Norada Real Estate Investments

Why Invest In Dallas Texas Real Estate

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As the housing market continues to decline in areas around the country, especially Florida and California, and with the threat of a recession looming like a dark cloud overhead, Texas' economy and housing market remains strong.

According to numbers released by the U.S. Census Bureau, eight out of the 10 fastest-growing metropolitan areas in the U.S. are in the South, and the South also accounted for more than half of the 50 fastest growing regions.

Dr. James Gaines, a research economist at the Real Estate Center at Texas A&M University said, “From 2000 to 2007, 3 million people moved to Texas, a 14.6 percent jump in the population, making Texas the fastest growing state in the country.”

“In the next 25 years we'll add another 13.6 million people, that's the equivalent of another Metroplex, metropolitan Houston and metropolitan San Antonio with enough left over to add another Corpus Christi.”, he said.

Dallas/Fort Worth drew in more people than any other metropolitan area in 2007.  The population there increased by 162,250 between July 1, 2006, and July 1, 2007, according to a new U.S. Census Bureau report.  Houston, Atlanta, and Phoenix also witnessed a swell by more than 100,000 people each.

With its affordable housing, low cost of living and cost of doing business, rising employment opportunities and attractive lifestyle, more people than ever before are being drawn to Dallas.  [Read more…]

Resales Up, Rates Down

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There are more signs of improvement in the real estate markets around the country.

Nationally, sales were up by 2% in May with the Midwest reporting a 5.5% increase and 6% in the Northeast. Condo sales also jumped up by 6% nationwide. Even some of the hardest hit markets showed increases including Sacramento, CA, Sarasota, FL and battle Creek, MI.

Mortgage rates took a welcomed dip recently reversing the upticks over the previous weeks. Thirty years fixed rate loans are back under 6.4% and fifteen year rates are under 6%.

It’s going to take more than lower interest rates and increased sales to help the housing market recover, but they are positive signs in the right direction. Along with increased prices in the hardest hit markets we should begin to see the beginning of a recovery.

2008 is the Year to Invest

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With interest rates still at historic lows, and investment opportunities in single family homes abundant, 2008 may one of the best years to invest in 30 years.

Even if prices drop a little more within the next twelve months, you may still be getting a great deal over the long term given the low interest rates which may not be around in the years to come.

It is best to stick to well-located detached single family homes in well researched markets that offer good prospects for growth and resale down the road. Middle of the road, bread-and-butter homes might be best in most cases for attracting your largest resale market.

Duplexes also make for smart investments but remember they are a little more difficult to sell because your typical buyer will probably be another investor.

And finally, avoid condos since you lack the control you have in single family units. Condos also require extra due diligence to make sure that you are not buying from speculators or developers at prices above market value or where there is excess inventory for sale.

The Housing Crisis Is Over

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The dire headlines coming fast and furious in the financial and popular press suggest that the housing crisis is intensifying. Yet it is very likely that April 2008 will mark the bottom of the U.S. housing market. Yes, the housing market is bottoming right now.

How can this be? For starters, a bottom does not mean that prices are about to return to the heady days of 2005. That probably won’t happen for another 15 years. It just means that the trend is no longer getting worse, which is the critical factor. Most people forget that the current housing bust is nearly three years old. Home sales peaked in July 2005. New home sales are down a staggering 63% from peak levels of 1.4 million. [Read more…]

The Worst Real Estate Markets

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The worst performing markets, according to a recent report by the Office of Federal Housing Enterprise Oversight (OFHEO), where property values are falling the fastest in the country are Florida with eight (8), California with six (6) and Michigan with three (3).

Merced, California has the honor of being that fastest deflating city in the country with an annual depreciation of -13% over the past 12 months. This is followed by Punta Gorda, Florida at -12%, and Santa Barbara, California, one of the most expensive markets in the country at -12%.

So where are some of the best markets? Well, the US Gulf Coast where markets are rebounding from hurricane Katrina happen to have some of the best investment opportunities for investors today. Housing is affordable, rental numbers make sense, and property values are increasing between 6% to 7% per year. Those are some of the biggest reasons for our Bayside Park investment opportunity in Waveland, Mississippi.

Investor Market Strong

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Last year investors accounted for 21% (about 1 out of 5) of new home purchases according to a new study by the National Association of Realtors (NAR).  That’s a whopping 1.35 million housing units – a large portion of the total market.  The record was set in 2005 at the height of the boom at 28%.

A major difference today is that investors are not buying to speculate and push prices up quickly as we’ve seen happen in the first half of the decade.  The median price for an investment property in 2005 was $183,500 compared to $150,000 in 2007.

According to the study, about 50% of the investors said they planned on holding onto their properties for anywhere from 3 to 11 years.  Another 18% planned to hold from one to three years and 20% were not sure.  Only 10% said they planned to sell (or flip) their property in a year or less.

The median household income of all home buyers last year was $71,700 while investor’s median income was about $93,000.  Interestingly 40% of all investor sales last year were accounted for by those under age 35.

The study also revealed that investors are optimistic about the direction of the market.  57% said they plan on buying additional property in the next 24 months compared to 44% primary vacation home buyers.  80% of investor buyers said that this is a good time to buy real estate compared to 59% of primary home buyers.

I agree that most real estate investors know there are many good deals out there.  They key is to have a clear investment strategy and know where to buy based on local economics and market timing.

Investing in Mobile Alabama Real Estate

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Imagine if you had the foresight 7 years ago to invest heavily in Las Vegas, Phoenix, Miami and Honolulu, and to get out 2 years ago. Each of those markets appreciated over 100% in a 5 year period. Many savvy investors made enough money in those markets in just 5 years that they never have to work again. Now, instead of waking up with that 7 am alarm clock, many of them softly awaken by the warm breeze off the ocean blowing through their open window.

Mobile, Alabama (pronounced ‘moe beel’) is a city located in southwest Alabama at the mouth of the Mobile River. Spanning about 38 miles on the north shore of Mobile Bay, it was the city held by the French, British, and Spanish until it was seized by U.S. forces in 1813.

Today, Mobile, Alabama is one of the country’s hottest growth markets. Any real estate investor looking for a market with a solid economic foundation and strong appreciation potential will find it here.

According to a new research forecast by Moody's Economy.com, Mobile County will have the fastest growing economy over the next five years among all 363 American metropolitan areas, growing over 34% from 2007 through 2012. [Read more…]

Estimating Value With The Capitalization Rate

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Capitalization RateThe Capitalization Rate (also known as “Cap Rate”) is used to compare an income property with other similar income properties.  It can also be used to place a value on a property based on the income it generates.

The Cap Rate merely represents the projected return for one year as if the property was bought with all cash.  But since we don't normally buy property using all cash we would use other measures, such as the cash-on-cash return, to evaluate a property's financial performance.

[Read more…]

Blog Question: Keep it or Sell it?

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One of our blog readers submitted the following question:

“I have a home that was appraised at $130,000 this month. However, I think it's worth at least $200,000.  Would you agree to keep it until the market comes back up and try to sell then?  My ex-husband will rent it from me until then.  Thanks, Bev”

Well Bev, there are several things to consider: [Read more…]

10 Best Real Estate Markets

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Most experts agree that the days of flipping properties are over.  With weak demand, slow sales and high inventory in most US markets, the question real estate investors are asking is, “Where do I invest now?”

As always, there are markets around the country where homes are affordable, the underlying economy is strong, and appreciation is imminent.  These are the markets you should consider looking at for your next long-term real estate investment. [Read more…]

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