Archives for November 2012

The Real Estate Indicator Screaming "Buy"

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Buy Real Estate NowI just locked down a 2.875% interest rate, fixed for the 15-year term of the mortgage. No points. With rates like these, I find myself rethinking the idea that I want to pay off my mortgage.

I can do a lot better than 2.875% investing the money. If I just sock it away in gold, I bet I’ll come out way ahead. Finding investments that clear such a low hurdle is not that difficult.

Right now is a great time to do this, if looked at from a historical perspective. The 10-year Treasury rate is 1.64% as I write. That is what investors are willing to accept to lend money to the US Treasury for a 10-year term. It seems absolutely crazy. But the Treasury rate we see is something of a forced smile.

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Top US Real Estate Markets for Foreign Buyers

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Wealthy foreigners from around the globe are taking advantage of America's housing bust to snap up U.S. properties at cut-rate prices — helping local markets rebound in the process.

“We've seen foreign investors buy $10 million to $20 million worth of property in a single trip,” says Peter Loewy of Los Angeles-based Teles Properties. “They think this is a good place to park money, and it's less expensive than their real estate back home.”

A recent National Association of Realtors (NAR) study estimated that foreigners and immigrants who've lived here less than two years spent $82.5 billion on U.S. investment property in the 12 months ended March 31, 2012.  That's about 9% of the total paid for all U.S. housing purchases during the period.

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Housing Under a Second Obama Administration

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A big part of my job is helping our clients project the most likely scenarios for the housing market.  Now that we know who will be President, my job just got easier because we have four years of experience with Obama and a divided Congress, so we know what we are getting.

However, there is never a dull moment.

Here is what keeps me up at night:

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Rents Continue to Rise Faster than Asking Prices

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Rent prices are climbing faster than asking prices, and the gain in rent prices is seen in metros where asking prices are actually falling, according to a report from Trulia.

Nationwide, year-over-year rent prices were up 5.1% in October, while asking prices were up 2.9% during the same period including foreclosures.

Out of the top 25 rental markets in the United States, Houston led with a 16.5% yearly increase.  Miami and Oakland took the next two spots with a 10% gain in rent prices.

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