Real Estate Still the Best Bet Despite Global Turmoil

Despite slowdown in the global economy, the demand for housing sector will remain strong in the country, and elsewhere in Asia. But the sector will not witness the kind of price appreciation it has seen in the last couple of years. The global slowdown of economy will have positive as well as negative impact on the Indian real estate sector. Les Sohar, founder of sharworldhomes.com and International Real Estate specialist with Re/Max, says that on the whole, because of the domestic demand-driven market, the recent developments in the international front will provide good opportunities to home buyers to fulfill their aspirations to own a house. Despite marginal slowdown of Indian and some other parts of the Asian  economy, it is expected to grow at healthy rate of 7.5%, which will not only reduce the impact of the global slowdown but also make it one of the most attractive investment destinations in the world, along with China.

The downgrade of US economy to AA+ does not indicate any impending default by the country in meeting its obligations in the near future, but it certainly hints at a slowdown of its economy. Besides the US, other developed countries in the Euro zone are also facing a slowdown in the economy. This will affect the export of IT services from India and exports from other Asian countries, which contributes to the demand for residential and office real estate in the country.
However, even in the worst-case scenario , Indian and most of the Asian economy will continue to grow at around 7%. To meet even 7% growth, fresh real estate demands will be there. However, there could be some glut for some time as oversupply situation in certain markets. But in the medium to long term, investment in real estate will continue to give net positive return, which is higher than inflation.

USA Sunbelt Existing Housing Numbers

Florida
Home Sales Updated May 18 First Quarter 2011 491.6 Thousand units
Qtr. Change: 23.6%
Yr. Change: 17.0%

California
Home Sales Updated May 18 First Quarter 2011 490.4Thousand units
Qtr. Change: 9.3%
Yr. Change: 1.8%

Arizona
Home Sales Updated May 18 First Quarter 2011 174.0 Thousand units
Qtr. Change: 18.8%
Yr. Change: 13.3%

New Mexico
Home Sales Updated May 19 First Quarter 2011 32.4 Thousand units
Qtr. Change: 15.7%
Yr. Change: -4.7%

Texas
Home Sales Updated May 19 First Quarter 2011 401.4 Thousand units
Qtr. Change: 5.7%
Yr. Change: -4.8%

Louisiana
Home Sales Updated May 19 First Quarter 2011 49.2 Thousand units
Qtr. Change: 4.2%
Yr. Change: -0.8%

Mississippi
Home Sales Updated May 19 First Quarter 2011 40.4 Thousand units
Qtr. Change: 2.0%
Yr. Change: -4.7%

Alabama
Home Sales Updated May 18 First Quarter 2011 66.8 Thousand units
Qtr. Change: 4.4%
Yr. Change: 7.2%

Georgia
Home Sales Updated May 18 First Quarter 2011 166.0 Thousand units
Qtr. Change: 9.5%
Yr. Change: -5.3%

South Carolina
Home Sales Updated May 19 First Quarter 2011 68.4 Thousand units
Qtr. Change: 1.2%
Yr. Change: -1.7%

North Carolina
Home Sales Updated May 19 First Quarter 2011 140.8 Thousand units
Qtr. Change: 12.5%
Yr. Change: -0.8%

Stock Market vs Real Esate (USA)

While I hate to mix business and politics for the fear that I will upset far too many people, I feel that this is an issue that at this time in our country’s history I must address. Let’s start by saying I’m a middle of the road kind of guy leaning right. I’ve often joked that I’m a liberal conservative. I think both the far left and the far right do more harm than good for our country. However, I believe in the freedom of the press, the freedom of speech, and the right to bear arms, freedom of religion, smaller government and less tax’s. I have voted for both Republican Presidents and Democratic Presidents. But, with that being said, the current Washington makeup is not good for our country and it is far from good for our industry. In my very humble opinion, I believe it would be a much safer bet to buy Real Estate at this time than it is to buy stocks. In just the last week I have seen my wife’s and my stock portfolio lose over $20,000. I don’t know about you, but $20,000 is a big deal to us. At the same time where I own most of my Real Estate for the past few months, I have seen prices rising on Real Estate. Again in my humble opinion I don’t think the stock market for the next two years is going to be a very stable place to put your money. Just now as I was writing this article the “ECONOMIST MAGAZINE” called me about a new online Real Estate Marketing piece they’re creating? I shared with them that I was doing this article and they agreed with me that in the next couple of years Real Estate is probably the safer place to have your money. We have reached the bottom end of the market in almost all areas of the country as far as Real Estate prices go. I’m sure I will get a lot of mail disagreeing with this statement, but I stick by it. At the same time the uncertainty of the stock market due to the debt in the country, the unknowns facing companies with Obamacare and with the uncertainty of taxes over the next two years will hold down the stock market. So the bottom line is, once again in my opinion, Real Estate is a safer haven for the next couple of years. I didn’t lose $20,000 in the last week on my Real Estate holdings, but I did lose $20,000 in the stock market. In fact if my Real Estate holdings went up just 1% I’m up $40,000.00 Last night my wife and I attended a seminar put on by “ Charles Swaab”, I left very depressed. Basically they said we can kiss good bye to any real growth in stocks over the next few years. Now today the stock market has crashed again; going down as of this writing, by over 300 points. However, mortgage rates have also dived. So now you have Real Estate that is actually starting to come back, combined with the lowest rates yet, and a stock market in turmoil. Now is probably the best time in years to buy Real Estate. So as you can see, I’m a true believer in putting my money in Real Estate at this time in the current economy. If you have investors you’re working with they will more than likely share my sentiments as far as to where they would choose to put their money at this time. So Realtors, start spreading the news and start working with investors.

This article was reproduced from Allison James, August 15/2011

Real Estate is the only INVESTMENT CHOICE, T-BILLS ANY ONE!

If you're thinking about investing in a rental property, experts say low home prices combined with low interest rates make this the best time in years to become a real-estate investor.
What's more, the real-estate market is starting to recover: U.S. houses lost $489 billion in value during the first 11 months of 2009, but that was significantly lower than the $3.6 trillion lost during 2008.
"We haven't seen home prices this low in so many years, coupled with the rates being so low," says Les Sohar, a Real Estate Expert with Re/Max, founder of soharworldhomes.com, who specializes in International  and Investment properties. "When the money is cheap to borrow and the houses are cheap to buy, and you get virtually nothing at the bank and the markets tank, it's absolutely the best time to invest."

Whatever you do, understand that buying investment property is an entirely different experience than buying your primary residence. "When you go to buy your own home, you usually have emotions in it," Sohar says. "When you go to buy an investment property, you need to put all that aside and ask, 'What makes sense?'"

Housing, 10 Worst Markets in the US. Disaster or Opportunity?

When looking at various economic indicators, various lists pop up revealing what analysts name the best and the worst real estate markets across the nation. BusinessInsider.com has named their ten “sickest” housing markets across America naming vacancy rates, total housing units and unemployment as their three determining factors. While several of these cities certainly belong in the bottom 10 real estate markets, some do not. Take Oklahoma City for example. This week, CNBC named Oklahoma City as the second best housing market noting factors such as the city’s underwater mortgages being 30.9% below the national average. We look to BusinessInsider’s own note that the city has an unemployment rate of only 4.9%, nearly half of the national average. Regardless, BusinessInsider’s analysis based on their chosen data points reveals these 10 cities as the worst real estate markets in America:

10. Oklahoma City, OK Homeowner vacancy rates: 5.2% (6th) Rental vacancy rates: 9.6% (34th) Total housing units: 539,077 Unemployment: 4.9%

 9. St. Louis, MO Homeowner vacancy rates: 3.3% (19th) Rental vacancy rates: 11.4% (18th) Total housing units: 1,236,222 Unemployment:8.6%

8. Kansas City, MO Kansas City tied with Detroit for #8. Homeowner vacancy rates: 3.7% (13th) Rental vacancy rates: 11% (22nd) Total housing units: 883,099 Unemployment: 8.4%

7. Detroit, MI Detroit tied with Kansas City for #8. Homeowner vacancy rates: 2.4% (32nd) Rental vacancy rates: 17.2% (3rd) Total housing units: 1,886,537 Unemployment:11.6%

6. Dayton, OH Homeowner vacancy rates: 4.7% (7th) Rental vacancy rates: 10.7% (23rd) Total housing units: 385,160 Unemployment: 9.3%

5. Baton Rouge, LA Homeowner vacancy rates: 3.9% (11th) Rental vacancy rates: 13% (12th) Total housing units: 329,729 Unemployment:8.4%

4. Atlanta, GA Homeowner vacancy rates: 5.4% (4th) Rental vacancy rates: 11.8% (17th) Total housing units: 2,165,495 Unemployment: 9.7%

3. Memphis, TN Homeowner vacancy rates: 4% (9th) Rental vacancy rates: 13.5% (11th) Total housing units: 550,896 Unemployment:10.1%

2. Indianapolis, IN Homeowner vacancy rates: 5.2% (5th) Rental vacancy rates: 13.5% (10th) Total housing units: 757,441 Unemployment: 7.8%

1. Tucson, AZ Homeowner vacancy rates: 6.8% (1st) Rental vacancy rates: 15.9% (6th) Total housing units: 440,909 Unemployment: 7.8%

Home ownership hits lowest level since 1965 in the USA

 As the foreclosure crisis continues to wreak havoc on the housing market, a source of national pride has taken a sour turn. Home ownership is on the decline and, according to Les Sohar of Re/Max and soharworldhomes.com, the United States is fast becoming a nation of renters.

Last Friday, the Census Bureau reported that the percentage of people who owned a home had dropped to 65.9% during the second quarter -- its lowest level since the first quarter of 1998 and a far cry from the high of 69.2% reached in late 2004.
It's the lowest level since the Census Bureau started keeping quarterly records back in 1965 (before that, it recorded home ownership rates once a decade). The Census Bureau's statistics, however, do not factor in mortgage delinquencies.
"The combination of falling home prices, limited mortgage credit, continued liquidations, and better rental options is fundamentally changing the way Americans live," said Sohar. "I believe this change is only beginning and is moving the country towards becoming a rentership society." Many people are still technically considered homeowners who occupy their homes, even though they no longer make their mortgage payments. These "homeowners" can squat for months or even years, because banks have been slow to process foreclosures in recent months.
In a February housing finance report, the Obama administration stated that its goal was to "ensure that Americans have access to an adequate range of affordable housing options. This does not mean our goal is for all Americans to be homeowners."
Johnson thinks the market has already hit bottom and home prices should start appreciating, albeit slowly, this year. In addition, with such favorable interest rates and good deals on homes, it's hard for potential buyers to resist taking advantage of the opportunity for too much longer.

An American Default?

This article may be so far of base in the future that people may laugh at it, or so obvious that we should have known better, let's see. The startling prospect of the United States defaulting on its debt is such a rare scenario that it is unclear precisely how the catastrophe would unfold. One thing is certain: It begins with Uncle Sam reaching into his pockets and finding them empty. "I don't think people know exactly what the sequence will be, but at some point there will be a bill in U.S. dollars that the Americans cannot pay," says Tom Courchene, an economics professor at Queen's University. Time is running out for Washington to avert default, which could plunge the U.S. into another financial crisis and leave America's ailing economy even sicker than it was before. Courchene sees three potential outcomes for the United States as it nears the Aug. 2 deadline, at which point the U.S. Treasury believes a default could proceed. The first scenario is the dreaded default, which would result if Congress simply does not make any progress in bipartisan debt negotiations. That would mean that the debt ceiling, which is currently capped at $14.3 trillion, is left untouched and the Treasury soon reaches a point in which it can't borrow the money it needs to run the country. Amazingly, the U.S. has been up against its debt ceiling for weeks but has managed to avoid defaulting by using what the Treasury describes as "extraordinary measures to create additional headroom under the debt limit." The second of August is when the Treasury believes those measures will be fully exhausted, which is why it is urging lawmakers to increase the debt limit immediately. As the weekend approached, Republicans and Democrats appeared far apart in negotiations, though U.S. President Barack Obama continued to call for a broader deal that will address the immediate debt crisis and the deficit challenges that loom alongside it. "This debate shouldn't just be about avoiding the catastrophe of not paying our bills and defaulting on our debt. That's the least we should do," Obama wrote in an opinion piece posted to the USA Today website Thursday evening. But avoiding a default is paramount: If America fails to pay its bills on time, its creditors will demand higher interest rates, its reputation will take a major hit in markets and investors could begin to drop their holdings in U.S. dollars. The Treasury warns that a default would constitute "an unprecedented event in American history," which would plunge the U.S. into another financial crisis when the country is still recovering from the last one. "I don't know what happens because we haven't seen many defaults," Courchene says. Courchene sees two other possibilities outside of a possible default: Congress could agree to Obama's plan to cut spending and raise the debt ceiling, or legislators could simply raise the debt ceiling to avert default and put off the debate on America's finances. The plan that Obama is advocating is a "win-win situation" for the U.S. and markets, Courchene says, because it would boost confidence and trim the deficit. This option would be good for markets and would prompt little change in interest rates due to uncertainty, says Courchene. Courchene says the remaining scenario in which Congress agrees to alleviate the debt ceiling pressure, but delays the debate on how to balance the books, is somewhere in between a default and Obama's so-called "grand bargain" deal. "There won't be the default issue, but there will be increasing concern that the U.S. system is not viable, and that will lead also to a rise in interest rates, but maybe not as dramatic as the default," Courchene says. "And so then people are going to be more and more cautious about holding U.S. dollars because this U.S. situation is unstable and eventually it's going to hit the tipping point."