Since the markets are obviously going to crash, they reason, they will wait to buy real estate until prices plummet. Will there be another housing market crash? Lending guidelines changed overnight and builders were left with tons of inventory and no buyers. Is it smart to wait for the housing market to crash before you buy? I bought quite a few homes at the bottom of the market, but I also bought homes on the way down and on the way up. When I bought houses at their low I was assuming they would jump back up in price. If you are sitting on the sideline waiting for a crash to occur, do you have a plan for when that happens or are you just waiting? I think many people who are waiting for a crash have not thought these questions through; they just want to buy at the bottom and sell at the top. I can make a guess, but I do not base my investment decisions on whether the markets will increase or decrease. I never thought prices would have risen as high as they have, but I also would have thought the builders would have built many more homes than they have.
None of the firms had an equal ratio of male to female brokers, TRD’s analysis found. No other woman was involved in the transaction, Lee said. The women that have made it to the top also have an added pedigree of sorts, according to Stacy Vierheilig-Fraser, senior managing director at brokerage and property management firm Charles Dunn. “I think you’re going to see many more women as brokers in the next five years,” Schatz said. Westside Estate Agency had the lowest ratio of females out of the top local residential brokerages with nearly 42 percent, a TRD analysis showed. About 50 percent of the brokers at the Agency and Hilton & Hyland were female, while Douglas Elliman’s representation of women exceeded 57 percent in its L.A. office. “The residential real estate companies are primarily owned by men,” Rey said. “Women need to form alliances where it’s not a covert industry where only one woman can make it.” Poirier has executed this by hiring several women for her team. That means using words like “collaborative” and “compassionate” in recruiting ads, according to Brokers + Engineers’ Renshaw. “Women are great in commercial real estate — it’s just that someone has to tell them,” Renshaw said.
The downturn rippled through world equity markets. Should real estate investors be worried? Yes, says Richard Barkham, Global Chief Economist & Head of Americas Research of CBRE, but only if policy makers overreact. Black Monday raised fear that the global economy was slipping into another serious recession, like that of 1979 to 1982. Interest rates were lowered and government spending was increased. Since the global economy remained in relatively good shape, the stimulus stoked inflation and fueled a property boom, particularly in the U.K. Real estate did well for a couple of years but crashed in 1989, not as a direct result of Black Monday but of the mistaken policy response, CBRE explains. The bursting of the dot-com bubble in the early 2000s was spread over three years, but the DJIA lost 27% of its value between January and October of 2002 alone. Interest rates were lowered, the U.S. moved to a zero-interest rate policy and government spending increased. Far more damaging was the housing market boom, ignited by aggressive interest rate cuts, which fell apart in 2007, continued CBRE. Bottom line: The global economy is in good shape and real estate investors should not fear a real estate crash reports CBRE.
They are among the nearly 9,000 census tracts that have been designated Opportunity Zones by the federal government and are ripe for real estate investment. The Opportunity Zone (OZ) investment is part of a new community development program offered through the Federal Tax Cuts and Job Acts of 2017, which encourages private investment in low-income urban and rural communities. They are a unique vehicle for smart investors who want to maximize their capital gains while investing that money altruistically to rebuild and reenergize communities. Earlier this year, governors from all 50 states were asked to identify low-income or low-performing areas in need of infrastructure investment. Under the OZ program, investors can defer taxes by taking capital gains from other investments and placing them into businesses or real estate assets in the OZ. For investors who aren’t as well-versed in real estate, these funds provide several benefits: • There is less risk because the fund will invest in different assets and geographies, as opposed to being exposed to the performance of just one market. • Companies creating the funds are usually sophisticated and adept at understanding the economic and social climate for each geography, ensuring smarter investments. It can be a capital investment in a startup company located in the OZ or the development of new residential and commercial buildings. While many investors will look to place their money in funds, there are opportunities for savvy real estate investors and developers as well. But while we await guidance from the government, it would appear from the onset that this program will be mutually beneficial to both investors and the communities in which they operate.
So, what does 2019 have in store for real estate investors? They will affect everyone, driving up costs for home buyers and creating more demand for rentals. Single-story homes will increase in value as demand rises. Millennials are finally ready to purchase their first homes despite headlines saying they “can’t afford them.” But because they are largely seeking affordability and quality of life, they are having to trade in the urban life they crave and head out to the suburbs. Investing Is A Lifestyle Many people want to be successful real estate investors. The problem is that the average person starts at the last step of the investment cycle rather than at the beginning. The property. For instance, if your personal investment philosophy were to invest for monthly cash flow, it would make no sense invest in a number of properties with an aggressive, highly leveraged debt ratio that allowed for no cash flow. As rich dad said, “Business and investing are team sports.” In order to be successful in any market, especially ones that you don’t live in, you need to have the right team. So, if you’re looking into becoming a real estate investor, 2019 could be a great time to do so.
Only in 22 counties in the United States is a one-bedroom home affordable to someone working 40 hours per week at federal minimum wage. That’s from the National Low Income Housing Coalition (NLIHC) report, which outlines the mismatch between wages and rent every year. (Fair Market Rent is an annually updated government estimate, typically the 40th percentile of the gross rent in an area.) NLIHC estimates that the average renter’s hourly wage in the United States is $16.88. The average renter in each county makes enough to afford a two-bedroom in only 11 percent of U.S. counties, and a one-bedroom, in only 43 percent. The national “housing wage” in 2018 is $22.10 for a modest two-bedroom rental home and $17.90 for a one-bedroom, the report estimates. (That’s how much an average renter in the U.S. would need to make to afford a modest apartment at fair market rent, without paying more than 30 percent of their income towards housing. Still, in not a single state, city, or county can someone earning federal or state minimum wage for a 40-hour work week afford to rent a two-bedroom home at fair market rent. The incredible shortfall in affordable units remains the more stubborn, intractable problem. Between 2005 and 2015, apartments costing $2,000 and more increased by 97 percent, according to Harvard University’s Joint Center for Housing Studies; Meanwhile, those under $800 decreased by 2 percent.
Inefficiencies in the Current Real Estate System In the real estate industry as it currently exists, investors are often required to invest in entire properties. There are only so many investors with enough capital to invest in real estate, due to the fact that even the most affordable properties can be very costly, compared with other investment options. Real Estate Investment Trusts Many people point to Real Estate Investment Trusts (REITs) as solutions where individuals have greater ability to invest in real estate. Blockchain technology grants the ability to unlock the potential held within the current real estate market, introducing a whole new world of liquidity and opportunity for investors. Benefits of a Blockchain-Based System In simple terms, blockchain application could allow real estate ownership to be delegated, traded or decentralized in other ways via tokens that represent fractional ownership of the underlying property or asset. SwissRealCoin is another blockchain solution looking to eventually provide global application for the tokenized real estate market. HiP is yet another company looking to change the world through blockchain-based real estate. The token is merely a fee on all trades." Bluenote is one more company in the blockchain property space, but with slightly different goals. Providing blockchain based proof that energy efficiency is the source of that profitability, can unlock the potential of $6.5 trillion in global real estate value, and solve climate change too."
In general, though, they break down into three categories: Single-family homes (including manufactured houses, modular homes and PUDs) Condominiums, co-ops or townhomes Multi-unit housing (duplexes, triplexes and fourplexes) Different types of homes are easier to buy and appreciate at different rates. But it makes sense to break them down into seven categories: Single family residence Condo/co-op Townhome Zero lot line Planned unit development (PUD) home Manufactured Modular/pre-fab Multi-unit Each category has characteristics that make them more or less attractive to a purchaser, depending on that person’s needs. Pros Someone else is going to clean, repair and maintain the common areas, including the grounds Many condos and co-ops provide extra amenities, including pools, gyms and 24-hour security/door staff They typically have lower prices than an equivalent single-family residence, though there are exceptions They’re often located where land is at a premium, so you may find yourself with a sea view or in a prime downtown location where a single-family residence would be prohibitively expensive Many condo developments and co-ops have a real sense of community and may help you make friends quickly However, some of those pros have flip-side cons. Related: Townhomes, condos and more (how property type affects your mortgage) Most townhomes share walls with two neighbors. Cons You’ll be sharing a party wall with at least one neighbor and usually two. Depending on your choice of zero-lot-line home, including its ownership model, almost all the pros and cons listed under the different types of homes above could apply. So you may well find single-family residences, apartment-style condos, townhomes and zero-lot-line homes all within the same PUD. Pros Plenty of attractive amenities Communal facilities and spaces maintained by the HOA or condo management Larger PUDS often have restaurants, bars, and shopping and medical facilities on site Selection of types of home This is a lifestyle choice that can deliver convenience and amazing amenities with a real community “feel.” Cons None of this comes cheaply: watch out for high HOA/condo fees You’ll be paying for the upkeep of amenities, even if you don’t use them Your mortgage lender will want to know you’re buying within a PUD Individualists may find HOA rules and that community “feel” oppressive Make sure you’re going to enjoy this lifestyle and that you’re prepared to pay for it. Multi-unit homes Multi-unit homes come with two-to-four units on one property. Pros Multi-unit housing can be a great option for multi-generational families who want to live together, but not right on top of each other You can live in one unit and get rental income for the others Most lenders allow you to finance them as primary homes as long as you live in one unit Many programs (like FHA) allow you to finance a higher amount with a multi-unit property Cons Multi-unit homes don’t generally appreciate as fast as single-family housing Fees for financing two-to-four unit homes are higher Qualifying for a home loan may be more difficult, depending on the lender and program You may not like your neighbors or being a landlord Related: Buy a duplex, tri-plex or four-plex and let your tenants pay your mortgage Different types of homes Don’t worry too much about choosing your next home.
Real estate investment can be classified by its ownership base and its capital structure. So public equity in real estate includes instruments such as REITs and real estate stocks, while private equity involves direct ownership of real estate assets. Many real estate investors, especially asset managers that typically invest on behalf of institutional clients, eventually invest in all four quadrants of the above matrix. The first synergy is with the investment process. But the synergies generated from the market insights remain valuable. This is especially true with smaller institutions, such as mid-size family offices or small charity trusts. An investment manager can often tailor-make an investment program for these investors by combining all four forms of real estate to create a generally diversified portfolio. For example, we are in an interest rate upcycle currently. Selected private debt can also perform because their tenure can be as short as two years, which allows investors to hold to maturity and renew their investment at the then prevailing interest rate. This effectively limits the interest rate increase risk.
LendingTree collected real estate data from more than 155 million properties across the United States to calculate which cities have the highest concentration of homes worth $1 million and up. Four cities in California have more than 10% of homes valued over $1 million. LendingTree then calculated the concentration of million-dollar homes in each city by dividing the number of homes valued at $1 million or higher by the total number of homes in the statistical area, according to the report. The data shows that expensive properties are more likely to be on the coasts than inland America with the exception of Denver, Colorado. Four cities in California have more than 10% of homes valued over $1 million, and San Jose is the only place where the median home value (among all homes) is above $1 million. Charlotte, North Carolina SergeevDen/Shutterstock Percent of million-dollar homes: 1.02% Median value of homes: $187,000 Median value of million-dollar homes: $1,295,000 2/22 21. Baltimore, Maryland Jon Bilous/Shutterstock Percent of million-dollar homes: 1.07% Median value of homes: $270,000 Median value of million-dollar homes: $1,214,000 3/22 20. Riverside, California sirtravelalot/Shutterstock Percent of million-dollar homes: 1.12% Median value of homes: $332,000 Median value of million-dollar homes: $1,339,000 4/22 19. San Diego, California Vacclav/Shutterstock Percent of million-dollar homes: 10.55% Median value of homes: $563,000 Median value of million-dollar homes: $1,384,000 19/22 4. San Francisco, California Andrew Zarivny/Shutterstock Percent of million-dollar homes: 40.03% Median value of homes: $891,000 Median value of million-dollar homes: $1,409,000 22/22 1.