Investment Trend Forecast for Real Estate in 2016

The Emerging Trends in Real Estate report, makes projections in both commercial and residential real estate for the next year. A highly respected report, it surveys more than 1,400 people in the real-estate market, from investors to property managers.

Here, we take a look at what the report details.

18 Hour Cities

 

Continued urbanisation is one of the most significant issues that will affect the real estate industry. Many cities across the country are mimicking the walkability and transit-oriented development that New York, Washington DC and San Francisco have established successfully as “24-hour cities”. Smaller cities are copying this model, but on a more affordable scale, thus being coined 18-hour cities.

While last year, this was an emerging phenomenon, but in 2016, it is becoming something to invest in. Attracting potential workers due to availability of affordable services, and employers due to the lower cost of doing business. The report states that this means that 18-hour cities are being considered viable investment alternatives to the big six.

Suburbs

 

The suburbs are thriving, but in a new way to the past, by using components of the urban environment. Investors like urban investments more than the suburbs, so using urban components are making them much more attractive to big investors. There is growing evidence that supports the idea that millennials will eventually make their way to outer neighbourhoods and suburbs. In this areas they are still looking for good public transport and the amenities that they enjoy in the urban areas.

Housing Options for All

 

The US is moving away from traditional home ownership, with changing demographics and household preferences meaning that the single family housing market is improving. This means that there are a number of new opportunities in housing options, with the housing market seeing aging baby boomers who are looking for homes to age in, and first time buyers looking for affordable options in higher cost urban options.

Food is Important

 

There is a general trend towards those wanting eat fresh and nutritious foods, but who live in urban areas. One way to meet this need is through urban farming, utilising rooftops and obsolete industrial properties, making it an excellent investment opportunity.

Capital

 

Investors are considering expanding to a wider market set and alternative investment choices because global uncertainty continues to enhance the attractiveness of hard assets in stable markets. There is a lot of domestic and global capital that continues to flow into the US real estate market.

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source: modestmoney.com

How to Choose a Realtor

My husband and I have been saving for a down payment on a house for the past year. So like most young married couples looking to buy a house, we go to a lot of open houses on the weekends just to see what’s out there.

On one hand, you get a good sense of the real estate market. On the other hand, it’s like going to a bakery while you’re on a diet—you can look but you can’t buy.

One of the things we were concerned about when it came to buying a house was finding a realtor.

When we first went to get some information from our credit union about getting a mortgage, they automatically set us up with a realtor that had affiliations with the bank. That should have been our first indication not to go with that realtor.

However, since we were just happy to now have access to the MLS listings, we didn’t think anything of it. It wasn’t until we found a place in our price range that we emailed the realtor and told her we wanted to see the place.

On our first open house tour, she was curt, unapproachable, and definitely not warm. I felt so uncomfortable around her. What had we gotten ourselves into?

Here are some tips on choosing a realtor and how we finally found a realtor we could trust.

Get Recommendations from Friends

If you have a friend you trust, or if your friends have recently gone through the home buying or selling process themselves, ask them for recommendations.

Most people actually like their realtor because they spend a lot of time with them, so recommendations should be easy to come by. One word of advice though: Always be attentive when you start mixing business with pleasure. Meaning, if you don’t end up liking the realtor your friend recommends, don’t blame it on them and don’t ruin a friendship over faulty advice.

Read reviews

These days you can read a ton of reviews online and see which realtor might make a good fit for you. Perhaps you don’t care so much about personality, and would prefer to just have the top expert in the neighborhood you’re looking for. It’s up to you to decide what’s most important in a realtor. Just remember: sometimes, you really get what you pay for.

Interview Them

You can choose to meet several different realtors to gather an idea of what you’re looking for and see whom you really click with.

We actually found our realtor at one of the open houses we visited. While we didn’t end up buying the house, we really loved the realtor. He seemed very matter-of-fact and down-to-earth.

We chose to go with him as our realtor because we really liked his personality and felt that he was very credible. He’s been a wealth of information as we look to buy our own home.

source: everythingfinanceblog.com

Metro Manila and Makati real estate market booming

I THOUGHT of sharing this information about my trip to the Philippines recently. I primarily stayed in the Metro Manila and the Makati Area for about a week. I did meet with several potential investors for the US market and inquired about the Real Estate Market in those areas.

I have to say that the Real Estate in those areas are booming and maybe over heating a bit. There are high-rise buildings everywhere. It’s amazing to see developments; I went when there were back-to-back holidays therefore the traffic to me was really not that bad. The weather was ok due to typhoon and rains coming and leaving the Philippines. So, it was very pleasant for me but what is really interesting is the information I gathered about what has been going on with the Real Estate Market there from whom I had spoken with.

Let’s talk about the high-end areas, Rockwell and Fort Bonifacio areas for example. High Rise condos and commercial areas are really skyrocketing in prices and they keep building them. My main question is who are buying all these high end condos to the tune of $300K all the way to $500K US dollars. About average 12 million Pesos and up. From what I gathered and it’s the small percentage of very rich business families and new rich that are buying up all these condos. I see most of them vacant because I believe they are all buying to speculate to re-sell when the prices even go higher. I also heard that most of them not only buy 1 or 2 they actually buy multiple properties in one building to wait for a good flip. The Money that is going around there is incredible, the wealth is really staying up and not trickling down to the middle and lower end citizens. I suspect it’s like a musical chair for these rich investors, whom ever are holding on to the properties when the music stops will be hit hard.

Now, there are also a ton of buildings that are being built by all the tycoons such like Lucio Tan, Henry Sy and the Zobels for lower end families. Those are going to about 3 Million Pesos but not in the Rockwell or the Fort and they offer financing for them. These condos are smaller in size but much more affordable for the above average families.

I believe the outer areas also have been booming and those properties come with land because most of them are in rural areas and are in subdivisions.

What has been doing very well in the Philippines are “call centers,” where a normal employee would make about $300-400 a month working for these businesses. The amount of dollar that went to the Philippines from calls centers have doubled since two years ago and has a 3 to 1 ratio compared to OFW dollar transmittals. Which is awesome for something that just really became bullish the last 5 years.

New money is also very abundant in the Philippines, meaning money from investors all over Asia. Real estate in the Philippines is fairly cheap compared to Hong Kong, japan, Singapore to name a few. Therefore a lot of investors from the Asian Region are also considering buying in the Philippines.

But remember all these investors are speculating and wanting to turn a profit, that means if the bubble burst, a lot of people will get hurt.

This is how I see investing in the Philippines, if you are speculating short terms you have to know when to time to sell fast. If you are buying to live in or retire please try to buy with cash and not finance to avail of your holding power just in case the bubble burst.

Between 1997 and 2004, luxury condominium prices dropped 30.4% (53.7% in real terms), as the Philippines experienced the biggest property crash of all economies affected by the 1997 Asian Financial Crisis. As with the present housing crisis in the US and Europe, a speculative bubble had formed in the 1990s after financial liberalization and economic reforms, pushing luxury condominium prices up 63% (35.3% in real terms) between 1995 and 1997.

But in recent years, employees of new IT-related firms such as call centers and other business process outsourcing (BPO) firms have boosted demand for rental housing, with a ripple effect on the construction, retail, and telecommunications sectors, resulting in property price increases of 59.3% (16.2% in real terms) from 2005 to 2008.

In 2009, luxury condo price growth slowed to 0.2% y-o-y, hit by the global financial meltdown. But the significant economic recovery of the Philippines that started in 2010 is now propelling prices up again, with 5.5% price rises in 2011.

I met some investors who are looking for properties here in the US market and I ask them and said that I was curious about their decision to invest in the US market. They replied to me that it’s great to Invest in the Philippines but a turn of even in politics or other unavoidable factors could quickly turn investments into dust. This person is a very seasoned investor commenting, they also state that since the dollar is weak and the US market has been depressed for close to 5 years, they believe it will turn around and the dollar strengthening is almost guaranteed.

It is really great to see the Philippines improving a lot and I hope that the growth and advancement stays long term.

source: asianjournal.com