The popular Inman Blog has expanded beyond the editorial team at Inman News. More than a dozen industry experts have been added to the blog, including Joel Singer of the California Association of Realtors, Sherry Chris of Real Living and Richard Mendenhall of WM Works.
Here is taste from the Inman Blog this week:
- A rising tide in the real estate industry despite…
War in Iraq, $45 per barrel oil, Hurricane Charlie, rising interest rates, fear of domestic terrorism, rising property taxes, slumping financial markets, escalating insurance costs…One has to ask, How can it be? Despite reports of a weak economy with little job growth, the labor market remains strong with near record-low unemployment (5.5 percent, which is actually below the much acclaimed 6 percent full employment statistic cited in most economic and finance text books of the 1980s and 1990s). These jobs are fueling the demand and ability for Americans to become homeowners at a record pace. Add historically low interest rates and steadfast tax relief for homeowners and you end up with a resiliently buoyant housing market that seems to test the will of common sense. Key: Watch the monthly jobs report: jobs report will be inversely related to interest rates (i.e., More jobs means rates will rise).
Carter W. Murdoch, PhD.
Bank of America
- Real estate is alive and well in Florida…
One of my hobbies while on business trips (and I am traveling a lot right now) is to check out the local real estate market to see if I can find a home I would love to buy in that particular city. Of course the house style varies city to city…an old apartment in the French Quarter in New Orleans, an original loft in New York, a beachfront condo in Florida. On a recent trip to Palm Beach, Fla., I decided I liked some of the really old retro condo buildings on Ocean Boulevard between the Ritz Carlton and Four Seasons Hotels. Not a bad neighborhood, but surely some good buys to be had. Well maybe not, I discovered, after finding out that very old and very small units are selling sight unseen for up to $400 a square foot. Has the Florida market peaked?
Not so, it seems – according to a Naples broker who informed me last week that he sold three $700,000 condos during the middle of the hurricane a few weeks ago. Go figure. That same broker also told me that by putting a very small ad in a local Ohio newspaper he was able to attract close to 150 prospects to a seminar on buying property in Naples. So what did I learn from all of this? Now I know why it is so difficult to sell agents on the benefits of using technology, when traditional marketing methods are still working so well.
- Unintended consequences
I have two kids. My parents had two kids. My grandparents had…you get the idea. And we never rent. Never. It is not about wealth, it is about ownership.
A year out of college, I bought my first home in a tough part of Boston. $1,800 down bought me an $18,000 triple-decker, a three family home. With other “pioneers” in the neighborhood I cleaned up the street, improved mass transit, and demanded better municipal services. I invested $15k to fix up the property: insulated walls, replaced windows, rebuilt porches and replaced major systems. Then I raised the rent on my tenants. Well, I had to pay for the home improvement loan, right? Somehow my Puerto Rican tenants moved out, and then their replacements moved out, and…you get the idea.
We pioneers were filled with a public service zeal to help the locals. In retrospect I learned that ANY neighborhood improvements drive out the people we intended to help. Depressing discovery. Lowering the crime rate makes the neighborhood more attractive, so rents rise as new people move in. It’s hard to help people. The only solution is ownership. People who own their own homes are in those boats that rise with the tide. Renters are in life jackets.
Some lenders hope that a loan for every immigrant (legal or illegal) will fill the post refi gap. Let’s take a rest on immigration for a few years. Let’s take care of our own, give our own poor a chance to catch up instead of diluting their wages with cheap labor. Let’s get more Americans in boats.
Senior Vice President
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