Rising rents are increasing the allure of investment property

Rising rents are increasing the allure of investment property

SD - If you have the interest of investing in real estate, it will not get any better than now!  Selection inventory is high, prices are stable and dropping in some areas, and rental income is increasing.  Contact me to see what your options are for purchase and financing for real estate investments.

Housing affordability is about the best it’s ever been, but tight lending conditions have made it difficult for buyers to take advantage of the good conditions. For investors with cash, though, it’s a golden time to buy, and we’re seeing the investor community step up. Its share of home purchases reached 22 percent in August, a good part of that in all-cash transactions, because lending is especially tight for non-primary occupant homes.

For investors who can hire out or manage property themselves, the attractive rates of return from rising rental income is a strong lure. Rents rose at a better than 3 percent annualized rate in the third quarter of 2011, government data show, and private data sources imply even faster rent growth.

Nor is there any reason to believe this rent growth will cool, given the favorable demographics of a rising number of young adults over the next 20 years, a high number of owners of foreclosed homes who can’t buy in the near term, and the low construction rate of apartments.

If annual rent gains stay near 3.5 percent, rents will double in 20 years. If they reach 5 percent, rent doubling would occur in 14 years.

In addition to strong rent returns, investors can anticipate solid home price appreciation over the long haul. Using 2000 as a “normal” year in which the market saw neither a bubble nor a bust, the metrics on home prices in relation to consumer prices imply a 14 percent undervaluation, and in relation to rental rates, a 20 percent undervaluation.

With the bubble clearly gone, the future home price path should follow the future rent growth path. That means home prices could also double in 14 to 20 years, though it is unclear when home prices will begin to catch up with rents. But long-term investors buying today are sure to catch some, if not most, of the upward ride.

November 2011 | By Lawrence Yun

Posted via email from Scott Deaton's Blog

Scott Deaton elected to Arkansas REALTORS Association Board of Directors

Scott Deaton elected to Arkansas REALTORS Association Board of Directors

LITTLE ROCK, Arkansas (November 9, 2011) – Scott Deaton, Managing Broker for Blackwood Team, with offices in Little Rock, Pine Bluff, Bentonville, and Cabot, has been elected to the ARA Board of Directors for Zone 12 at the inaugural gala held Wednesday evening, November 2, 2011 at the Embassy Suites in Little Rock, Arkansas.  Deaton succeeds Vic Hiryak of Little Rock.   

Elected to three-year terms on the Board as Zone Directors are Dwayne Hatt, Paragould; Denise Cunningham, North Little Rock; Sandy Ebel, Bentonville; Glee Cosner, Fort Smith; Kent Dover, Hot Springs; Scott Deaton, Little Rock; and Angie Johnson, Benton. 

“I am excited to be serving our state’s association of REALTORS,” commented Deaton.  “Over the past few years, our industry has shown its importance to the overall health of our local, state, and national economies.  I look forward to serving to protect the interest of homeownership, and to promote the opportunities available within the real estate industry…for buyers, sellers, and agents.”

The Arkansas Realtors® Association, with thirty-seven local Realtor® Boards and Associations statewide, is the State arm of the Chicago- and Washington, D.C.-based National Association of Realtors®. Members of the National Association, the State Associations and the local Boards and Associations are identified by the registered membership term, “Realtor®” and pledge adherence to the Realtors® Code of Ethics.

 

Posted via email from Scott Deaton's Blog

Why The Holiday Season Is A Great Time To Sell Your Home!

Why The Holiday Season Is A Great Time To Sell Your Home!

Many sellers automatically think that putting, or having, their home on the market during this time of year is a bad idea.  The sellers are busy with holiday activities, and so are the buyers, right?  Surely, there aren’t any buyers out there!  Not correct!  Having your home on the market during the holidays could be the best time!  Here are the reasons:

1.    Most sellers do feel this isn’t a good time, so current sellers are dropping out of the market for holidays, which means less homes for sale.

2.    Buyers who are looking in the winter tend to be more serious buyers.  They want, and need, to make a quick decision and start brand new by January 1.

3.    Singles, couples, and empty nesters tend to wait while school is in session to buy, less competition for them.

4.    Interest rates are at an all time low

5.    Buyer's can buy more house right now due to the lower cost of purchasing.

6.    Don’t wait until the Spring!  Competition for homes increases dramatically during the spring market (April – June).  Higher competition could cost you net proceeds and a longer market time.  Your home could be sold before the others ever make it to market. 

7.    The holiday spirit can help sell your home.  You decorate for your guests, and buyers will find your home more charming while it is decorated for the season.

8.    Most homes are never cleaner and never smell better, or are better decorated than during the holiday season.

9.    Sellers can usually negotiate their best deals during the holiday season.

Sellers who take their homes off the market or postpone selling them during the holidays won't save any money; they will simply postpone their own dreams and perhaps find more competition when they decide to enter the market again.

Sellers, if you are considering a move, don’t hesitate to put your home on the market during the holiday, and winter, months.  There are definite, proven, advantages to selling during this time.

Posted via email from Scott Deaton's Blog

Field of Dreams - SOLD, but not gone!

Field of Dreams - SOLD, but not gone!

The Iowa farm that was featured in the 1989 move "Field of Dreams" has found a buyer, according to The New York Times.

The Lansing family, whose farm served as the set for the famous Kevin Costner movie, will sell the 193-acre property near Dyserville – which turned into a tourist attraction for baseball fans -- for an undisclosed amount to an investment group led by a couple from the Chicago area, according to the report. The property had been listed for $5.4 million.  The group plans to retain the movie's original diamond, but will reportedly add a dozen fields and an indoor center for youth baseball and softball tournaments, the Times said.

Mary Umberger
Inman News™

Posted via email from Scott Deaton's Blog

100 birthday

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Of the Little Rock REALTORS Association.

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So What's Up?

So What’s Up with the Arkansas Real Estate Market?

Recent numbers from the Arkansas REALTORS Association show a good increase during the month of September 2011 over September 2010.  Pulaski County saw an almost 19% increase, and Saline county experienced over 35% increase in the number of units sold.  Not bad.  Of course, if the number of units sold increased, then so did the overall valuation of total homes sold accordingly.  As for pricing, the average sales price of homes in Arkansas has stayed relatively flat, with fluctuations +/- 1%.

When looking at the YTD numbers compared to 2010, we are a little behind where we were last year.  Pulaski County is down 6% in units sold compared to YTD 2010, but statewide we are down just under 2%.  2010 was the lowest real estate year since 1997, and we are sitting slightly below 2010 right now.  But, remember that 2010 included an incentive, cash, for buyers through April of last year.

I think we will end the year slightly ahead of 2010, and begin to see moderate, but steady, increases throughout 2012.  With the ‘perfect storm’ sitting on our housing market, buyers will begin to get back in the game due to the extremely low interest rates that will begin to increase, higher inventory of homes available now that will begin to stabilize, and stabile but slightly increasing home prices.  We are experiencing ‘lifetime’ lows for interest rates.  It will be safe to say that rates will never be this low again in the lifetime of anyone capable of reading this.  Whether you are looking for a place to call home or an investor, the opportunities of a lifetime are available in the Arkansas housing market….RIGHT NOW.

Posted via email from Scott Deaton's Blog