Rolling Boom Lifts Real Estate Beyond Coastal Cities, States
Author: Blanche Evans - Originally Published - Realty Times
Housing bubble? Out! Rolling boom? In! Migration and immigration patterns are creating
news in housing as homebuyers try to find more affordable homes in the South and West.
>> read more
New state population estimates just released by the U.S. Census Bureau suggest that homebuyers
are migrating from higher-priced markets to more moderately priced areas, bringing new growth
to cities such as Atlanta, Dallas, Jacksonville, Phoenix and Portland.
The effect is called a rolling boom. That's when high prices force homebuyers to the suburbs,
or to new towns or across state lines. California, for example, loses about 100,000 residents
a year to other states, which has helped to create rolling booms in Nevada and Arizona.
As those areas become less affordable, buyers are already migrating to Texas, Georgia and
other states.
For the 19th year in a row, Nevada grew the most of any state, with Arizona a close second.
There are three ways that state populations grow -- births, immigration from other countries
and migration from other states. Migration and immigration impact birth, creating population
booms. In 2005, the nation added nearly 3 million people bringing the country's population
to over 296 million.
Over half of that growth was in Florida, Texas, California, Arizona and Georgia. Regionally
speaking, 36 percent of the nation lives in the South, 23 percent in the West, 22 percent
in the Midwest and 18 percent in the Northeast. Florida takes the prize for the largest
population increase, gaining nearly 404,000 residents. Texas was close with 388,000, or
1063 per day.
California remains the most populous state with over 36 million people in 2005. Second place
went to Texas, with nearly 23 million, and third to New York with just under 20 million.
Over half the nation's population live in 10 states nearly equally divided among the Northeast,
Midwest, South and West.
Those states are:
*Northeast - New York, Pennsylvania, New Jersey
*Midwest - Illinois, Ohio, Michigan
*South - Texas, Florida, Georgia
*West - California
What does this mean to you as a homebuyer or seller? Realty Times advises that population
shifts are as old as mankind, so it's wise to expect constant change. We are migratory by
nature, and affordability will always play a part. But so does opportunity. The question
is where do you want to live? Look not only at home prices, but job opportunities, lifestyle,
and culture -- those should all be compelling if you are to be happy in your new home.
Remember. Wherever you go, there you are, buckaroo. Make sure you move somewhere you really
want to be.
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Real Estate Now Truly Global
Author: Lew Sichelman - Originally Published in Realty Times
The 70-story tower rising hard by the Kremlin in the Moscow Business Center is more than a
part of just another mixed-use complex. Being built by Turkish developer Summa, it also
stands as an example of the growing internationalization of the real estate sector.
>> read more
Another symbol of that growth is MIPIM, the International Property Market, which was held
earlier this month in Cannes, France. More than 21,000 people from all over the globe
attended the four-day event, an all-time high. The record registration, says the conference's
organizers, Paris-based Reed-MIDEM, reflects the "substantial appetite" investors are showing
for property world-wide.
The Russian contingent alone includes some 100 investors, developers, consultant and other
real estate market players. Five new exhibitors -- the countries of Georgia, Liechtenstein,
Mauritius and Mongolia as well as U.S. territory Puerto Rico -- are among the hundreds of
exhibitors.
The United Arab Emirates also has a strong presence, including first-timer TAMEER, which owns
some of the tallest properties in the world. Although the UAE draws the ire of most Americans,
many of the world's largest developers are eying Dubai. New construction in the UAE city-state,
including a tulip-shaped hotel on a man-made island just off the coast by none other than
Donald Trump, is valued at more than $50 billion. That's billion -- with a "B."
Further testament to the fact that real estate has gone truly global were two research reports
released here. One, by Jones Lang LaSalle, said that a third of the world's transactions -- some
$475 billion worth in 2005, an increase of 21 percent from the previous year -- were
cross-border deals.
"Investors are searching further and further from their home bases," said Tony Harrel, chief
executive officer of the firm's International Capital Group.
A report covering the 15 European Union countries by CB Richard Ellis, though smaller in scope,
found a similar phenomenon. While purchases by investors within their own countries rose by
just over 20 percent last year compared to 2004 levels, cross-border acquisitions increased
by more than 70 percent, the firm said.
"There's been a big increase in the amount of capital moving around the European market, with
a significant increase in the amount coming into Europe from the outside," said Nick Axford,
who heads the Ellis firm's research and consulting department. "Across the board, real estate
really is now an international market."
Both reports also suggest the trend will continue. "For every dollar of assets traded last
year," said Horrell, "there's more than $2 chasing deals."
The Jones Lang report classifies cross-border activity as including both "inter-regional"
deals in which either or both the buyer and seller originate from outside the region where
the underlying property is located as well as "intra-regional" transactions in which either
or both seller and buyer are outside the country.
It found that investment transactions fitting that definition "rocketed" by 40 percent in '05,
and now account for almost a quarter of total global real estate transactions.
On the buy side, the total amount of inter-regional capital was $32.9 billion; on the sell
side, $28.9 billion.
While the United States was the most popular destination for inter-regional investment,
60 percent of inter-regional purchase volumes were in Europe, the report said. "North
America is by far the biggest market, but last year it attracted only 16 percent" of
cross-border activity as counted in U.S. dollars, Horrell said.
American sources of capital continued to diversify internationally, accounting for 14 percent
of all inter-regional purchases, according to the Jones Lang report.
Australians were "highly visible," too, also accounting for 14 percent of the total as the
most active foreign investor in U.S. property. Middle Easterners accounted for 13 percent,
including several "trophy" properties in the United States.
The CBRE study also found U.S. interests to be the dominant European investor, with much of the
$13 billion they invested last year flowing into Germany, France and the U.K. At the same
time, though, U.S. investor also sold $8 billion worth of European property in 2005, mainly
in the U.K. and France.
While Irish investors put only $7 billion into play, they were the biggest cross-border buyers
"in net terms," the study said.
Both studies expect the trend to continue. The market should be "very strong" in 2006, said
Peter Schreppel, who heads CBRE International Investment.
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Summer Could be Hot for Homes
Author: Greg Avery- Originally Published - Boulder Daily Camera
Out-of-town buyers return; Broomfield's Anthem hits it's stride >> read more
Early year home sales trends suggest the local real estate market may be warming with the weather.
The region seems to be attracting interest from afar just as the largest new home project in years
hits its stride in Broomfield and other markets nationally begin to cool.
Sales of existing homes foretell better news for people putting their Boulder County homes on
the market this summer, and the pace of building for new homes means more options for buyers
looking farther east.
A record number of homes sold in the Denver metro area in 2004.
Since then, the numbers have declined slightly. The trend of people "buying up" in the real estate
market to take advantage of historically low interest rates seems to have played itself out.
But real estate agents are seeing other signs of health in the market this year.
Out-of-town buyers are scouting the area ahead of company moves or individual job changes,
said Irene Shaffer, a Re/Max of Boulder Inc. real estate agent who analyzes sales trends.
Lower-priced homes are beginning to sell better as well, she said.
Owners put 2,045 existing homes on the market for resale in Boulder County in February, with
62 percent of them priced below $500,000. That inventory, though far larger than the number
of high-end homes, was selling almost twice as fast last month than the houses costing more
than $1 million.
"That was the thing that wasn't happening at all in this market in the past few years,"
Shaffer said. "Now we're seeing them disappearing in a matter of days."
Ken Hotard, senior vice president for the Boulder Area Realtor Association, projects a slight
decline in the number of existing homes sold this year, but rising prices for those that do sell.
Boulder continues to see the biggest appreciation in home value in the area, particularly in
neighborhoods west of Broadway.
The median sales price in Boulder — the point at which half sold above and half below — topped
$500,000 last year and has kept rising. The median hit $570,000 for sales in February.
The most expensive homes on the market sold well in Boulder — 10 of the 54 sales closed last month
topped $1 million. Owners are selling 226 homes in that price range countywide, 14 of which sold.
Sales of newly built homes have begun to sag nationally, but Colorado's real estate market, much
like its job market, is on a different cycle.
Nowhere is that more evident than Pulte Homes' massive Anthem Colorado development, a 3,200-home
subdivision on 1,800 acres in northern Broomfield, where construction began in November.
The first home was finished and occupied two weeks ago.
About half of the development, located off the southwest corner of Interstate 25 and Colo. 7,
is Pulte's Anthem Ranch community for people ages 55 and older. The neighborhood is designed
for people who are nearing — or have reached — retirement and want to spend $280,000 to
$450,000 to live in an area with its own Del Webb brand of recreation centers and organized
athletic, leisure and travel activities.
The other half of the project, Anthem Highlands, has no age restrictions and features slightly
larger houses.
Pulte expects to complete about 330 homes in all of Anthem this year. All but 20 in Anthem Ranch
already have sold, said Jay Millard, a Pulte vice president who markets the project.
Neither Pulte nor area real estate experts expect to compete for buyers with existing homes in
nearby communities this year.
"It almost creates its own market," Millard said, adding that most interest so far in Anthem
is coming from far afield. "We're still very, very low on the awareness scale of local buyers."
As the project grows and surpasses Superior's Rock Creek in terms of size, that may change.
Between 30 percent and 40 percent of the buyers are expected to come from other states. Local
buyers mainly will be people who otherwise may not have been inclined to buy a new home
otherwise, Millard said.
Still, so many homes hitting the market during the next decade could weaken the demand for
similar kinds of homes in the many new subdivisions going up along the highway.
The I-25 corridor east of Boulder County and to the north will be the hub of new home-building
activity on the Front Range for the foreseeable future, said Gary Bauer, an independent
broker who analyzes regional trends.
Land within a reasonable drive to job centers is still available for builders to put up large
subdivisions and small-estate developments. With financing cheap for developers, builders are
putting up homes ahead of the demand.
A lot of that building will be luxury homes, a relatively new phenomenon for the I-25 corridor.
The result is a growing inventory of homes that buyers would've had to come to Boulder to find
a few years ago, he said.
"Historically, it was an event in and of itself to own property in Boulder," Bauer said.
"I think that is changing ... slowly, but still changing."
<< Hide Extended Entry
Loans hit 4-year High
Rising mortgages affect first-time homebuyers
Author: Aleksandrs Rozens, Associated Press
NEW YORK — U.S. mortgage rates recently hit highs not seen since July 2002, according to an
industry survey issued Wednesday, on the eve of the spring buying season.
>> read more
The rise in rates may limit how much money some home buyers can borrow and could force
some sellers to reduce prices.
"As rates go up it definitely affects homebuyer affordability," said Robert Moulton,
a Manhasset, N.Y.-based broker who is head of Americana Mortgage Group. "It will affect
more of the first-time home buyer market and will slow down anyone trying to trade up."
Rates for 30-year mortgages, the most commonly used home loan, rose to 6.42 percent last
week, according the Mortgage Bankers Association. The industry trade group surveyed 18
lenders, representing half of all loan applications received by lenders who work directly
with consumers.
That 6.42 percent is a high not seen since July 5, 2002, when the 30-year mortgage rate
was at 6.46 percent.
Rates for adjustable rate mortgages — a popular loan for first-time buyers — have risen
sharply in recent months. Last week they hit 5.64 percent, close to levels last seen
in December 2001.
The rise in borrowing costs could not come at a worse time for the housing industry,
which has many new and previously owned homes for sale.
The spring season also is typically the busiest time of the year for home sales because
many families look to buy homes and move in before the school year begins.
The 30-year mortgage rates won't go much beyond 6.75 percent this year, according to
Douglas Duncan, chief economist at the Mortgage Bankers Association.
The higher borrowing costs for home buyers already have nipped at demand. Requests for
home loan applications — while little changed in recent weeks — are down 20 percent
from last year at this time.
Earlier this week, the National Association of Realtors said it expects sales of previously
owned homes to fall 5.7 percent this year from 2005 to a 6.67-million-unit annualized rate.
Economists said the underlying strength in the U.S. economy and its job creation will
ensure there is some demand for housing in the spring, even if borrowing money for a
home purchase has gotten more expensive.
"It will be a relatively orderly soft landing," economist Joe Lavorgna, of Deutsche Bank
Securities Inc., said of the expected slowdown in housing this year. "At some point,
trees cannot grow to the sky and neither can home sales."
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