Saturday, September 26, 2015

Where are we going from here? REAL ESTATE MARKET IS HOT HOT HOT IN ARIZONA.

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Where are we going from here?

On the one hand I wish the phones stopped ringing, on the other this is best market we have had since the crash of real estate in 2006/2007.  In some areas prices have surpassed the heights of 2004/2005, in others they are getting very close to it. 

Unemployment is at its lowest level in Phoenix Metro since 2006. Good luck finding a handyman, a skilled construction worker or even a skilled office manager at a reasonable hourly rate! In June 2015 unemployment rate dropped to 5% less than the 5.3% national average.  There have been 61,400 new hires in Maricopa and Pinal counties since February 2014, according to the Arizona Department of Administration ---  a pace higher than the average number of new jobs created during February over the last 10 years.

Mortgage companies are back logged 45 to 60 days. Days you put an offer with closed of escrow within 30 days are over! Rates are low, down payment assistance programs are back, financial institutions have eased up, first time home buyers and renters are swarming the market and multiple offers jamming up the fax machines. 

Title companies, I call them the “Moo Cow Corrals” offer no incentives to Realtors to get their business, let alone offering their clients a glass of water going to sign their docs. Buyers, Seller check your HUDs twice before you sign on the dotted line. They are making a ton of mistakes.  
Who is buying who is moving to Phoenix? 

Renters who lost their homes are on the top of the chart, second to that are the first time home buyers and thirdly savvy investor, Californians and opportunists.

From 2008-2011forclosures and short sales had become the norms of the market. As the result, too many home owners lost their homes and entered the rental market. 7 out of 10 of our tenants when they give their notice to vacate, “BOUGHT A HOUSE” is their answer to why they are moving out.  
With rent increasing 15 to 30 percent in most areas in the past 18 months and how affordable homes

are still out here in Phoenix Metro, rates being so low, banks competing and sellers contributing up to 3% towards buyers closing costs, it will be foolish not to buy a home. We see a lot of first time home buyers entering the market. For just a little more than their deposits and first months rents combined, they are buying homes and their payments are equal or a bit higher than the rent. 

Savvy investors sold their investment properties in California where prices have sky rocketed and it feels like we are back in the 2003 area where speculators were sleeping behind the new home construction offices to enter into a drawing to buy a home. Owning rental properties in Phoenix Metro pencils out way better than in larger metropolitan areas, especially in California. I heard from one investor in California that the exchange boards at her 1031 exchange office are filled up with investors looking to complete their exchanges and no properties to exchange it with in California that makes any sense. A lot of them are coming to Arizona from buying one to multiple single family homes to mid and large size multiplexes. I know first hands because we are getting those calls.
Younger Californians especially from Silicon Valley area are moving to Scottsdale. They tell me, you cannot get a decent condo for $700,000 up there. A 3000 square feet home with pool on a large size lot in a decent area costs a fortune. Most tech guys work from home anyway. So we get a lot of those calls too. Quite a few that have already moved down here seem to be very happy with their decisions specially the ones with children.

We also see a lot of big corporations in the east coast transferring their head honchos to Phoenix Metro looking to expand their operation. Cooperate relocation has picked up by at least 6% in the last 12 months and a few more applications are under review as we speak. 

Recently there have had quite a few tenants with good credits from Los Angeles and Orange County moving to Arizona in search of new opportunities.  Soon they will enter the home buying market as well. 

Who are the sellers? 

A)     Owners that have been under water with their mortgages for the last ten years finding it now make sense to sell.
B)      Canadians investors: Most of the Canadians who bought investment properties in Phoenix Metro bought in when Canadian Dollar and US Dollar were at par in 2011. Now one US Dollar equals to 1.33 Canadian Dollar so they enjoy the property value appreciation plus an additional 33%.
C)      Owners who are up sizing/downsizing. Regular sellers.
D)     Flippers. There are still some opportunities not as much in the lower end homes out there to fix and flip. Higher price homes make more sense as long as the economy is doing well. A fine line to walk in that area. Be careful.  
E)     Very little foreclosure.

We specialize in buying and selling investment opportunities from a single family home to multi million dollar multiplexes. Our team at Global Real Estate Investments consists of seasoned Realtors that have got the pulse of the market and can lead you to the right opportunities. Our property management Company, Arizona Property Management & Investments is an award winning property Management Company in Phoenix Metro ready to get your vacancies filled and get those dollars into your back account reducing your liabilities. Our Maintenance Company, Arizona Handyman and Remolding Services LLC makes sure your investment is maintained well and up to date at a reasonable cost reducing your overhead  adding to your bottom line.

Please call me directly at 888-777-6664 ext  114 ( please make sure you tell the receptionist  you are an investor, they screen all my calls) or email me at
By looking at the articles below, you will see that we have been preaching those areas to our investors for the past two years.  We know what, where and how to help you make your next investment move to maximize your long and short term gains. Don’t make this decision on your own even if you live in Phoenix yourself. This is a free consultation.

Thank you.
Payam H. Raouf
(888) 777 6664 ext 114

Arizona Property Management & Investments
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8 Phoenix-area cities hit top 50 healthiest US housing markets


Eight Arizona cities are rising in the ranks of healthiest housing markets in the U.S., according to a WalletHub study. They all landed in the top 50 healthiest U.S. housing markets for comparably sized cities based on population.
Gilbert, a midsize city, ranked the highest of the Arizona cities at No. 11. Chandler was next at No. 22 and Tempe ranked No. 28 in the midsize cities. Among large U.S. cities Mesa ranked No. 40 and Phoenix was No. 46.

The website consolidated rankings in 14 criteria, including pricing, percent of homes still under water, days on market, affordability, and other measures to determine the healthiest markets in the U.S.

Texas topped the healthiest markets list with No. 1 positions for Austin (large), Plano (midsize) and Frisco (small).
Other Western markets ranked high as well. Seattle (No. 2, large) and Denver (No. 3, large) ranked higher than all Arizona cities. Salt Lake City (No. 21, midsize), trailed Gilbert, but was just one ranking ahead of Chandler.
Rank of Arizona cities among healthiest U.S. residential real estate markets
  • 11 Midsize - Gilbert
  • 22 Midsize - Chandler
  • 28 Midsize - Tempe
  • 35 Midsize - Peoria
  • 36 Midsize - Scottsdale
  • 40 Large - Mesa
  • 46 Large - Phoenix
  • 49 Large - Tucson
  • 55 Midsize - Glendale
  • 88 Small - Surprise
  • 123 Small - Yuma
Source: WalletHub
Eric covers economic development, banking and finance, infrastructure, transportation and utilities.

Monday, June 22, 2015

US home sales jump in May, average prices close to 2006 peak

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Rents have increased by 10% or more in most Phoenix Metro Areas since January of 2015! The inventory is low and demand is very high specially in areas where school districts are most  desirable such as Anthem, N Peoria, Deer Valley, N Glendale, Gilbert, Chandler, Mesa, Ahwatukee and N. Phoenix. 

Even with the home prices rising, the demand to purchase rental investment
properties in Phoenix Metro Area has picked up. Quite a few investors from California and New York  where home prices has gone up substantially in the past two years have started investing in rental properties in Phoenix Metro again. Their focus is long term. They are buying prime real estate in the $180,000 to $300,000 in the most desirable areas. 

If you are interested in knowing where and what they are buying and need some recommendations, please contact Payam Raouf, Owner/Designated Broker at (888)777.6664 ext 114.  Thank you. 

US home sales climb 5.1 percent in May; tight supplies drive up prices

By Josh Boak, AP Economics Writer 

WASHINGTON (AP) -- More Americans bought homes in May, a sign of economic strength that is pushing up average prices.
The National Association of Realtors said Monday that sales of existing homes climbed 5.1 percent last month to a seasonally adjusted annual rate of 5.35 million. May was the third consecutive month of the sales rate exceeding 5 million homes, putting home-buying on pace for its best year since 2007.
Solid hiring since 2014 and relatively low mortgage rates have stirred up demand and helped generate more first-time buyers, though rising sales have fueled spiking prices because relatively few properties are listed for sale.
"We can credit that to the stronger job market, a more confident consumer" and some additional listings in an otherwise tight market, said Jennifer Lee, a senior economist at BMO Capital Markets.
Some of the buying might also reflect a rush to capture the benefits of lower interest rates and relatively cheap prices that are jumping higher each month.
"There may be some anticipation of prices going even higher, which is sparking a move off the sidelines," Lee added.
Median home prices climbed 7.9 percent over the past 12 months to $228,700, about $1,700 shy of the July 2006 peak.
The market has just 5.1 months' supply of homes, versus an average of six months in a healthy market.
Economists say that the sales gains of recent months could be short-lived if prices increase so sharply buyers are priced out of the market. The recent rise in mortgage rates could also curtail sales, similar to the higher mortgage rates slashing into sales in the middle of 2013.
Still, real estate has begun to show some strength after muddling through much of the six-year recovery from the recession that has left millions of Americans still owing more on their mortgages than their homes are worth.
Sales jumped in all four major geographic regions: Northeast, Midwest, South and West. First-time buyers also accounted for a growing share of sales, a sign that younger buyers are returning to the market after enduring an economic downturn and sluggish rebound that delayed their purchases.
About 32 percent of the homes sold last month went to first-timers, compared to 27 percent a year ago. The improvement is substantial but still lags behind the historical average of first-time buyers composing 40 percent of the market.
More Americans signed contracts to buy existing homes in April — which should translate into more finalized sales in the following months. The Realtors' seasonally adjusted pending home sales index climbed 3.4 percent to 112.4 in April, the highest reading since May 2006.
Sales of newly constructed homes through the first four months of the year are up 23.7 percent compared to the same period in 2014, according to the Commerce Department.
Builders are gearing up to meet the additional demand.
Approved building permits in May surged 11.8 percent to an annual rate of 1.28 million, the strongest reading since August 2007, according to the Commerce Department. Construction firms are breaking ground on more houses and apartment complexes, with the government reporting a 6 percent increased year-to-date.
Much of that growth stems from the spillover effect from a stronger jobs market. Employers have added 3.1 million jobs over the past 12 months, increasing the total number of paychecks in the economy and the likelihood that more Americans will shop for homes.
Low mortgage rates have also helped, although rates are now starting to steadily rise in ways that might limit sales later in the year.
Average 30-year fixed rates were 4 percent last week, according to the mortgage giant Freddie Mac. That average has increased from a 52-week low of 3.59 percent.
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Saturday, January 10, 2015

Flip or Hold: Best Real Estate Moves for 2015

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    Whether it makes sense to flip or hold property depends entirely on your region.

    Closeup of a man calculating payments for a home.

    There is plenty of positive news for real estate investors to look forward to in 2015.
    Wild fluctuations in the nation’s real estate cycle have taken investors on a roller coaster ride since the early part of this century. From the first decade, marked by overheated home prices in many of the nation’s most popular metropolitan areas, to the post-Great Recession era sending home values into a free fall, investors have had to adjust and adapt their investment strategies to market conditions.

    So, going forward, which are the best strategies to pursue for real estate investors next year?
    The big picture for 2015. Looking at the nation’s housing and economic indicators, there is plenty of positive news to justify continued investor optimism in 2015. Home sales – both existing and new – are projected to increase next year, which is welcome news for fix-and-flip investors.

    At the 2014 Realtors Conference & Expo, Lawrence Yun, chief economist for the National Association of Realtors, or NAR, predicted a rebound for existing home sales for the next two years, and he projects the national median existing-home price will rise at a moderate 4 percent in each of those years. On the new home front, David Crowe, chief economist for the National Association of Home Builders, forecasted in an Oct. 31, 2014 National Association of Home Builders webinar that multi-family housing starts were projected to increase 15 percent in the rest of 2014 and hold steady in 2015.

    “Multi-family housing starts have rebounded back to normal since the downturn, mostly due to the strong demand for renting,” says NAR’s Yun, who also notes that renter households have increased by 4 million since 2010, while homeowner households have decreased by 1 million.

    Two major concerns remain: tight lending standards, which continue to keep people who could otherwise afford to buy a home from qualifying for a loan to finance the purchase, and interest rates, which are expected to hit at least 5 percent by year-end.

    Looking at the numbers. Daren Blomquist, vice president at RealtyTrac, says he believes 2015 is going to be a better year for buy-and-hold investors than for flippers – with the caveat that real estate values vary from area to area and property to property, so investment strategies will have to adjust accordingly.

    According to RealtyTrac’s numbers, the volume of properties being flipped declined dramatically, down from their most recent peak of 8.8 percent of all single-family home sales in the second quarter of 2012, to 4 percent of all home sales in the third quarter of this year.

    “As home-price appreciation slowed down, the flippers have become less active in this market as well,” Blomquist explains. “The interesting thing is that the volume of flipping is going down, but the average profit on a flip is staying very strong. The gross profit has stayed strong for the past three years in the 30 percent range.”

    For buy-and-hold investors, rental properties did well in 2014, although gross rental return was down slightly in the 586 counties surveyed by RealtyTrac, compared to 2013.

    “This year was not as good for buying rentals as last year. Last year, we had a 10 percent return because home prices went up, even though rents went up. Returns have slipped a bit because the cost of acquisition went up,” he says.

    Still, Blomquist says he believes it is a good time to buy rental properties, because the dynamics of this market are right.

    “We will see it flatten out because home prices are starting to flatten out as well. That will allow rents to catch up with home prices, which is good for buy-and-hold investors, but not as good for the flipper,” Blomquist says.

    The local perspective. To best-selling real estate author, attorney and longtime investor William Bronchick, 2015 is going to be a good year in the Denver market for owning rental properties, but not as good for flippers.

    “It’s great market for rentals, because people still can’t get loans and there’s so many renters. The lending market is tight, so there are more renters, so higher rental rates and lower vacancies make for a great rental market,” Bronchick says. “On other hand, inventory is low, so if you can get your hands on a good motivated property, then you’re good for a flip.”

    Working in North Carolina and South Carolina, investor and trainer Larry Goins, says current market conditions in these states are good for both flippers and rental property owners.

    “There are deals to be had, but you have to work harder to get them,” Goins says. “I like to buy lower-priced houses and rent them or do lease options or seller financing.”

    Specializing in the Atlanta market for decades, Andy Heller, a real estate investor and trainer on these topics, says that since the market crash, a buy-and-hold strategy has made more sense, because investors could buy property very inexpensively.

    “Most of the country has settled into a more normal appreciation especially in the last six months or so,” Heller says. “Allowing for the fact that we’re in a time of normal appreciation, what strategy is the best? Both. We don’t have an overheated market and we don’t have a collapsing market.”
    In the Greater Phoenix area, supply and demand economics will dictate the right investment strategy in 2015.

    “The Greater Phoenix market has been in low supply and low demand for 15 months now,” says Alan Langston, executive director of the Arizona Real Estate Investors Association or AZREIA. “We’re not sure that’s going to change anytime soon. Our market’s been stagnant for a long time, but that doesn’t mean real estate investing has been bad. It’s been different.”

    Langston believes investors will continue to be successful, they are whether rehabbing and flipping houses, or holding onto rentals - but they will have to approach the business differently than they used to.

    “If you know what you’re doing as a real estate investor, you’re going to adjust what you need to adjust so you do well on your property,” Langston says. “If you’re an informed investor, you’re going to be fine,” he says.

    Investor activity varies by investor, region and property types., the largest online real estate marketplace, recently released survey data collected from investors bidding on properties across the country, which confirmed that buying property to hold and rent is currently favored over flipping nationwide. However, investor intent varies considerably between online and offline investors, regions, and property prices.

    The study showed that purchasing property to rent is more prevalent in the Midwest and South, whereas there appears to be a higher propensity for flipping in the Northeast. The flip versus rent split is nearly even in the West, with a very slight preference toward renting.

    “Real estate investors appear more likely to flip a property in those regions where home values are higher,” says Executive Vice President Rick Sharga. “Higher prices can translate to a faster and potentially more significant short-term return on investment. The hold-and-rent strategy seems most popular in markets where home prices are lower, allowing investors to charge a more competitive monthly rental rate and still produce reasonable returns over an extended period of time."

    Monday, December 29, 2014

    The road to American serfdom via the housing market: The trend towards renter households will continue deep into 2015.

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    By: DrHousingBubble

    If you bought or rented in 2014 a larger portion of your income went to housing.  Rents and housing values are quickly outpacing any pathetic gains to be had with wages.  With the stock market at a peak, talking heads are surprised when the public is still largely negative on the economy.  Can it be that many younger adults are living at home or wages are stagnant?  It can also be that our housing market is still largely operated as some feudal operation.  Many lucrative deals were done with big banks and generous offers circumventing accounting rules.  This works because many perceive they are temporarily embarrassed Trumps, only one flip away from being a millionaire.  Why punish financial crimes when you will likely need those laws to protect your gains once you join the club?  The radio talk shows are all trying to convince people to over leverage and buy a home because you know, this time is the last time ever to buy.  Yet home sales are pathetic because people don’t have the wages to support current prices.  So sales drop and many sellers pull properties off the market.  You want to play, you have to pay today.  Rents are also rising and this is where a large portion of household growth has occurred.  2015 will continue to see housing consume a large portion of income and will lead many into a new modern day serfdom.

    The gain of 7 million rental households
    Over the last decade we have added 7 million renting households.  Is this because of population growth?  No.  This trend was driven because of the boom and bust in the housing market.  Investors crowded out regular home buyers in buying single family homes and now, we have millions of new renters out in the market.  Many of these people are folks who lost their homes via foreclosure.
    Learn About Credit Card Balances & Credit.
    Take a look at the obvious jump in renters:
    For better or worse, homeownership is a path to building equity.  It is a forced saving account for many.  Most Americans don’t even benefit from the stock market peaking because nearly half of the country doesn’t even own stocks.  And many own only a small amount.  Most Americans derive their net worth from their primary residence.  With fewer buying and more renting, I doubt that on a full scale people are suddenly buying stocks for the long-term.  But it is also the case that many are simply renting because that is all they can afford.  Many young Americans have so much debt that this is all they can pay.  Think of places like San Francisco where jobs pay well but rents are simply out of this world and home prices are nutty.
    Rents more stable versus wild housing prices
    Thanks to low rates, generous tax structures, and the American Dream marketing machine home values are operating in a casino like environment.  This wasn’t the case in previous generation but take a look at fluctuations in rents versus home prices:
    rents and home prices
    A crazy year for rents is when rents go up over 4 percent year-over-year.  For home values we routinely had year-over-year gains of 25 percent in the last 20 years (including the latest boom in 2013).  Rents are driven by net income of local families.  No funny leverage here.  But with buying homes, you have investors chasing yields, or loans that allow tiny down payments for buyers but then tack on a massive 30 year mortgage with a monthly nut that seems reasonable but only because of a low interest rate.  Some of these people have no retirement account yet take on a $600,000 or $800,000 mortgage without batting an eye.  So what we find is this psychological shift where some that want to buy are convinced that they need to start at the bottom of the ladder and pay an enormous price tag just to get in.  To move out of serfdom, you have to embrace the cult of Mega Debt.
    Young adults more likely to stay close to home – and rent
    Young adults are facing the biggest impact of the housing crunch.  Many are living at home because they can’t even afford current rents.  Those that do venture out, will likely rent as their first step.  A recent survey found that many young adults are planning on staying local.  Say you live with your baby boomer parents in Pasadena or San Francisco.  You want to buy like they did but good luck.  So many have their network within said community and will likely rent (or live with mom and dad deep into their 30s and 40s):
    rentals young adults
    I found this data interesting.  People are simply moving less from their home area.  So this will create more demand for rentals in these markets.  In California, we have 2.3 million adults living at home.  Pent up demand?  Unlikely.  The main reason they are at home is because of financial constraints.  These are people that can’t even afford a rental.  I’m sure this trend is occurring in other higher priced metro areas as well.
    Rental income soaring for investors
    Rental income has soared since the bust happened.  The biggest winners?  Those who bought properties to become the new feudal landlords.  You can see by the below chart that there was a larger concerted effort to consolidate rental income beyond the mom and pop buyers of former years:
    rental income
    Serfdom is also occurring to many households buying.  They are leveraging every penny into their mortgage payment.  Think you own your place?  Try missing a few payments and become part of the 7 million completed foreclosures since the crisis hit.  2014 simply saw more net income going into housing.  Is this good?  Not really since housing is a dud for the economy unless we have new construction being built but that is not happening on a large scale.  2015 will likely see this continuation of serfdom via renting or buying but at least you might save a few bucks with lower oil!  The road to serfdom apparently runs through housing.

    Tuesday, December 23, 2014

    4 predictions for the housing market in 2015

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    By: Chris Mathews Fortune Magazine

    Experts polled by Fortune expect home prices and mortgage rates to rise slowly next year.
    At a recent panel discussion on the 2015 real estate market, the chairman of Standard and Poor’s Index Committee, David Blitzer, was asked to describe what the market will look like in one word. His answer? “Mysterious.”
    His response tells us that, for one, the real estate market can confound even the experts. But, more importantly, it suggests that housing has reached an inflection point. With home prices in many markets at or above pre-bubble levels, we can no longer expect the “rebound effect” to power home values higher each month. Fundamentals, like population and wage growth, as well as the tastes of a new generation of home buyers, will dictate the trajectory of home prices in the new year. Here are four trends to watch for in the housing market next year:
    1. The demographic wave of Millennials will help boost prices: The U.S. has been stuck in a demographic rut, which has dragged down the demand for homes. For the past decade, the largest portion of the American population was made up of Baby Boomers, folks who long ago settled down and started families. But late last year, the Census Bureau announced that the cohort of now-23-year-old Americans is the largest in the country, followed by 24 and 22-year olds, respectively. As this ascendent generation ages another year, more of them will start families and look to buy homes of their own. Jonathan Smoke, chief economist at, argues that this generation will “drive two-thirds of household formations over the next five years.” Smoke thinks 2015 will mark the first year in which the Millennial generation’s presence in the housing market will be truly felt, especially in more affordable regions like the Midwest and the South.
    2. Young people will continue to demand housing where it’s tough to build: At the S&P Panel, Nobel Prize-winning economist Robert Shiller pointed out that since the housing crisis, the total value of owner-occupied housing has remained flat. This is because builders have not been constructing many single-family homes at all, a situation that the U.S. economy hasn’t faced since the Great Depression.
    Single-family home construction has been so subdued in part because the Millennial generation as a whole prefers to live where housing is expensive and where building is difficult. Jed Kolko, chief economist at Trulia, calls it the “Millennial mismatch” in a new report out Tuesday, where he shows that Millennials tend to live in markets like New York, Honolulu, and Austin, where homes are least affordable.
    3. Mortgage rates will rise: While many analysts were convinced that mortgage rates would rise this year on the back of an improving economy and the winding down of the Fed’s bond-buying stimulus program, the market didn’t comply. The year started out with news that the U.S. economy shrank in the first quarter, which put the market on edge. Next came news of unrest in Ukraine and slow growth in Japan and Europe, putting more downward pressure on interest and mortgage rates. Now, a 30-year mortgage is actually cheaper on average than it was at this time last year.
    US 30 Year Mortgage Rate Chart
    But economists are still betting that 2015 will be the year rates rise in earnest, citing, again, an improving domestic economy and a lack of stimulus from the Federal Reserve. Smoke, for instance, sees the 30-year rate ending at 5% by the end of next year, a more than 100-basis point increase from today.
    4. Home price increases will decelerate, but affordability will decline: The housing recovery slowed markedly in 2014. Home prices in October 2014 were up by 6.4% year-over-year, after climbing 10.6% in 2013. Economists polled by Fortune were nearly unanimous in predicting that home values would continue to rise, but even slower than they did this year. That’s because the rebound from the bursting of the housing bubble has just about run out of steam, with Trulia’s Kolko estimating that homes are only 3% undervalued relative to fundamentals nationally. Surveys of homeowner sentiment suggest that more of them will look to sell their homes next year, putting more downward pressure on prices. But factors like the “Millennial mismatch” and rising mortgage rates will conspire to make the most popular markets unaffordable for the middle class.

    Monday, October 20, 2014

    Rental fury: The trend for renting continues to grow stronger. Housing starts jump largely on the back of multi-family housing starts.

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    By: Dr Housing Bubble

    There was an odd sort of rejoicing last week in the midst of market volatility.  Housing starts jumped but the people pointing at this failed to grasp that a large reason for this was because of multi-family housing starts.  In other words, the demand is reflecting a nation that is becoming a renter class.  This trend reflects a new workforce that has more part-time employment and less job security than the previous generation.  Why would you buy a home if your employment is more volatile?  The numbers are clear and we have added over 7 million renter households in the last 10 years.  Right now we are at the peak of renting households.  However, we peaked for homeownership back in 2006.  Since 2006, we’ve actually lost about 2 million net homeowner households.  No need to worry since Wall Street has taken up the slack to purchase those single family homes and convert them back into rentals for the new modern day serfs.  The renting trend continues and the jump in housing starts reflects a change in home buying perception.

    Deconstructing housing starts
    It probably is worth digging into the housing starts data since some people were going hog-wild on data that reflects a trend towards renting.  Once broken down the solid rise in housing starts was brought on by multi-family units.  In other words, high density lower cost housing options.  You would like to see a higher demand for single family homes if the case were to be made that households were gearing up to purchase homes.  Yet this isn’t something builders are betting on.
    First take a look at single family housing starts:
    single family housing starts
    Can you spot the so-called surge?  Probably not.  Since 2008 home builders have been holding steady when it comes to single family homes.  After all, investors were out in the market looking for lower priced properties to churn out healthier rental yields.  In places like California, many investors have already pulled back and we are seeing the vacuum that is being left.  Many sellers are pulling their properties off the market thinking next spring and summer they’ll be able to lure in some new lemming.

    If we look into multi-family housing starts, we find an unmistakable trend:
    multifamily starts
    That is what a surge looks like.  This is a fury of activity to meet the demand of a renter nation.  No need to spin the above chart since it speaks loudly as to what builders are viewing as the next big thing.  Rents are holding steady and younger Americans are carrying large amounts of student debt and their salaries are unfortunately not all that great.  That is why you have 2.3 million adults living at home with their parents in California alone.
    We have added a whopping 7 million renter households in the last decade:
    renter and homeowner households
    The number of households that rent has increased by 20 percent over the last decade.  This is a strong trend.  This of course is coming at the expense of creating less homeowners.  This isn’t necessarily a good or bad thing.  In fact, I think the crap shack addicted zip code chasers would in many cases be better off renting in the long-term.  Many use the logic of “well over 30 years if you stay…” but rarely do they stay put for that long.  Will you live in a 700 square foot shack for 10 years just to build some equity so you can then move into a 900 square foot shack in the endless property ladder game?  This of course assumes your timing is on given real estate is now a boom and bust business.  This is why in places like San Francisco, you have many high tech workers opting to rent and foregoing the chase to buy ridiculously priced properties.
    It should be extremely clear that we are in a solid rental trend.  You can look at the housing start data above and arrive at your own conclusion as to where this “surge” is coming from.

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    Fed: Banks easing lending standards

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     Paul Davidson, USA TODAY

    The home mortgage market improved last quarter as demand increased and many banks eased their lending standards for the most creditworthy borrowers, the Federal Reserve said Monday.

    Banks also loosened lending criteria for a variety of other consumer and business loans as the economy improved and demand picked up.

    "The July survey results showed a continued easing of lending standards and terms for many types of loan categories, and a broad-based pickup in loan demand," the Fed said in its senior loan officer survey.

    The developments could foreshadow a turnaround in the housing market, which has slowed this year amid last year's increases in mortgage rates and higher home prices.

    More favorable credit conditions have been cited as a key driver of stronger economic growth recently. Last week, the government said the economy grew at a better-than-expected annual rate of 4% in the second quarter.

    Credit standards for many types of loans, including mortgages, are still more stringent than they were before the 2008 financial crisis, but they've eased in recent months, the survey shows.

    Mortgage demand started to flag as borrowing costs edged up after Federal Reserve officials signaled in May 2013 that the central bank would soon wind down bond purchases holding down long-term interest rates.

    Rates for 30-year fixed mortgages jumped nearly a percentage point to 4.46% by the end of last year. But rates have drifted down this year — and were 4.12% last week — in part because the Fed has indicated it's in no rush to raise short-term interest rates.

    Half the banks surveyed by the Fed in July said demand for prime mortgages was stronger the past three months. Lenders had reported weakening demand the previous three quarters.

    Even more encouraging, nearly a quarter of the banks said they eased credit standards for prime mortgages, the most since the 2007 housing crash. Only about 6% toughened their criteria.

    Several large banks also loosened standards, boosted credit limits and reduced the minimum credit score required for credit card loans.

    A surge in borrowing similarly boosted business loans, with more than 30% of banks citing stronger demand from small, midsize and large businesses and only about 5% reporting weaker demand.

    About 11% of banks surveyed eased their standards for loans to midsize and large companies, and 8% did so for small businesses, while none tightened.

    Banks cited more aggressive competition from other banks or lenders as the main reason for loosening their standards, along with a more favorable economic outlook.

    "The report points to continued gradual healing in the banking, corporate and household sectors," Barclays Capital said in a note to clients.
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