A Summer of Rental Discontent

June 21, 2012

 A slow down in apartment construction, coupled with low vacancy rates and a rising millennial demographic will continue to fuel a rise in apartment rents this summer.

According to Trulia, a company that tracks rents and home prices, it now costs more to rent than to own a home in 98 of the top 100 U.S. metropolitan areas.

Moody Analytics reports that demographics has become a leading factor in more people renting then buying, and “demand for rent will remain solid over the next two years.”  While the overall rental rate is 35%, the renter rate for those between the ages of 25-29 is nearly 65%, and for those under 24 years old, it is 77 percent, according to the Census Bureau.

On the single-family home stage, the rental craze has made it frustrating for the homebuyer. Inventory of “decent” homes is being depleted as investors snatch up single-family homes for the purpose of renting them out. Those left on the market are receiving multiple offers, resulting in bidding wars.  And prospective buyers with FHA loans are finding out that their loans may require sellers to do more home repairs than other loans. Subsequently, if a seller receives multiple offers, they may avoid the ones with FHA loans.

Prospective buyers are also losing homes to cash buyers and bidders with bigger down payments.

This is all playing into the hands of investors who surmised a couple of years ago:  “Accumulate hundreds or thousands of homes, rent to the 99% and make a killing when they dump them back on a property-starved market in three to five years,” according to Personal Real Estate & Investor.

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Luxury Home Market is Silver Lining Today

October 11, 2011

In every economic downturn there is a silver lining. And in housing, it continues to be the luxury home market.

But you need to move fast if you want a deal. Foreign buyers have been busy doling out cash on discounted properties brought on by the housing crash and the deals on a piece of luxury won’t last.

In Manhattan, a shrinking inventory means if you want a place to live for under $1 million, it will need some renovation. In Miami, prices are starting to rise as the economy slowly recovers and luxury properties are selling quickly. Realtors in Scottsdale, Arizona, and Malibu, California, report inventory on luxury homes is dropping, although prices continue to be stable.

From March 2010 to March 2011, the National Association of Realtors found that international buyers bought more than $82 billion in real estate, up 24% from the previous year.


Treat your renters like family – they may never move out

October 19, 2010

Whether it’s fallout from the housing market crash or simply that there isn’t enough money to go around, a new survey that shows more than 25 percent of renters have no plans to buy a home means property managers must treat tenants as long-term assets as opposed to transitory income.

Gene Bennett, founder/president of All American Management in Longwood, Fla., says in response to this new shift in behavior companies like his must adapt by re-examining the way they market to and retain tenants.

“With long-term commitments, it makes good business sense to offer added incentives to clients,” Bennett explains. He says it also behooves property managers to beef up customer service since long-term renters offer more positive, stable cash flow.

The aforementioned survey, conducted by Harris Interactive for Trulia, a website service for people looking to buy homes, found 27 percent of renters never plan to buy a home, and two-thirds of those who do plan to purchase one will wait more than two years. When asked what could influence them to buy a home in the next year, the top three responses were the ability to save for a downpayment (47 percent), getting a new job (28 percent), and low or lower interest rates (27 percent).

The survey’s results seem to mirror what is happening in America’s home-flipping market as well. With even less buyers for homes, according to the National Association of Realtors, only 4 percent of transactions this summer were for homes owned less than a year.


Orlando Real Estate Investing Alive and Well

October 19, 2010

Orlando real estate investor eyes investment market growth

Lenny Layland, founder, and broker/owner of Investorlando Realty based in Longwood, Fla., was one of 45 professional investors invited to attend the Investment Provider Leadership Summit in Phoenix, Arizona last month. For the past 11 years Layland has also run his own private real estate investment fund, Investorlando, Limited.  Layland says, “Real estate is alive and well, regardless of the recessionary climate.  In fact, it is one of the best investment opportunities in years.

“People don’t realize how big this is,” he adds. “It’s even a larger market than I thought, even on the international stage. For example, New Zealand investors at this conference see our prices as dirt cheap and are actively investing in the U.S.”

Layland, who graduated from Miami University with a degree in finance and turned down offers from Wall Street to become an independent investor and broker, has real estate investing in his blood. His parents retired to Florida after years of home investing in the small town of Eaton, Ohio.

Investorlando Realty, and the related real estate investment fund formed in 1999, provides individuals multiple, simple and diversified ways to invest in real estate.   The newly launched brokerage also offers property management, buyer representation, marketing, and consulting for residential, investment and commercial buyers and sellers.

Investorlando offices are located in the historic Longwood Village Inn, which opened as the Waltham Hotel in 1887. It is one of the few remaining 19th century buildings remaining in Florida today and is listed on the National Register of Historic Places.


Housing Remains Under the Gun

September 20, 2010

Any time a major industry struggles, factions seem to square off, and housing is no exception. The argument being bantered around in circles today is whether buying a home is a smart investment or just another staple.

The New York Times reports that economists are taking sides on this issue. One side believes housing is a luxury good, meaning home prices will rise nearly as fast as incomes in the long run. The other party theorizes housing has become a staple and prices will rise slowly with general inflation, like food.

In a recent article in Time titled “The Case Against Home Ownership,” the writer made some stirring observations for not owning a home. That struck a nerve with the National Association of Realtors, prompting President Vicki Cox Golder to fire off a letter responding that “recent attacks on the value of homeownership are knee-jerk reactions to current economic conditions.” The letter stated: “The positive impact of homeownership on society has been well documented; extensive research from government agencies, industry, and academia has shown that homeownership contributes to stable communities, helps reduce crime and improves academic achievement.”

And finally, there are those who have been touting the advantages of renting as opposed to buying, like freedom from debt and more leisure time with family, as reported in the August 27 issue of The Hestia Report.


Living green has morphed itself

May 26, 2010

Living green has morphed itself. In a short couple of years, it has gone from being environmentally friendly and conserving energy to all things healthy. Just look at the homes that are currently being certified green by the Florida Green Building Council. The only Platinum Home — the highest designation available — is in Orlando, Fla., that indeed is not sexy green. It scored high marks not for its roof gardens or rain barrels, but for its low-VOC and no-VOC carpets and paints. The tight envelope of the home keeps out allergens as does the fresh air intake of the air conditioning unit. Moreover, Cambria countertops are installed in the kitchen and all bathrooms: Cambria is food safe since it is nonporous and food and moisture cannot penetrate the surface.

And it’s not only the sick buildings we are addressing; it’s the foods we eat that have become the newest green offshoot. It started with eating local foods to cut down on emissions and carbon footprints, but it has become a quest for eliminating obesity — especially in children — and returning our eating habits to those of our ancestors free of processed foods and out-of-control portions. The obesity factor has reached such a high scale that the White House Task Force on Childhood Obesity was just released by First Lady Michelle Obama, which is aimed to reduce childhood obesity from 20% to 5% by 2030.

The greener eating craze has caused an uptick in the fight for exercise as well. It is not only a good diet that will keep you healthy, but it’s the regular exercise that so many people avoided way too long.

Indeed, it is the influx of baby boomers into their senior years that is really causing a stir.

If boomers are not kept healthy, their sheer numbers could crush even the best of health care plans.


Is Florida Getting Snubbed?

June 3, 2009

First it was The Associated Press earlier this year that said by reviewing driver’s license applications in Florida, there was a drop of 175,000 applications between 2003 and 2008.  Then United Van Lines’ 32nd annual “migration” study, which tracks where its customers moved from and their most popular destinations over the past 12 months, showed Florida had as many people move out as move in. It made folks wonder whether Florida had lost its allure.

Well, yes and no.  It is no coincidence that following the 2004 hurricane season that saw at least three major storms crisscross the Sunshine State like  a crazed banshee in the matter of six weeks, people may have put off their plans to relocate. While the state’s population actually grew by 2.2 percent in 2005, net migration did fall 13 percent.

But the real reasons Florida has seen its border crossings full of more tumbleweeds than New Yorkers is related to the economy. Dr. Sean Snaith, director of the Institute for Economic Competitiveness at the University of Central Florida, says the recession and the fact that the Dow lost 43 percent at one point, caused retirees to delay plans of moving to the Sunshine State.  “They had to push back their decisions,” the economist explains. “The influx choked up.”  Even worse, the state, like many, stopped producing jobs, so those not at retirement age are also in limbo about their plans to relocate. Throw in the fact that the cost of living has increased since the boom days of Florida migration, and it is easy to see why Florida’s allure may be changing. However, it may be short term. “As the economy recovers,” believes Snaith, “it will pull more migrants into Florida.” He says population growth should soon return to a normal 1.5 to two percent a year.

In fact, Snaith forecasts 2011 and 2012 will be good years for the state, especially the Orlando area, which is predicted to have the highest job growth statewide. Because of that, net migration will not affect Orlando as much since people will move from the coast to the epicenter of growth.

Finally, I leave with this statement by Wayne Archer, director of the Bergstrom Center for Real Estate Studies at the University of Florida from a report this past winter in which net migration was being analyzed.  

“There are pessimists who think people are going to pack up and leave Florida, but when I stand outside on these clear winter days, I think ‘they’re not going far.’ As long as people keep moving here, the growth will bring us a correction that you won’t get in industrial states like Ohio, Michigan or Illinois.”

Besides, the beaches are still free, and the water is warm. Surf’s up!