Will Housing Prices Soar By 2014?

Will Housing Prices Soar By 2014?

Real estate economists and analysts are increasingly optimistic that the housing market will have a dramatic recovery in the next two years, according to results of a new semi-annual survey of 38 real estate economists and analysts conducted by the Urban Land Institute’s Center for Capital Markets and Real Estate.

The economists predict that the national average for home prices will stop falling by this year and a subsequent turnaround will occur. By next year, they project that home prices will begin to rise by 2 percent, and then get a larger boost of 3.5 percent by 2014. The economists also predict that housing starts will nearly double by next year.

They also foresee rental prices continuing to increase for all property types, ranging from 0.8 percent to 5 percent.

The economists’ predictions were made on assumptions that the economy would continue to strengthen, including a larger drop in unemployment.

“While geopolitical and global economic events could change the forecast going forward, what we see in this survey is confidence that the U.S. real estate economy has weathered the brunt of the recent financial storm and is poised for significant improvement over the next three years,” says Patrick L. Phillips, ULI chief executive officer. “These results hold much promise for the real estate industry.”

Source: “Real Estate Will Rock in 2014,” RISMedia (March 31, 2012)

New Meaning to ‘Rock-Bottom’ Prices.

New Meaning to ‘Rock-Bottom’ Prices

Despite steady improvements in the housing market recently, ultra-low priced properties can still be found in many markets, and thousands of homes nationwide have properties for-sale at $10,000 or even less, MSNBC.com reports.

Prices are so low on some properties that even a 14-year-old girl — with the help of her mother — was recently able to purchase a home as a rental property in Florida, all-cash, for $12,000, NPR reports.

Ben Yonge, president of an investment brokerage, Equity First Realty, calls the home prices he’s finding in Orlando “absolutely ridiculous.”

“There are $19,000 condos in the heart of Orlando,” Yonge told MSNBC.com. Yonge recently purchased a four-unit apartment building in Orlando, which once fetched $120,000, for $25,000.

A rise in $10,000 or below properties has risen the most in the past year in Fresno, Calif.; Wichita, Kan.; Greensboro, N.C.; and Los Angeles.

But these ultra deals are starting to fade away in more cities. The number of listings in the $15,000 and under price range in February saw a decline in the last year in several markets, including Atlanta, Chicago, and even Detroit (where the median price for an existing single-family home sold last year was $54,000), according to Realtor.com data.

Source: “Bust Leaves Market Littered with Homes Under $10,000,” MSNBC.com (April 2, 2012)

The new American household: 3 generations, 1 roof.

The new American household: 3 generations, 1 roof

NEW YORK (CNNMoney) — As the economy continues to take a toll on consumers’ finances, a growing number of people are discovering that becoming roommates with mom and dad, or a 20- or 30-something son or daughter, helps to ease some of the financial pain in tough times.

As of 2010, 4.4 million U.S. homes held three generations or more under one roof, a 15% increase from 3.8 million households two years earlier, according to the latest data available from the Census Bureau.

When Alicia Moura’s father-in-law, Aecio D’Silva, retired from teaching at the University of Arizona in 2010 to pursue private-sector projects in aqua-culture and bio-fuel, he didn’t expect to wait long before his efforts paid off. But then the economy tanked, development funds dried up and his ventures languished.

Soon afterward, Alicia started experiencing some medical issues with her pregnancy and the family decided it would be best to move in together. Now everyone — Alicia, her husband, their two young daughters and the in-laws — live under one roof.

“We not only save money by having a joined household, but we save on stress, time and other resources by having in-home day care,” said Moura.

Foreclosure nightmares: 3 families fight for their homes

For multi-generational households, there is typically a nice payoff. Not only do they save money, but they are better able to avoid financial hardship.

The Pew Research Center reported that the poverty rate among those who live in multi-generational homes was 11.5% in 2009 (the most recent data available), compared to 14.6% for those who didn’t live with other adults other than their spouse or partner.

“It’s such an advantage to have multiple wage earners in the same household when the economy is still struggling.” said Nicolas Retsina, a lecturer at the Harvard Business School and one-time head of Harvard’s Joint Center for Housing Studies. Retsina said the multi-generational housing trend is one he expects will continue.

Freeing up finances. Leslie Bos, a mother of three who lives in Boston, asked her mother to move in with her when her mom had to leave her job as a social worker and go on disability due to health problems.

While Bos helped her mother out of a jam — her disability payments couldn’t even cover housing costs in Boston pricey real estate market — it has also saved Bos significantly over the years.

“The 10-year-olds still need minding after school so this has really cut my child care expenses,” said Bos, who works for a company that manages multi-family housing assets.

Census reported that “doubled up households,” those including at least one extra adult who is not enrolled in school and isn’t a spouse or partner, grew 10.7% to 21.8 million households in spring 2011, up from 19.7 million households four years earlier.

Many of those homes included adult children who flew back to the nest after being unable to find work. The number of 25- to 34-year olds living with their folks jumped by more than 25% between 2007 and 2001. Census reported.

Debby Bitticks’ adult daughter, Sandi Krul, moved back in so she could take a break from work and return to law school. Along with Sandi, came her husband and two young daughters. The entire clan live in the Bitticks’ Encino, Calif. home with Debby and her husband.

By combining the families, they are saving thousands of dollars a month in duplicate costs, giving Krul the opportunity to change the direction of her career without putting too much financial strain on her family.

Builders take note. “The recession caused doubling up to save money — and the story is still unfolding,” said Steve Melman, Director of Economic Services for the National Association of Home Builders.

The long-term impact, he said, is that more families will want bigger homes with more bedrooms to accommodate their extended families.

In fact, so many relatives are already moving in with one another that builders are starting to construct homes to accommodate them. Instead of offering a two-car garage, for instance, builders will design the house with a one-car garage and use the extra space for a guest room, explained Valerie Dolenga, a spokeswoman for Pulte Homes (PHM, Fortune 500).

Parents help their kids buy homes

Home builder Toll Brothers (TOL) has started incorporating multi-generational living arrangements directly into its designs — such as a guest suite with a kitchenette where a family room once may have been, according to Timothy Gehman, the company’s director of design. Previously, such accommodations were offered only as custom options.

When Rajendra Hariprashad, moved from Guyana to New York as a boy, he and his mom moved in with his grandparents. Now 34, Hariprashad lives in a four-bedroom home in Glen Oaks, N.Y., with his wife, 10-month-old son, parents, and his sister and brother-in-law and their two-year-old son.

All of the adults in the house are employed, making it easier to afford the four-bedroom, three-bath house, which cost about $600,000.

“But it’s more than a financial thing,” said Hariprashad. “Everyone thinks we should all have our own homes, but we’re so happy living together.”

Hariprashad said he envisions his family always staying together, even as the younger generation expands. “We’ll just need to buy a bigger house,” he said.