Zillow: Sell on the West Coast, buy on the East Coast | 2014-03-19 | HousingWire

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Here are the top housing markets right now

March 19, 2014

If you are looking to sell your home, living on the West Coast drastically gives you the upper hand on selling power as spring home shopping season heats up. According to Zillow’s latest analysis of national buyers and sellers markets, sellers in the West have better odds selling their home, compared to buyers in the Midwestern and East Coast, who face less competition for buying a home.

“The real estate data in markets on both coasts are telling markedly different stories. Relatively strong job markets in the West are helping spur robust demand, which is being met with limited supply, causing rapid home value appreciation and giving sellers an edge,” said Zillow Chief Economist Stan Humphries.

“In the East, housing markets are appreciating a bit more slowly, and homes are staying on the market longer, which helps give buyers the upper hand,” Humphries added.

As a result, Humphries explained that buyers in sellers’ markets this spring can expect tight inventory, increased competition and a greater sense of urgency. In comparison, sellers in buyers’ markets may need to be prepared to lower their asking price, or to wait longer for the perfect buyer to come along.

As a result, Zillow comprised this list of the top five seller and buyer markets.

Top 5 seller markets

1. San Jose, Calif.

As the top selling market, San Jose boasts a $748,800 Zillow home value index, compared to a $2,819 Zillow rent index. Year-over-year the ZHVI changed 13.5%.

2. San Francisco, Calif.

The city home to the Golden Gate Bridge recorded a $648,700 ZHVI, a 17.7% year-over-year change. Meanwhile, the city posted a $2,676 ZRI.

3. San Antonio, Texas

San Antonio is the city furthest to the east and posted a $152,400 ZHVI, a 4.3% year-over-year change, and a $1,249 ZRI.


4. Los Angeles, Calif.

Los Angeles hit a $503,400 ZHVI, which is a 16% year-over-year change. Plus, the busy city posted a $2,356 ZRI.

5. Seattle, Wash.

Just south of Canada and home of Zillow, Seattle recorded a $312,400 ZHVI, a 9.7% year-over-year change, and a $1,751 ZRI.

Top 5 buyer markets

1. Cleveland, Ohio

Ranking as the number one buyers market, Cleveland recorded a $115,000 ZHVI, a .7% year-over-year change, and a $1,127 ZRI.

2. Philadelphia, Penn.

As one of two cities in Pennsylvania, Philadelphia posted a $193,000 ZHVI, a 2.4% year-over-year change, and a $1,517 ZRI.

3. Tampa, Fla.

Tampa, located in the Sunshine State, reported a  $135,900 ZHVI and a $1,226 ZRI. This represents 15.3% year-over-year change in ZHVI.


4. Chicago, Ill.

Chicago reached a $177,800 ZHVI, a 8.3% year-over-year change, and a $1,615 ZRI.

5. Pittsburgh, Penn.

Barely making the top five list and the second city in Pennsylvania, Pittsburgh posted a $119,600 ZHVI, a 5.1% year-over-year change, and a $1,070 ZRI.

Fallout From Refinancing – NYTimes.com



Credit The New York Times



Homeowners who refinanced when fixed mortgage rates dropped below 4 percent will be less inclined to put their homes on the market as interest rates climb. And as a result, the limited property supply already impeding sales in many markets may not ease anytime soon.

A recent survey by Redfin, a national real estate brokerage based in Seattle, suggests that even those beneficiaries of low-refinance rates who do decide to move may want to make money renting out their homes while waiting for prices to rise, rather than sell right away.

Redfin questioned 1,900 people nationwide who said they planned to buy a home within a year; 42 percent said they already owned one, and of those, 39 percent said they planned to rent it out after they moved. The survey also asked buyers about their frustrations with the process, and “low inventory” topped the list.



Market dynamics are encouraging owners to keep their homes off the market for now, said Anthony Hsieh, the chief executive of loanDepot, a mortgage lender. “The rental market is very, very healthy today because a lot of Americans are locked out of the mortgage market,” he said. “And there is the promise that real estate is going to appreciate, because we’re just coming out of a deep recession.”

Of course, most borrowers can’t afford to buy another home without using equity from their first for a down payment. But Mr. Hsieh says that those who were able to take advantage of low refinance rates tend to be “premium consumers,” with very good credit and stable, above-average incomes.

“These are the folks that will think twice before they pay off that mortgage that is such cheap money,” he said. “They’re going to explore all types of options before they do that.”

They may want to consider a few other factors before taking on tenants, said Jed Kolko, the chief economist of Trulia, an online marketplace for residential real estate. First is the effort involved in managing a rental property. Second is the greater financial risk of owning two homes in the same market should home prices take a dive. And third is the changing nature of what’s driving rents.

“Over the past several years,” Mr. Kolko said, “the strong demand for renting single-family homes has been driven by people who lost homes to foreclosure but still wanted to stay in the same area. But now it is more driven by young people, and they are more urban focused.”

Patric H. Hendershott, a senior research fellow at the Institute for Housing Studies at DePaul University in Chicago, says he has witnessed the current allure of being a landlord firsthand. He lives in a housing community for older people, and he has recently noticed that residents who are moving to larger units are choosing to rent out their smaller ones.

But he views another scenario as more likely for low-rate holders: Those who can’t afford to move on without selling will essentially be “locked into” their homes. As interest rates rise, even buying another home at the same price will result in a higher mortgage payment.

In a recent analysis of the effect of lock-ins, Mr. Hendershott predicted that if rates continue to rise, the result will be substantial declines in housing turnover in strong housing markets, in which large numbers of households refinanced at low rates.

“We had a big episode of this in the 1980s,” he said, recalling when soaring interest rates locked in large numbers of homeowners.

Research cited in his analysis found that during that period, household mobility declined by 15 percent for every 2 percent increase in rates.


Worst rental affordability crisis that this country has known – Yahoo Homes




Since the housing crisis began in 2008, approximately 4.6 million homes were lost to foreclosure, according to CoreLogic. The vast majority of those homeowners became renters. Even as housing recovered, credit tightened, pushing even more potential buyers out of homeownership and into rentals, both apartments and single-family rental homes.

There are now 43 million renter households, or 35 percent of all U.S. households, the highest rate in over a decade for all age groups, according to Harvard’s Joint Center for Housing Studies; 4 million more renters today than there were in 2007. For those aged 25 to 54, rental rates are the highest since the center began record keeping in the early 1970s.

As a result, rental vacancies have fallen dramatically, and rents have skyrocketed.

“We are in the midst of the worst rental affordability crisis that this country has known,” said Shaun Donovan, U.S. Secretary of Housing and Urban Development.

Half of all U.S. renters today pay more than 30 percent of their incomes on rent. That’s up from 18 percent a decade ago, according to the Harvard center. For those in the lowest income brackets, the jump is even worse.

“Over four years, a 43 percent increase in the number of Americans with worst-case housing needs,” said Donovan. “Let’s be clear what that means, they’re paying more than half of every dollar they earn for housing.”

The numbers are not lost on Annie Eccles, who is in her late 20s. She has been renting for over two years, and the rent on her Bethesda, Md., apartment has increased by the maximum the county allows every year.

“It’s frustrating because we pay for rent, we also pay for parking, and just knowing that every June it’s going to increase significantly, it’s frustrating,” said Eccles.

And Eccles pays almost as much each month on student loan debt as she does in rent. Put together, it makes it very hard for her and her husband to save up enough to buy a home of their own.

“It would be hard buying in this area, just because it’s so expensive,” she added.

Most younger Americans, like Eccles, want to be homeowners someday. While so-called millennials favor mobility and city living, they still see homeownership as a goal.

“Nineteen out of 20 people that are surveyed say that they intend to buy a home at some point in the future, if they’re under the age of 30,” said Eric Belsky, director of Harvard’s Joint Center for Housing Studies. “There is no question that the will toward homeownership remains there, it’s the way.”

Home prices are rising faster than expected, due to heavy investor demand, ironically in single-family rental housing. While more than 3 million owner-occupied homes are now investor-owned rentals, there is still a lack of supply in the market. New rental stock is coming soon, but demand is not easing. Renters may want to be buyers, but many still can’t, due to rising home prices and mortgage rates.

“You add in other things, like higher student debt for many people, you add in the fact that incomes for low- and moderate-income people have not been going up as fast as inflation, and you have a situation where it’s going to be very difficult to buy homes,” said Belsky.

All roads lead to home


A new approach to equity investment provides the keys to a global portfolio of holiday homes.




May 09 2013
Sue Chester



Concealed on a Phuket private estate overlooking Surin beach, Villa Arawan is one in a portfolio of global properties offering unforgettable holidays in return for an investment. The traditional spiked pagodas that flank the orchid-strewn pool are an idyllic setting for an evening meal with the family, where, to the trill of cicadas, you can brainstorm which other handsome quarters in the portfolio to visit next.


Villa Arawan is a new hybrid of holiday home, an equity investment that offers a high-end house share at a choice of stylish vacation and city destinations. It is ideal for those who roam throughout the year, between co-ordinates as diverse as Mauritius, Cape Town, Florence and Berlin, and who want a home-from-home without the hassles of multi-property ownership.


David Rogers is a founding director of Rocksure, one of this new breed of businesses with residences, including Villa Arawan, scattered over several continents. The success of US destination clubs in the 2000s was a significant influence on the venture’s launch in 2004. “Members were piling in, writing cheques for $300,000 to enter these clubs, but the properties were still owned by the club’s founder,” explains Rogers. “It was only timeshare really, members had just bought time. If there was a capital gain – and in those days there certainly was – that belonged to the entrepreneurs who’d bought the properties with the members’ money.”


Rogers decided to turn the destination-club sector on its head, so that “the people writing the big cheques” could own the properties themselves. He set up a real-estate equity fund offering shares in a luxury property portfolio, with a points system – “Rocksure pounds” – that provided a specific number of days’ usage per year according to the capital investment made. A typical £238,000 villa-fund share translates to two high- and two low-season weeks, or for “canny members”, as Rogers puts it, a low season booking stretching up to six weeks.


Getting time-specific access for your cash in an equity investment sounds bafflingly similar to timeshare or fractional ownership. However, timeshare is the long-term purchase of self-catering holidays, typically offering one week’s occupancy at a specific resort. Fractional ownership, meanwhile, is generally seen as the purchase of a deeded portion of one specific property, hotel or resort. However, the timeshare industry these days also sells longer chunks of time, and confusingly calls this fractional ownership.


Philip Bacon is managing director of the Madrid office of HVS, specialist consultants and advisers to the hospitality industry in all its forms and guises. He describes this new form of equity investment that has one foot firmly planted in the leisure industry thus: “Rocksure and equivalents have made the real estate itself appeal to the end user, instead of just the holiday aspect. In doing so, they’ve put themselves into the world of financial services. It’s an investment-driven product; you’re buying into a fund that owns a portfolio of properties.”


All equity-investment firms have a predetermined number of shareholders and properties for each fund, ensuring members receive the maximum possible access. Rocksure’s first fund, Alpha, opened in 2006 and was designed to cap at 36 shareholders and six properties. By 2007, Alpha shareholders owned mortgage-free villas on the Algarve and in Marrakech, Buzios, Phuket and Colorado, plus a New York apartment. Its Bravo villa fund opened in 2008, with new destinations.


Most of the funds are structured around a planned exit period. Rocksure’s Crystal villa fund has a seven-year life span, while its Capital fund will close after 10 years. Opened in 2010, Capital was designed to appeal to a new market of business travellers and city-break fans, enabling them (following an investment of £100,000) to stay in their own classy Paris, Barcelona and Prague apartments for 14 to 25 days per year. The next acquisition will be in Vienna or Venice, with London and Florence also on the horizon. The respective property portfolio is sold at the predetermined fund end date, and shareholders can expect to receive their original capital investment back, plus more than 80 per cent of any capital growth.


Another equity-investment company is The Hideaways Club, which started in 2007 and has two collections. The Classic (£250,000 per share) has 270 members and 40 properties throughout Africa, Asia and Europe. It will cap at 600 members and 100 properties. The City (£127,000 per share) launched in January 2011. Its 120 members (to cap at 1,200, with 120 homes) currently own apartments in Bangkok, Berlin, Dubai, Istanbul, Kuala Lumpur, Miami, New York and Prague. Unlike Rocksure, its funds continue in perpetuity. “We don’t like the idea of being forced to sell at a certain time, as it might be the wrong one economically,” explains Stephen Wise, Hideaways’ co-founder and CEO.


Former tennis champion Tim Henman and racing driver Nick Heidfeld have invested in The Hideaways Club’s multi-home-owning lifestyle, which includes Chalet Lune in Nendaz, Switzerland. The ski-in, ski-out home offers wraparound mountain vistas, and you can head straight from the slopes into a Jacuzzi to mull over a late-winter break to Palm Springs.


The finances seem promising, too. Rogers believes that Rocksure’s Alpha villa fund – due to end in 2014 – has generated a 20 per cent capital gain over five years. “So with almost two years to go, things look good. That figure would have been considered bad in the run-up to 2007, but it’s amazing in today’s economic climate.”


Yet while investors become key-holders to multiple smart front doors, leaving them spoilt for choice, they are also charged annual dues to cover the cost of utilities, gardening, maintenance, insurance and a concierge service. Those relating to Rocksure’s villa funds include an on-site cook/housekeeper, too. Rogers adds food for thought: “With a bit of luck and a fair wind, the annual dues will be covered by eventual capital gain. It’s a nice feeling. You sit by your pool, paying £1,200 a week for the whole property with your family and guests, and you think, ‘This could end up being free.’”


It’s worth noting that annual charges vary markedly. Hideaways’ range from £3,250 to £6,500 for the City Collection and £4,650 to £14,000 for the Classic Collection. Meanwhile, Sibaris Villas, a new fund due to open in April, will charge about €36,000 per year for a collection of mostly five-star-hotel-branded palatial villas costing around €7.1m apiece. (The average fund property purchase price is about €1.5m.)


In early 2010, retired journalist John Quinn invested £189,000 in Rocksure’s Bravo fund and £93,585 in the Capital fund, and pays £4,000 and €2,100 in annual charges respectively. “The charges are relatively low in Rocksure. If they’re not, where is the fun in the finances? Instead of getting a dividend on your investment, on which you have to pay tax, you get holiday weeks, so your fund provides a ‘dividend’ that is tax free. If the equivalent of that holiday time costs a vast amount in annual charges, how do you benefit financially?”


Stephen Petasky, president and founder of Canada’s The Luxus Group, explains that entering either of his funds is selective. “Applicants must have a fluent to high net worth. They have to be accredited investors with C$1m [about £645,000] of liquid net worth just to get into the game. We want people who have the means to carry on, not someone who’s mortgaging C$200,000 on a home to buy into Luxus.”


In return, they gain access to prized properties such as The Luxus Group’s Auberge Resorts Calistoga Ranch forest retreat at the northern end of California’s wine country, deep in a Napa Valley private canyon. The timber cabin has a capacious outdoor living room with a wood-burning stove, and a jetted spa tub on the veranda. With annual charges ranging from C$6,900 to C$27,000 (about £4,450 to £17,400), Luxus members expect nothing less than premium home-from-home creature comforts, as Petasky explains: “We stock a full drinks cabinet, mountain bikes in the garage, boogie boards at surf destinations, etc. All so you don’t have to start your vacation from scratch.”


Judson Macor, CEO of his own business, Airsprint, invested C$300,000 (about £193,500) one year ago in Luxus’ Elite fund, allowing about three to four weeks of mid-season stay. He plans to take his family around Europe on a four-week trip via Rome, London, Paris, Florence and Venice. “I was just in Hawaii. Last year we went to Costa Rica,” he says. “The ability to travel almost anywhere in the world and have access to a private residence, that’s what it’s all about.”


A new British leisure-property fund, Emerald Circle, is due to open in the second quarter of 2013. It is an open-ended fund with the option of experiences 365 days a year; members can opt to use their points on one‑off special events, such as a private tour of the Harry Potter studio with a cast member, or a round of golf at St Andrews with a premier player. Emerald’s ambition is to achieve 750 to 1,000 members over a seven- to 10-year period, building up to a £1bn property portfolio. Destinations such as Myanmar are being considered, as are a few £7m to £15m trophy homes: a Tuscan palazzo and French châteaux.


Philip Mekelburg is CEO and co-founder of Equity Estates, a US luxury-residence fund. He started the company in 2006. “At that time, it was impossible to find a quality home in the holiday-rental sector that was stylish, with a concierge service and with consistency at each location,” he says. “You would see something on the internet, but when you showed up, the side of the house that wasn’t photographed would be awful and there would be mould in the children’s bedroom.”


Equity Estates’ latest acquisition is Rum Punch Villa, a 7,500sq ft aquiline structure on a secluded beach in Anguilla. Eye-catching atop a rocky outcrop, its white façades match the starched sands perfectly. Its a property that sounds like it might appeal to Dennis Pemberton, CEO of a real-estate-investment firm who has bought a $300,000 share in Equity Estates, whose annual fees vary from $10,000 to $20,000. Pemberton has already experienced the fund’s “fabulous” Turks and Caicos villa with his family and the New York pads for business trips. “The Columbus Circle one is in a top location close to 5th Avenue and the Plaza Hotel. The living room’s corner windows afford a stunning view over Central Park and the city lights by night.”


Pemberton’s favourite home to date is Casa Cristal in Costa Rica. “It’s this amazing ultra-modern glass, cubic house that sits right on the ocean. People walking down the beach stop and look up at it. There’s an infinity pool that overlooks the ocean; you hear the sound of the waves crashing. We had a chef come to cook us some of the best meals we’ve ever eaten. The family joke is that every time we leave a property we say, ‘This is where I want to live.’”