Top Real Estate Articles of the Week; 9/7/2012

Investors Eye Profits From Single-Family Home Rentals

By JOE GOSE, FOR INVESTOR’S BUSINESS DAILY

Institutional investors are raising billions of dollars to acquire distressed single-family homes and turn them into rentals. It’s a strategy fashioned on the idea that home “rentership” is increasingly replacing ownership following the housing market’s crash, amid stricter mortgage-lending standards and a struggling economy.

Renting out single-family homes has long been the province of mom-and-pop investors and traditional homeowners. But given the foreclosure crisis, institutional investors are now able to pay just pennies on the dollar for properties to amass thousands of homes. Read More at Investors.com

What’s up with the Housing Market?

by Irwin Kellner

PORT WASHINGTON, N.Y. (MarketWatch) — As the U.S. economy rounds the Labor Day turn, it appears that, after several false starts, the long-depressed housing market is finally climbing out of the basement.

It is nothing more mysterious than supply and demand. For the first time in a number of years, the supply of both new and used homes available for sale has dropped below demand.

No matter what the product or service, whenever demand exceeds supply, rising prices are sure to follow. Housing is no exception. Prices are rising both quarter-to-quarter and year-over-year for the first time in two years. Read More at MarketWatch.com

Will Jobs Data Hurt Real Estate Recovery?

By AnnaMaria Andriotis

The most recent job numbers may be disappointing in more ways than one: Payroll numbers will need to more than double their current growth rate before a full housing recovery can occur, economists say.

Recent weeks have seen some upbeat news about the housing market. According to data released this week by CoreLogic, for example, home prices increased 3.8% in July compared with a year prior—the biggest year-over-year increase since August 2006.

But a lagging workforce is likely to hold back the recovery in home sales. Today’s jobs report indicates that growth remains sluggish: U.S. nonfarm payrolls increased by 96,000 in August, according to seasonally adjusted data released by the Labor Department. Economists expected a gain of 125,000. While the unemployment rate fell to 8.1%, down from 8.3% in July, that was largely because some people stopped looking for work. Read More at MarketWatch.com

Real Estate Now Tops Legal Malpractice Claims List, ABA-Published Study Shows

By Martha Neil

For the first time, real estate matters are now the most-frequent subject of malpractice claims against lawyers, a new study has found.

Results of a 2008-2011 survey of 53,000 insurance claims were announced Thursday by the ABA Standing Committee on Lawyers’ Professional Liability in conjunction with the National Legal Malpractice Conference in Chicago. In previous studies dating back to 1985, plaintiff’s personal injury matters were the biggest generator of malpractice claims.

The committee “has provided a one-of-a-kind, detailed overview of legal malpractice claims,” said ABA President Laurel Bellows in a press release about the study report. It can be purchased on the ABA’s website.

The report, she continued, “will give law firm risk managers, lawyers practicing in the field and legal malpractice insurers valuable insights into the areas of law, types of activity and other variables that give rise to malpractice claims.” Read More at ABAjournal.com

Commercial Real Estate in Northern California is Gaining Strength

Ernie Ochoa, Century 21 M&M Merced Office (209)386-1140 email-eochoa @c21mm.com

Ernie Ochoa, Merced Office (209)386-1140 begin_of_the_skype_highlighting (209)386-1140 end_of_the_skype_highlighting email-eochoa @c21mm.com

Century 21 M&M Realtors are seeing an increase in commercial real estate activity in Northern California. Ernie Ochoa, Realtor for Century 21 M&M in Merced says this is because rents are low. He is seeing an increase of Mom and Pop type businesses looking for commercial real estate space to lease.

David Lal, Century 21 M&M Hercules Office (510)306-5558 email-dlal@c21mm.com

David Lal Hercules Office (510)306-5558 email-dlal@c21mm.com

David Lal, Realtor for Century 21 M&M in Berkeley and Hercules says that he is seeing ‘first time investors’ looking for entry level commercial properties. According to David the “C” rated properties are actually showing some appreciation.

“Strip malls are still taking a beating, but office space and warehouses are ramping up, in part due to the fact that affordability is at its greatest,” says David. “Square footage for both commercial real estate sales and commercial real estate leasing has stabilized and in some cases, the cost per square foot is creeping up – especially in San Jose where internet technology companies are thriving.”

According to Ernie Ochoa, “Commercial Leasing is up, we are definitely seeing an increase in activity, but Commercial real estate sales just aren’t happening over here in the Central Valley.”

Sara Shipman Century 21 M&M Oakdale Office (209)844-1702 email-sshipman@c21mm.com

Sara Shipman Oakdale Office (209)844-1702 email-sshipman@c21mm.com

Sarah Shipman, Realtor for Century 21 M&M in Oakdale agrees with Ernie Ochoa, “Locally we are anywhere from 24 – 48 months behind the Bay Area in commercial real estate recovery. I have definitely seen an increase in phone calls from small business owners looking for properties to lease, but not much movement on the sales side.”

A new report from the Mortgage Bankers Association (MBA) shows that nation-wide commercial mortgages performed better than other types of loans last year. At the end of 2010, the 30+ day delinquency rate for commercial mortgages reached 5.33%, compared to 6.48% rate for all loans.

In fact, last year marked a turn around for commercial real estate in the United States. The national transaction volume totaled $120 billion in 2010, as opposed to the $54.6 transaction volume experienced in 2009. It appears that corporate tenants, particularly in large population areas, took advantage of the lower rents, especially during the last three quarters of 2010.

Century 21 M&M Commercial Realtors agree that the market environment over the next 24 months presents a favorable time to acquire commercial properties at discounted prices. During the recovery phase of this recession investors, purchasing commercial properties at significantly lower prices, should see a return on investment that exceeds historic averages.