|Real Estate Information
Boom or Bust
For those looking to invest in the real estate market?keep your eyes on the headlines. According to the Federal Deposit Insurance Corp. (FDIC), the number of areas across the U.S. with real estate booms shot to 55, increasing by nearly two-thirds last year. The FDIC warns, "these booms may be followed by busts".
"Boom" areas are defined as having inflation-adjusted prices at the end of 2004 that were up 30% or more in three years.
Of the 362 major metropolitan cities included in this study, over 15% were boom areas. This data, analyzed by the Office of Federal Housing Enterprise Oversight, more than doubles the peak of the 1980's booms and is the highest ratio of boom markets in 30 years.
As for "boom or bust", busts are rare. Only 17% of U.S. housing booms from 1978-1998 ended in busts, which are defined as a 15% or more drop in home prices over a five-year period.
What is making the market soar? Aside from inflation, the mortgage industry has to be considered first. Adjustable rate and interest only mortgages are growing in numbers and subprime loans now account for 10% of all mortgage loans.
With interest rates lower than they've been in years, borrowers can afford to finance an amount greater than the standard 80% loan to value. The percentage of loans exceeding 80% of the purchase price has grown to over 30%. If a borrower has an adjustable rate mortgage and the interest rates rise, their payments increase. If the market values drop, or bust and they have 90% or 95% loan to value, they owe more on the home than it is worth. But these are all "What ifs??".
In the markets with the highest number of "boom" cities, California with 21 cities has a high increase rate of 58% and Florida with 11 cities has a high increase rate of 54%. These two states alone account for 60% of the boom areas! With these numbers, would you purchase an investment property in Florida or California and flip it in three years for a possible return upwards of 50%?
Of course. A relatively sound investment. How much longer can the market withstand these price increases before it busts? Even history shows a period of time when the market stalls so that inflation can catch up. If you want to invest in real estate, carefully examine the history of the market you are purchasing in! If it has been booming like Florida and California, be careful how long you hold on to the property. If you notice the market is starting to drop, sell. Hold on too long, it may bust!
Jason M. Rigler
Dubai or not to Buy? A Short Assessment of the Dubai Property Market
Never has there been such an ambitious and creative drive to establish a property market as has been witnessed in Dubai over the past three years. Running short on oil reserves, Dubai's crown prince, Sheikh Mohammed Al Marktoum, set out to turn Dubai into the financial, commercial and tourism capital of the Middle East and in the space of three years he has more than succeeded.
Much Ado About Mansionization?
Is there a perpetual shadow hovering over your house? Do you feel as though you live in a Batman movie? You may be the victim of a neighboring McMansion or a new development trend called mansionization, the housing industry's equivalent to bigger portions and fast food.These mansionizers-who are frequently "spec" builders--buy small or dilapidated homes, raze them and erect massive structures, often resembling sterile apartment buildings.
An Often Overlooked Secret of Marketing and Negotiating for Real Estate Investors Looking for Deals
When you call sellers, what do you say? When you sit down to write a marketing postcard to find deals, what do you write? When you go to negotiate price and terms, how do you present it?These are scary situations and it is not unusual to be at a loss for words at such times. In fact, you may avoid these situations all together just so you don't have to face the overwhelming fear.
Beat the Crowd when Investing in Real Estate
We all are thinking about it and some of us are actually taking action and getting their hands on real estate investment properties. The longer the NY Stock Exchanges doesn't produce desirable returns the more people are starting with real estate investments.
Choosing a Realtor
Purchasing a property, either as an investor or as a prospective homeowner can be one of the most exhilarating and frightening experiences of your life. In both situations it is imperative that you find just the right property at the right price.
Is a Vacation Home Right for You?
Many of us dream about owning the vacation home in the Mountains, or on the Lake or Ocean. A place where one can retreat periodically from the hustle-bustle of everyday life.
Family Feud with an Auction Deadline - Adventures in Probate/ Estate Purchases
One of our investor students told us of an interesting probate deal or "adventure" they're working on now and while it's a good story, it also illustrates lots of the ins and out of probate or estate issues and purchases.The Seller (we'll call him Scott) co-owned this house with his mom, and he co-signed on the loan with mom.
The Real Estate Cycle
The real estate cycle, like the business cycle, refers to the activity of the real estate market as it reacts to the forces of supply and demand.Supply and demand.
Things To Consider Before Buying a Condo Hotel or Resort Residence
Resort home ownership, such as condo hotels and fractional shares is different from typical home ownership. So it is important to ask certain questions before signing the purchase agreement on a resort property.
Popping The Real Estate Bubble Myth!
If you turn on the TV, listen to the radio, or even surf the internet, you'll notice that there is a lot of people talking about the "Real Estate Bubble", and asking the question, "when is it going to burst?" They (these so-called experts) have been saying for years that the real estate market can't continue this type of growth. These "experts" remind me of chicken little, with all of their prosphesy of doom and gloom, and the "sky is falling" syndrome.
Transforming Doghouses into Dollhouses
Successful real estate investing depends largely on a correct assessment of a property's profit potential, but it also depends on your ability to transform a doghouse into a dollhouse. The renovation process involves physical work and choosing the best supplies, in order to create maximum positive emotional effect and profits, but if you make wise choices in your choice of colors, textures, and building materials, you'll assure yourself a fast and cost-effective sale.
Create a Sizzling Home Sales Flyer
Did you know that the sales flyer is the most important tool in selling a house?Even if your home is listed with an agent, check the flyer that your agent has created, to see if you can jazz it up. Examine it closely, to make sure that all your amenities are listed.
Is An Old Home for You? - The Pros
If you prefer a home that is unique and has character, you probably are giving some thought to buying an older home. Before buying, it's a good idea to carefully evaluate the pros and cons of owning the home.
Real Estate Investors Kick Away $1,000
Those new to real estate investing often fail to take action because they don't have much cash. The truth is that the very best investors got their start when they had little or no money.
Property Investing Secrets 7
Property Investing Secrets:How Buying Real Estate Is Like Planning a Trip to the Greek IslandsOne you start property investing, one important tip is to press the flesh with the real estate agents in the areas where you plan to buy. Because property investing is a bit like buying a holiday package, you must separate yourself from the rest of the investors by giving the real estate agents the information they are looking for in your first face to face meeting.
Dont Just GET THE DEED - The Infamous Kitchen Table Closing
Q: Hi Lou, I have a property under contract that I want to resell/flip as-is to a rehabber/renovator, but I may have to purchase it quickly and simply record the Quit Claim Deed, without using a closing attorney or waiting for a title exam. I need your advice.
Dramatic Profits From Preconstruction Real Estate Investing
The preconstruction process is an innovative real estate investment opportunity in which you buy tomorrow's property at today's price. Preconstruction investing is a boon for the investor or buyer as well as the developer or builder.
Dealing With Dual Real Estate Agents
Historically, real estate agents have represented the seller of a property. The seller, after all, is usually the one who pays their commission, and agents therefore have a fiduciary relationship with the seller.
Flipping Houses for Gold: Three Tips to Help You Find the Perfect Fixer
Many real estate investors enjoy "flipping houses," or buying and selling houses quickly for profit. Not all flips are fixers.
Secrets of Making Money from Real Estate - Part 3
Great, now how do I actually INVEST in real estate?Investing in real estate will get easier the more you do it. The first deal may take some time, but like anything, the more you do it the better you'll become.
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