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- 2014 Property Investor Report | Global | Colliers International
• 70% of all respondents worldwide plan to expand their property portfolios.
• US investors are most ambitious on an international front.
• Globally, there is strong demand amid greater levels of risk tolerance.
• Canadian property investment in the US continues to surge.
- Labor Market Spider Chart – Federal Reserve Bank of Atlanta
The spider chart is designed to allow real-time tracking or monitoring of broad labor market developments by comparing current conditions to those in the fourth quarters of 2007 (prerecession peak) and 2009 (postrecession trough in employment). Indicators of labor market status are broken up into four groups: Employer Behavior, Confidence, Utilization, and Leading Indicators. The data will be updated twice monthly.
See also: https://blogs.reuters.com/data-dive/2013 /11/22/four-charts-from-the-most-import ant-jobs-report-you-arent-following/ for some insights into which trends and ratios might mean what.
- A foreign attraction to Montreal’s real estate market
Positives and negatives:
While foreign buyers are appreciated by the real estate industry because they purchase properties in a relatively soft housing market, investors from Asia and the Middle East have been blamed for driving up home prices in Vancouver. Economists have warned that foreign buyers also create a more volatile market driven by yields, rather than by fundamentals like having a place to live.
- Weak October Sales Have Home Builders Fretting About Spring – Developments – WSJ
“October was basically a crummy month for a lot of builders,” said Jody Kahn, a senior vice president at Irvine, Calif.-based Burns. “Their frustration is about the government shutdown and how it probably trumped any seasonal (sales) lift that builders were hoping to see. Most did not have very good sales.”
Burns received 248 responses to its latest survey spanning 273 U.S. markets. The survey provides an early glimpse each month of sales of new homes in advance of the U.S. Census Bureau releasing its data weeks later. Due to the federal government shutdown in October over budget and debt negotiations, Census isn’t scheduled to release data on new-home sales in September and October until Dec. 4.
The shutdown will ripple well into 2014.
- NAHB: Positive Outlook Remains on Multifamily Starts – Multifamily Executive Magazine
Developers are remaining positive in their outlook for multifamily starts for the next six months, as suggested by the Multifamily Production Index (MPI) released by the National Association of Home Builders (NAHB) Tuesday.
- Yellen’s Likely Confirmation Puts the Brakes on Rising Interest Rates
While Freddie Mac attributed this week’s movements to economic stats, Bankrate pointed to another cause.
“After two consecutive weeks moving to the upside, mortgage rates reversed course following Federal Reserve Chair nominee Janet Yellen’s comment that ‘there is more the Fed can do,'” Bankrate said in a release.
“Investors took this to mean that the Fed will not be in a hurry to rein in stimulus or boost interest rates,” Bankrate explained, “and that helped bring both bond yields and mortgage rates back down.”
Yellen is certainly a significant factor.
- How Many Houses Are Empty? (AMH, ARPI, SBY)
This will be interesting to track.
Silver Bay noted in its third-quarter conference call that lease expirations in the third quarter were “a relatively small subset of our portfolio and may not be representative of our renewal and turnover experience.” However, they start to give a sense of what to expect over the longer term. Of the 675 lease expirations, “163 properties turned over, implying a 24% turnover rate.”
However, the company is “estimating the turnover rate for [the] single-family sector to come in around 33%.” That’s in line with results reported by American Homes 4 Rent, which saw a retention rate of 73%, which means about 27% of its residents left. Like Silver Bay, however, American Homes’ “tenant retentions statistics are based on a relatively small sample.”
… Silver Bay’s goal is to have an occupancy rate “well north of 90%. …
- NAR: Build more houses, please! – Bankrate, Inc.
The slowdown is expected, Lawrence Yun, NAR chief economist, said in a release. “The erosion in buying power is dampening home sales. Moreover, low inventory is holding back sales while at the same time pushing up home prices in most of the country.”
Lack of available homes for sale remains a major stumbling block for buyers, especially first-timers who are trumped by all-cash buyers.
- Great Graphic: GDP and GDP Per Capita International Comparison | PRAGMATIC CAPITALISM
Since 2003, on a per capita basis, Australia and Sweden have led the per capita growth of the high income economies. Interestingly, Japan’s growth per capita has been greater than the US and the other G7 countries, save Germany.
Rising or falling means something too, actually more.
- Another Sign Investors Looking Beyond Gateway Cities – Daily News Article – GlobeSt.com
Lawrence Yun, chief economist of the National Association of Realtors, was the most recent industry watcher to note the trend to smaller markets by investors, in the NAR’s quarterly forecast. “Investors have been looking for better yields, and have found good potential in smaller commercial properties, notably in secondary and tertiary markets,” he said. “Sales of commercial properties costing less than $2.5 million in the third quarter were 11% above a year ago, while prices for smaller properties were 4% above the third quarter of 2012.”
- Choose These Hipster Zips for Rental Returns – Daily News Article – GlobeSt.com
RealtyTrac started with zip codes with a disproportionately large population in the prime hipster age range—between 25 and 34. Nationally, that segment accounts for 13% of the total population. The firm focused on zip codes with more than 20% of the population in that age range.
Additionally, RealtyTrac narrowed the list to zip codes where at least 20% of the population either walked to work or used public transportation to get to work, given that easily walkable, densely populated neighborhoods are another hallmark of hipster culture. It also narrowed the focus to zip codes where renters accounted for occupancy in at least 50% of all housing units, and where the vacancy rate on rental properties was 5% or less.
All of these filters left only 83 zip codes nationwide.
However, zip codes are not uniform within. The focal point of a hipster area could fall very near, or on, a zip-code border, with the far borders of relevant zip-code areas not being hipster.
- What is the First Thing an Aspiring Real Estate Investor Should do?
I wrote an article last week about creating big goals. I think goals are extremely important for investors and anyone who wants to succeed in life, but if I had to start all over as a real estate investor, goals would not be my first action. My first action would not be education or finding a mentor, although these are extremely important. My first action would be to talk to a lender.
Why Talk to a Lender First?
Lenders (and mortgage brokers) are also numbers people. They’ve seen deals that worked and deals that failed. They can help with figuring out the right way to finance properties: points, no points, seller carry-backs (not as common right now, but times change), 15 v. 30 years, etc.
Do you start with the lender or the real-estate agent who will be your buyer’s broker? The agent may have an excellent working relationship with certain lenders/mortgage brokers.
Don’t forget the CPA (tax accountant) and last but not least, insurance broker. These are in addition to the team Mark Ferguson mentioned: “attorneys, title companies, property managers.”
You might want to add a property inspector, “handyman” or woman, various contractors, and a landscape service.