U.S. home prices continue surge in May

U.S. home prices continue surge in May

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July 30, 2013 at 1:53 PM by AHN
Nathan Andrada – Fourth Estate Cooperative Contributor

Washington, DC, United States (4E) – U.S. home prices rose in May to its highest mark in more than seven years amid signs that the recovery in the country’s residential real estate is gaining traction.

In the 12 months through May, home prices in 10 major cities in the U.S. surged 11.8 percent, according to the home price index of S&P/Case-Shiller. In the broader measure of 20 cities, home values climbed 12.2 percent from a year earlier, compared with economists’ forecast of 12.4 percent gain.

The S&P/Case-Shiller index is calculated using the average of three-month data, which means transactions in March and April influence the result in May. The report also showed the year-to-year increase in April remained unrevised.

Home prices have been boosted by record-low borrowing costs, tight supply and improving labor market. Another reason cited for the rise in home values is expanding household finances, which may drive up consumer spending, the largest contributor in U.S. economy.

The 10-city index climbed 2.5 percent on a seasonally unadjusted basis in May from the previous month, while the 20-city index jumped 2.4 percent using the same comparison.

Each city being tracked in the index recorded an increase in price year-over-year, led by San Francisco’s 24.5 percent increase and Las Vegas’ 23.3 percent gain. New York’s 3.3 percent was the smallest increase in May.

In May, property prices in Dallas and Denver reached record levels, marking the first time a city had topped its prerecession peak, according to the report.
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Buying Land as an Investment

By Dan Hinson

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In today’s foreclosure-heavy market, it’s not uncommon to find land properties for sale in your area. Land has always been a great investment, due to its limited supply and historic rise in value. In fact, banks are now putting land on the market at prices that are pennies on the dollar compared with the original cost.

Many investors are purchasing land across Georgia. Depending on what you plan to do with the land, there are two different courses of action you can take:

Improving the Land

There are many types of land that you can purchase, some of which has been improved and some not. In Georgia, we have a lot of “pipe farms” available, which are pieces of land that have been stopped midway in the process of creating a community. Roads and sewer may have been installed. If you are investor, this may be good or bad. When you purchase a partially developed piece of land, you are most likely committing yourself to finishing the project, which can add more cost and more risk.

Unimproved land, or land in its natural state, can be purchased specifically to be improved and then sold. Improvement usually consists of building some type of structure on the land, whether it is residential or commercial. Building a structure on the land can significantly raise the value, however, like development of a subdivision, can be costly and add risk.

In today’s market, purchase money financing and/or institutional funding is less available to investors, so cash deals are more frequent. Improvements are financed, in great part, based on the strength of a business plan that ties generation of income to the improvement. The investor might consider an improvement to be a good investment, but the lender may not see the tangible means necessary for repayment.

Unimproved Land

Historically, raw or unimproved land values have risen, but like the rest of the real estate market today, buyers can often purchase land at lower than perceived market value. Many investors choose to purchase and hold unimproved land speculating that value and demand will increase within a reasonable timeframe. This strategy doesn’t involve building costs and maintenance is sometimes less expensive. Additionally, ROI from real estate investments has historically exceeded other investment opportunities. This rationale is widely held by speculative real estate investors today.

Land prices can be dirt cheap (pun intended) in rural areas, but growth can be slow depending upon the intended use of the land. The price of land may be higher in more populated areas, but the potential for return greater. Commercial and residential land values vary with location and use. There is no specific investment rule-of-thumb.

Current land investment opportunities are numerous and vary often providing the buyer with the upper hand. If you have any questions or comments about buying or selling land, be sure to post your thoughts below.

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Success is a State of Mind

By Brenda Waters
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I’m sure you’ve been asked, “do you have to go to work tomorrow?” My answer to this mundane question is, “no, I get to go to work tomorrow!”

I must confess that I’ve never been one of those people that leap out of bed in the mornings. I hit the snooze button way too many times before I’m in the frame of mind to embrace another day. But the minute my feet hit the floor, I start thinking of all the things to be accomplished. Things that I have to do and things that I want to do.

Rarely at the end of the day have I accomplished everything, but I don’t beat myself up over it. Somewhere in my life’s journey I came to the realization that success comes one step at a time. I also discovered that success is a state of mind and that my success depends on my state of mind.

“Successful men and women become successful because they acquire the habit of thinking in terms of success. Get the success habit in the small circumstances you control, and soon you’ll be controlling the bigger ones.” – Napoleon Hill (“Think and Grow Rich”).

As a real estate salesperson, I met each potential client with butterflies in my stomach. A feeling similar to that of performers right before the opening curtains reveal you to your audience or you are announced as the next speaker. I began visualizing meeting clients, working through the sales transaction from beginning to end, and sitting at the closing table in a win-win finale. Success became a state of mind.

But how do we cope if the ending is not a happy ending… not a success?

“All my successes have been built on my failures.” – Benjamin Disraeli.

Nobody likes to fail, and why should you? Focus on getting better and not on the mistakes or failures. Understanding mistakes is important, but your focus and attention should go into getting better. Success orientation (thinking about success) is associated with more success whereas failure orientation (focusing on mistakes) is not. Studies show that people who believe in repair feel much better and are able to attend to negative feelings much less than people who do not.

Also, studies show that keeping your eye on the long-term goal constantly can distract you from your performance because it creates such distance from your goal. Instead, focus on the short-term sub-goals, especially after “failure.” Remember, success is one step at a time.

“A winner is one who accepts his failures and mistakes, picks up the pieces, and continues striving to reach his goals.” – Dexter Yager.

To be truly successful, you must become conscious of your thoughts and recognize the power of your mind to create your success.

Rather than reacting to an endless barrage of random thoughts, begin to quiet your mind and focus on the thoughts that instill in you a sense of positivity and vision for success. Do this often and I guarantee you will be amazed with the results.

Anything you can conceive and believe, you can achieve!

What recent success can you attribute to your belief in yourself? A vision of your success? A state of mind?

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Luxury Sales Continue to Bounce Back, Brokers Say

By Alyssa Abkowitz
LUXURY REAL ESTATE
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Natalie Keyssar for The Wall Street Journal

Copper Beech Farm, an estate located in Greenwich, Connecticut, was listed last month for a believed record $190 million.
Cash buyers, low mortgage rates and rising consumer confidence are among the biggest drivers pushing luxury housing in the U.S., according to luxury real-estate agents at the annual conference of the National Association of Real Estate Editors.

The luxury markets, which vary from a low-end in Atlanta of $750,000 to a minimum in Los Angeles of $3 million, are rebounding as buyers bounce back from the housing crisis. International buyers are fueling some purchases, with up to 20% of buyers in L.A. being from overseas, says Kofi Nartey, an agent at The Agency in L.A. Many of them are paying full cash, speeding up closings and eliminating the need for appraisals. He adds that there were 697 home sales over $5 million in California in 2012, an all-time high, many of which were all-cash deals.

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Judith O’Rear, Real Estate Specialist 678-731-8223

Home Sales Move Faster, Asking Prices Rise

By Alan Zibel
National Association of Realtors
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Home sellers are having a far easier time attracting buyers this year and as a result, sellers’ asking prices are on the rise, according to two reports released Wednesday.

The National Association of Realtors reported on the median amount of time homes were listed for sale, a number that fell to 69 days for sales that closed in July, down from 98 days a year earlier. And a good portion of the market is selling faster: A third of homes sold in July were on the market for less than a month, the group said.

With buyers acting more quickly, sellers have been able to boost their listing prices. Asking prices were up by 2.3% in August compared with the same month last year, according to real-estate website Trulia.

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Judith O’Rear, Real Estate Specialist 678-731-8223