Romney’s real estate deals

Out of all of the presidential candidates, former Massachusetts Governor Mitt Romney owns the most real estate — even after unloading a couple of sizable properties.

Places for Home Builders to Dig In

Where are the best markets to build and sell new homes these days?

Amid a flurry of housing news this week, including President Barack Obama’s latest mortgage-refinance proposal, comes an interesting piece of real-estate analysis in the building sector. Houston-based Metrostudy has analyzed the strongest markets for home builders. They include: San Diego; Southern California; Texas’s Rio Grande Valley; St. George, Utah; and Orlando.

The research is by Brad Hunter, chief economist at Metrostudy, a company that, among other things, sends observers out each month to hundreds of new-home communities to count how many single-family homes are under construction, occupied and vacant. Metrostudy’s work is a complement to the U.S. Census’s monthly housing starts numbers and vacancy survey.

Mr. Hunter’s analysis of about 80 markets found that most areas saw housing starts fall in the fourth quarter. (Housing starts in November reached a 19-month high, but they were flat the following month.)

There were a few other key points in Metrostudy’s analysis:

1. San Diego, which showed some signs of recovery in home prices earlier this year, showed “significant strength” towards the end of the year. Construction began on 440 new homes there in the fourth quarter of 2011, a 46.7% increase over the previous quarter. Part of this increase comes because the third quarter numbers were abysmal. But San Diego also showed a 72.8% increase in absorption of new homes, meaning more houses are selling and supply is shrinking, making it a good market for builders.

2. A few of the usual suspects are some of the worst new-home markets in the country, including exurban Central California (starts down 8.2% in the fourth quarter compared with the prior quarter) and Las Vegas (32.9% decrease) as demand continues to lag there and inventory remains roughly flat.

3. Northern Virginia, which has stayed relatively strong during the housing downturn because of its proximity to job centers related to the federal government, is starting to falter. Metrostudy found that starts of single-family detached homes there fell 22.1% in the fourth quarter, and at year end, home construction was down 14.7% annually. Fewer people are moving in as well, as absorption fell 10.9% in the quarter, and inventory rose 17.7%, the highest level of any market observed.

Property Values: Real Estate for $350,000

A canyon house in Utah, a bungalow in Atlanta and a colonial in New York.



Investor Cash Adding Downward Pressure on Home Prices

Cash buyers, principally investors, may
be putting downward pressure on home prices according to the Campbell/Inside
Mortgage Finance Housing Pulse Tracking Survey released Monday.  The survey found that investors with cash in
hand are able to offer something that homeowners dependent on mortgage
financing cannot, a guaranteed sale with a quick closing timeline.  This seems to offset the desirability of a
higher bid with a mortgage contingency.   

The
Housing Pulse survey found that the trade-off between price and speed is
particularly true with offers on distressed properties because the lenders and
servicers liquidating the properties generally prefer transactions that can
settle within 30 days.  The Campbell
report states, “While investor bids may not be the
first offers accepted, they often end up winning properties after other
homebuyers are eliminated because of mortgage approval or timeline problems.
Appraisals below the contracted price are a common reason for mortgage denials.
Most mortgage financing timelines are now in excess of 30 days.”

The
survey reports that 33.2 percent of home buyers in December were cash buyers,
up from 29.6 percent in December 2010. 
However, 74 percent of investors came to the table with cash.  This is especially striking as the survey
found that investors accounted for 22.8 percent of home purchases in December,
changed only slightly from 22.2 percent in November.  But, Campbell says, “Despite their relatively
small share among homebuyers, investors have an outsize effect on home prices because
their bids bring down market prices.”

Real estate agents responding to the
survey commented on the low bids they are seeing from investors.  Campbell quoted anecdotal information from a
few agents indicating they are seeing investor bids 10-20 percent below list
prices, but with quick closings.

The total share of distressed properties
in the housing market in December continued at a three-month moving average of
47.2 percent, the 24th consecutive month that the HousePulse
Distressed Property Index (DPI) was over 40 percent.

The Campbell/Inside Mortgage Finance
HousingPulse Tracking Survey involves approximately 2,500 real estate agents
nationwide each month and provides up-to-date intelligence on home sales and
mortgage usage patterns.

…(read more)

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Property Values: Real Estate for $1 Million

A cabin compound in Wisconsin; a co-op in Wash. D.C.; and a house on the Maine coast.