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Island Lights In Real Estate Darkness

At times of poor economies property prices more often than not fall, and the property market in itself is sometimes enough to cause a recession in the rest of the economy as home owners see their top asset slashed in value, and cut back on spending as a direct result of feeling less wealthy.

2008 has already seen the world’s financial markets in turmoil with a rogue trader in France losing billions of Euros for his bank, and the Federal Reserve aggressively cutting interest rates to try and stave off a recession in the US.

But among the gloom, those involved in real estate markets around the world can often point to areas where property bucks the trend, and is on an upward move despite all that is happening to property elsewhere.

A prominent UK real estate site predicts that France will see a rise in property values for 2008 of between 5 and 8 per cent.

The advantages France has compared to some European markets is that the British buy there extensively, and have done for over twenty years now. The recent upgrading of the channel tunnel could ensure interest remains high in Northern France, easily accessible from London and her Home Counties.

Two countries who share borders with France are also likely to be areas where property prices will increase in 2008 – the tax havens of Andorra and Monaco, which have similar tax benefits.

Monaco because tax havens are in demand whatever is happening to the economy, and the supply of properties is short with new supply not coming on stream for another three to four years. Andorra will continue to enjoy the overspill from Monaco, where studio apartments start at around a million Euros, while in Andorra the same million Euros will buy a house.

Further into Southern Europe the UK property site suggests both Mallorca and Tenerife could see property price gains, and with local populations on both Spanish islands becoming restless about the amount of future developments to be allowed the supply of new apartments and villas could be limited.

Mallorca – often known as Majorca – is the main island of the Balearic Islands, which also includes Menorca and Ibiza. Located in the Mediterranean off the east coast of the Spanish mainland, Mallorca is the largest of the Balearic Islands and sees most tourists – some of whom ultimately buy a holiday home on the island or move there full time. According to the 2005 census, the population of the city of Palma was 375,048. The population of the entire area was estimated to be 517,285; the 12th-largest urban area of Spain. Approximately half of the total population of Mallorca lives in Palma, but many newcomers steer to the coastal resorts such as Alcudia.

And while 2008 may appear to be gloomy for the real estate sector, there will no doubt be some light among the darkness of falling prices in some areas of Europe.

INFO-TECH

INFO-TECH
REGULATORY BODIES & RULINGS: STel not to shut down; seeks details of security concerns Mobile service operator STel Pvt Ltd, a joint venture between the Siva Group and Bahrain Telecommunications Co (Batelco), on Saturday told the Government that it would not stop offering mobile services unless the Department of Telecom (DoT) …

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Austin Real Estate: Strong in 2007, Holding Steady in 2008

2008 has begun with a mix of decidedly lousy economic news and some pessimistic projections, so at first glance it might be very tempting for those hoping to either buy or sell homes in Austin to stay on the sidelines and avoid the Austin real estate market completely.

That would be a mistake. Don’t be discouraged, because things are not exactly as they appear. You need to look past the negative-leaning news headlines in order to find the proverbial silver lining in a cloudy real estate picture.

Of course the mortgage industry is still reeling in the wake of the sub-prime mortgage crisis, with some experts anticipating yet another large wave of borrowers defaulting on their loans. National statistics show existing home sales in 2007 down at least 20 percent over the previous year. There’s talk of the housing bubble bursting in various regions of the country, news of the highest unemployment rates in two years, and now even some presidential candidates openly using the dreaded “R” word, recession.

But that’s the national scene. When it comes to Austin real estate, the news was far from bad in 2007. In fact, to insert the word “bad” into any discussion of either last year’s local housing market or any analysis of the year to come would frankly border on irresponsible. The truth is the Austin real estate market bucked national trends and appears poised to remain solid this year, despite mixed economic predictions.

Yes, sales of homes in Austin were also down in 2007, but only by 12 percent, better than the national average. And there is further reason to avoid applying what you hear in the national news to the Austin real estate market: according to the National Association of Realtors, in several regions around the country average sales prices have actually increased, and that includes Austin homes, which went up in value by nine percent.

More encouraging news is that Austin homes in 2007 didn’t take too long to sell, and didn’t linger: on average, they stayed on the market 47 days, compared to 49 days in 2006 — hardly a cause for panic.

According to some economists, the Austin real estate market will cool in 2008. A new report from Austin-based Angelou Economics says stricter lending restrictions in the wake of last year’s mortgage crisis may price some first-time or low-end homebuyers out of the market — and it thinks this may have already started happening: apartment vacancy rates, typically seen as a leading indicator for decreased home sales, are at a five-year low, meaning those folks won’t be seeking homes in Austin, but will keep renting.

But at the same time, Angelou acknowledges that continuing population and job growth will cushion the Austin real estate market from the worst effects of the sub-prime mortgage troubles. After all, Austin is still perceived as a great place to live, work and play. The simple fact is people are still moving here, and shopping centers, hospitals, schools and entertainment venues are popping up all over the landscape.

Angelou also says increases in the prices of Austin homes will slow from “rapid” to “average”. That’s not exactly a grim development for sellers.

Angelou expresses concern about new home construction, which saw a significant slowdown in 2007 — a nearly 40 percent drop in new home permits over 2006. And according to a study cited by The Austin Business Journal, new home construction dipped 20 percent. By year end continuing angst over the mortgage crisis caused home builders to run for cover and scale back their previously aggressive plans in central Texas. The most recent and striking example of this came just in December, when Centex Homes announced it was backing out of plans to purchase nearly 500 acres of land in northern Travis County — an acquisition that would have eventually led to 1400 brand new homes.

Yet even this doesn’t necessarily translate into bad news for potential buyers and sellers of Austin homes. Buyers could be the recipients of favorable deals, as those home builders now focus on getting rid of their existing unsold inventory. As always, they’ll compete with the existing resale homes in Austin by offering incentives to buyers, who could find themselves in a brand new home at a bargain price.

But that new home inventory won’t last forever — and with less of those brand-new subdivisions being built and aggressively advertised, that’s less competition for homeowners who might be inclined to put their homes on the market. And of course it’s in their interest to price their resale homes competitively, in order to compete with the builders and sell within a reasonable amount of time. All that competition only works to the advantage of people in the market for an Austin home.

So don’t let a little gloomy news get you down. The Austin real estate market finished 2007 strong, and will remain that way in 2008.

Tough Days Ahead for Indian Real Estate Market

The turmoil from the wall street crash is going to be a high pitched one for the Indian real estate market. All the demons are now shaking there hands to create barricades in front of the never ending parade of the India inc. And, the realty is going to be the worst sufferers. The reasons are simple. The market demand and supply forces are now at their lowest ebb. No outsourcing company is now planning to expand in India. The IT giant has cut short its Rs. 5 lakhs sq Ft expansion plan to 3 lakhs. There is an overall 30% deduction in the demand for official space. The residential space has already faced a hibernating demand graph. The rise in home loan rate is forcing many prospective buyers to stop their purchase.

In the supply side of the real estate story, there is a gloomy tale to be told. The major chunk of the inflow of money into the Indian real estate market comes through FDI and private equity. The RBI has given strict instruction to the Banks in the Indian banking system not to invest in real estate. In such a scenario, the FDI and private equity hole to be pivotal for the growth of Indian real estate market. But the FDI in real estate segment is now destined to decline. The real estate prices almost crashed in the United States and other developed markets. So precarious is the condition of the real estate investors active in those economies are that they are filing for bankruptcy. So, where is India in this perplexed situation which has a nascent and yet to be organised real estate market!

Both Lehman and Merrill Lynch have a significant stake in a number of Indian companies. As they are facing a financial catastrophe even remaining afloat, they are offloading their stakes in the Indian companies. This has affected share prices of those companies and also caused a real estate slow down. The FIIs in Indian real estate have pulled out a net $8.01 billion since the beginning of 2008, with over $900 million of this outflow having taken place in the first half of September alone. According to the available data, Merrill has invested in more than 200 companies, out of which in 177 companies, it owns more than one per cent of the paid up capital as on June 30, 2008. The Lehman Brothers has also invested in more than two dozens companies and in some real estate projects.

The US major Lehman Brothers has alone invested 700 crores in the Indian real estate market. keeping the current situation of Lehman, anybody can predict the future of that investment. In such a case, the ball is now at the Government of India’s court. The Government needs to cut down the home loan interest rate to boost up the residential property market at least.

As has been observed that real estate prices and stock markets are highly correlated. The reason being that in a rising stock-market, real estate becomes a hot spot avenue for high net worth individuals to park surplus funds. This leads to an escalation in immovable property prices. In a falling market, however, they tend to cover losses in one market by selling off their investment in the realty segment. Any decrease in investor wealth means that the market gains and this is converted to cash for re-investment in property, have been sucked out of the system, thereby reducing the total demand in the realty market. This leads to a continuously accelerating change in the economy of price correction feeding from one asset class to the other. And there are fears that Indian real estate trend may follow the stock market.

Real Estate Investing: Beginners Guide For 2008

If you want to make money in real estate investing in 2008 then its going to take a different approach then when the market was running steadily along. I like to basically take the approach of doing rehabs to pay down your debt and to build your cash reserves and then focus on buying rentals and using flips to pay them off.

Unfortunately, I would not recommend flipping to anyone due to all the hassles involved now. Finding a buyer is difficult and when you do find a buyer your only option left to sell on 100% financing is FHA which in combination with lenders being so tight right now its tough to get a home sold. So if you want to invest in real estate how would I recommend you get started now?

I believe as a brand new investor you need to focus on buying 1-2 properties this year and holding them as rentals or rent to owns to eventually resell when the market changes again. Here is the step by step break down on how I would do it as a brand new investor.

1) Talk to your commercial banker. Get pre-qualified for an 80% loan.

2) Find your source of funds for the 20% down. I recommend an equity line or a private lender.

3) Find your deal

4) Buy your deal and place your tenant in it

5) After 6 months go to another local commercial banker and refinance for what you owe and place a line of credit on your equity. Do not pull out all of your equity. You may want to pull some out for profit but do not pull it all out.

6) In a few years when the market changes sell the homes and take home a substantial profit due to the low prices that are out there right now.

This is how I recommend a new investor who has a stable income and a credit score over 620 to get started. Once the market picks up again then you can revert to doing rehabs to flip for profit but for right now be conservative, buy what you can comfortably handle, and understand that any profit you make will come off of credit lines and refinances in these houses.

Now, what if you have no credit and no cash and you want to get started in real estate investing? This will go into detail about how to wholesale and assign contracts. Here is your guide.

1) Network and get to know every investor in town. Find out what they buy and ask if they would pay you to find a good deal

2) Find out which attorney in town understands investors and how they work.

3) Find a deal and put an escape clause in it.

4) Sell the deal to one of your investors.

5) Build cash and fix your credit with the profits until you can eventually buy a home.

This is how I recommend a new investor get started in 2008. The game has changed but there is always a way to make money if your willing to believe that you can make money, and you supply the action necessary to make it happen. Go to my blog where I share more tips and information that will help you to make money in 2008 with real estate investing.

BRIEFCASE: Boulder and Broomfield businesspeople in the news

BRIEFCASE: Boulder and Broomfield businesspeople in the news
Comer & Associates, LLC of Boulder has been retained by Aurora-based Merrick & Co to validate a new market opportunity.

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