Market Trends and Condition

We know that you rental property investors get upset when you hear about rising prices, but when rents are rising, it’s great news. In an article at msnbc.msn.com titled “Office and home rent will keep rising and rising,” it’s fun to read that both residential and office rents are rising. They are expected to continue rising into the future.

Home ownership has sunk to historic lows, and demand for rental properties continues to rise. Rent for a primary residence increased 2.5 percent in December 2011 compared to the same period a year earlier. One research report states that rents are at their highest level since 2007. They reached an average of $1,009 per month last year. At the same time, the vacancy rate dropped from 6.6 percent to 5.2 percent last year.

While the article referenced here was written for apartment complex owners, single family rental homeowners can benefit from the information as well. This is particularly true if you’re renting homes in proximity to colleges or computer/software companies that hire younger employees.

1. Others their own age – this is easier in an apartment complex environment, however purchasing rental properties in areas with a concentration of younger people can be a good approach if that’s your tenant demographic.

http://nationalreihomes.com/real-estate-news-blog.html

These are some short stories in the news this week of interest to real estate investors.

Home Sales Suffer from Tight Lending Restrictions

Since 2006, home prices have fallen nationally by around one-third. Home affordability hasn’t been at this level in decades. Home prices are at rock-bottom, and interest rates are at historic lows as well. This would seem to be a perfect storm for normal home buyers, but there’s nothing stirring.

There is a possible $20 billion settlement in the works with mortgage lenders for the benefit of foreclosed homeowners. However, the government says they’re launching another probe. They state that it shouldn’t influence the outcome of the current negotiation however.

While some analysts are calling the new probe “window dressing” and a political rebranding of previous efforts, the administration states that this new probe will be better than past joint-agency federal probes. Attorney General Eric Holder says that the new watchdog group will have more than 50 investigators and attorneys, and that subpoenas are being sent to 11 financial firms for records related to the buying and selling of mortgages.

I guess the RE professionals are getting a taste of the crisis too...wow!

Real Estate Professionals Feeling Brunt of Recession
02/02/2012 By: Krista Franks Printer Friendly View
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The effects of the housing crisis are widespread, but nowhere do they hit home more than in the real estate community.

Eighty-eight percent of real estate professionals in a recent survey said they have lost money since 2008 or are living off significantly less income. Many are dipping into savings to make ends meet.

The survey of more than 800 real estate agents and brokers across the nation, 99 percent of whom claim real estate as their primary employment, was conducted in January by insurance company Entitle Direct.

There is a proposed settlement with the major banks to get the mortgage mess behind them. It is worth a purported $25 Billion and is doled out to about 2,850,000 people. Because of the mess that the mortgage industry is in due to MERS, I think this may be the best they can do. However, it is patently unfair to the other 4,000,000 people in the pipeline.

Read the whole story here:

http://www.cnbc.com/id/46284177

The title was the headline of an article this week at msn.com. There are a lot of numbers flying around about homeownership and renting in the U.S.

• The share of all American privately owned houses that stood empty fell in the fourth quarter of 2011 to its lowest level since 2006. This was because the number of houses occupied by renters rose faster than the pace of new vacancies created when homeowners move out.

• The number of housing units occupied by renters rose by 749,000 units in the last quarter of 2011 compared to a year earlier.

• From the fourth quarter of 2010 through the same period in 2011, there was a drop of 91,000 homes occupied by owners.

In the third quarter of 2010, foreclosure properties made up around 30% of all residential real estate sales. In the same period in 2011, that percentage was down to 20%. However, it’s not a time for rejoicing. In the third quarter of 2011, 221,536 properties, down 11% from the previous quarter, and 5% lower than the same quarter a year earlier.

One reason this isn’t that joyous of a statistic is that foreclosures significantly slowed last year due to the robo-signing scandal, and there was a greater-than-normal seasonal drop-off in the fall. Fewer homes are coming through the process, but there is expected to be an increase in 2012. The average foreclosed home sold in 193 days, up from 172 days in the previous quarter and 161 days in the third quarter of 2010.

http://nationalreihomes.com/real-estate-news-blog.html