Warren Buffett Just Made a Huge Bet On The US Housing Market-Perhaps the most bullish indicator for U.S. housing is Warren Buffett. The legendary investor has been buying up real-estate brokerages around the country as he bets on a housing turnaround. Now, he is partnering with Brookfield Asset Management, a Canadian real-estate investor, to more than double the size of his brokerage business. Bloomberg Businessweek’s Noah Buhayar has the details: Berkshire’s HomeServices of America Inc. unit will be the majority owner of the venture to manage a U.S. residential real-estate affiliate network, according to a statement on the new company’s website. The firms plan to offer a new franchise brand, Berkshire Hathaway Home Services, starting next year. Brookfield’s network has operated under the Prudential Real Estate and Real Living Real Estate brands. Read more here
New Home Prices Rise to 5-Year High- New U.S. single-family home sales held near two-year highs in August as prices surged, according to a report today from the Commerce Department. The median price of a new home increased a record 11.2 percent to $256,900 – this is the highest median price for a new home since March 2007, adding to signs of a slow recovery in the housing market. Compared with August last year, the median sales price jumped 17 percent, the largest year-over-year rise since December 2004. The inventory of new homes on the market held near record lows last month. At the August sales pace it would take 4.5 months to clear the houses on the market, unchanged from July. A six-month supply of home is considered healthy so there could well be a burst in new home building to come. Existing home sales also rose for the month in most areas, according to a report released yesterday. New home sales make up a small percentage of the housing market but they have an important ripple effect. When the home is built, construction jobs are created. Once the home is sold it generates revenue for the home builder and the Realtor. There is also a need for new appliances like refrigerators, washers and dryers. All of this boosts spending and creates jobs. It also works the other way, as jobs are added, people have money to buy new homes, creating a circle of positive economic activity. Source: ABCNews.com
Macomb County sells foreclosed homes in package deal-Hundreds showed up to save big trying to buy foreclosed homes at a Macomb County auction. Now they’re upset because a company bought all the houses for the minimum bid before anybody else had a chance. Just like at any auction, these investors expected the real estate to sell for way more than the minimum bid, and they believe Macomb County could’ve made a lot more money if they hadn’t offered a package deal. Read more here
Foreclosure Investors Hitting Real Estate Trifecta- If you’re going to be a foreclosure investor and own rental property then central to the value of your assets is tenant demand — the more prospective tenants the better. It now appears that the pool of potential tenants is getting bigger, in part because a large number of people simply don’t want to own. While not all markets are equally attractive, what we now see for investors in many neighborhoods is essentially a real estate trifecta: First, there is a substantial inventory of short sales, foreclosures and REOs available at discount. Second, interest rates are near historic lows. Third, rental rates are generally rising with tenant demand. According to REIS.com effective rents nationwide averaged $1,032 in the second quarter versus $982 in 2008. Read more here
A Look at the Hottest and Coldest US Housing Markets, By Price- U.S. home prices rose in June from the same month last year, according to the Standard & Poor’s/Case-Shiller home price index released Tuesday. Steady increases have contributed to a housing recovery that began earlier this year. And most markets are being affected by foreclosures. Bank-owned homes typically sell at a sharp discount, weighing down the values of nearby homes. In markets where the supply of bank-owned homes for sale has declined, investors and other buyers will often drive up prices on the few properties that hit the market. Here are the top five cities that have recorded home price gains over the past year and the five that have posted the steepest declines in the same period: Read more here
Is the Real-Estate Rebound for Real? - For investors, “home” is no longer a four-letter word. The real-estate sector, for the first time in years, is serving as a beacon of relative strength in an otherwise weak economy. Standard & Poor’s on Tuesday reported that home prices in its S&P/Case-Shiller 20-city index rose 0.9% in May from the prior month, after adjusting for seasonal trends, and have risen 2.6% since bottoming in January. New-home inventories are at a 49-year low. Some of the world’s smartest investors, including Warren Buffett, are taking notice, placing big bets on a continued recovery in the housing market. Other kinds of real-estate investments—including real-estate investment trusts that own shopping malls, apartment buildings and hospitals—also have been among the best performers this year. Read more here
Evidence Mounts: U.S. Real Estate Market Has Passed Bottom, Entered Recovery-The Federal Housing Finance Agency (FHFA) released its monthly reportTuesday on U.S. home prices in May, based on its House Price Index (HPI) for houses financed or guaranteed by Fannie Mae or Freddie Mac. According to the FHFA, home prices increased in May by 0.8% from April to an index level of 188.06, which was the highest level for home prices since August 2010 (see top chart above). The April-May increase in the HPI was the fourth back-to-back monthly price increase starting in February, and was the largest four-month increase in home prices (3.47%) since the fall of 2005. Over the last year, home prices have increased by 3.7% since May 2011, and that annual gain was the largest yearly increase in home prices since September 2006, almost six years ago (see bottom chart). It was also the first time of four consecutive annual increases since the summer of 2007. Read more here
‘Dead’ Listings Get a New Life- The big drop in inventories of homes for-sale is helping once-expired listings finally get sold. Sellers are finding re-listing their properties may offer them more luck now than a few months ago, real estate professionals report. Nationwide inventories of single-family homes, condos, townhouses, and co-ops has fallen about 20 percent in the last year, according to Realtor.com. Inventories are at some of their lowest levels ever observed. Meanwhile, more buyers are coming off the sidelines, wanting to take advantage of record low mortgage rates and low prices, but are finding fewer properties to choose from. As such, some real estate agents are soliciting once-expired listings to convince sellers that they can give them a successful second chance at making a sale. For example, in Atlanta, one broker, who realized the value of expired listings, offered 25 iPads to her real estate agents who brought expired listings from competitors. “Think about this … every single listing is now twice as prominent and important as it would have been back in the day of 100,000 available listings,” broker Ann Bone told RISMedia. “Each listing today is worth two listings two years ago.” Many real estate professionals take a listing for 90 days and if it doesn’t sell, then it expires. Several MLSs require that expired listings stay off the market for at least 90 days to prevent agents from continually relisting properties and hiding the actual accumulated days on the market, reports RISMedia. Some agents report that they’ve had some luck at taking an expired listings and then selling them within five days of coming back as a new listing. But others caution it’s not as easy as just relisting the property. Many of these expired listings may need to address possible flaws that may have held them back in the first place — such as not priced right for the market or not in the right condition — before they return to the market, if they hope for a better outcome. Source: Glozal.com
Luxury Homes Linger Longer Than Lower-Priced Houses- While the market for lower-priced and entry-level homes is showing signs of momentum, the luxury-home market seems to be stagnant. The average days on the market for luxury homes — houses selling for more than half a million dollars — is 186 days, according to the Institute for Luxury Home Marketing’s weekly report. On the other hand, the national median for all homes dropped to 84 days in June, according to REALTOR.com MLS data. Inventories of for-sale homes in the luxury market as well as median asking prices have mostly stayed stable since November, according to the ILHM. Meanwhile, lower-priced homes are seeing falling inventories and list prices increase. The dropping inventories in lower-priced homes may be helping to drive most of the momentum. For example, Sam Khater, a CoreLogic economist, estimates that lower-priced homes are appreciating three times faster than more expensive homes due to the lower inventories and higher buyer demand. Source: Glozal.com
Wall Street’s hottest investment idea: Your house- Your house might be a better investment than you think. At least Wall Street seems to think so. For a while now the conventional wisdom on real estate has been that while home prices might not fall much more, they aren’t likely to go up anytime soon either. The best personal finance advice, then, when it came to buying a house, was to buy as little as possible. Read more here
Housing Passes a Milestone- The housing market has turned-at last. The U.S. finally has moved beyond attention-grabbing predictions from housing “experts” that housing is bottoming. The numbers are now convincing. Nearly seven years after the housing bubble burst, most indexes of house prices are bending up. “We finally saw some rising home prices,” S&P’s David Blitzer said a few weeks ago as he reported the first monthly increase in the slow-moving S&P/Case-Shiller house-price data after seven months of declines. Read more here
How to Use a Self-Directed IRA to Buy Real Estate- Difficult economic times have spurred non-traditional methods to save for retirement, and many people are using a self-directed IRA to purchase non-traded assets like real estate. A self-directed IRA is the lesser known of IRA options and requires account owners to make active investments on behalf of the plan. To open one, an owner must hire a trustree or custodian to hold the IRA assets and be responsible for administering the account and filing required documents with the IRS… Read more here
Foreclosures Up For First Time In 27 Months- Foreclosure starts rose year-over-year in May for the first time in more than two years as banks resumed dealing with distressed properties after a mortgage abuse settlement earlier this year, data firm RealtyTrac said on Thursday. The $25 billion settlement between major banks and states, formally approved in April, had been expected to jump-start foreclosure proceedings that were previously stalled by uncertainty about the liability of banks… Read more here
U.S Cities Struggle With Blighted Bank-Owned Homes-The smell of rotting food and decay inside 10956 South Wilmington Avenue, Los Angeles, was overwhelming. A burst pipe in the kitchen ceiling leaked water onto a floor littered with half empty cans, razor blades, odd shoes, stained clothing and an upturned, mold-ridden sofa. Windows were smashed and boarded up… Read more here
Why Now May Be The Ideal Time to Buy Real Estate-Well, it’s only taken half a decade, but the moribund real estate market is finally starting to show signs of life. If you were thinking about making a move on a piece of property, right now is possibly the best time. You can still take advantage of low prices in most places around the country, and mortgage rates are at once-in-a-lifetime record lows…Read more here
Investors Target Property Tax Deadbeats-Tax Liens are potentially one of the best investments you can make. The returns are so good, CNN recently ran an article about this lesser known investment strategy. Find out more about Tax Lien investing and why investors are turning to purchasing them in this article here.
Buying Homes by the Thousands-Because home prices are so good right now, large Real Estate investors are looking to buy homes by the thousands. While not all of us can buy thousands of houses at a time, those big time investors know why now is the perfect time to scoop up these houses. Read this article to find out more.
Interest Rates Falling-Despite Economist warnings that interest rates will soon increase, there has been a continual decline in mortgage rates. If you are a real estate investor, now is a great time to use someone else’s money to create a cash flow for yourself. If you can generate a higher rate of return than the payment you are making, it is a good investment. Read about the decline in interest rates nationwide here.
Renting Prosperity-The Wall Street Journal recently reported on how the country is turning into one of renters. This is great news for Real Estate investors because it is demand for the product you are buying. The supply is still plentiful for great cash flow creating properties, and the demand continues to increase. Read this article about the increasing renter phenomenon here.
Warren Buffet Would Buy a Few hundred Thousand Properties- In this news clip, billionaire Warren Buffet talks about investing in real estate and what a smart move that is if you can do it. With Insider’s Financial we will teach you how to buy properties the way Mr. Buffet said he would if he could.