Will Foreign Investments in Distressed Assets Continue into 2016?

Will Foreign Investments in Distressed Assets Continue into 2016?

Distressed assets are any asset put on sale, usually at a lower price, because the owner is forced to sell it. Since 2012, there has been a huge upswing in these types of investments in the European market. According to “Record Breaking Year for European Distressed Asset Purchases in 2014,” 2014 saw €80.6 billion ($91 billion) of closed European commercial real estate (CRE) and real estate owned (REO) transactions. This was more than 2.5 times the transaction volume recorded for 2013. Will this trend continue into 2016? To answer that question, we have to look at how the 2015 market was and the signs we can see so far in 2016. 2015 Market “Record Breaking Year for European Distressed Asset Purchases in 2014” forecasted between €60 and €70 billion ($67 and $79 billion) closed CRE loan and REO transactions for 2015. According to the article, there were likely going to be fewer distressed asset investments in 2015 than in 2014 because many deleveraging processes were almost completed, which would theoretically limit the amount of distressed asset opportunities. In 2015, there were approximately €85.9 billion ($95 billion) closed European CRE and REO transactions. 2015 saw a lot of changes in regulations regarding distressed assets and bankruptcy laws. These changes have made it easier for companies to sell certain assets, which will affect the distressed asset trends in the years to come. The reforms across the European sector are going to be ushering in new opportunities for foreign investments of this nature. The last quarter in 2015 was the busiest of the year, which seems to point towards an eventful 2016...
4 Reasons Why You Should Never Buy or Sell a Home Without an Agent

4 Reasons Why You Should Never Buy or Sell a Home Without an Agent

The home buying process is just as exciting as it is scary. You’ve got an idea of a dream home in your mind and you’re determined to find it. Yet, the do-it-yourself route can take the joy out of the search. To ease the process and make the right choice, it’s best that you partner with an agent when buying or selling your home. I know it’s possible for you to make the right decision on your own, but here are 4 reasons why an agent should act as your voice of reason. Experts in their field Don’t go into the market thinking you’ve gained all there is to know. Assumptions in the real estate field can be costly. Real estate has its own language and, often, the only people who are fluent are realtors. Without one, many misconceptions of acronyms and other jargon can mislead you. A realtor’s expertise is necessary for the documentation involved in buying or selling a home: dozens of reports, disclosures, forms and other technical documents needed to close a deal will be better handled by your real estate agent. Finding the hidden gems The internet has tons of great sites to help you narrow your search but you can’t efficiently find all of your options on your lonesome. Even though you can easily find real estate listings online; realtors have access to more listings and databases that the general public does not.   Many times there are properties that aren’t yet advertised or won’t be publicly advertised. Your realtor can help you identify hidden gems and it’s important to evaluate all your options...
2016 Real Estate Trends Thus Far- By Richard Maize

2016 Real Estate Trends Thus Far- By Richard Maize

2016 Real Estate Trends Thus Far- By Richard Maize We are only one month into the year and already some new real estate trends are beginning to emerge. According to the 2016 Emerging Trends in Real Estate, released earlier this week by the Urban Land Institute, the next year has a particularly good outlook. Here’s a quick list of the variables that will play a factor in this year’s good fortune. More “low-key” cities are beginning to take off in the real estate world- Cities such as Austin, Portland, San Antonie and Nashville are really taking off. The report suggests that, in addition to having up and coming, trendy bar scenes they also benefit from an overall lower cost of living. Microhousing. The Great Recession has led to an increase in demand for rental housing, which has become increasingly less affordable, in turn the general public has become more open to the idea of microhousing- small but modern, versatile apartments. Increased investment in city infrastructures and public transit. For years everyone has complained about the lack of decent public transportation- which makes it harder for people to live in the more affordable suburbs and commute to work. As of late, there has been much more emphasis put on reforming public transportation systems, especially in LA, where new light rail stations are in the works. Millennials are becoming parents. The millennial generation has put off marriage and having children longer than any other generation in history, which has led to them staying in large cities much longer than their parents or grandparents. With the millennials becoming older we are starting...
Does the Stock Market Affect the Real Estate Market?

Does the Stock Market Affect the Real Estate Market?

          The stock market and the housing market are two very different things, however, analysts have noticed a correlation between the two. Why is this? And how exactly does the stock market affect the housing market?          Some real estate agents tend to believe that a stock market slump always helps real estate, and in many ways that may be true. But the answers to these questions are not so black and white. Take for instance times of economic expansion such as October and November of 1987 or times of market corrections such as September 2001 following the terrorist attacks of 9/11; while the stock market took a huge hit, the housing market remained relatively unaffected. On the other hand, when looking at periods of recession, the stock market as well as the housing market were both affected negatively.          So what is the key difference? Well for one, the state of the economy as a whole. In times of economic expansion or market corrections often times MORE jobs are created, which means more people are capable of buying a home; In times of recession unemployment rates rise, consumer confidence declines, and current homeowners choose to hold on to the house that they have rather than sell. Now that is not to say that during times of market correction the housing market is not affected at all, there have been some studies that show that home sales declined slightly during the months following major corrections but this is likely due to the decline in stock assets for many potential...
Four reasons to stay invested in US housing

Four reasons to stay invested in US housing

America’s housing market is undeniably a booming industry and after surviving the stock market roller coaster over recent years, there are several reasons to stay invested in US real estate. A climbing job market and the resurgence of bank lending are just two of the leading reasons as to why investing in the housing industry domestically could return a profitable investment. Strong job growth and consumer confidence The job market overall has rebuilt a solid foundation in the U.S. which will soon lead to a strengthening housing industry and a larger audience of consumers ready to own property. The US economy has added about 3 million private sector jobs over the last year. Of the 3 million, 750,000 new jobs fell among the 25 to 34 age range. As the job market continues to improve, the unemployment rate has seen a decline by an impressive 2.5% over the past two years. While considering these positive trends, the labor market is expected to evolve into a stage where there a higher income on average; which will ultimately result in a higher demand for homes because more individuals are financially capable.   Low inventories and rising pent-up demand The absolute level of inventory of new and existing homes are at decade lows (now 2.5 million units total). These housing inventories are at 15-year lows but as of 2015, the demand is quickly rising. Over 30% of 18 to 34-year-olds are said to be living at their childhood home, a perfectly capable audience for first time home buyers.  The expanding demand for credit leads to more lending Financial lending from banks is...
3 Ways to Help Speed Up the New Mortgage Process

3 Ways to Help Speed Up the New Mortgage Process

The new “Know Before You Owe” or (Tila Respa Integrated Disclosure) rule by way of the Consumer Financial Protection Bureau (CFPB) has begun on October 3, 2015. The new mortgage disclosure rule replaces four disclosure forms with two new policies, the Loan Estimate and the Closing Disclosure. Though the rule doesn’t only bring the introduction of these two new forms, TRID will also change the way that real estate transactions are processed and closed. As a homeowner, it’s best to know what’s needed of you so that your side of the process can be expedited as much as possible. Not to mention that the new forms are easier to comprehend. The TRID rule also requires that you get three business days to review your Closing Disclosure and ask any questions you may have before closing on the mortgage. Here’s how to navigate the mortgage process on a fast-track with the new “Know Before You Owe” rules: Expect New Forms After you’ve signed on for your first mortgage, with the new policy, there will be a couple of documents immediately sent your way for your needs. Know what’s headed your way so you have a mental inventory if you don’t receive any of the listed documents below. You will receive the Loan Estimate (LE) no later than three business days after an initial application. You will receive the Closing Disclosure (CD) at least three business days before closing. The Loan Estimate and Closing Disclosure outline the consumer’s monthly payment, the costs of getting a mortgage, the costs to close and other important information about the loan. Know the New Timelines...
California Housing Market Forecast for 2016

California Housing Market Forecast for 2016

In October, 2015 California’s housing market softened as both statewide sales and average price contracted from the month prior are still on target to meet forecast projections, according to the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.).  However, a shortage of housing may put a limit on the potential for improvement. Still, the numbers are exciting; according the the C.A.R. there were 383,300 home sales in 2014 and approximately 407,500 in 2015- a 6.3% increase, and the C.A.R. expects it to continue to increase to 433,000 in 2016. While this news is certainly a large improvement, California housing prices are still continuing to rise. The average price of a home in 2015 went up 6.5% to $476,300 and is projected to rise another 3.2% to $491,300 in 2016. The good news for potential buyers is that while housing prices may still be on the rise,  2016 is still estimated to have the slowest rate of price appreciation in five years, houses are generally selling for less than asking price AND the unemployment rate is getting lower- it is forecasted to go down to just 5.5%, a very steep decrease from 7.5% in 2014! With job growth improving and mortgage lenders lessening credit restrictions it is safe to say that the California housing market is improving, but not without some challenges. Inland markets are set to see the most improvement in 2016 due to lower housing costs and better job markets, while markets such as central Los Angeles and the San Francisco Bay area may continue to struggle due to limited housing, increasing costs, and higher interest rates. According to C.A.R. San...
What is an REIT and is investing in one right for you?

What is an REIT and is investing in one right for you?

  What is an REIT and is investing in one right for you? A REIT is a Real Estate Investment Trust. These are companies that finance or own real estate that generates income such as a hotel, a hospital, shopping malls, storage centers, or apartment buildings. Similar to the structure of a mutual fund, a REIT can provide investors from all types of income diversification and long-term financial growth. REITs usually pay all of their taxable income out as dividends to their shareholders, which in turn, the shareholders pay income taxes on said dividends. REITs provide a way for investors to earn a share of the income generated by a commercial real estate project without ever having to purchase commercial real estate themselves. In fact, many REITs are publicly registered with the SEC and traded on the stock market. These are what you would call publicly traded REITs. Some others are registered with the SEC yet not publicly traded. These are what you would call non-traded REITs. This is a very important distinction between the multitude of different kinds of REITs. Before investing, you should always know whether or not the REIT is publicly traded or not, and how this could affect your risk vs. reward. REITs offer investors a number of rewards which include, Dividends: Stock exchange-listed REITs have provided a stable income stream to investors. Adding Diversity to your portfolio: Liquidity: REIT shares that are listed with the stock exchange can be easily bought and sold- the same is not true for ones that are privately listed. Performance: Over long term investment, the stock exchange listed REIT...
Top 10 Cities for Millenial Home Buyers

Top 10 Cities for Millenial Home Buyers

I hear it all the time, “kids these days.” or “I can’t find a decent executive assistant because millennials are so entitled.”. Millennials take a lot of heat for being entitled, unmotivated, and over-educated. Many claim that millennials would rather live at home than move out or rather rent than commit to a home. These people are vastly mistaken. The millennial generation hit the job market during one of the greatest recessions of all time- and while many past generations have endured similar problems, the millennial generation is unique the sense that they are facing a globalized economy in which large corporations can outsource jobs to foreign nations for much less than they could pay a recent college graduate here in the United States. On top of that, due to the recession, they also have to compete with candidates who are 10-20 years their senior who lost their jobs for the same entry level positions. They got stuck in a catch 22 where no one would hire them after graduating college because they “lacked experience” which they obviously could not get without someone hiring them. So it’s not that millennials are disinterested in buying and owning their own home, it’s more likely that they are simply not sure if it’s possible. The issue lies in the fact that roughly 97% of them need a home loan and this can be tricky when they are just starting their careers, or possibly still working a part time job that they are overqualified for while they seek full-time employment in their field of choice. BUT, there is good news! According to Realtor.com...

Why Buying your First Home is an Investment

Buying your first home is an investment, regardless of your intent because your first purchase not only brings lifestyle changes for yourself but it’s also about managing an appreciating asset as well. In today’s society, homeownership is still considered a major pillar of the American Dream and it can be seen as a direct reflection of financial stability. But the weight of this decision shouldn’t ever be taken lightly and it should be seen as an investment so that decision is fruitful in the long run. Here are some things to consider when looking to purchase your first home in hopes of turning it into an investment rather than just your first property.   Take Advantage of Your Age Buying your first home when you’re young compared to later in your life leaves you much more of a leash for your residential future. Your personal situation is more likely to be in a better place when you’re young as far as credit history, family size, as well as other aspects that should be accounted for. If you’re single, or in a relationship without kids, you may have more flexibility as far as location and property size which could be better for your bank account. Choosing a location that will sit well with future buyers can be profitable for you when you’re looking to sell. It’s good to stay conscious of schools in the area, possible traffic, and the neighborhood’s environment. Consider Developing Communities Developing neighborhoods usually are undergoing an internal and external infrastructure change and in these instances, housing properties aren’t as pricey as surrounding communities that have been...