Foreclosure Trends

===Foreclosures rise nationally in May===

I've been contacting my Investor clients who may wish to take a leap at this point based upon trending of interest rates and foreclosures, which will lead to more need for rentals and the up-cycle for income property/passive investing. Getting the houses at the right price in an adjusting market is the tough part for the investor, as Sellers try to maintain a strong average sales price.

A one-month increase of 3,859 residential foreclosures nationwide tracked by Foreclosure.com confirms the existence of a buyer's market in the residential real estate sector, the company recently announced. Foreclosure.com data also indicates that investors are moving quickly to purchase foreclosed properties, with more than 25,000 foreclosed homes being sold in April 2006. Nationwide, there were 27,064 new foreclosures during May 2006 -- an increase of 16.6 percent compared to April 2006.

The total number of foreclosed homes available for sale in the United States climbed 1.9 percent from the previous month, totaling 89,327 during May. Increasing foreclosure rates during May in California and Florida contributed to an overall national upward trend in foreclosed homes, according to new Foreclosure.com data. Additionally, foreclosure rates rose significantly in Alabama, Louisiana and Mississippi, each of which had been experiencing a lower than normal foreclosure rate following Hurricane Katrina.


Chris

Affordable Housing Trends

Hi everyone, here's the latest and greatest trend we need to be aware of...especially public officials who have the ability to modify growth restrictions, create higher density zoning and demand more affordable housing through incentivizing developers. It is definitely a problem in our area, as the children of current residents cannot afford to return home and live here based upon the average home prices.


"===Affordability problems escalating even as housing market cools===
With interest rates rising and speculative demand cooling, the housing boom is coming under pressure, finds this year’s "State of the Nation’s Housing" report, released by Harvard's Joint Center for Housing Studies. As long as the economy continues to create jobs and builders trim production to match slowing demand, house prices will keep climbing and the housing sector will likely achieve a soft landing. Although house price growth will likely moderate in many areas, sharp drops in house prices are unlikely anytime soon. Even with higher interest rates and home prices crimping affordability, the lure of house price appreciation continues to draw homebuyers to the market. While the national homeownership rate edged down a tenth of a percent in 2005, it increased in the West and Northeast where house price growth was the strongest. In fact, about one million homeowners were added nationally last year. But, the report cautions, five years of unprecedented house price appreciation and decades of land use restrictions that make building affordable housing difficult are adding to widespread housing affordability problems.

From 2001 to 2004 alone, the number of households spending more than half their incomes on housing increased by 14 percent to 15.8 million. The paradox of today’s housing market is that while more people are building home equity than ever before, slow growth in wages for households in the bottom three-quarters of the income distribution is not keeping pace with escalating housing costs. Amidst a housing boom, it is now impossible to build housing at prices anywhere near what low-income households can afford without subsidies. "


Thanks for Reading!
Chris

===Real estate action shifting to middle America===
A new statistical analysis of housing price cycles in 100 major metropolitan areas suggests that real estate action is shifting to areas that didn’t enjoy the recent housing boom. Christopher L. Cagan, director of research and analytics for First American Real Estate Solutions, examined historical housing price movements and concluded that middle America markets like Columbus (OH), Indianapolis (IN), Houston (TX), San Antonio (TX), Memphis (TN), Atlanta (GA), Cincinnati (OH), Des Moines (IA) and Louisville (KY) are due for above-average price increases and home building because of expanding employment bases and moderate housing prices. Cagan also doesn’t believe what he calls the shooting stars of housing booms like most of California, Florida, Washington, D.C., New York City, or Boston are going to incinerate. He simply believes appreciation rates will dwindle to the low single digits or go flat for awhile as incomes catch up.

This is precisely what we heard at a Broker's forum a the Mid Year Conferences hosted by The National Association of REALTORS a couple of weeks ago. Time to buy in Middle America!

Chris

Second Home Trends from NAR

Hi everyone,

I attended the National Association or REALTORS (NAR) Mid Year Meetings and Expo in Washington DC last week. In addition to taking classes toward a Certified International Property Specialist(CIPS), I sat in on the annual meeting of the newest specialty offered by our association: Resort and Second Home Property Specialist (RSPS). In that meeting, I learned about the trends we need to recognize and support with the investment style of Baby Boomers. Anyway, the following article from Realty Times is a great synopsis of these trends from the NAR, and I find it all very important...

New NAR Survey Reveals Motivations Of Second-home Owners
By Blanche Evans
May 15, 2006

It's important for the real estate industry to understand what motivates homebuyers and sellers which is why the National Association of Realtors has worked hard in recent years to understand the differences between types of homeowners, including those who buy more than one property. To help its members obtain more insight into clients and their needs, and thereby improve their services to those clients, NAR has heavily researched the phenomenon of second-home owners.

According to the preface of the 2006 National Association of Realtors Profile of Second-Home Owners, second-home owners are defined as those who "own one or more residential properties, in addition to a primary residence, and who use these properties either for vacation or investment purposes. Although both types of properties share several attributes, vacation homes are properties owned primarily for recreational use by the owner or their family, while investment properties are owned primarily to rent to others."

Ownership of more than one home is increasingly common, notes NAR, due to peak earnings of the baby boomer segment of the population, less-than-stellar returns in other financial assets other than real estate, and popular tax incentives (including capital gains exclusions) and loan programs that favor buying property over other investment instruments. For example, between 2000 and 2005, the value of homes nationwide rose over 50 percent, while the Standard & Poor's 500 Index returned just over 2 percent for the same period, says NAR.Older baby boomers dominate the second-home market as vacation-home owners (age 59) and investors (age 55) and most own multiple properties. About six in ten survey respondents own two or more homes in addition to their primary residence.

Observes David Lereah, NAR's chief economist, "Boomers believe in diversifying their assets, and most second-home owners see their purchase as being a better investment than stocks. A surprising majority of survey respondents hold multiple properties, and they are interested in purchasing additional homes."While the U.S. Census Bureau data shows there are 6.8 million vacation homes in the United States and 37.4 million investment units in addition to 74.6 million owner-occupied units, the line appears to be blurring between how owners define themselves:Twenty-one percent of vacation-home owners own two or more vacation homes. In addition, 34 percent of vacation-home owners report they own two or more investment properties.

Lifestyle figures prominently in their choices with half of vacation homes located in resort areas near water or sports features. Distance is about 220 miles; most owners say they drive to their vacation homes. Most homes were in the $300,000 range, less than the value of their primary residence.More than half of investment property owners, 53 percent, own two or more investment homes and 12 percent own two or more vacation homes.Financial gain is the motivator, with most rental properties chosen to generate income and within easy access -- 10 miles. Most homes were in the $200,000 range, lower than the investor's primary residence."We've always known that a certain segment has invested heavily in the rental market, and some people earn their living simply by holding and managing investment property. What we see now is a crossover between largely vacation- and investment-home owners, with people recognizing the value of those investments and pouring more assets into real estate," says Tom Stevens, president of NAR.

Since 2003, two-thirds of second homes have been purchased through a real estate agent, while over four out of five primary homes are purchased using an agent. Thirty-two percent of all vacation-home owners and 24 percent of investment owners paid cash for their property. Combined with mortgages that have been paid-off, 82 percent of vacation homes and 75 percent of investment properties are owned free and clear. Of owners who purchased with a mortgage, the median downpayment on a vacation home was 27 percent and the median downpayment for an investment home was 23 percent.

When asked about the source of downpayment funds for more recent vacation-home owners with loans, who purchased since 2003, half said savings, 23 percent from the sale of other real estate, and 19 percent identified equity or sales proceeds from their primary residence.For more recent investment owners who purchased with mortgages, half said downpayment funds came from savings, 28 percent from equity or sales proceeds of their primary residence, and 18 percent from the sale of other real estate. Surprisingly, considering that one in three buyers in 2004 and many more were second-home buyers in 2005, that the most recent property was purchased a median of six years ago. Most second-home buyers have held additional properties for longer periods.Some believe investors are fleeing the marketplace, that may apply to speculators, but not for buy-and-hold investors. Thirty-five percent of all investment-home owners said they were planning to buy another home within two years. For those who currently own four or more investment units, 64 percent said they planned to buy another property within two years, and 17 percent said they planned to purchase five or more additional properties. Under a third said they planned to sell a property within the next two years.
Copyright © 2006 Realty Times. All Rights Reserved.

Adjusting Market Trends

Just saw this on RealTrends report..."Across the U.S., home prices are falling, with many metropolitan areas expected to see large reductions, according to a report on CNNMoney.com. The city that may see the biggest drop is Las Vegas, where prices are predicted to decrease by 8.2 percent this year, the Web site says. What's in the cards for your local market?

Check out www.CNNMoney.com's forecast for 379 cities across the U.S. While the outlook is grim for many of the housing boom's best performers -- places like New York, Los Angeles and Washington, D.C. -- the future looks bright for several cities that missed out on the action, the Web site says. Among the markets the article reports are on the way up: Houston, Memphis and Rochester (NY). "

We are experiencing a definite adjustment in Southern Maryland, but still hope to stay ahead of the curve on the 'Washington DC market'. There are still people buying and selling, and there will be continued attraction to our market based upon the lifestyle. I'm off to an appointment to show waterfront in 10 minutes...wish me luck!

That's all Folks! Chris

Trendspotting Broker

Trendspotting Broker

Just in...New-home sales in March soared 13.8%, the largest percentage increase in 13 years, the Commerce Department said April 26. The median price of new homes sold, however, fell to $224,000, down 2.2% from what homes were selling for in March 2005.

Existing-home sales rose by 0.3%, marking the second consecutive monthly increase after five months of declines. (It's not a tremendous increase, but perhaps is an indication of the upcoming trends in buying. Our area of Southern Maryland has seen a slight decline in resale value, and an increase from 28 days to 120+ days for list -to-contract time).

The number of homes for sale increased 7.0%, representing a five-and-a-half-month supply at the March sales pace, the largest supply since 1998. Median prices of existing homes are up 7.4% in the past 12 months to $218,000, the smallest price gain since January 2004.

Meanwhile, the U.S. economy bounded ahead at a 4.8% pace for the opening quarter of the year, the strongest growth spurt in two-and-a-half years, the Commerce Department reported April 28. The increase marked a vast improvement from the feeble 1.7% annual rate registered in the final quarter of 2005.
Consumer confidence in April, according to the Conference Board's Index of Leading Economic Indicators, rose to 109.6, up from a revised 107.5 in March. April's reading, important because it helps predict future economic activity, reached its highest level in four years. This is really good news.
On April 27 at the Joint Economic Committee of the Senate and House, Federal Reserve Chairman Ben Bernanke lent cheer to U.S. financial markets by saying that a pause in the Fed's tightening program is possible. The Federal Open Market Committee, which makes monetary policy for the Fed, meets May 10.

This week look for updates on personal income and construction spending on May 1.

Need real estate assistance, please visit my web site: www.mcnelisgroup.com. Email me and we'll get started! Residentail and Commerical, Sales and Leasing, National and International Network Brokerage.

Talk Soon!

How's the Market, Chris??

This is a question I answer everyday...and I think RealTrends has a far better response thsan I do:

Buyer demand and seller supply nearly balanced

For the first time in eight years, the overall U.S. housing market is experiencing a rare balance between home buyer demand and home seller supply, according to HouseHunt’s latest “Current Market Conditions” quarterly survey. Only 45 percent of respondents reported more buyers than sellers, compared to a 61%-39% ratio six months ago. Thirty-one percent reported more sellers than buyers; the remaining 24 percent said their markets are almost evenly divided. In the South, the Midwest, the Northeast and in California, the buyer-seller ratio closely matches the national figures. The HouseHunt national survey in the first quarter of 2006 also found:

* It’s taking longer to sell a home in most markets, and the trend is up. Fifty-five percent of respondents said it was taking more than 60 days.
* Seventy-five percent of sellers are still getting at least 95 percent of their asking prices. Only seven percent say they are still getting more than 100 percent. In Southern Maryland, the trend is that Sellers are negotiating about 5.5% on average.
* Home appreciation in the past 12 months is holding firm at about 10 percent. The trend is moving toward single-digit appreciation, however. Fifty-four percent reported five percent or less, 20 percent said five to ten percent, and 26 percent said ten percent or more.
* Eighty-one percent reported a good supply of unsold homes in virtually all price ranges, with inventories steadily growing.
* Multiple offers dropped from 70 percent a year ago to 39 percent in the first quarter of 2006 as demand for unsold homes decreased in many markets.
* Move-up and repeat buyers outnumber first-time buyers by a two-to-one margin in most parts of the country. The margin is three-to-one in California and the South. The national two-to-one ratio has remained constant in the past three to five years despite rapid run-ups in home appreciation.

This applies in Southern Maryland for sure. We are very fortunate, however, to expect continued appreciation over the next 5+ years. Single digit appreciation??? Make you mad because you expect more??? Consider the alternative and smile wide.

Second Homes Sales Hit Record

Second home sales hit a another record!

It is happening...just like the economists have been predicting for 30 years. Boomers are spending the cash-ola. International properties are also becoming a focus, even with the dollar being weak in many situations.

Vacation- and investment-home sales both set records in 2005, with the combined total of second home sales accounting for four out of ten residential transactions, according to the National Association of Realtors. The annual report, based on two surveys, shows that 27.7 percent of all homes purchased in 2005 were for investment and another 12.2 percent were vacation homes. All together, there were 3.34 million second-home sales in 2005, up 16.0 percent from an upwardly revised total of 2.88 million in 2004. The market share of second homes rose from 36.0 percent of transactions in 2004 to 39.9 percent in 2005.Vacation-home sales increased 16.9 percent last year to a record 1.02 million from a downwardly revised 872,000 in 2004, while investment-home sales rose 15.7 percent to a record 2.32 million in 2005 from an upwardly revised 2.00 million in 2004.

Time to make it happen...Bring on the Boomers!

A Lofty Life

I saw this article byBarbara Ballinger in the Realtor Magazine Online today...find it interesting history about the Loft Space. My favorite way to exist, for sure...

-What to Look for in a Loft. If clients say they want a loft-style home, find out what features are most appealing to them. Would they consider a new development with an open floor plan and big windows, or do they have their heart set on a traditional warehouse conversion?Here are some features that architects, developers, and real estate professionals say buyers should look for in a loft:
Authentic 19th-century materials. “I like the idea of using hardwood for floors, brick or plaster for walls, and real tin for ceilings rather than ersatz materials,” says Smith-Miller. But he adds that modern living requires certain accommodations that didn’t come with original lofts, such as ample storage and energy-efficient windows.
High ceilings, few walls. Ken Wolfson, owner of Wolfson Lofts, a development company in Las Vegas, says well-executed lofts have high ceilings and few walls “if any.”
Good location and floor plan. Broker Payman Emanian of Premier Realty in Pasadena, Calif., who has seen lofts take off in his city’s downtown and in Los Angeles, says the positive characteristics of other home styles are the key for a good loft, too, such as good location, good construction, and a “wide-open” floor plan.
Quiet. Because high ceilings, hard floors, and big windows in downtown lofts can make interior spaces noisy, Diessner says buyers should look for surfaces that absorb sounds. Smith-Miller says wood ceilings, unfinished brick, and natural stucco all fit that category. One material that doesn’t soften the sound is painted stucco, she explains. Putting rugs down on the floor or tapestries on walls also will help.

Condo Hotels

Trendspotting Broker I saw this today on www.wsjonline.com when a reader asked about the viability of purchasing this type of product in Branson, Missouri.
"Condotels", also known as "condo hotels," are typically condominiums in resort or downtown communities. A condotel looks and feels to visitors like a hotel or resort, but in these resorts, individuals have the opportunity to purchase individual units. Unlike a timeshare, where buyers pay for limited use of a resort, buyers of a condotel own their residence outright and can stay in it, rent it out, or sell it according to their own wishes. In these communities, in-house management companies rent out the units on behalf of their owners in exchange for a percentage of the rental income. Condotel owners and their renters often have use of the resort's amenities, such as concierge, fitness and spa services. Whether an owner can use the amenities while a renting guest is staying in the unit depends on the rules of the particular condotel development. These condos make up a relatively new investment category and account for less than 10% of all vacation homes and investment properties in the U.S., according to the National Association of Realtors.
Owning a condotel differs from buying and managing a condo in several respects, says Joel Greene, president of Condo Hotel Center in Miami, a real-estate agency that specializes in the sale of condo hotels throughout the country.
Unlike typical condos built by multifamily housing developers, condotels are often developed by hotel and resort companies -- such as Starwood Hotels & Resorts Worldwide, Hilton Hotels Corp., The Ritz-Carlton Hotel Company, LLC, and Four Seasons Hotels and Resorts. The price you pay for a unit may be substantially higher than that for a "regular" condo.
For the extra cost, you have access to the services of an in-house management company, which will market and rent your unit out for long or short periods of time (even nightly). The management company's rental program will charge you a portion of your rental income (typically 50%), and will handle the maintenance of your unit, groundskeeping and the clean-up after your renters leave. It will also oversee guest amenities such as pools, tennis courts and golf courses. If you bought a "regular" condo and hired an outside management firm to market and lease your unit to renters, there may be less flexibility when it comes to placing your unit in and out of the rental program, and the firm may not market your unit nationally in the way that a large hotel company might, Mr. Greene says.
When looking to invest in a condotel, research the local real-estate market (e.g., are prices on the rise, or has the real-estate market peaked?). Study regional tourist activity and hotel occupancy, since a condotel unit, especially if it is run by a hotel operator, may be marketed like a hotel room. The location of your unit has the potential of figuring prominently into how profitable an investment it is. Jerry Yeiter, past president of The National Real Estate Investors Association and president of Yeiter & Co., an accounting firm in Houston, says some investors have had success with condotels in Florida and Arizona because these destinations offer desirable tourist activities and because these buyers purchased at a time when area real-estate prices were appreciating. Ask yourself whether Branson can attract tourists. I checked with the Branson Lakes Area Chamber of Commerce and Convention and Visitors Bureau, and was told by Jennifer McCullough, public relations director, that Branson, which is in the Ozark Mountains, draws more than seven million tourists a year. Factoring in visitors who stay in rented vacation condos, the combined hotel and condo occupancy rate in Branson is 62% to 63%, according to the town's chamber of commerce and convention and visitors bureau.
If you buy before a condotel project is fully built, you may be able to purchase your unit at a lower cost, as developers tend to offer the lowest prices pre-construction. You may have to wait until the project is completed, though, before you can rent out your unit. Estimate how much you can fetch per night and how often you need to rent the unit out to bring in enough to cover your mortgage and other expenses. "It's all about the numbers," Mr. Yeiter says. "You'd have to look at the rules and make sure the property would be suitable for an investor." Some management companies, for example, stipulate how often you must make your place available and even how it should be decorated.

I think this is a good explanation, and will watch for more trends toward this type of product in resort/high volume tourism areas. Outta Here-TSB.

Baby Boom Housing Trends:"65+ in the United States", a study commissioned by the National Institute on Aging (NIA,) of The National Institutes of Health is now a living document. The study, designed to get an overview of the health and socioeconomic status of aging Americans, found the following trends:
The U.S. population age 65 and over is expected to double in size within the next 25 years. By 2030, almost 1-out-of-5 Americans, some 72 million people, will be 65 years or older. The age group 85 and older is now the fastest growing segment of the U.S. population.
The health of older Americans is improving. Still, many are disabled and suffer from chronic conditions. The proportion with a disability fell significantly from 26.2 percent in 1982 to 19.7 percent in 1999. But 14 million people age 65 and older reported some level of disability in Census 2000, mostly linked to a high prevalence of chronic conditions such as heart disease or arthritis.
The financial circumstances of older people have improved dramatically, although there are wide variations in income and wealth. The proportion of people aged 65 and older in poverty decreased from 35 percent in 1959 to 10 percent in 2003, mostly attributed to the support of Social Security. In 2000, the poorest fifth of senior households had a net worth of $3,500 ($44,346 including home equity) and the wealthiest had $328,432 ($449,800 including home equity).
Florida (17.6 percent), Pennsylvania (15.6 percent) and West Virginia (15.3 percent) are the "oldest" states, with the highest percentages of people age 65 and older. Charlotte County, Fla., (34.7 percent) has the highest concentration of older residents and McIntosh County, N.D., (34.2 percent) ranks second.
Higher levels of education, which are linked to better health, higher income, more wealth and a higher standard of living in retirement, will continue to increase among people 65 and older. The proportion of Americans with at least a bachelor’s degree grew five-fold from 1950 to 2003, from 3.4 percent to 17.4 percent; and by 2030, more than one-fourth of the older population is expected to have an undergraduate degree. The percentage completing high school quadrupled from 1950 to 2003, from 17 percent to 71.5 percent.
As the United States as a whole grows more diverse, so does the population age 65 and older. In 2003, older Americans were 83 percent non-Hispanic white, 8 percent black, 6 percent Hispanic and 3 percent Asian. By 2030, an estimated 72 percent of older Americans will be non-Hispanic white, 11 percent Hispanic, 10 percent black and 5 percent Asian.
Changes in the American family have significant implications for future aging. Divorce, for example, is on the rise, and some researchers suggest that fewer children and more stepchildren may change the availability of family support in the future for people at older ages. In 1960, only 1.6 percent of older men and 1.5 percent of women age 65 and older were divorced; but by 2003, 7 percent of older men and 8.6 percent of older women were divorced and had not remarried. The trend may be continuing. In 2003, among people in their early 60s, 12.2 percent of men and 15.9 percent of women were divorced.
The 65+ report is a project of the NIA’s Behavioral and Social Research Program, which supports the collection and analyses of data in several national and international studies on health, retirement, and aging. The program’s director, Richard M. Suzman, Ph.D., suggests that, with five years to go before the baby boom turns 65, "Many people have an image of aging that may be 20 years out of date. The very current portrait presented here shows how much has changed and where trends may be headed in the future."
While the report didn't go into housing, the results should impact community and housing design beyond the Universal Design features available today that eliminate or moderate difficulties in such ordinary tasks as turning off light switches and grabbing a bar to get up out of the bath. With a higher divorce rate, and lower remarriage rate for older females, resulting in an estimated 3 men for every single 10 females according to the Census, new types of housing could emerge that provide a variation on community or communal living for older single, divorced or widowed females.
Boomers are already notable in housing for their wealth and ability to buy second homes, which is driving the vacation home marketplace to new heights every year, but for their primary homes, what will they do -- remain near work centers, and if so, in what kinds of housing?
Will they age in place in their ranch-style ramblers or sell everything and move to a high-rise in the sky? How about a little waterfront in Southern Maryland listed with The McNelis Group, LLC?

Chris McNelis 

Trendspotting Broker

Trendspotting Broker

This is really good news for the Commercial sector, not to mention another benchmark we can use to stay ahead of the curve...boring but important.

"NAR LAUNCHES LEADING INDEX FOR COMMERCIAL REAL ESTATE MARKET:WASHINGTON (February 22, 2006) – The National Association of Realtors® launched a new leading indicator for the commercial real estate market today that shows an increase in commercial brokerage activity can be expected over the next six to nine months.David Lereah, NAR’s chief economist, said the new index shows the broad recovery in commercial real estate markets will continue. “In fact, the index increased in nine of the last ten quarters – this trend implies that commercial activity of net absorption and the completion of new buildings will remain solid through the third quarter of this year.”The Commercial Leading Indicator for Brokerage Activity is a new tool to assess market behavior in the major commercial real estate sectors. “The index incorporates 13 variables that reflect future commercial real estate activity,” Lereah said. “Our methodology follows a well-known process of looking at changes in individual indicators and then weighting them appropriately in a process that results in a single indicator of future market activity.”The index is designed to provide early signals of turning points between expansions and slowdowns in commercial real estate. NAR reviewed a wide variety of indicators, examined the relationships of indicators that demonstrated a historical impact on commercial real estate, and modeled a forward looking index based on historic trends. Although individual indicators sometimes move in opposite directions, together they offer a better indication of future market activity. View Commercial Leading Indicator BackgrounderQuarterly data for 13 selected series were reviewed back through the first quarter of 1990. The modeling demonstrated a change in commercial brokerage activity that could be seen two quarters later as measured by net absorption in the industrial and office sectors, and the value of building construction put-in-place on completion of retail, office, warehouse and lodging structures. An index of 100 is defined as the level of commercial real estate market activity during the first quarter of 1990, the first period to be analyzed.During the fourth quarter of 2005, the commercial leading indicator was at an index reading of 117.6, up 0.8 percent from 116.7 in the third quarter; the reading was 1.6 percent above an index of 115.7 in the fourth quarter of 2004.Net absorption in the office and industrial sectors during the third quarter of 2006 is likely to be in the range of 125 million to 140 million square feet. The value of new commercial buildings reaching the market is projected to be $4.5 billion to $6.0 billion higher than the $252.4 billion recorded in the fourth quarter of 2005.The 13 series in the index include industrial production, the REIT (real estate investment trust) price index, NCREIF (National Council of Real Estate Investment Fiduciaries) total return, personal income minus transfer payments, jobs in financial activities, jobs in professional business service, jobs in temporary help, jobs in retail trade, jobs in wholesale trade, initial claims for unemployment insurance, manufacturers’ durable goods shipment, wholesale merchant sales, and retail sales and food service.Separately, attitudinal results from NAR’s Commercial Practitioner Survey in February show most respondents rate current business activity as moderately improving or holding steady; 12 percent said it was deteriorating.On balance, to find the right space or property for a client, 36 percent of practitioners said there is limited ability and another 36 percent said there are fewer choices but that it is not a major problem.When asked about the relationship between local rents and operating costs, 32 percent said costs are rising faster than rent, and 45 percent said both were rising at about the same rate; nearly a quarter said rents were rising faster.Regarding expectations for business conditions over the next year, 74 percent of practitioners are optimistic and 9 percent are pessimistic.In terms of market impact, 51 percent said private local investors are having a significant impact; 49 percent said developers, 25 percent end users, 17 percent private national investors and 11 percent said foreign investors.With market fundamentals improving in most markets, 57 percent said new local tenants, users or start-ups were creating demand for space, 45 percent identified existing tenants or user expansion, and 27 percent said new national or international tenants or users.More than 100,000 NAR members offer some level of commercial service, with 57,000 specializing primarily in the commercial real estate market.The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing more than 1.2 million members involved in all aspects of the residential and commercial real estate industries.
# # #The next commercial real estate market forecast is scheduled for release on March 15, and the next commercial indicator index will be released May 23.Information about NAR is available at http://www.realtor.org. This and other news releases are posted in the News Media section. Statistical data, charts and surveys also may be found by clicking on Research."

Trendspotting Broker

Trendspotting Broker

Sorry for the last entry...still learning what not to do.

Anyway, I've been more involved with people who are buying and selling businesses. It is interesting how every type of business requires a distinct vntage point from a gross income perspective, and what makes it tick.

Liquor sales: I learned today that the smaller, more portable items such as pints of beer, half pints of liquor, have a 30-32% profit margin, while beer and liquor in larger quantities have about a 20-25% margin... Out of that one must pay rent, utilities, payroll, etc.

The client I gleaned this perspective from was referred to me by an Attorney friend after the client was dismayed with a couple of 'business brokers' who, in his opinion, inflate values too much and were not good facilitators.

I think the price one should be willing to pay must recignize tht intangible 'good will' if it is attributable to the continuing success of a subject business, but the business should be a machine already. Then, enhancing the value based upon your ability to revitalize small pieces of the business and add services or products while renegotiating your position to maintain other product lines(or not) adds directly to the bottom line...or at least forces one to discover new avenues and new trends within their business sector.

The speed bumps in business simply force you to discover newer and better products. But never forget the marketing, especially the BUZZ.

Always learning, I think. Chris

Chris

Trendspotting Broker

Trendspotting Broker

I've been gathering data about Tenant In Common(TIC)ownership...and this was just posted today about regulatory concerns with Real Estate Brokers handling these types of deals. I think it is just a matter of time before it is figured out for Broker involvement, because it is like the Time Share was back in the 1970's, which was finaly regulated and brought mainstream big time in the 80's...Here's the info:

"Tenant in Common Transactions Under Scrutiny: How You Can Advise Regulators There is an implied concern that some of these investments that are sold as a pure real estate transaction may in fact be a sale of a security and therefore subject to state and federal securities law. Securities law may prevent Realtors from being fairly compensated for services rendered in a TIC transaction. A TIC is a form of real property ownership where a purchaser owns an undivided fractional interest in real property. Because of the confusing aspects of TIC transactions, NAR has issued two publications – the TIC Hot Topic Report, and the TIC Brochure - providing guidance to NAR members on the risks and rewards of the TIC marketplace. The publications provide an overview of the market, an analysis of the factors that separate securitized TICs from real estate TICs, the conflicted regulation of securitized TICs between state real estate laws and state and federal securities laws, and the risks to the investor and the real estate professional. NAR is in on-going discussions with the Securities and Exchange Commission to clearly define a process by which real estate professionals may participate, and be compensated, in the brokerage of securitized TIC interests. "

We shall see...just another trend to keep track of.

Where do you go first when it's time to look for housing or real estate investment opportunities? The web? Magazines? Newspapers? A friend in the industry? A mortgage professional? Fill me in on your favorites.

Greetings

I've just begun the newest part of my business interest...a blog about spotting trends in the real estate industry. I think it is one of the best parts of being in general brokerage...I am required to be aware of personal goals and desires shared by clients in order to be results-driven. Preferences, service requirements, communication styles, new technology and more.

Spotting trends and tapping into the buzz about a new focus is important...these are little morsels of info that generate new attitudes and expectations for consumers. Besides, it's cool to stay in touch with new stuff.