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January home prices in Chicago fell for the sixth month in a row, approaching lows reached in the depths of the recession in 2009

The Chicago area fared worse than the national average, with the local index reaching its lowest level since 2001. The index for Chicago-area single-family home prices fell 7.5 percent from the year-ago period, and dropped 1.8 percent in January from December.

The Standard & Poor’s/Case-Shiller home price index covering 20 major markets fell 3.1 percent year-over-year, and was down 1 percent compared with December 2010, according to a report released today.

“These data confirm what we have seen with recent housing starts and sales reports. The housing market recession is not yet over, and none of the statistics are indicating any form of sustained recovery,” said David M. Blitzer, chairman of the S.& P. index committee in a statement.

Chicago was one of 11 metropolitan areas to hit a new low in January from their market peaks in 2006 and 2007. The Chicago-area price index has fallen 31 percent since its peak in September 2006.

After rebounding nearly 7 percent from its recessionary low, the national price index has fallen more than 5 percent since July and is only 1.1 percent higher than the bottom set in April 2009. As of January, average home prices across the U. S. returned to 2003 levels, the report said.
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Source: http://chicagobreakingbusiness.com/2011/03/january-home-prices-down-3-1-near-09-lows.html

Technorati Tags: real estate, real estate investing, chicago real estate, chicago housing market, chicago housing trends

Increased demand for rental housing will drive vacancy factors down to 5% and rental rates up to double digits in hot rental markets by 2012

Rent hikes have averaged less than 1% a year over the past decade, according to Commerce Department statistics, adjusted for inflation. Now, Peggy Alford, president of Rent.com, expects rents to spike 7% or so in each of the next two years — to a national average that will top $800 per month.

In the hottest rental markets, the increases will likely top the 10% mark annually for the next couple of years. In San Diego, Alford anticipates rents will rise more than 31% by 2015. In Seattle rents will climb 29% over that period; and in Boston, they may jump between 25% and 30%.

The driving factors

Now that the recession is easing, many of the young people, who moved back home with Mom and Dad, are ready to find new digs, mostly as renters, not owners. Plus, the foreclosure crisis continues unabated, and the millions losing their homes are looking for new places to live.

Apartment developers many not be able to keep up with this heightened demand, which will force prices upwards, according to Chris Macke, a real estate analyst with CoStar, which tracks multi-family housing trends.

“There will be an envelope of two or three years,” said Macke, “when the rise in demand for rentals will exceed the industry’s ability to meet it.”

Plus, Alford added, “there’s been a shift in the American Dream. We’re learning from our surveys that a huge proportion of people are choosing to rent.”

They’ve experienced the downsides of homeownership — or seen friends and family suffer — and don’t want to take the risks or pay the higher costs of homeownership.

Where homeownership costs are particularly high, there are many more renters than owners. In Manhattan, for example, only about 20% own their homes; in San Francisco, about of third of the population does; in Los Angeles, less than 40%; and in Chicago, about 44%.

One factor that could rein in rent increases

The huge number of foreclosed homes that could hit the market over the next few years could put a lid on rental rates.

In many markets, like Phoenix and Las Vegas, there are neighborhoods filled with recently built, single-family homes going for fire-sale prices. When the cost of owning homes falls well below the costs of renting them, more people will buy.

Read Here: Why an investor should consider multifamily investing
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Source: http://money.cnn.com/2011/03/15/real_estate/rent_rise_housing/index.htm

Technorati Tags: real estate investing, rental markets, hot rental markets, demand for rental housing

In August, foreclosures set a new record high for the third time in five months, indicating that 2010 repossessions will shatter all previous records.

Remember: The housing bust TRIGGERED this great recession in the FIRST place! And now, despite $3.6 TRILLION Washington has thrown at this crisis, it is NOT getting any better.

And this is only the latest in a long parade of catastrophic housing news we’ve seen recently. Sales of new and existing homes plunged to the lowest levels on record in July. Home prices have now crashed a staggering 28% since 2006.

And now, while home sales are plunging, soaring foreclosures are exploding the number of houses for sale. That’s serious: The faster this gap between supply and demand grows, the faster home prices and home equity are likely to plunge in the months ahead.

That means more trouble for banks … more nightmares for borrowers … more pain for stock investors — and it also means investments that soar when stocks sink are set to make some investors much, much richer!

Where are the investing opportunities right now

This kind of foreclosure news should signal a further depression of home values which is great for better prices for investors who want to turn the property into a rental. Possible investing niches for single family homes:

• Foreclosures

• Short sales with strategy #1; strategy #2 or strategy #3

• Assign the contract

• Fixer uppers

• Government foreclosures

• Bulk REOs

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Source: NL from Mike Larson of Money & Markets published by Martin Weiss PhD

Technorati Tags: real estate, real estate investing, home foreclosures, foreclosure rate, rental property investing

Residential property auctions have increased during the prolonged downturn in the real estate market, providing developers with a method to quickly sell multiple units that might languish on the open market otherwise.

Auctions have been a strong segment of the shore market, in part because of the large number of vacation and second homes.

Max Spann Jr., president of Max Spann Real Estate & Auction Co., said the Clinton, Hunterdon County, company has been very busy with such properties along the shore from Cape May to Monmouth counties.

“Usually, they’re the first to feel the real estate correction and feel it most severely because they’re discretionary buys,” said Spann, 46, who lives in Clinton.

In the second quarter, company auction sales of 64 units accounted for half of the 128 condominiums sold in the Wildwoods, he said.

Spann said the company, founded by his father 40 years ago, is experiencing an increase in auction sales just as it did in the late 1980s and early 1990s.

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At the height of the real estate bubble in 2006, Max Spann Co. sold fewer than 100 residential properties, he said. By 2008, such sales had risen to about 300, and last year were more than 300, Spann said.

“Percentage-wise, business has increased 50 percent the past two years in dollar terms,” he said, declining to disclose sales or revenue figures.

From 2003 to 2008, U.S. residential property auction sales increased by 48 percent, National Auctioneers Association figures say.

In 2008, the most recent data available, residential auction sales were worth $17.1 billion, up from $14.2 billion in 2005 before the real estate market went into decline. Counting commercial and agricultural real estate, the auction market was worth $58.6 billion in 2008.

“Auctions are a great solution for developers sitting with a lot of inventory and the costs of carrying that inventory such as loan payments and taxes,” Spann said.

Appeal of auctions for buyers

For buyers, the appeal of an auction is possibly getting a deal, or at least knowing that they didn’t overpay for a property, Spann said.

“Buyers can walk away knowing they bought correctly because the rest of the marketplace was competing and other people saw the same value or close to it,” he said. “They may pay $5,000 more than other bidders, but I’ll take that margin of error anytime.”

And auctions are especially appealing in a down real estate market because they compel deals to be done quickly.

“The auction format creates a sense of urgency that’s needed in this marketplace,” Spann said. “You can come and bid your price, but you’ve got to be there.”

The urgency and being there are flexible concepts in another kind of auction taking place right now for two choice building lots next to the High Bar Harbor Yacht Club on Long Beach Island.

They’re being offered in an online auction of $125 million in residential and commercial property by Carlton Exchange, a unit of New York-based Carlton Advisory Services.

Carlton associate Reuben Twersky said the bidding for the properties will continue — usually three to four weeks — until a buyer and the seller come to terms.

“The way the process works is that you make an offer, and the buyer either accepts or makes a counter offer,” Twersky said. “Based on the counter offer, you can meet it or bid again, until the seller agrees on a price.”

Bidders, who review the properties and bid through www.carltonexchange.com, aren’t aware of the bids by others, he said.

And the company has a thorough process for making sure bidders are qualified and have the necessary funds, he said.

“The sellers are using the Carlton platform to drive national and international investors in the market,” Twersky said. “You might not have a local buyer but you have national and international buyers looking at Long Beach Island as a worthwhile investment in today’s market.”
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Source: http://www.pressofatlanticcity.com/business/article_d9e6923e-9d0e-11df-be3a-001cc4c002e0.html

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Overbuilding during the housing boom has left so many homes available that landlords, desperate for renters, are wooing Section 8 recipients

Their portion of the government subsidies, delivered electronically, guarantee the landlord gets paid. As a result, Section 8 recipients suddenly have a housing smorgasbord.

Plenty of average housing stock remains in many places, but in certain markets, there are also more upscale selections.

On the website GoSection8.com, landlords nationwide tout boom-era showpieces—replete with “great rooms,” backyard swimming pools and built-in stainless-steel barbecue grills—that once sold for hundreds of thousands of dollars. Las Vegas has been one of the nation’s hardest-hit real-estate markets.

3 Crucial Keys To Investing Success: The most successful real estate investors #1. Pick a niche like foreclosures, probate sales, commercial property, tax certificate sales and the like – #2. Learn all there is to know about that niche – #3. Exploit the heck out of it for maximum profits.
Click here to get proven help with selecting the most lucrative real estate investing niches

P.S. Need money for your deals?
Click here for the best sources for money or zero down real estate sources

Some renters are getting pickier

“More and more, I’m seeing tenants turn down places,” says Arman Davtyan, owner of seven Las Vegas properties rented to Section 8 tenants. Instead, they’re going for “another property that’s either bigger or in a better area or has more bedrooms,” he says. “Before, they tended to take whatever they could get.”

Though some neighbors have long contended that government-subsidized tenants increase crime and depress property values, some now say that having a house occupied is better than leaving it vacant, which attracts vandalism and other problems.

Residents have mixed emotions about the new tenants

In Antioch, Calif., a San Francisco bedroom community where the number of Section 8 listings has skyrocketed in recent years, residents have mixed emotions about the new tenants. “I would concede, I wouldn’t be happy with an empty house,” says Walter Ruehlig, a longtime resident of Antioch. “It’s kind of like, ‘What poison do you choose?”‘

But resident Natalie Wilson says Section 8 tenants brought big changes to Antioch, including fights, loud parties and litter. She helped launch a neighborhood-watch program. “If a block has five Section 8 homes, are you going to want to move into that neighborhood? No,” says the middle-school registrar. “You don’t want to live next to a Section 8 house.”

Tensions have run high in Antioch. Section 8 tenants complained they were being harassed by police and filed a federal lawsuit in 2008, which is still winding through the courts.

In the Las Vegas development, Paradise, officially known as Paradise Court, relations between neighbors are more peaceful, Ms. Newburn says. Kye Jensen, owner of a townhome behind Ms. Newburn, says a concern is how any renters will affect property values.

Denise McCrae is looking for an apartment near Newport News, Va. Her current apartment in Philadelphia has a red brick dining-room floor and industrial-style windows. She longs for a dishwasher and a washer and dryer.

Several rental listings around Newport News spotted on GoSection8.com have impressed her. One that stands out is a townhouse with a community weight room and a “theater area” with a big-screen TV for residents. Another perk: central air conditioning, which she now lacks. “I was like, ‘This can’t be Section 8 at all,”‘ Ms. McCrae says. “This is beautiful.”

The change marks one of the most dramatic shifts since the 1974 creation of Section 8

The change marks one of the most dramatic shifts since the 1974 creation of Section 8, nicknamed after its location in the U.S. Housing and Community Development Act. The $18.1 billion Housing and Urban Development program offers more than 2 million families the chance to live outside of housing projects. Recipients pay a certain percentage of their income, typically no more than 30%, each month.

Landlord participation is voluntary, and the home must pass an inspection. With no official centralized location for available properties, it is impossible to know how many units are available, though the count appears to be rising. When GoSection8.com was launched in 2004, a few hundred listings occurred monthly. Now, 700 or more can come daily, says Richard Cupelli, the site’s president. “The amount of new owners that are seeking Section 8 tenants is through the roof.”

While some of these new landlords are homeowners who can’t sell or those trying to avoid foreclosure, many are investors scooping up bargain-priced units for the rental income.

Last year, Mr. Davtyan, who rents to Section 8 tenants, paid $60,000 in cash for a four-bedroom house in North Las Vegas. He charges rent of $1,436 each month, giving him a profit of about $15,000 per year after insurance and property taxes, he says. He also paid $60,000 for a six-bedroom house in central Las Vegas 18 months ago that once commanded nearly $300,000. It rents for nearly $1,700 a month.

“It’s the most lucrative way to go right now,” he says. “Nowhere else does your money make that kind of return.”
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Source: http://online.wsj.com/article/SB10001424052748703954804575381270905814374.html

section 8, renting to section 8 renters, real estate investing, commercial property foreclosure, property investments, buying rental property, rental property investment, property investors

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