“Last year, the amount of institutional investors activity exploded. What you’re seeing now is the natural digestion of that exponential growth. That means maybe a slowdown in how many home they acquire, it may mean letting go employees in areas where it doesn’t make sense.”

These investors are moving their focus from acquisition to profitability, hoping to show Wall Street that the business model is not only feasible but highly profitable. The American Home now boasts 2,500 homes in Atlanta; Nashville, Tenn.; Orlando and Tampa, Fla.; and Charlotte, N.C.

Edelheit said rental demand is tremendous, and management is working well, but the model is still too green for the larger investment community. “You look at the stock prices of the companies that are public, and it’s pretty clear that Wall Street remains unconvinced in the single family rental model, and I think it’s natural for these firms to start right sizing and make sure that they are profitable.”

That could mean consolidation, with some of the larger firms that have stronger management structures buying up smaller players. Large-scale investors are still a relatively small segment of the 14 million single family rental market, but it appears they are here to stay, despite the recent volatility. Smaller investors, however, may be moving on, having exhausted their cash and their credit opportunities.

(Read more: Home prices across the US defy gravity)

Last spring, Redfin was running seminars for small “armchair” investors on how to buy and manage single family rentals. The classrooms were packed.

“There was a surge because people read the papers—in March, April, there was a bull market in housing. Suddenly at every cocktail party somebody wanted to make a killing in real estate,” Kelman said. “Some wanted to ride the wave, but some just caught it late.”

—By CNBC’s Diana Olick. Follow her on Twitter @Diana_Olick.

Questions?Comments? facebook.com/DianaOlickCNBC

Article source: http://www.cnbc.com/id/100988740

A: This is a concern that often leads sellers to sit on the sidelines rather than call their Realtor and put that “For Sale” sign in front of their house.

There is a logjam of sorts in our market right now. The number of homes for sale remains far less than needed to adequately meet current buyer demand. Until sellers gather the courage they need to move forward this is likely to be the case for the foreseeable future.

NOW is a great time to sell, because:

1. It has become evident in the past 10 years or so that the real estate market is as volatile as the stock market. Its temperature is related to a number of factors (health of the stock market, employment figures, etc.). As it becomes more challenging to predict future market strength, making decisions about when to sell (or to buy) becomes more about what the real estate market is doing now.

4. If by chance you do not find your new home before you must move, there are good interim housing options, including short-term rentals, available. It is certainly true in my experience, that when a seller takes a leap of faith, with focus and intention, putting their homes on the market, even though they are uncertain about where they will land, the next “right” home for them appears just at the right time.

Article source: http://www.sfgate.com/realestate/article/Sound-Off-What-to-consider-in-a-seller-s-market-4321772.php

(Read More: New Housing Fears: Home Prices Rising Too Fast?)

The PHLX index closed at an all-time high on July 18, 2005. It then dropped a staggering 81 percent to a trough in March of 2009. It has made a remarkable comeback in just the past year and a half but is still 34 percent below that peak in 2005. Only one component of the index, Texas-based Lennox International, a provider of climate control solutions for heating, air conditioning and refrigeration markets, is above its 2005 peak.

The overall quick pick-up in the home builders has some calling the stocks overvalued. They did, in fact, take a pause last fall, as some analysts downgraded various builders as being too hot for the fundamentals. Then come December, they began climbing again.

“Just because the stocks are overvalued doesn’t mean they are not going to go up more,” says David Goldberg, a housing analyst at UBS. “It’s a momentum play.”

(Read More: Foreclosure Fixer-Uppers Help Boost Remodeling)

Goldberg warns, however, that there is a lot of growth baked into these stock valuations for 2013, expectations that may be tough to meet. Big builders like Lennar and DR Horton continue to report growth in new orders, but in their latest reports that growth didn’t meet expectations, and the stocks responded accordingly.

“If you’re betting on a deeply sloping line that keeps going up, you get very sensitive to slowing growth rates,” notes Goldberg.

Expectations for housing starts and new home sales are both in the 20 percent range for 2013. Granted they are both coming off very small volumes historically, but those are still big expectations to meet. They very well could exceed those expectations, given the sheer optimism in the housing market today, but investors going in should still pay attention to fundamentals and to diminishing, but still-existing, headwinds.

(Read More: Shiller: Housing Malaise Could Resemble Japan’s Lost Decade)

Article source: http://www.cnbc.com/id/100405275

But we aren’t San Francisco, New York or San Jose, Calif., either, the top-ranking (if high-priced) beauty queens of real estate next year.

The Tampa-St. Petersburg area lands pretty much in the middle at No. 29 in a survey of 51 major markets appearing in the 2013 Emerging Trends in Real Estate. The report was unveiled Wednesday by the Urban Land Institute and PricewaterhouseCoopers, now known as PwC.

“The Tampa-St. Pete market is one where real estate investors will proceed with caution,” says Mitch Roschelle, Emerging Trends, co-chair and head of PwC’s national real estate advisory practice in New York. But the same market may benefit, he adds, if investors sense the Miami market is overheating again and look for nearby Florida real estate opportunities.

“The enduring low-gear real estate recovery” will continue in 2013, says Emerging Trends. Safe but super-low interest rates increasingly will drive yield-hungry investors away from plain-vanilla financial instruments. And the “ever-seesawing” stock market will push those same investors toward real estate markets coming off recent bottoms.

Within battered Florida, Miami broke through in the survey at a solid No. 12 of national real estate markets. The ranking is based on three measures: investment, development and home-building potential. Orlando ranked 28th, just ahead of Tampa Bay. And Jacksonville, the only other Florida city measured, came in at No. 39.

On a map, the four Florida cities decline from south to north. Miami was ranked as “modestly good” while Tampa Bay and Orlando were deemed “fair” and Jacksonville was called “modestly poor.”

Here are the five most interesting nuggets from the 104-page online report:

5 “The amount of foreign capital in New York City and Washington, D.C., is ‘breathtaking.’ San Francisco, Miami, Los Angeles and Boston also draw attention, but not much heads elsewhere.”

4 “Most areas can sustain little if any new commercial construction, given relatively lackluster tenant demand and the generally weak employment outlook.”

3 “Office users squeeze more people into less square footage, preferring green buildings with operating efficiencies, while retailers reduce store size in favor of various integrated e-commerce strategies.”

2 “The large generation-Y demographic cohort orients away from the suburbs to more urban lifestyles, and these young adults willingly rent shoebox-sized apartments as long as neighborhoods have enticing amenities with access to mass transit.”

1 “More intergenerational sharing of housing occurs to pool resources among children (seeking employment), their parents (reduced wages and benefits), and grandparents (limited pensions and savings).”

Bottom line? In real estate, smaller, leaner and more urban trends will all become big drivers in 2013.

Robert Trigaux can be reached at trigaux@tampabay.com.

Article source: http://www.tampabay.com/news/business/realestate/tampa-bay-lands-in-middle-of-metro-pack-in-2013-real-estate-outlook/1257010

While home prices still haven’t hit bottom nationally, demand is starting to grow, especially for distressed properties on the low end of the market.

Large scale investors, like hedge funds and other private equity firms are rushing in with cash on hand, and that gives them the upper hand in competition for these properties.

So how does an individual investor, without extra cash lying around, get in? Retirement funds.

It may sound risky, but with strong rental demand and relatively little supply of single-family homes, it could be far less risky than the stock market. That’s because your gains are largely coming from rental income, not home appreciation, which is why this works so well in today’s market.

“Here in Reno, prices are half of what they were at the top of the bubble, so, yeah, it might go down a little bit more but I don’t think it will go to zero, like some of my stocks have gone to zero,” says Terry Vander Ploeg, who invested $105,000 in a Reno foreclosure.

The catch is that you have to do it through what’s known as a self-directed IRA. Not a lot of firms do this, but some do: Guidant Financial, Sterling Trust, IRA Resources and PENSCO are a few. The firms act as custodian of your self-directed IRA, holding the property and dealing with all associated expenses.

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Article source: http://www.cnbc.com/id/46718050?__source=RSS*blog*&par=RSS

Aug. 12 (Source: By Eve Mitchell, Contra Costa Times, Walnut Creek, Calif.) - When the country’s credit rating was downgraded, experts thought interest rates would shoot up, another jolt to the struggling real estate market.The opposite happened, but that good news has been offset by the stock market’s wild swings.

Low interest rates can attract homebuyers, but that is only one part of the decision, said Faramarz Moeen-Ziai, a mortgage banker with San Ramon-based Bank of Commerce. A healthy job market is more important.

“The primary factor driving a purchase decision is people’s income,” he said. “And until we see unemployment go down, we’re not going to see (an increase in homebuying).”

Refinancing is another matter, however, as homeowners who have adequate equity rush to take advantage of low interest rates. “In the last week, we’ve noticed a spike in refinancing,” said Moeen-Ziai, who estimated that volume has about tripled.

The past two weeks have certainly been a test for the Bay Area housing market. Wild stock swings, the credit downgrade and continuing concerns about the economy have certainly weighed on buyers, sellers and their agents.

Rebecca Gallardo with Protello Group Real Estate Services in San Jose said she had a client pull out of a deal “because of the volatility. He thinks he’ll get a better deal come December.”

But not everyone is spooked.

“The financial unrest of last week has not had an impact on my decision to buy a home. I still consider purchasing a home one of

the best investments I can make,” Matthew Le, a 26-year-old San Francisco renter who is looking to buy a home in Pleasant Hill, wrote in an email.

“I have not had a buyer walk,” said Joy Di Ricco, a Realtor with the Antioch office of Better Homes and Gardens Mason-McDuffie Real Estate.

Still, it’s important to communicate with buyers, Di Ricco added. “They’re nervous,” she said. “If you don’t communicate, you will lose your buyers.”

Before it was evident that interest rates would be heading south, Realtors said they fielded calls from some concerned clients.

Cathy Warshawsky of Bay Area Home Loans in San Jose said she had several clients who were “working like mad” with their Realtors over concerns that interest rates would go up. “They were really scrambling.”

But other agents were surprised by their clients’ calm.

“I thought a lot of my buyers would be calling me saying, ‘I’m frightened’ about this and that and the other. But actually my buyers are acting contrary to how I might have expected them to,” said Anne Walker, an agent with Coldwell Banker in Cupertino.

“There’s so much pent-up demand for purchasing real estate that people (who) are so strongly set in moving in the direction of purchasing, that no matter what happens with the stock market and the SP rating, it just doesn’t seem to be deterring them.”

Economic issues are of course a factor, but for many buyers the choice is really about a place to live.

“Buyers are still careful buyers,” said Kristine Marr, a senior loan officer with RPM Mortgage in Walnut Creek. They want to find the right home and that’s what’s driving the buyer mostly as long as they are preapproved and ready to buy,” she said.

Contact Eve Mitchell at 925-952-2690 or emitchell@bayareanewsgroup.com.

Source: By Eve Mitchell, Contra Costa Times, Walnut Creek, Calif.

To see more of the Contra Costa Times, or to subscribe to the newspaper, go to http://www.contracostatimes.com/.

Copyright (c) 2011, Contra Costa Times, Walnut Creek, Calif.

Distributed by McClatchy-Tribune Information Services.

For more information about the content services offered by McClatchy-Tribune Information Services (MCT), visit www.mctinfoservices.com.

A service of YellowBrix, Inc. Publication date: 2011-08-12

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Article source: http://www.loansafe.org/homebuyers-have-mixed-reactions-to-market-swings

I realize everyone is glued to the stock ticker today, watching their personal net worth fall yet again; I know this because every time I wired up to do a live shot on CNBC today, my “hit” was “killed” at the last minute because the Dow dropped again.

But it is precisely on days like this that we have to focus on how it all affects housing; stocks may fill our 401K’s, but our homes are (or were) our single greatest investment.

The drop in the stock market was preceded by a huge drop in mortgage interest rates, and it will likely be followed by one as well. The overnight average last night on the 30-year fixed hit 4.35 percent on Bankrate.com. Economic uncertainty pushes Treasury yields down, which in turn pushes mortgage rates down. Tomorrow we get the jobs report, and my guess is that it won’t be particularly stellar either.

So I was all set to talk on TV today about how mortgage rates, even this low, won’t help the housing recovery significantly (sure, higher rates would hurt) because a) we’ve been at historically low rates for quite some time now, and b) rates are not the most important decision-making factor for consumers today. We had a great conversation about this yesterday on the blog, so I took it further to ask some mortgage professionals.

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Article source: http://www.cnbc.com/id/44021412?__source=RSS*blog*&par=RSS

Andrew and Peggy Sheren can’t resist a good deal, especially when it comes to financing their McLean, Virginia home.

“We’ve gone from an interest rate from something like greater than 6 percent down to the lowest interest rate we currently have is three and an eighth percent,” Andrew remembers. They have refinanced their home four times in four years, taking equity out only the first time for a renovation, but essentially cutting their interest rate in half.

Negative economic reports of late have pushed the rate on the popular 30 year fixed to below 4.5 percent, the lowest this year and just about a quarter percent off the 50-year lows we saw last summer; adjustable-rate products are even lower. When investors see bad economic news, they pull money out of the stock market and park it in bonds. The price of bonds goes up, the yield goes down, and mortgage rates follow down.

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Article source: http://www.cnbc.com/id/43308687?__source=RSS*blog*&par=RSS

Yesterday morning I attended the FDIC’s background press briefing before the vote on proposed risk retention rules.

While the rules covered a vast ground, I was of course most interested in those that focus on the “Qualified Residential Mortgage.”

The QRM would be the exemption from risk retention, and therefore banks would want most borrowers to fall under the QRM standard.

A few moments after we reporters sat down at the big conference table, FDIC representatives clunked down a huge document in front of each of us. Then another, then another: Well over 200 pages of what these proposed rules are all about. Thankfully, they then had some other FDIC folks explain to us exactly what we needed to know. I then ran out onto the balcony camera and reported the three top points…20 percent down payment, debt to income ratio requirements and various servicer rules.

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Article source: http://www.cnbc.com/id/42341427?__source=RSS*blog*&par=RSS