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Upper East Side Sees Increase in Vacancies: New Market Trend or Census Data Flaw?

March 29, 2011

Posted by Sandie under Real Estate

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New York City’s Upper East Side, especially along Central Park, boasts the most expensive real estate in the city. According to the 2010 census, this area had the highest percentage of vacant housing units in the city this past year.

Over the last 10 years, vacancies have increased in the area by 26 percent. The increase in vacancies has occurred despite a 3.8 percent decrease in the number of housing units during the same time period, and has caused people to question whether the census data is in fact flawed.

There are relevant questions that must be taken into account that may have affected the census data. Is it possible that people were at their Hampton homes during the time of the survey? Or has the financial crisis forced people to move out of the area and into cheaper zip codes?

According to Jonathan Miller, a well-known real estate appraiser from Miller Samuel Inc., “In some strange way, the high vacancy rate suggests more affluence.” Miller says that despite the reported increase in vacancies, “It doesn’t mean these houses are empty.”

For the purposes of the census, a vacant housing unit is characterized as such “if no one is living in it at the time [of the count] unless its occupants are only temporarily absent.” The census website also notes, “Units temporarily occupied at the time of enumeration entirely by people who have a usual residence elsewhere are also classified as vacant.”

Questions still remain about the accuracy of the census data and what the results of the survey mean for the future of the real estate market in New York’s more affluent neighborhoods.

“The big question is what about the vacancies,” said Andrew Beveridge, professor of sociology and demographic expert at Queens College. “New York was growing, but after Lehman [brothers collapsed] it just stopped,” said Beveridge. “I think the census might have counted properly.”

Real Estate Market Shifts: Buyers Seek Smaller Houses

March 15, 2011

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A recent study from the National Association of Home Builders (NAHB) shed light on the current state of the real estate market and gave projections for the future. What the study found is that as a result of the recent housing slump, people are looking for smaller houses.

According to the NAHB report, builders “surveyed expect homes to average 2,152 square feet in 2015, 10 percent smaller than the average size of single-family homes started in the first three quarters of 2010. To save on square footage, the living room is high on the endangered list – 52 percent of builders expect it to be merged with other spaces in the home by 2015 and 30 percent said it will vanish entirely.”

The report notes the increasing importance of green and eco-friendly homes. “In addition to floor plan changes, 68 percent of builders surveyed say that homes in 2015 will also include more green features and technology, including low-E windows; engineered wood beams, joists or tresses; water-efficient features such as dual-flush toilets or low-flow faucets; and an Energy Star rating for the whole house.”

According to the U.S. Department of Housing and Urban Development, home sales have been increasing due to the affordability of existing homes. Despite this good news, the report also noted that the “housing market remains fragile as data through January paint a mixed picture of recovery. Existing home sales ticked upward in January, but remained below levels seen in the first half of 2010. Mortgage delinquencies continued a downward trend compared to early 2010 and foreclosure starts and completions remain below peak.”

If you want to learn more about the results of the NAHB survey, read more from Realty Times.

Start planning your next getaway; TripAdvisor ranks top vacation rental hot spots for 2011

March 11, 2011

Posted by Sandie under Real Estate

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Trying to decide where to vacation this year? TripAdvisor.com, one of the world’s largest travel sites, just released their list of the top vacation rental hot spots for 2011. This year’s list has something for everyone, from summer beach getaway spots to areas with top-notch ski resorts.

“Vacation rentals can offer families and groups of travelers significant savings over other accommodation options,” says Hank Hudepohl, TripAdvisor’s director of vacation rentals.

The list:

Kissimee, Florida
Big Bear Lake, California
Gatlinburg, Tennessee
Kihei, Hawaii
Destin, Florida
Palm Springs, California
Outer Banks, North Carolina
Lahaina, Hawaii
Hilton Head, South Carolina
Cape Cod, Massachusetts

According to Hudepohl, this year’s list shows off some of the “best vacation rental destinations in the U.S. where travelers can save big.”

Read more about the vacation hot spots that made the cut on RIS Media.

Wealthy Buyers Re-Emerge in Real Estate Market

March 7, 2011

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“It hasn’t been a good six months for all people, but it was a good six months for rich people,” says Glenn Kelman, CEO of Redfin real estate brokerage. The numbers seem to back up Kelman’s assertion; despite a four-year decline in the housing market, the rich are back in the real estate game.

Sales of million-dollar homes and condos rose last year in all 20 major metro areas. The average jump in high-end home sales in these areas was reportedly 18.6 percent.

What’s the inspiration behind the re-emergence of wealthy buyers in the market? According to Kelman, “When Wall Street goes up, rich people buy homes.” Take a look at the market and you’ll see that stock values have almost doubled from their March 2009 lows.

Greg McBride, chief economist at Bankrate.com, said that “Higher income households are feeling better about their financial security.” The biggest market for million-dollar homes, San Jose, California, saw a 27.4 percent spike in sales last year.

The wealthy have taken advantage of the dip in home prices, and getting mortgages for these homes has become cheaper too. Normally buyers must take out a jumbo loan in order to finance a mortgage above the $417,000 threshold. Loans for homes that fall above the threshold typically have higher interest rates because they are what is technically referred to as non-conforming, or higher risk – not backed by Fannie or Freddie. Whereas interest rates on homes with higher mortgages have typically been significantly higher than average, by 2010 the difference between interest rates for average buyers and buyers of high-end homes had shrunk to just 0.6 percent more.

To read more, visit the CNN Money site.

Potential Homeowners Faced With Larger Down Payments

February 17, 2011

Posted by Sandie under News, Real Estate, Rent2Buy Concept

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Just three years ago, the median down payment for conventional mortgages in 9 major U.S. cities was at 11%. Last year, this number rose to 22%. The stiff increase in the amount of money banks require for a down payment will have a marked impact on the housing market and will undoubtedly change the behavior of those seeking homeownership.

An increase in the required down payment means some individuals who intended to purchase a home are no longer financially able to do so. This shrinks the portion of the population looking to buy a home, and thereby negatively impacts the housing market.

“There’s no question that the tightening of criteria unquestionably prices households out of the market,” says Zillow Stan Humphries, economist at Zillow.com. “The middle ground buyer is the one having to fight to get a conventional mortgage.”

The Obama administration has proposed that the minimum put down for a conventional loan be gradually increased to 10%. Private lenders are also becoming more risk averse, increasing the amount required for a down payment.

What effect will the increasing down payment requirements and the elevated cost of borrowing have on the future of the housing market?

One significant outcome will be the continuing decline of house prices. Another effect will be to push individuals seeking homeownership to consider less traditional means of financing.

The rent to buy or rent to own option will become a viable alternative for those individuals who are no longer able to afford the down payment banks and private lenders require. People with their hearts set on homeownership will most likely keep renting and trying to save up enough money to shell out for a down payment in the future. However, the act of paying rent and the intention of saving money are two conflicting financial situations.

Instead of just renting a property and trying to save money, those looking to achieve the “American Dream” of homeownership should consider renting a place with the option to buy it.

Read the full article in the Wall Street Journal.

BIG project in the works in NYC: Bjarke Ingels breathes new life into New York real estate space

February 14, 2011

Posted by Sandie under Announcements, News, Real Estate

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A new project is in the works for Bjarke Ingels, 36-year-old Danish architect and head of Bjarke Ingels Group.

Bjarke Ingels Group, also known as BIG, was founded in 2005. Since then, Ingels has headed up the construction of several unique and innovative structures both in Denmark and abroad, including the building of the Copenhagen Harbour Bath and a residential project in Ørestad. BIG currently has offices on two continents and is operating projects on three.

Despite strict building codes and the historically non-creative architectural design of New York City’s apartment complexes, Ingels is setting out to construct an apartment building that will merge feasibility with sustainability and bring new life to architectural innovation in the city.

The apartment building Bjarke Ingels has designed will look like a pyramid but with a hollow opening in the center and a slight curvature in its façade that is arguably very un-pyramid-like. One of the goals of the design is to provide the new building’s residents with a view of the waterfront without interfering with the already spectacular views of the building’s neighbors.

If the project lives up to its vision, it will surely add some life to the New York rental space. And if we’re lucky, we might see some very unique pyramid-esque apartments available for rent to buy.

Read more about Bjarke Ingels’ new project from New York Mag.

File Sharing and Storage for Real Estate Agents: Google Docs vs. Dropbox

February 11, 2011

Posted by Sandie under Real Estate

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The real estate business has changed. With the development of the internet, smart phones, and the jumble of web sites and services meant to make life easier, the hard part becomes figuring out which site, service or device is worth using. This post will compare two file sharing services, Google Docs and Dropbox.

Google Docs: If you already have a g-mail account, you don’t have to sign up again or create any kind of account in order to have access to Google Docs. Google Docs is free. Need extra storage? It’ll cost you just 25 cents per GB per year. To use Google Docs, you must manually upload or download files from your hard drive. The lack of a syncing feature is its main drawback. The Google service does offer several useful features for sharing and editing documents including the ability to invite others to view, invite others to edit, email the doc as an attachment, and get a link to the file to share with others.

Dropbox: It’s easy to create a Dropbox account, but it does require that you take the time to do so. With Dropbox you get 2GB free storage. Go beyond that and you have to pay. There are options for upgrading your storage, including a monthly fee of $9.99 for 50GB and $19.99 for 100 GB. What Dropbox does that Google can’t is automatically sync the content of a special folder on your hard drive with the web and any other folders. There is no need to manually upload and download files like with Google Docs. When you start your computer, Dropbox automatically syncs it all.

So, which service should you use for file storage and sharing? It really depends on how you’ll be using it, how much you think you’ll be using it, and how much money you’re willing to shell out to get the service you desire.

If you’re an agent who has a preference for either of these services, feel free to comment on our blog and share your experience with other readers!

Stricter FHA Financing Rules Signal Need for Creative Modes of Financing

February 9, 2011

Posted by Sandie under All Things Rent To Buy, Real Estate, Rent2Buy Concept

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The Federal Housing Administration has changed their condo financing rules, squeezing sellers and creating significant new challenges for the resale of some real estate projects.

According to Orest Tomaselli, CEO of White Plains, NY-based National Condo Advisors LLC, “There were 26,000 condominium developments that would have had to have been recertified by Dec. 7, 2010, and, in fact, my office sent out letters to almost every single one of these developments across the country telling them they were going to lose their approval. Most of them didn’t even know.”

While FHA-approval typically involves a substantial amount of paperwork, the benefit is easier access to FHA financing. Condominium purchasers did not necessarily need to rely on FHA funding in the past, because up until 2007, private lenders were loaning them large sums of money. For those who did want FHA financing, there was something called a spot loan that allowed them to get FHA approval for the particular condominium slotted for purchase.

“In February 2010, the FHA ended the spot loan — replacing it was a process where every single condominium development had to have project approval, which was to be given by HUD (the U.S. Department of Housing and Urban Development), which administers the FHA, and lenders that were delegated FHA lenders,” said Tomaselli. Because of the economic downturn, the presence of private lenders in the market has drastically decreased and the need for other forms of financing has again become an important consideration for developments.

While condo developments used to be able to get approval once and then be set for life, the process has changed. Developments must now get reapproved every two years. The guidelines for approval are stricter than ever, and some developments are reconsidering their need for a partnership with the FHA. But there are drawbacks to relinquishing FHA-approval. Without FHA-approval, condos are seen as less desirable and are at a disadvantage in terms of marketing and value. This is a crucial concern considering the current state of the housing market.

So, what does this mean for you? “When those condo owners want to sell their units and no one can finance,” says Tomaselli, “when buyers can’t get a mortgage because the development is not FHA- or Fannie Mae-compliant, that’s when the pain will rise and everyone will start to scramble to become compliant.”

Rent to buy is an alternative that allows buyers to pay a monthly rental payment on a property and have a portion of that payment go towards the eventual purchase price. For sellers, offering potential homeowners the option to rent to buy the property means a property does not remain vacant, but rather makes money each month until it is purchased. It’s crucial to consider creative ways of financing given the housing market’s current state. Rent to buy is just one option that can benefit buyers and sellers alike in a time when finding a happy ending for either is almost unimaginable.

Read more, in this article from Inman News.

5 Characteristics of a Tech Savvy Agent: How to Use Social Networking Wisely

February 8, 2011

Posted by Sandie under Real Estate

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In order to stay competitive in an increasingly tech-centered world, you need to adapt to the changing trends and maximize your use of the internet and other new technologies. Social media is just one facet of your online strategy that is extremely important to master. Using social networking effectively will allow you to expand your audience and client base, easily and cost-efficiently manage your business, and stay connected with others without spending an inordinate amount of time on it.

So what are the characteristics of a tech savvy agent? The following 5 characteristics are those you should strive to emulate in order to step up your social media game and become a more effective and successful real estate agent.

Open Networker: Know how to engage people. If you have 1 million friends, it means nothing if you can’t find ways to engage them and develop those relationships.
Authentic and Personal: Share information about what you are passionate about. Don’t spit out content just because you think it may be relevant to your audience; also make sure to give them some insight into who you really are as a person and not just as a professional. When it comes down to it, people would rather do business with a friend than a stranger.
Engaging: Signing up on Facebook, Twitter, and other social networking sites is a first step towards cultivating an effective social media strategy. Being a member of these types of websites makes you a part of the online community. But there is little value in just being a member of the community; you must strive to be an ACTIVE member of the community. Engage with your connections. Make sure to post updates, ask questions, and respond to what other people are saying. Be present in the communities you subscribe to and you’ll begin to reap the rewards.
Balanced: Don’t be too over the top. Nobody wants one of their Facebook connections posting on their wall every few hours with self-promoting content. Social networking is about advertising yourself and your services without blatantly selling anything. Don’t just post your own thoughts and opinions. Go further and provoke discussions with your friends and followers. Bottom line, don’t be overly dominant; let the engagement of your entire online community work in your favor!
Expert: If you’re an expert in a certain field or area, share the wealth! One of the biggest difficulties we’re faced with on the web is distinguishing legitimate content from fluff. Make this easy for your friends and followers; share your expertise. Generate content stemming from experience you have had or things that you know. Share real quality content and your fan-base is guaranteed to grow.

So what’s the bottom line? If you’re going to optimize your use of social media platforms you have to actively and consistently engage users and followers on these sites. Be authentic and personal, sharing content that you are truly passionate about. If you have substantial expertise in an area, don’t keep it to yourself! Share your knowledge with others, engage them in conversations, network openly, and you are sure to reap the rewards.

5 Cities You Wouldn’t Expect to Have the Fastest Growing Foreclosure Rates in the Country

February 7, 2011

Posted by Sandie under Real Estate

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The increase in foreclosure rates across the country has received a wealth of media attention in recent months. Discussions of foreclosure rates and the housing crisis often involve the invocation of Las Vegas as a prime example of a place where foreclosure rates have skyrocketed and the housing market remains in disrepair. Several other cities are experiencing increasing foreclosure rates, most in places you would not expect.

Spartanburg, South Carolina: 1 in 16 homes
With a 228 percent increase in foreclosure filings in 2010, Spartanburg had the highest foreclosure growth rate of any American city last year.

Albuquerque, New Mexico: 1 in 46 homes
Despite the influx of young professionals and retirees in recent years, Albuquerque has been struggling in the housing market. The foreclosure rate in Albuquerque increased by 60 percent in 2010.

Myrtle Beach, South Carolina: 2.25 percent
While Myrtle Beach has traditionally been a hot-spot for those purchasing second homes, a recent contraction of the second-home market has led to a 44 percent increase in foreclosures.

Savannah, Georgia: 1 in 40 homes
The 37 percent increase in foreclosures seen in Savannah last year occurred primarily in the town’s Historic District and The Landings, both areas where home values rose drastically before the housing market tanked.

Charlotte, North Carolina: 1 in 50 homes
Though the unemployment rate in Charlotte has begun to drop, complete recovery of the economy in this growing metro area is still a far cry away; foreclosure filings increased by 37 percent in 2010.

Rent2Buy Blog

Upper East Side Sees Increase in Vacancies: New Market Trend or Census Data Flaw?

Real Estate Market Shifts: Buyers Seek Smaller Houses

Start planning your next getaway; TripAdvisor ranks top vacation rental hot spots for 2011

Wealthy Buyers Re-Emerge in Real Estate Market

Potential Homeowners Faced With Larger Down Payments

BIG project in the works in NYC: Bjarke Ingels breathes new life into New York real estate space

File Sharing and Storage for Real Estate Agents: Google Docs vs. Dropbox

Stricter FHA Financing Rules Signal Need for Creative Modes of Financing

5 Characteristics of a Tech Savvy Agent: How to Use Social Networking Wisely

5 Cities You Wouldn’t Expect to Have the Fastest Growing Foreclosure Rates in the Country

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