not going to deter them from selling. For most, the personal reasons that go into a decision to sell after many years of ownership (health reasons for instance) for selling will outweigh the effect of the tax.

Real Estate Tax in Effect in 2013
Tax (Photo credit: 401(K) 2012)
So what’s the bottom line? If you have realized a large gain on your home and are considering a sale, you might want to list your home sooner than later to avoid the tax.

In the meantime, here are this week’s sales.

28 Franklin Road: (Pictured above) Spacious, sunny Colonial is on flat 1/2 acre in move-in condition. Beautiful kitchen with granite counters, SubZero frig, and sliding door to deck overlooking the property. The master suite includes a large marble bath and large walk-in closet. Charming home on one of Scarsdale's prettiest streets.

Sale Price: $1,600,000 Real Estate Taxes: $38,122

2 Bansom Road: Elegant center hall Colonial with nine foot ceilings on first floor, wainscoting in center hall and dining room, extra large garage and laundry room. Slate patio off kitchen. Nine foot ceiling in master suite. 1,000 square foot finished basement. 3-zone heat and cac. Cook's kitchen with large center island and stainless steel appliances. Sun-filled home with large rooms.

Sale Price: $1,500,000 Real Estate Taxes: $34,259

168 Johnson Road: Young Edgewood Colonial. Open kitchen/family room with woodburning fireplace. Spacious master suite with skylit bath and 3 large closets including a walk-in closet. All Anderson windows, hardwood floors thru-out, 3-zone sprinkler, 3-yr Timberline roof, updated baths, new water heater, new appliances, refinished deck, newly fenced in yard. Finished lower level with playroom, maid's room and many closets.

Sale Price: $895,000 Real Estate Taxes: $19,213

209 Glendale Road, Edgemont: Newly renovated and expanded four-bedroom Colonial with wonderful flow in ideal location. Designer's own kitchen (2004) with high quality cabinets, granite counters, stainless steel appliances, island with breakfast bar and eat-in area with French doors to spacious deck and flat yard. First floor includes cherry floors and oversized family room with high ceilings open to kitchen. Master bedroom with soaring ceilings, walk-in closets and luxurious bath.

Sale Price: $1,285,000 Real Estate Taxes: $34,795

580 Fort Hill Road, Edgemont: This sunny colonial just had a makeover! Freshly painted inside and out, and recently updated with a newer look. Five bedroom home on a lush .36 acres offers versatile space for today's savvy buyers. Central AC, first floor master bedroom and bath and 2-car attached garage.

Sale Price: $557,000 Real Estate Taxes: $26,353

Taken from: http://www.scarsdale10583.com/201208302672/real-estate/new-real-estate-tax-in-effect-in-2013-and-this-week-s-sales.html
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College Town Investment Opportunities: Rents and Prices this Academic Year Get High Marks

Whether you’ve got a kid in college or not, investing in this year’s hot rental housing markets in and around university towns might be worth a close look.

Not only are the going monthly rents in these communities likely higher than you imagined, but real estate prices have come off bottom and are rising in most of them. So you have the prospect of solid rental income, depreciation write-offs on your rental business, plus at least modest capital gains on the house or condo, assuming a continuation of current value trends.

college rental real estate complex at Downtown Nashville
(Photo credit: afagen)
Check out this overview of rents, median list prices and mortgage costs compiled by Realtor.com from cities with the top 25 universities, as ranked by US News and World Report.

Back to School 2012 Chart

You can rack up significant gross rents in some of these markets, especially in Boston ($37,008 a year), Princeton ($24,672), Washington D.C. ($31,644) and Los Angeles ($27,480). Loan costs at today’s low rates – assuming a 20 percent down payment and excellent credit – will eat up a chunk of that gross, as will local property taxes and management fees if you’re not managing the units directly yourself.

Of course, in higher rent-roll urban locations, prices for houses and condos suitable for rental to students don’t come cheaply, witness D.C.’s $395,000 median list price, LA’s $358,000 and Boston’s nearly $335,000. But in all these markets – D.C. in particular – median sale prices are on the increase, giving you a capital asset that is growing in value.

In some college towns, you can be a landlord for a lot less. Pittsburgh’s $140,000 median price and Atlanta’s $175,000 median are attractive, and Pittsburgh’s annual gross rent-to-price ratio is just as good as Boston’s, and better than both Providence and D.C.

Chicago is worth serious consideration as well, with an average annual gross rent roll of $19,560 on a median list priced rental unit costing $194,000. Houston ($13,608 annual gross rents, $183,000 unit price) and Philadelphia ($17,700 gross rents, $234,900 unit price) are also interesting options, though Philadelphia area housing prices have been flat or slightly negative recently, according to Realtor.com’s monthly national survey, and local inventories of unsold units have been increasing, counter to the national trend. At least for the short term, housing price appreciation in the Philadelphia market is a question mark.

Keep in mind that rent and price data alone do not convey several key investment considerations for anyone seriously thinking about college rental real estate. Property taxes can vary sharply from city to city, with some of the highest costs – and thus drains on your net returns – in the northeast. Also, student housing rentals are not for the faint of heart, even if your own son or daughter is serving as on-site manager.

Think back to the parties you attended or hosted back in college or grad school and ask yourself: Am I willing to handle the higher maintenance and repair bills that are virtually guaranteed with this type of rental investment?

There are substantial profits available from college rental units, but you need good management arrangements – including tenant screening, rent collection and maintenance contracts – to really pull it off well.

By Ken Harney

Ken Harney writes a nationally syndicated column on housing and mortgage issues, the Nation’s Housing, and has won numerous “Best Column – All Media” awards from the National Association of Real Estate Editors, along with the Consumer Federation of America’s prestigious “Media Service Award,” for lifetime contributions to consumer interests in housing. He served a three year term on the Federal Reserve Board’s Consumer Advisory Council and is the author of two books on real estate and mortgage finance.

Taken from: http://www.forbes.com/sites/realtorcom/2012/08/30/collegetownrealestateinvestments/
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How To Find Quality Tenants – Fast!

As a property owner, you’ve got a lot on your plate when renting out your place – the last worry you need is a poor tenant. Even if you’re the best judge of character and typically have a great rapport with your tenants, it’s possible for a “bad egg” to slip in every now and then.

The Rent Rite Directory is a great tool to help you weed out the so-called “wheat from the chaff”.

According to the company, the nationwide Rent Rite Directory (RRD) is “an easy and fast way to confirm whether or not someone is going to be a quality tenant.

“When you join the Rent Rite Directory’s FREE Incident Reporting community, you are joining a network of like-minded Property Owners, Managers, and Landlords who understand the value in saving time and money while preserving their peace-of-mind, and improving their local neighborhoods.”

Hotlets offer services to both landlords letting, and tenants looking for, property
(Photo credit: Wikipedia)
Information that is provided to users is drawn from credit reports, criminal background checks and of course the incident reporting database and provides information on things such as:

Skips
Evictions
Criminal Activities
Non-Payment of Rent
Proxy Renters
Damages
Other lease violations
Other services provided include:

Tenant screening
Fast results – Information is compiled electronically, and delivered within just a few seconds of submitting the application.
Detailed reports – More detailed information than other tenant screening services, and you can customize your report – paying only for the information you want. Select from the following options when putting together the report you need:

FICO score
Bankruptcy report
Equifax credit report
TransUnion credit report
Sex offender search
Evictions/liens/judgments
Criminal background check
SSN validation
OFAX Patriot Act search
ID mismatch alert
Neighborhood/Community Email Alert System

Receive email alerts when on-property crime is reported and/or suspicious activity in the area has taken place. In some states it’s possible to receive Amber and Silver Alerts as well.

DocuSign

Electronic signing of leases possible through DocuSign technology

Auto Approved Tenant Screening

Available to individual owners, landlords and even real estate agents (1-20 units), it’s possible to obtain a lease recommendation on prospective tenants in an easy “PASS”, “FAIL” or “PASS with Conditions” format, saving property managers time and money.

RRD recommends that the tenant be present when being screened. All information is retrieved in a manner compliant with the Fair Credit Reporting Act and does not violate a tenant’s rights as spelled out in current law.

For more information, check out RRD’s website at therrd.com

Taken from: http://realtybiznews.com/how-to-find-quality-tenants-fast/98715079
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Thursday, August 30, 2012

How To Decide If A Home Is Right For You

Picking out a new house can be exciting and terrifying at the same time. How do you choose the best location? What if the house has problems you can’t afford to fix? What’s the tiebreaker if you love two places equally?

The first and only way to begin the decision-making process is to grab your calculator. A dream home becomes a nightmare the moment you can’t afford it. “As you calculate, look beyond the listing price,” says Steve Jones, associate broker of Crawford Olson Real Estate in McCall, Idaho. Here’s why: A house with a vaulted ceiling costs more to heat than one with a low ceiling. And a house with a pool means paying to maintain it. All these extra factors can add up.

Another less-tangible way to decide if a home is right for you is to trust your intuition, says Pat Trainor, a realtor with Coldwell Banker High Country Realty in Blue Ridge, Georgia. “I believe that most buyers form an impression in the first few seconds after they walk into a house,” he says. Even as a seasoned agent, he says he formulates an impression almost immediately. “Is this a happy house? Or does it depress me? Notice how you respond—and trust your reactions,” Trainor adds.

A Coldwell Banker High Country Realty office in Sunnyvale.
A Coldwell Banker office in Sunnyvale. (Photo credit: Wikipedia)
Trainor says he’s noticed that when a house is a good fit for a buyer, the couple or family will begin to talk about where they’d place their furniture. “When a client is doing this, he or she is mentally moving into the home,” says Trainor. The upshot? If you’re viewing a house and find yourself imagining your sofa near the window and your green chair near the fireplace, pay attention. Chances are, the house is a nice match for you.

That said, there’s no such thing as a crystal ball when it comes to house hunting. And wondering whether the house will be too small if you get a dog—or too big when the kids leave for college—is inevitable. But Cindy Jones, also of Crawford Olson Real Estate, says that while it’s important to envision a home’s role over time, making a decision with too many variables in mind can work against you. “Buy the house for the way you are living today,” she says. Then adapt as you go.

Another tip? Decide based on how you live, not where you’ll live. A house that offers dramatic mountain views and enormous windows onto a pond can seem like a wonderful place to call home. But if you’re rarely home during the day, the views aren’t going to be visible most of the time. Focus on features that will please you indoors. This advice is particularly applicable to high-traffic parts of the house, such as the kitchen. A sleek, minimalist European stainless steel breakfast bar may set your heart on fire, but if you’ve got busy toddlers, a practical kitchen with lots of room and sturdy smudge-resistant cabinetry may be a better match.

When you finally do make a decision, should you make an offer right away? Sometimes yes. Sometimes no. “I usually advise sleeping on it overnight,” says Trainor. The exception can be when a market is especially active. “This is a real gut check time. Would you be broken hearted if you lost this house to another buyer? If the answer is yes, make an offer. Seldom will you go wrong if you follow your heart.”

Full List: How To Decide If A Home Is Right For You

By Bethany Lyttle

Taken from: http://www.forbes.com/sites/forbeslifestyle/2012/08/29/how-to-decide-if-a-home-is-right-for-you/
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House Hunting in Spain - FOUR-BEDROOM VILLA WITH A GUEST HOUSE ON SPAIN’S COSTA BRAVA

FOUR-BEDROOM VILLA WITH A GUEST HOUSE ON SPAIN’S COSTA BRAVA $2.47 MILLION (1,990,000 EUROS)

This four-bedroom villa, built in the 1950s and expanded in the 1990s, was originally a one-story fisherman’s house. It overlooks the Mediterranean and the bay of La Fosca on Spain’s Costa Brava, and is a 90-minute drive from Barcelona. Clad in white stucco, the house has a red tile roof, arched doorways and terra cotta floors. The front porch has arched windows on three sides, and the arched front entrance opens into a hallway. To the left is a large room that contains the living and dining areas and has a working fireplace, white-painted ceiling beams, and glass doors that open onto a terrace facing the bay. To the right is a kitchen with white marble countertops, a breakfast bar, oak cabinets and a shelf above the stove adorned with painted tiles. Behind the kitchen is a bathroom with a shower stall and a bedroom overlooking the garden.

A staircase in the front hall leads to the second floor, which has two bedrooms on the left, facing the water, and one bedroom on the right. One of the bedrooms facing the water is used as an office. The other is the master bedroom, which has exposed ceiling beams stained light gray, a fireplace, an entire wall of built-in wardrobes and a glass door leading to a balcony overlooking the bay. The master bathroom has white tiled walls, a shower stall, and a vanity topped with white marble. The third upstairs bedroom, across the hall from the master suite, has an unpainted wood ceiling and a view of the garden behind the house.

English: Aigua Blava, a small bay on the Costa Brava, Girona, Spain, near Begur, Spain, and Palafrugell
(Photo credit: Wikipedia)
A stone path leads through the gardens to the guest house, which has indoor and outdoor living and dining areas. The guest house has a master bedroom in the loft over the living room, a second bedroom with built-in twin beds, plus a bathroom and a kitchenette. The two-car garage has a shower room, designed for rinsing off sand before entering the house from the beach.

The house is directly across the road from the unspoiled beach at La Fosca bay. Palamós, a bustling fishing port, is a 20-minute walk and has a marina and many well-regarded restaurants. From the house, a 20-minute walk along a rocky coastal path leads to the remote beach of Platja Castell. The house is about 40 minutes from the airport in Girona, and the Barcelona airport is an hour and 40 minutes away.

MARKET OVERVIEW

The global financial crisis hit Spain hard in 2008, and no recovery is in sight, said Mark Stucklin, the owner of the real estate Web site Spanish Property Insight. “There’s no denying that there’s a savage adjustment going on here,” he said. The problems stem from overbuilding, easy credit and inflated housing prices. Prices in most of Spain are down 75 percent from the peak in 2007, and new construction is down 95 percent, Mr. Stucklin said. ‘That’s a collapse of the house-building industry by anyone’s standards,” he said.

Yet some small segments of the market, such as luxury homes for buyers prepared to pay cash, are reasonably healthy. “There’s a market for the really good stuff for people who have the money to buy it,” Mr. Stucklin said. In Barcelona, for example, prices have dropped only 20 to 25 percent because a limited number of building sites are available.

On the Costa Brava, the coastal region in northeastern Spain where this house is located, prices have dropped about 30 percent from their 2007 peak, according to Alex Vaughan, the owner of the real estate company Lucas Fox. Most sellers in Spain are willing to negotiate a price 10 to 15 percent below their asking price, he added.

Prices vary widely depending on the location of the property. Mr. Vaughan said a typical villa costs from 750,000 euros to 3 million euros ($938,000 to $3.75 million at .80 euros to the dollar), depending on the area and its proximity to the beach or a town center. The property described here is priced near the middle of the range at 1,990,000 euros ($2.47 million).

WHO BUYS ON COSTA BRAVA

Traditionally, most of the foreign buyers in Spain are European, although Mr. Vaughan said that metropolitan areas also attraction buyers from Asia and the Middle East. Most of the foreigners who buy on the Costa Brava are from Northern Europe, especially Britain, France, Switzerland, the Netherlands and Germany, Mr. Vaughan said. In recent years, the region has also drawn buyers from further afield. “Increasingly in the Costa Brava there are Russian buyers, American buyers and even a few Asian buyers,” Mr. Vaughan said.

BUYING BASICS

Foreigners must obtain a tax identification number and a local bank account, but there are no special requirements for buying property in Spain. Transaction costs are usually about 10 percent of the purchase price, said Tom Maidment, the Barcelona-based director of Lucas Fox Costa Brava and the listing agent for this property.

Transfer taxes are 8 percent of the purchase price. However, Mr. Vaughan said that this year the government has reduced these taxes to 4 percent for new properties bought directly from the developer, with the hope of stimulating the property market and reducing the glut of unsold new homes. The government is also considering new immigration rules that would allow people from outside the European Union to acquire Spanish residency if they bought a property worth at least 250,000 euros ($300,000), Mr. Vaughan said.Notary costs for a property like this are typically about 1,500 euros ($1,875). Mr. Maidment said land registry fees are usually about 1,000 euros ($1,250). Legal fees also vary, depending upon the complexity of the transaction. “It’s not actually typical for Spanish nationals to use a lawyer,” he said, “but we advise all foreign buyers to use a lawyer.”

WEB SITES

Government of Catalonia: gencat.cat Costa Brava and Girona Tourism site: costabrava.org

LANGUAGES AND CURRENCY

Spanish; euros (1 euro=$1.24)

TAXES AND FEES

Municipal taxes for this house are about 1,200 euros ($1,500) a year, the listing agent said.

In addition, nonresident foreign owners who have vacation homes in Spain pay an annual tax, equal to 2 percent of the assessed value of the property. The assessed value is usually significantly lower than the market value. The tax for a house like this would be between 2,000 and 4,000 euros ($2,500 and $5,000).

CONTACT

Tom Maidment, Lucas Fox Costa Brava, 011-34-933-562-989; lucasfox.com

Taken from: http://www.nytimes.com/2012/08/30/greathomesanddestinations/real-estate-in-spain.html
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Housing Prices In 20 Cities Mark First Gain Since 2010, Real Estate Execs Claim Return Of Pricing Power

Home prices in 20 U.S. cities climbed in June from a year earlier, the first gain in almost two years, indicating the market that triggered the recession is beginning to rebound.

The S&P/Case-Shiller index of property values in 20 cities increased 0.5 percent from June 2011, the first gain since September 2010, a report from the group showed today in New York. The median forecast of 29 economists surveyed by Bloomberg News called for a 0.05 percent drop. Nationally, prices jumped last quarter by the most in more than six years.

Rising demand driven by mortgage costs close to a record low has trimmed the glut of unsold houses on the market, which may continue to give property values a lift. Waning foreclosures and more access to credit would further stabilize the industry, and bolster consumer confidence and spending.

“The price gains are becoming broader,” said Brian Jones, a senior U.S. economist at Societe Generale in New York, who projected values would rise. “This is certainly a positive step,” he said, “but we still have a long way to go.”

The NAR building and the U.S. Capitol in the background
The NAR building and the U.S. Capitol in the background. (Photo credit: Wikipedia)
Stock-index futures trimmed earlier losses after the report. The contract on the Standard & Poor’s 500 Index maturing in September dropped 0.1 percent to 1,406.7 at 9:23 a.m. in New York after having been down 0.3 percent earlier.

Survey Results

Estimates in the Bloomberg survey ranged from declines of 1.5 percent to a 1 percent gain, according to the survey. The Case-Shiller index is based on a three-month average, which means the June data was influenced by transactions in April and May. The 20-city index improved after showing a 0.7 percent drop in the year ended May. Year-over-year records began in 2001.

Today’s report also included quarterly national figures. Prices covering all the U.S. increased 1.2 percent in the second quarter from the same time in 2011 compared with a 1.4 percent drop in the year ended March. They jumped 6.9 percent from the previous three months before seasonal adjustment. The gauge increased 2.2 percent after taking those changes into account, the best performance since the fourth quarter of 2005. “We seem to be witnessing exactly what we needed for a sustained recovery,” David Blitzer, chairman of the S&P index committee, said in a statement. “The market may have finally turned around.”

Monthly Gain

Home prices in the 20-city adjusted for seasonal variations increased 0.9 percent in June from the prior month. Unadjusted prices climbed 2.3 percent from the previous month.

The year-over-year gauge provides better indications of trends in prices, the group has said. The panel includes Karl Case and Robert Shiller, the economists who created the index.

Thirteen of the 20 cities in the index showed a year-over- year gain, led by a 14 percent increase in Phoenix.

Atlanta showed the biggest year-over-year drop, with prices falling 12 percent. Toll Brothers, the largest U.S. luxury-home builder, reported a better-than-estimated profit and an increase in revenue for its third quarter ended July 31. The average price of the homes that the Horsham, Pennsylvania-based company delivered in the quarter climbed to $576,000 from $557,000 in the previous three months.

“The housing recovery is being driven by pent-up demand, very low interest rates and attractively priced homes,” Chief Executive Officer Douglas Yearley Jr. said on an Aug. 22 conference call with investors. “With an industrywide shortage of inventory in many markets, we are enjoying some pricing power.”

Sales Climb

Recent reports also indicate a pickup in demand. Purchases of new homes rose more than projected in July to match a two- year high, Commerce Department data showed last week. Previously-owned house sales rebounded from an eight-month low, the National Association of Realtors reported.

Foreclosures, though abating, are still a risk. Distressed sales accounted for 24 percent of existing-home purchases in July, the Realtors data showed. That’s less than the prior month and down from 29 percent in July 2011. Such sales are comprised of foreclosures and short sales, in which the lender agrees to a transaction for less than the balance of the mortgage.

Taken from: http://www.nj.com/business/index.ssf/2012/08/housing_prices_in_20_cities_ma.html
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Wednesday, August 29, 2012

U.S. Office Property Investors Moving to Suburban Assets as Downtown Property Yields Become Too Low, Says RCA

Sales of office properties in the US worth $2.5 million or more totaled $5.4 billion in July, down 10% from a year earlier, the third consecutive month of decline, according to Real Capital Analytics' (RCA) "US Capital Trends Office" report for July.

Unlike in the recent past, suburban office buildings have gained popularity. The sales volume of suburban office properties in July was $3 billion, greater than the volume for CBD properties, which was $2.4 billion. While CBD property sale volume was down 40% year-over-year, the sales volume for suburban properties was up 51% year-over-year, according to RCA.

Sales of several medical office portfolios helped add to the sales volume of suburban office properties in July, but the trends are still positive for suburban offices, even excluding portfolio sales, according to the RCA report. Individual property transactions of suburban office buildings were up 39% year-over-year in July.

So what is going on? "Generally speaking, investors are moving to suburban offices, because CBD offices in primary markets are trading at such low yields that it doesn't make sense for most investors to buy in the CBD. As a result, many investors are shifting to the high quality suburbs," says Ben Carlos Thypin, director of market analysis at RCA.

U.S. Office Property Investors Building 17, RCA Victor Company, Camden Plant the Nipper Building At 1 Market St., Camden
(Photo credit: Wikipedia)
Meanwhile, public REITs, that still have access to cheap, unsecured debt, have chosen to acquire a lot fewer offices in 2012 than in 2011. After accounting for 20% or more of office acquisitions in Manhattan, San Francisco, Boston and Chicago last year, they are responsible for 5% or less of the dollar volume in those markets so far this year, according to RCA. "Presumably, they too are looking for transactions with better yields," says Thypin. "Two office REITs, SL Green and Vornado, have been investing a lot more in retail (and, to a lesser extent, multifamily) than usual," he says.

"Institutions and equity funds are on track to buy slightly more office properties in 2012 than in 2011, maintaining their leading role in the marketplace. With a strong preference for CBD properties, the average yield on institutional office acquisitions of 6.5% --a full 100 basis points below the other sectors-- reflects the core locations and strong tenancies" they seek, according to RCA.

In other news in the RCA report: the largest sale closing in July was not in Manhattan, but in Queens, where the $1.4 million-square-foot One Court Square property was sold for $481 million to a group of private investors. "Improved financing conditions are fostering the rebound of private sector investment, a positive development that should benefit a broad array of markets," said the report. Thought of as generally opportunistic, private buyers are averaging well over 7.5% initial yields on their office acquisitions, according to RCA.

Finally, foreign acquisition of office buildings is still important to the US market.

In fact, according to RCA, even though foreign acquisitions of US office buildings are 34% behind the pace averaged in 2011, the US office market remains a favorite of global investors. "In fact, 18% of all recent cross-border acquisitions have been in the US, a five year high," said the report. And foreign buyers have been behind almost half of the transaction volume in Washington, D.C. in 2012.

By Hortense Leon

Taken from: http://www.worldpropertychannel.com/north-america-commercial-news/real-capital-analytics-ben-carlos-thypin-sl-green-vornado-one-court-square-office-building-sales-office-property-sales-reits-foreign-property-investors-rca-suburban-office-property-sales-6011.php
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Real Estate Slump Makes Beachfront Homes More Affordable

The bottom of this real estate cycle, which went deeper than anyone expected, has produced something else surprising: beach-town bargains.

Properties on or near the ocean typically hold their value better in a downturn because their supply is limited.

But this time, even some island properties are distressed, and some home prices are a fraction of what they were before the real estate bubble burst.

RealtyTrac, the Irvine, Calif.-based provider of foreclosure information online, this summer issued a list of the 10 best beach towns for buying foreclosure bargains.

The company started by rounding up the top U.S. beach towns and then ranked them according to how much prices were discounted for distressed properties from pre-foreclosure to bank-owned.

Atlantic City placed seventh, with an average sales price discount of 31 percent in the first quarter.

Atlantic City, New Jersey Beachfront real estate homes
Atlantic City, New Jersey (Photo credit: Dougtone)
Topping the list was Sebastian-Vero Beach, Fla., with a 45 percent average discount. Other cities with bigger price reductions included Corpus Christi, Texas; Santa Barbara, Calif.; and Charleston, S.C.

Carol Moscony, an agent with Number One Realty in Atlantic City who handles quite a few distressed properties, said the fall in prices has been dramatic, even for ocean-front condo units.

“Six years ago, a gentleman bought a property in the Ocean Club. He spent more than $600,000 and has it for sale now at $359,000,” said Moscony, 66, of Brigantine. “People are going through this two-bedroom home and not even putting in an offer.”

In the Island Club condos, across the street from the Ocean Club, studio units with an ocean view that can sleep four were selling six years ago for $175,000, she said.

“Today, I have some in the building for $65,000,” Moscony said, adding that the monthly condo fee is $225 and includes all utilities, free parking and bicycle storage.

She said she’s also working on a short sale of two units at the Seabreeze Condominium. The owner paid $90,000 and $85,000 for the units and is now getting offers less than $40,000.

The market’s softness extends to rentals too, she said, estimating that 65 percent of available properties have been rented this summer. And renters want a bargain as well.

“If a unit rents for $16,000 for the summer, they want it for $12,000,” she said.

Some year-round rents also have fallen, and three-bedroom properties that rented for $1,250 to $1,450 a month four years ago are now about $950, she said.

Buyers are taking advantage of the opportunities for vacation homes.

In Ocean City, home sales increased 14 percent to 735 units last year and 25 percent in the first quarter of this year to 185 homes, according to an analysis of Multiple Listing Service data by Maria Marinelli, president of the Ocean City Board of Realtors.

Marinelli, a broker/associate with Re/Max At The Shore, also found sales increases last year of 5 percent in Atlantic City (to 242 sales) and Brigantine (256), and 22 percent in Longport (44 sales).

The National Association of Realtors 2012 Investment and Vacation Home Buyers Survey found that U.S. vacation-home sales rose 7 percent last year to 502,000.

The survey found that 39 percent of vacation home purchases were distress sales, meaning the properties were selling for less than the mortgage owed on them or were in some part of the foreclosure process.

The median price of vacation homes sold last year was $121,300, down 19 percent from $150,000 in 2010.

The Realtor survey also produced a portrait of a typical vacation-home buyer as someone 50 years old with a median household income of $88,600, purchasing a property a median distance of 305 miles from their primary home.

A little more than a third of vacation-property sales were within 100 miles of the buyer’s residence, and a similar share were more than 500 miles away.

While buyers like the bargains produced by the severe downturn in real estate and the resulting pressure on prices, real estate professionals are ready for the improving market to get back to a more normal balance.

“I’m only hopeful. I’ve lived through real estate slumps two or three times, but it has never been this bad,” Moscony said. “This will turn around also.”

Contact Kevin Post:

609-272-7250

KPost@pressofac.com

Beach-town bargains

Source: RealtyTrac

©2012 The Press of Atlantic City (Pleasantville, N.J.)

Visit The Press of Atlantic City (Pleasantville, N.J.) at www.pressofatlanticcity.com

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Taken from: http://www.loansafe.org/real-estate-slump-makes-beachfront-homes-more-affordable
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