Oceanfront Homes in Rhode Island – Now Is The Time to Buy
Below is the full article… Be sure to check out Judy’s E-Zine articles online!
If you are thinking about an oceanfront home in Rhode Island, now is the time to start looking. If you time it right, you can experience all the joys of living at the beach this summer. And, perhaps more importantly, all of the key economic factors are working in your favor – the stock market is rebounding at a record pace, many Sellers have corrected their prices to reflect the current market and interest rates are still at historic lows. But the inventory of beachfront housing and condominiums is limited and those with Wall Street bonuses in hand have already started buying. The market for luxury housing at affordable prices (e.g., $500,000 to $750,000) won’t last much longer. When you start checking out real estate listings, look at them critically. Not all homes with “ocean views” are really “oceanfront”. And not all “oceanfront” homes have direct access to the beach. (more…)
Sneak Preview!
This is a sneak preview of my latest E-Zine article.
…If you are thinking about an oceanfront home in Rhode Island, now is the time to start looking. If you time it right, you can experience all the joys of living at the beach this summer. And, perhaps more importantly, all of the key economic factors are working in your favor – the stock market is rebounding at a record pace, many Sellers have corrected their prices to reflect the current market and interest rates are still at historic lows.
But the inventory of beachfront housing and condominiums is limited and those with Wall Street bonuses in hand have already started buying. The market for luxury housing at affordable prices (e.g., $500,000 to $750,000) won’t last much longer.
When you start checking out real estate listings, look at them critically. Not all homes with “ocean views” are really “oceanfront”. And not all “oceanfront” homes have direct access to the beach. In Rhode Island, the old adage of “location, location, location” has never been truer….
The full article will be published later this week. Stay Tuned!
Wall Street Journal
Judy was recently quoted in the Wall Street Journal as one of Rhode Island’s luxury Real Estate specialist.
Here is a link to the article.
A Dream House After All
By KARL E. CASE
IF you read the coverage of the latest figures on the sales of existing homes from the National Association of Realtors, you may well have come to the conclusion that the American dream is dead. It is indeed worrisome that sales in July were down 25 percent from a year ago.
But a little perspective is in order.
First, the bad news. What has happened in the housing markets since 2005 is a catastrophe that may take years for our economy to recover from.
Anyone who believed that home prices never fall has learned a tough lesson. The Case-Shiller price indexes released on Tuesday suggest that since their national peak in 2006, home prices have fallen by 29 percent. Some areas of course look better than others. Las Vegas is down 57 percent from its peak and Phoenix is down 51 percent. On the other hand, Boston is down just 13.5 percent and Dallas only 4.2 percent.
The effect on household wealth has been huge. Data maintained by the Federal Reserve show that the value of residential real estate directly held by households fell to $16.5 trillion in the first quarter of 2010, down from $22.9 trillion in 2006. It has yet to be determined who will end up bearing those losses. The decline in wealth has substantially reduced consumption, stifling the economy.
Depressing, yes — but the end of a dream? Not exactly. I have never quite understood what the American dream really means when it comes to housing. For some people, it means having a solid and fairly safe long-term investment that is coupled with the satisfaction of owning the house they live in. That dream is still alive.
Others, however, think the American dream is owning property that appreciates by 30 percent a year, making a house into a vehicle for paying bills. But those kinds of dreams have become nightmares for the millions of foreclosed property owners who have found themselves sliding toward bankruptcy.
But for people with a more realistic version of the American dream, buying a house now can make a lot of sense. Think of it as an investment. The return or yield on that investment comes in two forms. First, it provides what is called “net imputed rent from owner-occupied housing.” You live in the house and so it provides you with a real flow of valuable services. This part of the yield is counted as part of national income by the Commerce Department. It is the equivalent of about a 6 percent return on your investment after maintenance and repair, and it is constant over time in real terms. Consider it this way: when Enron went belly up, shareholders ended up with nothing, but when the housing market drops, homeowners still have a house. And this benefit is tax-free.
The second part of the yield on investment in a house is the capital gain you receive if it appreciates and you sell the house. Gains are excluded from taxation if the property is a primary residence and the gain is less than $250,000 for a single filer or $500,000 for a married couple filing jointly.
Consider a few other bonuses of buying a home today. You can deduct the interest you pay on the mortgage. Interest rates are about as low as they can get. And, don’t forget, home prices are down by 30 percent on average from the peak. The mortgage-interest deduction and the tax-free income from housing cost the government at least $200 billion a year.
During this recession the government has been doing even more on behalf of the American dream. It offered a tax credit of $8,000 to first-time buyers, and eventually $6,500 to other qualified buyers. Not only did the Federal Reserve continue to keep the short-term interest rates it sets at essentially zero, it purchased $1.4 trillion in mortgage-backed securities so that lenders could keep mortgage rates low.
Do the math. Four years ago, the monthly payment on a $300,000 house with 20 percent down and a mortgage rate of about 6.6 percent was $1,533. Today that $300,000 house would sell for $213,000 and a 30-year fixed-rate mortgage with 20 percent down would carry a rate of about 4.2 percent and a monthly payment of $833. In addition, the down payment would be $42,600 instead of $60,000.
IN fact, until about two months ago, it looked as if potential buyers were beginning to understand all these advantages and that the market was turning around. By May 2009, housing prices had stopped falling in a majority of the metropolitan areas surveyed in the Case-Shiller index. Sales were also up. In 2008, 4.9 million existing homes were sold. In 2009, the figure rose to 5.2 million; last November, sales hit an annual rate of 6.5 million (a boom-time number). Even new construction showed a pulse.
So, what happened to kill the momentum? For one thing, the first-time buyer credit expired at the end of April. And some longer-term demographic changes may also be affecting the housing market.
In the next several years, the Census Bureau and other demographers project that the number of American households will increase by 1 to 1.5 million each year. With new construction sagging, we should be experiencing a tightening market with low vacancy, as has occurred in every housing cycle since World War II. But instead of falling, vacancy rates remain at near-record levels.
My guess is that the number of households has not been growing as much as projected and may even be falling. We won’t know for certain until the 2010 census is complete. This figure depends on many factors: immigration, emigration, the age distribution of the population and the number of young adults staying at home or doubling up. Unemployment is high, and we know that without jobs people tend to move in with Mom and Dad. And we don’t make immigration easy, even for those with advanced degrees who would be most likely to enter the housing market. None of this bodes well for a quick recovery.
While demographic trends are uncertain, one important reason for the recent downturn is clear: The steady drip of bad news about the economy has sapped the confidence of buyers, sellers and lenders. And there is no understating the importance of expectations and confidence in this industry.
Real estate sales are unlike other financial transactions. You can place a rough inherent value on a stock or bond by looking at fundamentals: a company’s profits, price-to-earnings ratios, quality of its products and management, and so forth. But a house is worth what someone is willing to pay for it. That’s a very personal, emotional decision.
And emotions can change on a dime. To try to track moods and expectations as part of our Case-Shiller data, the economist Robert Shiller and I send out 2,000 questionnaires each year to recent homebuyers in San Francisco, Los Angeles, Milwaukee and Boston, asking them what they think is likely to happen to the value of their houses over the next year.
In 2005, respondents felt on average that prices would rise 9.6 percent. In 2008, they anticipated a small drop. In 2009, the figure turned positive again in all four cities, with an average anticipated gain of 2.2 percent. We have just tabulated this spring’s survey, which found that homebuyers anticipate a gain of 5.2 percent in the next year.
In a given year, the number of completed sales is about 4 percent to 5 percent of the housing stock. Thus it doesn’t take a change in mood of a large number of buyers to change the overall direction of the market.
This financial crisis has made us all too aware that we live in a Catch-22 world: the performance of the housing market drives the economy, and the performance of the economy drives the housing market. But housing has perhaps never been a better bargain, and sooner or later buyers will regain faith, inventories will shrink to reasonable levels, prices will rise and we’ll even start building again. The American dream is not dead — it’s just taking a well-deserved rest.
Karl E. Case is a professor emeritus of economics at Wellesley and co-creator of Standard & Poor’s Case-Shiller housing index.
Is a housing shortage coming?
money.cnn.com
By Les Christie, staff writerJune 15, 2010: 5:58 AM
NEW YORK (CNNMoney.com) — As the nation struggles to shrug off the worst housing crash since the Great Depression, it may be hard to believe a housing shortage could be on its way.
The nation is simply not building enough homes to keep up with potential demand. Just 672,000 new homes were started in April, less than half the long-term run rate needed to meet the nation’s natural population growth.
“It is ironic, but there is a growing consensus that there may be a new housing shortage coming,” said James Gaines, a real estate economist with Texas A&M.
So far, the shortfall has been masked by a weak economy that has put a damper on homebuying. Once the job market rebounds, however, people will look to have their own homes again. This pent-up demand could get unleashed on unprepared markets, causing shortages and rising local prices.
Household formation — the technical term for people moving in together — has been on hold during the past few years as young people, especially, have been unable to find jobs. In the past, an average of more than 1.3 million households were formed each year, causing demand for 1.5 million new homes. (More homes than households are needed to replace those destroyed by fires, floods, teardowns and neglect.)
In 2009, only 398,000 new households were formed, according to the Census Bureau. That is much lower than average and a quarter of the number formed just two years earlier.
“The decline in household formation is artificial,” said Gaines. “The young are moving in with their parents. There’s even doubling up among working class people. There’s a pent-up demand coming if and when the economy recovers.”
Those doubting a new bubble is near point to a large inventory overhang. As many as 7 million homes are vacant but not for sale, according to the Census Bureau, which should provide cushion to offset increased demand.
“The housing market hasn’t been this way before,” said Nicolas Retsinas, director of Harvard’s Joint Center for Housing Studies. “The gravity of the problem is deeper and the challenges different. You have to get through that inventory.”
The inventory number, however, can be deceiving for two reasons: People may not want to live in hard-hit areas where the houses are (think: California exurbs and Detroit neighborhoods) or the homes may be beyond repair.
“Many of these vacant homes may not be habitable or are in locations where nobody wants to live,” Gaines said.
Ordinarily, the nation’s homebuilders can react quickly to meet surges in demand. But several factors are preventing them from being nimble. The biggest is the difficulty getting loans, according to Jerry Howard, CEO of the National Association of Home Builders (NAHB).
“When we came out of past recessions, there wasn’t the difficulty of obtaining financing that there is now,” he said.
Many small builders have been unable to obtain construction loans or lost their financing in mid-project. That has prodded NAHB to support federal legislation that would make $15 billion in lending guarantees available for private builders.
Hard times also persuaded builders to postpone purchases of land they could prep for future development. It will take them that much longer to gear up production once the housing market improves.
Too, many builders went out of business in the bust, so there will be fewer companies out there to do the building. The survivors will confront a transformed regulatory environment, according to Howard, that will make new homes harder to build and more expensive.
“There is an increased focus on smart growth that will create regulatory barriers to the kind of sprawling development that has characterized a lot of recent building,” said Retsinas.
The regulations come under two categories, according to Susan Asmus, NAHB’s senior vice president for advocacy, covering where new homes are built and how they’re built.
One category is storm water runoff. The Environmental Protection Agency tightened requirement governing how builders handle that. Builders will have to install controls such as catchments or retaining ponds that slow the flow of storm runoff into the local watersheds.
“It could add as much as $15,000 to $30,000 an acre in extra costs, depending on the soil,” said Asmus.
Another proposed regulation mandates sprinkler systems in each new home. This is already state law, starting January 2011, in California, Maryland and New Jersey. That adds as much as $10,000 to the cost of construction.
Previous overbuilding one-time boom towns, such as Las Vegas and Miami, should provide enough inventory of like-new homes to counter any strong pent-up demand that breaks free.
It’s the more constrained markets, where it’s particularly hard to build — such as New York, San Francisco and Seattle — that will field the bulk of the new bubble problems, according to Retsinas. He, however, is less worried about the purchase market than about rentals, the usual entree for the young buyers expected to lead the new housing market charge.
“Nobody is building any rental inventory,” said Retsinas.
Inventory Issues
News from one of our Premier Affiliates!
Seattle, WA – June 2010 – LuxuryRealEstate.com, the most viewed luxury real estate website in the world, announced today it has acquired The Society of Leisure Enthusiasts (“The Society”), an online marketing solutions company focused in the luxury vacation rental industry. The Society brings a selection of over 3,000 of the most luxurious vacation rentals in the world as well as an advertising distribution platform to LuxuryRealEstate.com. The Society was privately held and is based in Colorado. The terms of the transaction were not disclosed.
The Society client base includes vacation home owners, property managers and resorts. They market the homes to affluent travelers through their own website, TheSociety.com as well as through an advertising platform called The Global Bundle. The Global Bundle technology distributes property listings to the finest luxury websites, the leading vacation rental websites and to several social media outlets. Distribution outlets have included DuPontRegistry.com, LuxuryTravelMagazine.com, RobbReportCollection.com, WSJ.com, LuxuryRealEstate.com, Paradizo.com, Affluence.org, HomeAway.com, VRBO.com, and more.
“We are thrilled to join forces with LuxuryRealEstate.com,” said Michael McFadden, CEO of The Society. “They are the leaders in luxury real estate and together we will bring the finest vacation rentals to affluent travelers around the world.”
“Vacation rentals, especially high-end properties, have become an essential force in the luxury real estate ecosystem. The Society has carved out a great niche in the marketplace. This acquisition will allow us to provide our clients with the best marketing solutions for their luxury properties,” explained John Brian Losh, CEO and Publisher of LuxuryRealEstate.com.
The newly created Vacation Rental division will to be managed by the former CEO of The Society, Michael McFadden.
About LuxuryRealEstate.com
LuxuryRealEstate.com, a 2009 Webby Award Honoree, has been voted ‘Best of the Web’ by Forbes magazine multiple times, praised by the International Herald Tribune, Town & Country, the Wall Street Journal and has been ranked ‘Best Website’ by consumers according to surveys by the Luxury Institute. Since its debut in 1995, LuxuryRealEstate.com has remained the #1 portal for luxury properties on the internet, consistently driving more traffic to member websites and generating more qualified inquiries than any other website. LuxuryRealEstate.com has several times more $1,000,000+ content of any near-peer.
Also known in the industry as the Who’s Who in Luxury Real Estate network, a global collection of the finest luxury real estate brokers in the world, this group of more than 1000 brokerage firms and 95,000 professionals in more than 65 countries collectively sells in excess of $190 billion of real estate annually, with an average sale price of $2,450,000. Members sell homes for record prices and handle transactions of incredible complexity and magnitude with complete discretion. Every member is carefully selected by CEO/Publisher John Brian Losh, one of REALTOR Magazine’s 25 Most Influential People in Real Estate and broker of fine properties and estates through his Seattle-based brokerage firm, Ewing & Clark, Inc.
About The Society of Leisure Enthusiasts
The Society of Leisure Enthusiasts provides vacation home owners, estate managers and vacation rental firms the most complete one-stop-shop marketing solution called the Global Bundle (www.TheGlobalBundle.com). This premier offering ensures marketing exposure for all luxury vacation rental listings on the finest luxury websites, the most dominant vacation rental marketplaces, and the most viral social media outlets. The Society of Leisure Enthusiasts also owns and operates an online luxury vacation rental marketplace www.TheSociety.com.
Media Contacts:
Meghan Barry, Executive Vice President
LuxuryRealEstate.com
800-488-4066 begin_of_the_skype_highlighting 800-488-4066 end_of_the_skype_highlighting
Michael McFadden, CEO
The Society of Leisure Enthusiasts
Self Help: Part 1
Since the selling season is now upon us, we thought this might be a good time to start talking about some simple things that buyers and sellers can do to make their real estate experience a more successful and more pleasant one. This will be a regular multi-part series published throughout the summer so be sure to check back regularly.
And so…
PHOTOGRAPH your house all the time. That’s right, take pictures of your property throughout the year whether you are currently selling, thinking about selling, or will be selling at some point (this is pretty much everyone). Doing so will ensure that there will always be an ample supply of beautiful images of your property which can be used in marketing the property. This is insurance that no matter what time of year your home gets listed (February and March are particularly dreary), you will always have great photos that shows your home off at its best. By the way, your listing agent will just LOVE you when you present your fabulous photos! Beautiful summer day, take some pictures. Having a fabulous party on your lush green lawn, on your Garden Patio or in your Great Room, shoot it…..before the guests arrive. House looks like a Bing Crosby song after a snowstorm, snap some pics. If your trees are full of red and gold leaves, click-click. If your yard or garden looks great or your countertops shine after spring cleaning, get it on camera. In short, anytime you are really impressed with your house and think that someone else would be too, take a picture of it.
Tips
– You do not need a great camera to shoot great pictures. If you have one, fantastic. If not, something in the 3-6 megapixel range will do just fine. Disposables are not recommended. Remember, digital images are always easier to manipulate.
- Keep any sources of bright light behind you such as the sun if you are outdoors or fluorescent lighting indoors. Having these within the image will produce clear and over-bright pictures. Hiding light behind objects within the frame or closely outside its borders however can be very effective in producing striking images. If the sun looks lovely coming through a tree or over building, or a lamp or light fixture highlights a feature of your home, by all means photograph it.
- The simplest and most effective trick to producing interesting and well composed images is by framing your image according to the Rule of Thirds. Mentally divide the image into thirds both horizontally and vertically. Where the lines converge to form a crossroads is best location to place the object you wish to drawn attention to within the frame. This allows the eye of the viewer to both focus on the object and to explore its surroundings. Also, it looks cool. For more on the Rule of Thirds, refer to its wiki page.
- This is a good example of the tips discussed in this article.
Median R.I. house prices rise 12 percent in April
By Lisa Vernon-Sparks – Providence Journal Staff Writer
May 25, 2010
WARWICK — For the sixth consecutive month, housing prices in Rhode Island rose, a trend that is expected to gain momentum over the next few months as the industry recovers from the recession, according to housing officials.
Median house prices increased by 12 percent last month, to $205,000 compared with $183,000 for the same month last year, according to a report released Tuesday by the Rhode Island Association of Realtors.
In March, the median home price was $193,500.
Single-family house sales increased by 26 percent, rising to 668 last month compared with 529 in April 2009, according to the Realtors.
The surge in sales indicates that many first-time buyers took advantage of an $8,000 federal tax credit, extended to April 30. The government also expanded the program, offering a $6,500 credit to people who already own a home.
Karl A. Martone, president of the Realtors Association, said extending the credit through April has had a “solid impact on the market.” This, combined with lower interest rates, renewed consumer confidence and the coming summer housing season, traditionally stronger, should mark the beginning of a sustained period for Rhode Island housing, he said.
“It’s stabilizing. Sales were off the chart for single-family homes and prices rose as well, probably in large part due to the credit that was available to move-up buyers,” Martone said Monday. “We’ve grown back in a healthy manner. We are fortunate enough to be entering the home-buying season. We had a good first quarter. The market is growing robustly. We really haven’t seen a chill in the market since the tax credit ended.”
The inventory of single-family homes listed for sale has increased steadily since the beginning of this year, and is higher for last month, at 5,696, than for April 2009 when it was 5,296. Available housing remains below its July 2008 peak of 6,750.
Trending along with increases in single-family sales and prices is growth in the condominium market. Sales in April were up by 47 percent, with 110 sold last month, compared with 75 units sold in April 2009. The median price of condominiums decreased, down 15 percent, from $198,000 to $168,000. Distressed sales, whether short sales, abandoned properties or foreclosures, made up 18 percent of all condo sales last month, compared with 24 percent of all condos sales in April 2009.
Sales on multifamily dwellings have slowed, down by 38 percent, but prices are rising to levels not seen since 2008, according to the Realtors’ report. The median price of multifamily properties in April was $123,750, compared with $69,900 during the same month in 2009.