Archives for May 2012

Rental Housing Boom Set to Explode

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Rental households comprise 34% of the housing stock, and are growing at the incredible rate of 1.6 million per year, while owned households are actually declining in number. This is an incredible surge in demand.

In our summary of the U.S. housing market, only 20% of renters live in large buildings (20+ units), and the remaining 80% of renters live in alternative types of housing.

Approximately 55% of new renters are renting single-family homes, while 45% are renting apartments. The single-family rental business, which is already larger than the institutional quality apartment business, is booming. Unprecedented levels of distressed home sales, at home price/rent ratios that are the lowest in decades, is driving the boom.

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Why are Billionaires Buffett and Trump Bullish on Real Estate Right Now?  (Part 2)

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In Why are Billionaires Buffett and Trump Bullish on Real Estate Right Now? part 1, we stated that the Federal Reserve is committed to stable, steady long-term inflation.

But what about all this talk of hyper-inflation?

There are some doom-and-gloomers out there heralding hyper-inflation.  Hyper-inflation means you wake up in the morning and a pound of coffee is $5, but when you go back that afternoon, it’s $7 and by the following morning it’s $10.  In other words, the dollar is in free fall and it takes more and more dollars to buy the same goods and services.  It’s happened many times in other countries in just the last 50 years.  It’s ugly, especially for those who don’t know how to see it coming, how to prepare and what to do when it happens.

Now we understand the argument for hyper-inflation and it’s a good one.  So let’s take a look at why real estate right now makes so much sense.

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Why are Billionaires Buffett and Trump Bullish on Real Estate Right Now?

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When we interviewed Donald Trump a couple of weeks ago, he told us that NOW is a great time to get into real estate – and he specifically pointed to houses.

Fellow billionaire, Warren Buffett, appeared on CNBC a couple of months ago and essentially said the same thing.  In fact, he said if there was an efficient way to do it, he'd like to buy 200,000 single family homes!

You may or may not agree with them at first blush, but when two billionaires (neither of whom are trying to sell you houses) both say the same thing, it's probably worth taking a closer look, don't you think?

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Is It Time to Buy an Investment Property?

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Is it time to buy a property?  Maybe…

The Wall Street Journal reports that the housing market may have bottomed out. Of course, that’s what the press has been saying for the last 4 years.  But now, the WSJ says buyers are bidding against one another:

A new development is catching home buyers off guard as the spring sales season gets under way: Bidding wars are back.

From California to Florida, many buyers are increasingly competing for the same house. Unlike the bidding wars that typified the go-go years and largely reflected surging sales, today’s are a result of supply shortages.

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Phoenix Housing Is On Fire

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The Phoenix housing market is on fire, driven by strong economic growth, once in a generation affordability levels, and a surge in investment activity that far surpasses the levels during the housing boom. Once considered to be ground zero of the housing market collapse, Phoenix has orchestrated a dramatic turnaround in recent months and has considerably outpaced other distressed markets such as Las Vegas, Riverside, San Bernardino and Sacramento. Phoenix was one of the hardest hit housing markets during the bust, with home values declining 57% from 2006 through mid-2011.

But since the middle of 2011, the housing conditions in Phoenix have markedly improved and prices have begun to rise. Certainly record affordability has helped nudge hesitant homebuyers off of the sidelines in recent months, but affordability is now excellent in nearly every market in the country.

So why has Phoenix experienced such a sharp rebound while many other markets continue to struggle? Improvement in the following market drivers are playing a key role in Phoenix's recent surge:

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