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Nashville’s suburb, Rutherford County, saw pop of 44-percent in population

Factors that weigh in
Randy Gustafson, director of the Tennessee State Data Center at the University of Tennessee, attributes the boom to the county’s proximity to the state capital 30 minutes north.

County Mayor Ernest Burgess has another view: “We attribute it to the great quality of life in Rutherford County and the great economic opportunities and the opportunity for people to raise their children and send them to excellent schools.

“You don’t have to go out of the county to shop, to find a great restaurant. People like us because we have all these great amenities and we’re still not a major city.”

He says people are drawn by employment opportunities at places such as the Nissan plant in Smyrna and by the education options offered by Middle Tennessee State University.

Tennessee stats for other cities and communities

Nashville, in the center of such growing suburbs, saw a healthy 10% growth in the past decade, a trend also fueled by a rise in immigrant labor and international refugees.

Memphis, the state’s largest city, saw a 0.5% decline.

Overall, Tennessee’s population grew 11.5% to 6,346,105. “The suburban counties that are like a donut around the big cities in Tennessee, especially Nashville, are the ones that show the most growth,” Gustafson says.

Among other large counties, Shelby grew 3% to 927,644, Knox 13% to 432,226 and Hamilton 9% to 336,463. Gustafson said that growth was powered by people moving inward from other parts of the state and outward from the cities.

There were declines in 117 cities. “A lot of those are really small,” Gustafson says. “Most of them are around 1,000 people or less, and they’re mostly rural areas. In some respect, the decline is due to an aging population that doesn’t have as many children.”

The Volunteer State’s expansion was driven largely by immigrants. Tennessee’s Hispanic population grew faster than any other group — 134% to 290,059 — more than doubling to almost 5% of the population.

Resources

# Tennessee local county, city data
# Interactive map shows your state, county, locality census numbers
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Source: http://www.usatoday.com/news/nation/census/2011-03-17-tennessee-census_N.htm

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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.

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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

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Real estate investors/developers often need to think “outside the box”

Case Study: Developer sees great potential in second home segment

In doing research for a new line of country homes, Trendmaker found 3,400 parcels of land in the Round Top area that hadn’t been built on and whose owners lived in other cities.

It was part of what gave the builder the confidence to enter the rural central Texas housing market.

“With baby boomers retiring and Texas leading national population growth trends, we see tremendous potential in the second-home market,” said Will Holder, president of Trendmaker Homes.

The company is launching a line of manufactured homes called Texas Casual Cottages for buyers who own their own property in country settings where it can take longer to build a second or retirement home because the locations are so remote.

“You don’t have to worry about it getting framed and then deer season comes and it sits for a month, and it’s out in middle of the woods and stuff gets stolen,” Holder said.

The homes are being built off-site by GroundForce Building Systems of Navasota. Trendmaker will deliver and assemble them at the home sites, as well as build porches and handle other infrastructure issues.

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They will have metal roofs, large porches, pine floors and wood walls, along with modern finishes like open family room and kitchen combinations, large bathrooms and walk-in closets.

Floor plans will range from a 450-square-foot guest cottage to a 4,500-square-foot farmhouse. And prices will start in the $50,000s for a small cottage and reach more than $300,000.

A model home will open in Round Top next month on Texas 237 across from the Big Red Barn, a well-known antiques center.

If sales go well, Holder said, he would like to expand the product into other parts of Texas, including Corpus Christi, the Canyon Lake and Lake Livingston areas, Galveston and Bolivar.

Longtime Houston real estate agent Sandy Reed, who moved to Round Top in 1990 to renovate and sell historic houses, will serve as sales manager and design consultant for the new home line.
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Source: http://www.chron.com/disp/story.mpl/headline/biz/7027826.html

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Mitsubishi Estate Co., Japan’s biggest property developer by market value, said it will set up a real estate fund in the U.S. this year and seek takeovers overseas to counter declining demand at home.

“We cannot just sit back and be satisfied with what we’ve built over the years at home as demand will probably remain weak and competition will increase,” Chief Executive Officer Keiji Kimura said in an interview in Tokyo on May 19. “We believe this is a good time to start building up our global platform.”

His plans come as commercial property sales in Manhattan, the biggest and most expensive U.S. office market, tripled in value in the first quarter from a year earlier. Office vacancies in Tokyo are at a record high and commercial land prices declined to the lowest in at least 36 years.

The firm may initially invest in about two buildings on the East Coast through its Rockefeller Group Investment Management unit, said Kimura, 63. He declined to elaborate on the size of the fund. Mitsubishi Estate is also in talks with several real estate asset management firms in the U.S. and Europe for possible takeovers and alliances, Kimura said.

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

The firm aims to increase operating profit from overseas business to about 20 percent of the firm’s total, from 7 percent last year, he said.

‘Very Transparent’

“The U.S. real estate market is very transparent,” said Masahiro Mochizuki, a real estate analyst at Credit Suisse Securities (Japan) Ltd. in Tokyo. “It’s a good move for the company to seek expansion in that market rather than some of the Asian markets that are less so.”

At home, Mitsubishi Estate, the biggest landlord in Tokyo’s Marunouchi central business district, is planning to start its first private real estate investment trust, allowing it to securitize property investments, Kimura said.

In February, Nomura Real Estate Asset Management Co. announced plans to start a private REIT, Nomura Real Estate Private REIT, nine years after Japan opened the REIT market to developing securities pioneered by the U.S. in the 1960s.

“Private REITs are good vehicles in a way that it doesn’t get affected by the market prices,” Kimura said. “We’re starting to see some interest from pension funds to invest in real estate, so this could be a good offering.”

The TSE REIT Index, which tracks 37 funds, had a record market value of about 6.79 trillion yen in May 2007, compared with about 3 trillion yen today.

Profit Forecast

Mitsubishi Estate’s net income dropped 74 percent to 11.9 billion yen in the year ended March 31 as the firm wrote down losses on projects in Tokyo. It forecasts profit to jump more than fivefold to 63 billion yen.

Tokyo’s office vacancy rate rose to a record high of 8.82 percent in April, according to Miki Shoji Co., a Japanese office brokerage company. The number of condominiums put up for sale in Tokyo and surrounding areas rose 23 percent in April from a year earlier, a third straight monthly gain, according to Real Estate Economic Research Institute.

Japanese commercial land prices declined 6.1 percent in 2009, more than the 4.7 percent drop a year earlier, the Ministry of Land, Infrastructure, Transport and Tourism said in a report released in March. Values are at their lowest since the ministry began collecting comparable data in 1974.

Signs of Rallying

By contrast, the U.S. property market is starting to pick up. About $3.3 billion of transactions priced at $10 million or more were closed or went under contract in the first quarter, almost matching the $3.5 billion sold during the whole of last year, New York-based property broker Cushman & Wakefield Inc. said in a report on April 6. About 5.7 million square feet (529,000 square meters) of offices were leased in the first quarter, 84 percent more than a year earlier.

“We expect the condominium market in Japan to slowly pick up, but we will never see the kind of growth we used to see at its peak,” said Kimura. “In the U.S., we’re starting to see some investments return to the market.”
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Source: http://www.businessweek.com/news/2010-05-21/mitsubishi-estate-plans-u-s-property-fund-takeovers-update2-.html

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