Home Prices and Debt–Crippling Post-Graduates March 1, 2012
Posted by admin1 in Real Estate.Tags: Mortgage Interest Rates, Real Estate, student debt
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Tougher times cause everything to shift in one direction or another. The housing crisis, that long lasting thorn in America’s paw, is causing the real
estate market to have a major gimp in it’s stride. Recent college graduates have long chased the American dream of finishing the arduous task of
schooling, landing their dream job and naturally progressing into home ownership. It is the mounting pile of student debt that comes with achieving the
increasingly required schooling necessary for snagging the dream job that is preventing college grads from adding the status of homeowner to their
lives. It now seems that student debt is an additional thorn in America’s paw that will only lead to further crippling America’s real estate market.
Today, outstanding student debt has surpassed credit card debt in America. Students are leaving with an average of over $25,000 in debt, which prevents them from receiving mortgages because lenders are being stricter with qualifications required to receive a loan. These recent graduates are starting further and further behind as the debt of schooling and education continues to rise; if they are unable to find a job out of school, it further slows their progress, making that hole even harder to emerge from.
The numbers are continuing to slide against the recent college graduates. The unemployment rate of people 25 to 34 is about 9 percent. Right now,
people 25 to 34 make up 27% of homeowners, but a decade ago they made up 33%. In the span of a decade (2001 to 2011) only 9 percent of 29-34 year old Americans qualify for mortgages, whereas ten years ago 17% qualified. But where are these people living? About 6 million people between 25 to 34 are living in their parent’s homes, up from 4.7 million in 2007 when the tough economic period started.
This caustic mix of high unemployment and high amounts of debt will undoubtedly have a cascading effect later in America’s future. When the current poor economic conditions started in 2007, it caused many Americans to go back to school, which added to the total of outstanding student debt. With interest rates for mortgages at very low rates, it would seem that it should make the housing market boom, but the additional student debt has held many people back. With fewer and fewer homes being filled by the 25 to 34 demographic, these houses will sit unsold, slowing down construction and housing industries and possibly adding to unemployment in that sector.
With America’s economy going through tough times, the news of recent grads struggling not only in the job market but also in the housing market doesn’t give many people hope for change for a better chance at achieving their version of the American dream. With the election year upon us, it’ll be interesting to see what is proposed to help homeowners and students alike.
Mortgage Interest Rates Jump to Highest Level Since August April 8, 2010
Posted by admin1 in Real Estate.Tags: High, Mortgage Interest Rates, Real Estate
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Source: Washington Post
Author: Elizabeth Razzi
URL: http://voices.washingtonpost.com/local-address/2010/04/jumping_mortgage_rates_and_ope.html
Mortgage interest rates jumped this week to the highest level since August, Freddie Mac economists report today. Thirty-year fixed rates hit an average of 5.21 percent — which is up from last week’s 5.08 percent — and a half a percentage point above the record low recorded in early December. Thirty-year loans also charged 0.6 point in prepaid interest, on average. One point equals 1 percent of the loan amount.
Freddie Mac economists chalk it up to a couple of positive economic reports posted recently, including better employment numbers and a surprise 8.2 percent jump in pending existing-home sales logged in February. They didn’t mention it, but retail sales also showed gains — and the Fed’s extraordinary program designed to drive down rates by buying mortgage-backed securities issued by Fannie Mae and Freddie Mac expired at the end of March, both of which could have helped boost mortgage rates.
Perversely, rising interest rates tend to boost home sales — at least in the short term. Buyers who had been sitting on the fence often get jolted into action when they see rising rates eat into their new-home budget. Combine that with a major nationwide marketing push by Realtors to hold open houses on as many of their listings as possible over the April 10-11 weekend, and the market could get pretty interesting over the next week or so.
The Realtors are doing this open house push as we enter the final three weeks of the government’s tax credit program for home buyers. Buyers need to be under contract by April 30 to qualify for the $8,000 first-timer tax credit or the $6,500 credit available to some repeat buyers.
Do you think the open house extravaganza is a good idea — something that should be repeated more often? Or are you getting all the info you need from online photos? Share your thoughts in the comments!
How The Housing Bubble Burst March 9, 2010
Posted by admin1 in Real Estate.Tags: Bubble, Burst, Economy, Housing, Real Estate
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A lot of people are wondering what can be done to fix the real estate market, but the question that isn’t posed enough is what went wrong in the first place? How did the housing bubble burst? It’s a sensitive topic, but an important one to bring up. If we can understand how and what happened to cause the real estate market to collapse than we may be capable of preventing something like it from ever happening again. There’s not one specific area to point to and say, “That’s what caused the housing bubble to burst”. Rather, there any many different causes that came together to and lead to the crumbling of the housing market and eventually the economy.
One of the first causes was that Americans love to own homes. They love to own homes so much that many analysts of the market have said that around 2005 (the peak of the housing bubble) there was a type of mania and madness going on with people who wanted to buy and own real estate. This started the trend of people buying houses they really loved, but ultimately couldn’t afford. This was the proverbial snowball ready to gain speed down the mountain. If you add this housing madness with the belief that owning rather than renting is a great and smart investment (which some experts say is not necessarily true, but rather is based on a case by case basis), the housing bubble may not have immediately burst but it was being incessantly poked at.
The bubble may have also burst because something imploded right before it. When the stock and the dot-com market crashed in 2000 many took their money away from stocks and used it to buy housing. Some would argue that so much money being taken out of the market and thrown into the supposedly “smart” investment of a house caused a housing frenzy that put people in houses they could never pay for. With so many buying, interest rates and values of homes went down which caused many to hold homeowners accountable for their loans and thus make them pay what they couldn’t afford. Foreclosure rates then increased in 2006 and 2007 and it spelled the beginning of not just troubles for the housing market but for the nationwide economy.
We are now at a point where the market (both housing and economic) is rebounding, but now is more important than ever to remember how we got here. If we do that, we may be able to prevent the housing bubble from ever bursting again.
Flipping Houses – No Easy Task February 13, 2010
Posted by admin1 in Real Estate.Tags: Flipping Houses, Real Estate
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With Spring right around the corner, I started looking into one of my favorite dreams – flipping houses. I always assume the best time to get into the business is when the weather breaks. I think to myself how great it would be to work on houses all summer. So, naturally, every year around spring time I start reading up on housing and real estate. I came across an article on MSN that pretty much took the wind right out of my sails.
The article more or less painted a pretty scary picture of house flipping. Between all of the legal jargon and the failure statistics they talked about, it almost made flipping houses more of a nightmare than a dream. However, after thinking about the article some more, I determined that every job has it’s bad aspects and there are bound to be risks involved with opportunity taken. What distinguishes my attitude towards flipping houses from everyone else is the fact that I absolutely love home renovations and all of the work that in entailed. I have a drive to complete every project I work on 100% no matter how much work is involved. I’m constantly looking to help friends and family members out with their home renovation projects. I just can’t see why I wouldn’t want to do it for myself some time. Granted, the point they made about not being able to buy houses with no money down was valid. You do see a lot of shows on TV and infomercials that make flipping houses sound like a breeze. I know better than that though. I have to believe that some people get into the business just to make money but really have no desire to do any work. I think that despite the article basically making it sound like you need to be a professional to flip houses, I would still pursue a future opportunity to flip a house based on my desire to work on houses, the attention I pay to detail, my dedicated work ethic and my passion for being financially independent. Maybe someday in the future I’ll have an update for you that will include my first flip.
Fairway Markets Hitting Manhattan November 4, 2009
Posted by admin1 in Real Estate.Tags: 75 Stores, Fairway Markets, Manhattan, Real Estate
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Source: NY Times
Author: Sana Siwolop
URL: http://www.nytimes.com/2009/11/04/realestate/commercial/04fairway.html?_r=1
“Looking Beyond the City for Growth”
PELHAM MANOR, N.Y. — Among supermarkets, Fairway Market, the popular Manhattan-based food emporium, is a destination retailer.
Howard Glickberg, chief executive of Fairway, outside the company’s new store in Pelham Manor, N.Y.
What started in 1933 as a modest 3,500-square-foot fruit and vegetable market on the Upper West Side now includes five stores in operation and three more in the works. It already claims 10 million shoppers a year, who are said to drive an average of 17 miles to reach its stores.
It probably does not help that new Fairway stores have turned up in obscure sites. In 1995, the retailer opened a sprawling Harlem store in a former meatpacking plant that sits on 12th Avenue, partly under the West Side Highway. And in 2006, it opened a store in a large Civil War-era coffee warehouse located on what was then a desolate stretch of waterfront in Red Hook, Brooklyn.
Last week, Fairway’s chief executive, Howard Glickberg, a grandson of the company’s founder, Nathan Glickberg, happily led a visitor through the still-vacant interior of a new 75,000-square-foot store scheduled to open next spring in this village of 5,500 in Westchester County.
The store is part of Post Road Plaza, a freshly overhauled 280,000-square-foot shopping center. Along with the recently redeveloped Pelham Manor Shopping Plaza across the street, the plaza is expected to help to transform a still largely industrial corner of the county.
At Post Road Plaza, Fairway will take some of the space that once belonged to Kmart and before that to the discount retailers Caldor and Korvette. At 75,000 square feet, the new store will be twice as large as Fairway’s longstanding flagship store on Broadway, between 74th and 75th Streets. It will have access to some 1,300 parking spaces and will offer a 25-foot-wide main aisle and the company’s first in-house wine store.
Fairway was a retail pioneer in West Harlem and Red Hook, and its entry injected new vigor into both neighborhoods.
The company’s choice of store sites has long been shaped by a particular set of real estate needs. Unlike larger chains, Fairway does not rely on a large central distribution facility. Instead, in the interest of freshness, most products are shipped directly to its stores, which means the stores need access to major highways and sizable storage space.
With the exception of customers of the Upper West Side store, most customers come by car, so Fairway also looks for sites with parking for at least 400 vehicles.
Leasing costs are important too. Although the company continues to introduce amenities like in-house cafes (the Upper West Side store turns into an informal steakhouse at night), deal-conscious shoppers are its bedrock.
“We create our own neighborhoods — it’s hard to go into the toniest towns and find 75,000-square-foot spaces with big parking lots,” said Aaron J. Fleishaker, the vice president of real estate operations.
Lately, Fairway’s expansion’s plans have quickened because of a major new investor and because of a desire to take advantage of the softer rents that prevail in the New York area.
In 2007, Sterling Investment Partners, a private equity company based in Westport, Conn., took a controlling interest in Fairway from the founding family, first investing $150 million, and then at least $30 million more to help finance expansion, said Charles W. Santoro, a managing partner and co-founder of Sterling.
Before this infusion, Fairway used to open a new store roughly every three years, but now its goal is to open three stores every two years. Mr. Santoro said the company’s sales, now more than $500 million annually, were growing “very rapidly.”
Mr. Glickberg added, “Eventually, we want to have about 15 stores within a 75- to 100-mile radius of Manhattan.” Rather than owning its own stores, he said, the company now prefers signing long-term leases.
In the suburbs around New York, new Fairway stores have turned into important focal points for retail developments that are remaking themselves completely or that sit in areas where the shopping waters are still uncharted.
Last March, the company opened a 52,000-square-foot store in Paramus, N.J., at the Fashion Center, a once-struggling enclosed mall that was recently redeveloped to house a number of big-box tenants, all with their own outside entrances.
To build a large square-shaped store at the Fashion Center, Fairway had to convert the mall’s little-used common areas and help two smaller tenants move. But Fairway also needed at least 500 parking spaces, so it took a spot that did not face Route 17, a major shopping artery. “We’re actually on the wrong side of the shopping center,” Mr. Glickberg said. “The landlord there owes me a big favor.”
East of Manhattan, the company has a 52,000-square-foot store in Plainview on Long Island, and it is working to open its first Queens store in what is still, for now, a Waldbaum’s supermarket in Douglaston.
Fairway’s largest store to date is to appear in Stamford, Conn., in the once heavily industrial South End, a peninsula that sits south of both Interstate 95 and the city’s downtown. There, Fairway is building an 80,000-square-foot store from the ground up at the 80-acre Harbor Point mixed-use development, which changed hands last year, passing from Antares Investment Partners, based in Greenwich, to Building and Land Technology, which is based in Norwalk.
At Harbor Point, Fairway is both the anchor store and the only retailer that has so far committed to space. Penny P. Wickey, a principal at Saugatuck Commercial Real Estate of Westport, Conn., the retail leasing agent for Harbor Point, said the development would eventually have some 350,000 square feet of retail space.
In addition to looking for store sites, Fairway is seeking space for a large central bakery, because the bakery at its Harlem store, which supplies other stores, will most likely be too small to serve its needs when it has eight markets or more.
Mr. Glickberg, meanwhile, would like the company to begin lining up new sites to follow the Douglaston store. “If the right space comes along, we’d grab it,” he said. “I don’t have a problem taking space, paying rent on it for a year and keeping it dark.”