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- Southern California renters have an edge over home buyers – latimes.com
Ebb and flow in the real-estate market:
While the housing recovery has led to higher prices and bidding wars, an expanding supply of rentals is holding down prices.
By Andrew Khouri. August 24, 2013, 8:26 p.m.
Why buy when you can rent?
With a frenzied housing market shutting out would-be buyers all over Southern California, sending that check to the landlord is looking smarter every day.
The rental market provides a stark contrast to the red-hot housing recovery. In Los Angeles County, apartment rents have risen only slowly, with an expanding supply of rentals holding down prices. In downtown Los Angeles, an apartment building boom has even driven rents down by 5% over the last year, to an average of $1,990 in the second quarter.
Rents also declined in the single-family home market, where an influx of cash investors is driving up prices for home buyers. These new investors, including some cash-rich Wall Street firms, have scooped up properties to hold and rent.
The story here is those all-cash, bulk buyers. They've made purchasing much more competitive while increasing the rental stock.
Read the source article … http://www.latimes.com/business/la-fi-be tter-off-renting-20130825,0,5103842.stor y
- 10 Ways To Make More Money In Real Estate
Just a fairly bare outline, but it gets the juices flowing:
Published on: Friday, August 23, 2013. Written by: Wendy Patton
There are literally 100s of creative ways to make money in real estate. Real estate investing stretches from raw land that can subdivided to large commercial properties run by property managers. It can also involve just owning the mineral rights to drill for oil, natural gas or other highly profitable minerals. The only limit to make money in real estate is your imagination.
Most beginning investors start to make money in real estate by investing in a single family home. You can make a decent profit this way. But you should at least be familiar with other ways you can make money in real estate.
A good strategy to make money in real estate is to gradually increase the number of units you control.
Below Are Ten Ways You Can Make Money In Real Estate
1. Duplexes, triplexes, and fourplexes. These are a natural progression from single-family houses. They offer a decent opportunity to finance your investments. As long as the building has less than four units, it's considered a residential property. Anything over five units is considered commercial and the lending rules change significantly.
2. Small to medium apartment buildings. These are between 5 and 50 rental units. The advantage here is strong cash flow. It's a great way to make money in real estate.
Read the source article … http://www.nuwireinvestor.com/articles/1 0-ways-to-make-more-money-in-real-estate -61049.aspx
- Replacing Fannie Mae And Freddie Mac Is A Fix That Has Nothing To Do With The Problem – Forbes
Strongly worded critical analysis:
8/28/2013 @ 9:44AM. By Mark Greene, Contributor.
I do not have the credentials of a financial scholar and I am not an elected leader, but apparently I have a better memory. Profit driven competition and innovation in the mortgage industry, and the proliferation of financing alternatives to better fit individual borrowers, gave us the no employment, no income, no asset, no down payment, weak credit history mortgage financing collapse that we are still recovering from. How can anyone propose that we frame a landscape that leaves open a door to the kind of runaway risk that crippled Fannie Mae and Freddie Mac the last time we tried it?
Fannie and Freddie are popularly portrayed as the villains that perpetrated the mortgage meltdown, when in fact they were simply the playing field.
With investment banks in the skilled positions, lenders on the line and our political leaders coaching from the sidelines, private sector competition and innovation in the mortgage industry is the villain that led to the collapse. Remember, Fannie and Freddie purchase and securitize mortgage loans from banks and mortgage lenders, essentially creating the secondary market space for Mortgage Backed Securities (MBS). As the sellers of these loans, the banks and mortgage lenders are responsible for the quality of the loans they are selling. It was the sub-standard quality of the loans originated and underwritten by the banks and mortgage lenders that resulted in widespread defaults and caused the catastrophic losses at Fanni e Mae and Freddie Mac.
What's your take on it?
- Richmond: Mounting concerns threaten support for plan to seize underwater mortgages – San Jose Mercury News
By Robert Rogers. Contra Costa Times. Posted: 08/30/2013 04:51:39 PM PDT
RICHMOND — With legal and financial challenges mounting , momentum is building to scuttle the city's radical plan to use eminent domain to seize underwater mortgages and refinance them at amounts homeowners can afford.
New concerns have arisen in recent days that Richmond may not be able to refinance its municipal bonds or secure insurance protection in the event of a major loss in court stemming from the eminent domain plan.
… investors this month steered clear of the city's highly rated municipal bonds, which it was attempting to sell to refinance a bond issue, saving $4 million. Some think the lack of investor interest was precipitated by the eminent domain decision.
In an email exchange Thursday, city Risk Manager Kim Greer also said MRP did not have insurance to cover the city against potential damages.
"Once the (eminent domain) activities hit the newspapers, no carrier would even consider them," Greer wrote.
- Housing bubble fears grow as UK property price recovery gathers pace /Euromoney magazine
This does not sound good for the UK.
…The average UK house price, at £162,621, government figures show, is more than six times median incomes. According to the OECD, this means UK house prices are 21% overpriced against incomes and the eighth most overvalued in the world….
…says Andrew Brigden, chief economist at Fathom Consulting.
"We've had low rates for years, but schemes like the Mortgage Guarantee Scheme are allowing people to actually access those low mortgage rates. They're making it as easy as it's ever been to get onto the housing market at a time when prices relative to incomes are as stretched as they've ever been; it's only very low interest rates that are just about keeping things sustainable at the moment.
"This is not going to provide an upturn to a level that's going to be sustainable at any sensible interest rate. At some point there will be correction — triggered by an interest rate rise or an end to Help to Buy — and it's probably going to be tied to the political cycle so there's a risk that by 2015 prices could be coming down again. Either would be enough to trigger a correction and the chances of one or both of those happening by about 2015, I would say, are pretty high."
"Help to Buy is a bad idea because if it's successful it will raise prices that are already 15% to 20% overvalued with risks for the economy and taxpayers, once the artificially created house price bubble bursts," says Capital Economics property economist Matthew Pointon.
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