Foreclosure Buying By Wall Street Providing Hot Air For New Housing Bubble

Hot air rises, and so are housing prices. It appears that Bernanke's efforts to fund the housing market are beginning to gain some traction. An army of 'ex-Wall Street executives' has had more than two years now to re-trench themselves, and move in, to essentially take over the foreclosure and investment property market in the US.

© David Gn ' Fotolia.com

The Fed is providing 45 billion dollars per month in 'hot air' liquidity for the housing market. Billions of these dollars are being loaned out to newly formed capital / investment entities whose goal is to buy up as many foreclosures as possible, along with any other desirable properties that may be available.

A number of industry professionals are telling me that prices are beginning to rise significantly and the inventory of available foreclosures is dwindling. This is creating a demand for housing that is resulting in a tighter supply and driving selling prices upward like a balloon. But when the hot air runs out, the balloon falls back to the ground.

These buyers are not end users. A housing market driven by investment activity could prove to be much more volatile than a housing market driven by more traditional owner occupant activity.

Some of these businesses, formed as 'early' as 2011, have already gone from start-up investing operations to publicly held companies. There is no mistaking what is happening here. Wall Street sees an unprecedented opportunity to profit from the housing market once again.

The Fed wants to keep interest rates low and 'create jobs' by liquefying the housing market just as they did in the early 2000's. The banks hope that all of this activity will result in improved balance sheets via profitable loans and improving housing prices. And those who made money during the housing boom see another opportunity to profit from the housing bust and the resulting foreclosures.

Indeed one of the interesting aspects of real estate is it's ability to generate cash flows in a variety of ways. Shelter is a high demand item, desired by virtually everyone in the world. It's high dollar value, perhaps $9 TRILLION at this point, makes the US housing market one of the wealthiest sectors on earth, even after the housing bust.

Stock market savvy investment companies are using 'Bernanke Bucks' to buy tens of thousands of foreclosures which they plan to rent or sell, while turning this cash flow into a profit bonanza via a stock IPO. There are a handful of these companies which are already public or nearly public, making much more off of the stock sale than they would as ordinary real estate investors.

Could this be the beginning of a new investment bubble? I think the answer is 'yes'. Fundamentally we are talking about the power of none other than the Federal Reserve, the Wall Street banks, and investment companies created by guys with Wall Street connections. They have the ability to monetize the cash flows into the stock market. This promises to be the biggest real estate investment innovation since derivatives were invented.

This is the same methodology that gave us the original housing bubble. Wall Street has learned a lot about manipulating the housing market. And with the development of stock market oriented real estate investment companies, they are developing the ability to 'manufacture' a housing recovery.

I expect you'll hear lots of news in 2013 about how the housing market is improving, and prices are rising. As long as the Fed remains willing to keep the bucks flowing, we're going to see more and more foreclosed properties flowing to large scale investing operations. This is a fundamental transformation in the housing market that is unprecedented.

It's going to take a few more years for this entire scenario to unfold, but at some point, it's safe to say that prices and ownership costs may reach unsupportable levels once again, leading to another bust. Only time will tell how big this bubble will become and how much hot air will be necessary to inflate it.
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Donna S. Robinson is a real estate investor, author and investing coach located in Atlanta, GA. Follow her on twitter at donnaconsults, Facebook.com/RealtyBizConsulting and watch her videos on youtube. Her latest book, Basics of Real Estate Investing, is now available for Kindle on Amazon.com

What Influences Your Home Buying Decision?

Are power lines a better neighbor than someone that fails to maintain their property? Is a quiet cemetery preferable to a party house? The influence of external factors (external obsolescence) must always be considered when evaluating a home, but some of those factors may not always be considered adverse by potential buyers. Like everything real estate related, every situation is different and much depends on the preferences of a homeowner.

© pitris ' Fotolia.com

External influences like heavy traffic, airport noise, industrial endeavors and similar other uses can impact value and desirability. But that isn't always the case in major cities where sirens, traffic noise and the like are part of the environment.  Is a condo adjacent to Central Park adversely impacted by traffic noise? Even airplane noise can blend into the background if the home is chock full of other features considered desirable by the owner.

Detention and retention ponds can be eyesores, but when screened with vegetation and properly maintained they can blend into the landscape. While some may consider being adjacent to a cemetery uncomfortable, others see it as a quiet green space. Same for power lines; many avoid them but some buyers will make an exception if other more important features of the home work. Builders put them up and someone buys them.

Golf courses are often considered highly desirable for the obvious reasons; plenty of green space, sweeping views and the image of living on a course. What may not be considered is that most landscape maintenance is done in the predawn hours; mowers and leaf blowers at 0500 can get real old real fast. There are also the obvious factors of balls and players in the yard and don't forget possible lot use restrictions and course rights of way.

The bottom line is that not every buyer looks at external influences in the same way. Each situation must be evaluated in context; what are the comparable properties like in this micro market? Is there a demonstrated adverse impact on value due to this influence? The best answers will likely come from an experienced appraiser and experienced agent. The appraiser is best to determine if there is a demonstrated impact and the agent is best to develop a successful marketing strategy. The bottom line is that there tends to be a buyer for every home.

About the author: Hank Miller is a full time Associate Broker and Certified Appraiser in Atlanta. He is known as much for his attention to detail as he is for his candor. Visit www.hankmillerteam.com for all things real estate.

New Albanian Real Estate Site Launched

For those interested in investigating property in Albania, a new website has just launched to reveal a network of local professionals and property search capabilities.

The site, Albania Estate, features investment properties, rentals, resorts, and information about the market in Albania.  Ilir Dardha (left), Albania Director, had this to offer:

'We are very pleased to launch our new website. Since launching Albanian property for sale in 2005, the demand for property here has grown and grown, due to the very low property prices and capital growth and rental return projections. Now we want to offer more services and features to cater for this emerging market.'

From residential to commercial in Albania's capital of Tirana, to the beaches in Durres and Saranda, the new site helps those interested in properties in Albania, as well as professionals in associated fields to study and connect on opportunities along the Albanian Riviera and the surrounding regions.

Rental management, property management as well as other services are presented in several languages as well. For more information, please visit the site links above, or consult with Albania Real Estate directly at: +1 414-852-5513 ' There's also a Facebook profile for the new portal here.

Higgenbotham to Auction Several Florida Properties

In Florida auction news, Higgenbotham Auctioneers International (HAI) has just announced offering for bids a portfolio from Maranatha Properties Inc. including ranch home, commercial warehouses, commercial buildings, industrial tracts, a lake front home, home sites and vacant land. Scheduled to be held near Daytona Beach, the bidding starts January 24th and concludes January 26th.

Higgenbotham Auctioneers in Lakeland recently

According to the news release, the some of these properties are slated to be sold absolutely, and an online live auction is also scheduled to take place at the Higgenbotham website. The onsite auction is to be carried out at live on the site of one warehouse at 726 N. Beach Street Daytona Beach, FL 32114, for those interested. Online bidding will be allowed.

1501 Robie Ave., Mount Dora, FL

A short list of the properties for bidding includes:

• 726 N Beach Street, Daytona Beach, FL 5,135± SF Warehouse
• Carrigan Avenue, Oviedo, FL - 50± acres offered in 3 parcels
• 56,000± SF Building - 1501 Robie Ave., Mount Dora, FL (Trulia details via link ' Google streetview above)
• 9 Industrial Lots offered individually - Cypress Road, Silver Springs Shores, FL
• Home on 106± acres on Lake Pierson - Offered in 3 Parcels
• Ranch Home on 160± acres - 29540 Fullerville Road, Deland, FL - 11 Parcels from 3.87± to 20± acres
• And others

Interested parties can contact Earl Williams at (800) 257-4161.

 

Hamptons Real Estate Legend Gary DePersia: On Haute Living Mag

One of America's leading luxury real estate gurus, the Hamptons' Gary DePersia has just rejoined the Haute Living Real Estate Network. The network, a super exclusive group of leading agents who sell the most opulent estates imaginable, is a directory (or who's who) of prominent exclusive property wheelers and dealers.

According to the press from PRWeb, Haute Living Magazine will feature DePersia as an exclusive Haute Living Real Estate professional. DePersia, who specializes in selling to affluent buyers, has sold or had a hand in selling over $1 billion in property over more than 250 transactions.

For readers interesting in learning more about Haute Living Magazine or Gary, a good place to start is with his profile.  The $10.5 Million North Haven Residential property in the feature image is but one of DePersia's fabulous listings.

The video below shows a bit more personal view of just why DePersia just may be the premier high dollar real estate sales person in America. What the reader might find even more fascinating about DePersia, are his humanitarian efforts and those of his company though. Take a look at Gary's Facebook for more on this.

Allsop Releases UK Residential Auction Review 2012

Last week leading independent property consultancy, Allsop Residential, released their 2012 review showing emerging market paterns derived from their sales.

The video report below, tells of UK regional data, property types, average lot sizes, and such aspects of sale as investment yields and more. The report also takes a look at the demand and distribution of UK stock.

As you will see via the report, the firm held seven major residential sales in 2012 which gleaned some £314 million. Obviously the background data on such enormous sales volume provides clear insight into what went on in the market last year. Gary Murphy, Partner and Auctioneer for Allsop, added the following for clarification:

'Despite the difficulties posed by a double dip recession from the start of the year, the continued drought of mortgage finance for many first time buyers and the volatility of market confidence exacerbated by further crises in the Eurozone, our auction rooms have remained reassuringly active. As always, however, pricing is key.'

For those interested in seeing the full report you can download the PDF here. Among the other conclusions drawn from these reports, Allsop iterates the high demand for properties at auction illustrated by their sales and other data.

Established in 1906, Allsop is the number one UK auction player in residential and commercial properties with five offices in West End, the City, Leeds, Brighton and in Glasgow.

ThreeSixty Sold over 100 New Homes in 2012, More Exclusive Homes Available

ThreeSixty generated spectacular sales last year, with over 100 brand new homes sold at South Bay. With resort-style recreation facilities, and gated privacy, the dream homes sold from as low as $400,000.

An award-winning community, with a great South Bay location, not far from Manhattan Beach Pier, Hermosa Beach and Marina Del Rey, ThreeSixty features three types of properties, clustered in neighborhoods: The Flats, The Court and The Row. The exclusive homes are served by resort-like entertainment facilities, with swimming pool, basketball, paddle tennis and bocce ball courts, plus a billiards lounge and bar, wine room, modern gym and more.

The Flats, as the name implies, are single-level floorplans that range from approximately 957 to 1,662 square feet. They feature up to two bedrooms plus a retreat, up to two bathrooms and one- and two-car garages. Prices are from the low $400,000.

The Court neighborhood only has one last residence still available, the Residence Two, featuring 1,978 square feet, with three bedrooms, 3.5 bathrooms, courtyard patio, chef's kitchen, entertainment space and a two-car garage. Prices start from $500,000.

Finally, The Row offers a trio of sophisticated three-level townhomes, the largest floorplans at ThreeSixty. Designs range from approximately 1,549 to 2,152 square feet, with two to three bedrooms, two- and one-half to three bathrooms and two-car garages. Prices start from the low $500,000.

Brokers may be interested to know that closing at William Lyon Homes' ThreeSixty brings them a $10,000 flat referral fee, and by the way these homes look, they are not a hard sell at all.