The change in home prices 2007 to 2015. How is your neck of the woods doing? There is a lot of “green” out there.
Real Estate News
Reaching The Top Again?
According to the S & P Case Shiller composite index home prices continue to rise. The latest data show a 5.5 percent gain in prices from October 2014 to October 2015. That means that as of October 2015 home prices have returned to their 2007 levels in the 20 cities included in the index as can be seen in the chart below.
The real estate boon is and has been on again folks. Real estate is sexy again. And prices are likely to continue rising. There is simply not enough supply for the demand. Even here in Memphis, TN homebuilders are scrambling to get any buildable lot they can get.
If you are on the fence regarding selling any properties, 2016 may be the time for you to hop off onto the sell side. If you can find a good deal, now is the time to consider doing a flip and even buying more rental property. Be careful though. Stick to the fundamentals of cash flow, cash flow, cash flow! Don’t bet on constantly increasing rents and increasing prices. Nothing goes up forever.
Will prices make it back to the 2005/2006 highs? Who knows?
I am interested in what you think or what you see happening in your market. Let me know with your comments.
The Rent Squeeze Continues
Rents are going up. That’s great for us landlords right? Maybe not. Rents are outpacing income as can be seen in the attached graph from Zillow.com.
Higher rents will force many people to make hard decisions. Not just about where they can live, but also about things. For example, many at this time of year will be asking themselves if their kids should get Christmas presents or if the rent should be paid in full. To us that seems like an easy decision. Not so much to a loving parent.
If you are raising your rents, make sure you are qualifying your tenant’s income and make sure they can afford your property and all of the other things that go into living, like eating and getting around. Smarter landlords also know that if a tenant starts to fall behind they have to stay on top of the situation. Even though many things in the economy seem to be booming right now, it is times like these that can make it harder and harder for some folks to catch up and easier and easier to fall further behind.
Simple Mistakes Can Cost You
Especially when it comes to complying with various government edicts, codes and ordinances. There are folks like Berton Ring ticking off landlords all over the country.
It is interesting how he plays both sides of the coin.
Is the Boom Coming Back?
These charts from the Wall Street Journal would seem to show that real estate is slowly making a comeback. While we are not even close to what we saw in the boom years of 2007-2008, things appear to be looking up. If you are thinking of buying, you might want to do so now.
Have Home Prices Rebounded In Your Area?
Have home prices rebounded in your area? Check out these maps and graphics from the New York Federal Reserve.
I can say that here in Memphis, TN prices seem to have ticked up a bit, especially in the parts of town I deal in. It also seems to me that there are fewer deals out there and more people chasing them. Are the boom times coming back?
How are things in your part of the country? Are prices up? Deals harder to come by? Please share with your comments.
Rents To Outpace Inflation
Rents are still going up, up, up!
According to this article, rents will outpace inflation as demand remains strong and supply remains low.
Builders are getting the message and trying to increase supply but that takes time and generally meets a lot of resistance from local residents.
It will be interesting to see how this shakes out in a few years. Will there be a glut of apartments that drive rents down? Will some of these renters be enticed back into the housing market? Seems unlikely right now but time will tell.
Rents Have Risen For The Last 23 Quarters
Nationwide, rents now average $1,111 per month according to this article in the Wall Street Journal. Rents are now over 15% higher than they were at the end of 2009. Renters continue to get squeezed by high demand and low supply. This trend shown in the graph below is expected to continue for at least the next year.
Questions on Ebola, Apartments and Landlords
I have been watching the recent news about the ebola virus just like everyone else. Amongst all of the news I noticed that the two victims here in the US lived in apartments. Now, I understand the threat that Ebola is and I also understand the need to contain it. Nonetheless, as a landlord certain questions pop into my head when I read headlines like the following:
“Ebola decontamination begins at Dallas apartment of 2nd hospital worker”
Questions like:
Who pays for this hazmat cleanup?
How was the hazmat team allowed in to the apartment? Who gave them permission to remove all of the tenant’s belongings? Was it by court order? Did the family allow them in? Would I as the landlord have to get close to the place and let them in? Should I get one of these?
What about damages to the apartment caused by the hazmat team? Who is responsible for those?
Is the rent still being paid?
When and how does the landlord get possession of their property back? Do they even want it back?
What happens if one of my tenant’s gets ebola or a similar disease? What rights do I or my other tenants have?
These are all interesting and hopefully unique legal questions that I quite frankly do not have the answer to right now. But, I think it would be helpful to know what a landlord’s rights and responsibilities are on the front end of these things just in case.
I will try and get some answers and put them in another blog post.
If anyone out there has any related experience or expertise, please share it.
What other questions might you have as a landlord in a similar situation? Please share with your comments.
Got Ebola?
File under “You knew this would happen sooner or later.”
Here is the headline:
Landlord Refuses To Rent To African Student Amara Bangura Over Ebola Fears
You can read the story here.
Stay tuned folks, this could get interesting real fast.
