Global Uncertainty: Is this a good time to buy USA Real Estate?

Often, we are asked by potential investors: Is this a good time to buy property in the USA?… When will the recovery happen?.. And what about the US Dollar?…  Isn’t it just better to invest at home? Here I attempt to answer these commonly asked questions… I actually traded for a living for a few years (for myself, not a job).  I’ve always loved reading about...

USA House Prices: Nominal, Real, and Price-to-Rent Values

Below are three graphs from Calculated Risk showing nominal prices (as reported), real prices and a price-to-rent ratio: Nominal House Prices The first graph shows the quarterly Case-Shiller National Index SA (through Q3 2011), and the monthly Case-Shiller Composite 20 SA and CoreLogic House Price Indexes (through September) in nominal terms (as reported). Real House Prices The second graph...

US Real Estate: Smart diversification option for HNI Indians

The reason is perhaps not hard to come by. Rohit Prakash, President – American Full House LLC says, “In the last few years property prices in India have risen significantly. Investors who invested at the lows in India have gained from this rise. They are now looking at booking profits and investing in other assets that are available at reasonable valuations. The US real estate market is one such avenue where prices are currently at the lower end of the range with potential for strong upside. In addition, while smaller investors may be hard pressed to find good properties at $100,000 in India very easily today, there are quite a few such opportunities in the US.”

Miami-area home sales held at 5 year high in September

Miami-area home sales held at a five-year high in September, rising 15 percent from a year earlier as price reductions and super-low mortgage rates helped stoke year-over-year sales gains across the price spectrum. The median sale price fell short of the year-ago level for the 48th consecutive month but the magnitude of the decline – 1.5 percent – was the smallest yet, a real estate information service reported.

Southern California Aug Home Sales Rise

August was the first month since June 2010 to post a year-over-year gain in home sales. Last month was also the first since November 2009 in which all six Southland counties logged higher sales than a year earlier.

CoreLogic: 10.9 Million U.S. Properties with Negative Equity in Q2

Nevada had the highest negative equity percentage with 60 percent of all of its mortgaged properties underwater, followed by Arizona (49 percent), Florida (45 percent), Michigan (36 percent) and California (30 percent). The negative equity share in the hardest hit states has improved. Over the past year, the average negative equity share for the top five states has declined from 41 percent to 38 percent.

USA: Real House Prices and Price-to-Rent

Real prices are back to 1999/2000 levels, and the price-to-rent ratio is also back to 2000 levels in real terms (adjusted for inflation using CPI less Shelter). On a price-to-rent basis, the Composite 20 index is back to October 2000 levels, and the CoreLogic index is back to March 2000. In recent months, rents have been increasing; lowering the price-to-rent ratio.

Las Vegas: Best place to buy a home and rent it out

The housing market in Las Vegas may continue to struggle, but for investors, the city is the best place to buy a home and rent it out, a new report revealed on Monday. HomeVestors of America and Local Market Monitor released its list of best markets to invest in rental property, and Las Vegas came out on top… That means investors can buy homes at low prices and have a sizable pool of renters from which to choose… The return could be short-term (the cash flow attained by renting out the property), long-term (the appreciation of the property over time) or both, he said. The risks include future potential home-price drops in the market.

Rents Rise, Vacancies Go Down

Vacancy rates are falling fast (the excess supply is being absorbed). The falling vacancy rate is pushing push up effective rents. Note: The excess housing supply includes both apartments, condominiums, and single family homes. A record low number of multi-family units will be completed this year (2011). Only 8,700 apartments came on the market in Q1 (in the Reis survey area).

US realty turns hot property; Indians snapping up big housing deals

Rohit Prakash, based in Austin, Texas, has for long been doing brisk business helping Americans and foreigners buy and sell property in the capital of one of America’s biggest states.

Recently, he set up American Full House to cater to Indians looking to buy homes in locations that have seen a huge price drop. An Indian buyer who contacted him sometime ago is close to doing two deals in a suburb of Los Angeles at $82,000 and $85,000 each for a three-bedroom condominium. At the peak of the housing boom, these properties were selling at close to $250,000.
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Indian buyers are mostly exploring cities such as Los Angeles, Las Vegas and other parts of southern California and Phoenix, and Miami, where prices are still 60% lower than the peak.
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Prakash of American Full House points out that rentals in most American markets are still high as people who have foreclosed their homes are looking to rent out property. “One could easily get a return of 6-10% in many markets here,” he says.

A spokesperson of the National Association of Realtors attributed the international appetite to the fact that properties in the US are less expensive compared with foreign properties. Homes in the US are viewed as a secure investment. The average price paid by an international buyer in the US was $315,000 and the states with the heaviest concentration of such buyers are Texas, Florida, California and Arizona. With more and more Indians likely to join the rush, the list is only likely to expand.

Wall Street Journal: Why It’s Time To Buy Homes

Rising home prices made renting cheaper than buying in many parts of the country. But that dynamic has begun to change: Housing affordability, as measured by the ratio of median home prices to median household incomes, has fallen below pre-housing bubble levels in just over two-thirds of the country, according to an analysis of more than 380 metro areas by Moody’s Analytics.

Renting is still cheaper than buying in most markets, but rising rents and falling house prices mean that, in some areas, this won’t be the case for long. Buying a home is already cheaper than renting in Chicago, Cleveland, Detroit and Orlando, Fla., according to Moody’s Analytics. In other markets, including Dallas, Las Vegas and Sacramento, Cailf., the equation is likely to soon turn in favor of homeownership if current trends persist, the firm says.

Miami Renters Fuel a Boom

When the real estate market collapsed five years ago, this city’s downtown soon became an emblem of the worst excesses of the building boom. Glittering new towers sat mostly vacant.

Those towers are filling up much sooner than some analysts predicted. The new arrivals, mostly renters, are spurring the establishment of restaurants, bars and shops.

Condo sales here began surging after property owners slashed prices about two years ago, sometimes by 50% or more. … Fewer than 4,000 out of the 22,000 new units built since 2003 remain unsold, according to Condo Vultures.

Buying Real Estate in the USA as a Foreigner

Foreign residents can buy and own USA property directly, but many investors prefer to own through a holding company, an LLC (limited liability company) usually set up in a tax friendly state like Texas, Delaware, or Nevada. In order to own property and collect rents or proceeds from sales, foreigners need to obtain a US Tax ID number and set up a bank account – both of which are easy once...

California (Southland) Home Sales Report

“Sales have been far below average for quite a while and there’s little doubt there’s pent-up demand out there. But too many people still aren’t in the mood or in a position to buy. They might be concerned about prices falling more, or can’t qualify for a loan. They might owe more on their homes than they’re worth and can’t move up. Others were foreclosed on in recent years and can’t re-enter the market yet.”

Although the market is still characterized by historically high levels of distressed property sales, investor purchases and tight credit, some indicators have been inching their way back toward normalcy.

Home Value Decline Percentages For 25 Largest Metro Areas

According to Q1 2011 Zillow® Real Estate Market Reports Largest 25 Metropolitan Statistical Areas Covered by Zillow Zillow Home Value Index Q1 2011 QoQ Change YoY Change Change From Peak United States $169,600 -3.0% -8.2% -29.5% New York, N.Y. $346,600 -1.6% -5.3% -24.2% Los Angeles, Calif. $386,400 -3.0% -7.6% -36.1% Chicago, Ill. $167,900 -4.8% -13.8% -38.1% Dallas, Tex. $125,400 -1.2% -6.9%...

Resurgent USA: New Households Form at Fastest Rate Since ’07

New Households Form at Fastest Rate Since ’07 in Resurgent U.S. By Steve Matthews – May 1, 2011 6:01 PM CT Millions of young adults like Webb are starting to leave their parents’ homes, creating households at the fastest rate since 2007. They’re helping to provide a so-called shadow supply that may boost U.S. housing starts more than 50 percent by next year and spur consumption at a rate...

Apartments: Increased Occupancy, Rents, and Net Income

April 26, 2011 From the Associated Estates Realty Corp (AEC) conference call, an apartment REIT in IN, OH, MI and PA (ht Calculated Risk): Looking at certain performance metrics throughout our portfolio, we continue to see residents staying longer – on average, 18 months. Also, it has been well publicized, households have a greater propensity to rent versus own as renting allow for...

Price-to-Rent Ratio (Owners Equivalent Rent)

This graph shows the price to rent ratio. The Composite price-to-rent index is just above the May 2009 levels, and the CoreLogic index is back to January 2000. Owners’ Equivalent Rent (OER) is at about the same level as two years ago – so the price-to-rent ratio has followed changes in house prices since then. Rents have been increasing again, so the OER will likely show an increase...

Las Vegas: Might see 1/3 appreciation if you buy now.

More than half of this year’s purchases were all-cash transactions, a sign that investors are finding bargains at the low end of the market, said Robert Lang, a professor of sociology at the University of Nevada, Las Vegas.… “Prices are below the cost of materials and labor,” said Lang, also a senior fellow at the Brookings Institution in Washington. “If you’re betting the U.S. economy won’t go back to Armageddon, you might see one-third appreciation if you buy now.”

Nearly half of the housing market is now distressed properties

HousingPulse Distressed Property Index Rises for Month; Homebuyer Traffic Flattens WASHINGTON, D.C. (April 25) – The HousingPulse Distressed Property Index (DPI), a key indicator of the health of the U.S. housing market, rose to 48.6 percent in March – the second highest level seen in the past 12 months. In another potentially significant development, the HousingPulse Homebuyer Traffic Index...