Although most analysts agree that one of the most promising housing sectors for the near future is senior housing, the current housing slump is taking a toll on that very market. Rental and condo developments marketed to senior citizens are definitely attractive to the aging population because they require less upkeep and offer more amenities, but seniors are having trouble unloading their old homes in this market. And although according to Mike Pardoll, senior vice president of investments at Marcus & Millichamp, “the seniors housing sector has improved significantly from last year,” he adds that much of the improvement is due to the need for rehabilitative services and skilled nursing facilities, which could leave out many “active living” communities that simply hoped to attract the senior population with appealing activities and low maintenance homes.
As a result of the continued housing crawl toward recovery, some senior living homes are thinking creatively about how they fill rooms and suites. For example, some seniors are using “gap loans,” which are home equity loans the enable a homeowner to budget for having their house on the market for a year. One senior living community actually suggests and facilitates the use of these loans, since they can be used to pay apartment rental expenses. Other facilities are opting to rent out condos instead of only selling them in order to fill more vacancies.
This time last year, it seemed like senior living was about the only area of new construction in the market. It will also be interesting to see the effect of the discontinuation of reverse mortgages by Bank of America and Wells Fargo. This could help or hurt the active senior citizen market. We may not know the answer for some time to come, but it certainly will have an impact. The frightening thing is that there seems to be an acknowledgement in this market sector that seniors are having difficulty getting their current homes sold.
Paddy Deighan is a real estate investor, attorney and advocate. This blog is dedicated to providing useful information, tips and guidelines for all of your real estate needs.
Showing posts with label real estate values. Show all posts
Showing posts with label real estate values. Show all posts
Tuesday, July 19, 2011
Foreign Investors may Be Fueling Increase in Real Estate Trends in Some Areas
Foreign investors may be fueling what little surges in real estate sales that may exist. In Silicon Valley, California, for example is cited as an area with projected property value climbs and the attractiveness of the area as a future home for many foreign investors. “We’re getting a huge influx from China and India,” explains one upscale property specialist in the area, adding that “there is just a lot of wealth there.”
“I’m telling all my friends this is the time to find good deals in Silicon Valley,” says a stay-at-home mother from Guanhzhou, China, who just bought a $500,000 home in Fremont with her husband. They believe that property values in the area are set to skyrocket in the next five years and that “your real estate slump makes this a great time for us to buy.” And should they opt to move to the area, it offers good “culture…business environment and good education for the kids.”
Foreign investors typically have another competitive advantage in the market place. They are buying at a premium to the US dollar since many currencies have strengthened against the dollar. Many Asian buyers are buying at 30% discount because of currency spreads. This makes attractive deals even MORE attractive and affordable.
In fact, some analysts believe that Silicon Valley is set for another “boom” as “investors pile into internet IPOs and startups” while “house prices and salaries soar”. Office rents in the area are also climbing, with some buildings reporting 35 percent hikes. Hotels are regularly logging 80 percent occupancy and higher. The boom is leading some to speculate that another bust – reminiscent of the dot-com bubble – is on the way, but chief executive of Weebly.com, David Rusenko, disagrees. “These are all wealthy, private individuals who understand the gambles they are making,” he says. “It’s not like in the dot-com days when grandma was placing bets on IPOs,” he adds. And conventional wisdom indicates that this latest “tech boom” could last into 2013. The question is, in 2014, will Silicon Valley properties still be worth the money paid the year before?
“I’m telling all my friends this is the time to find good deals in Silicon Valley,” says a stay-at-home mother from Guanhzhou, China, who just bought a $500,000 home in Fremont with her husband. They believe that property values in the area are set to skyrocket in the next five years and that “your real estate slump makes this a great time for us to buy.” And should they opt to move to the area, it offers good “culture…business environment and good education for the kids.”
Foreign investors typically have another competitive advantage in the market place. They are buying at a premium to the US dollar since many currencies have strengthened against the dollar. Many Asian buyers are buying at 30% discount because of currency spreads. This makes attractive deals even MORE attractive and affordable.
In fact, some analysts believe that Silicon Valley is set for another “boom” as “investors pile into internet IPOs and startups” while “house prices and salaries soar”. Office rents in the area are also climbing, with some buildings reporting 35 percent hikes. Hotels are regularly logging 80 percent occupancy and higher. The boom is leading some to speculate that another bust – reminiscent of the dot-com bubble – is on the way, but chief executive of Weebly.com, David Rusenko, disagrees. “These are all wealthy, private individuals who understand the gambles they are making,” he says. “It’s not like in the dot-com days when grandma was placing bets on IPOs,” he adds. And conventional wisdom indicates that this latest “tech boom” could last into 2013. The question is, in 2014, will Silicon Valley properties still be worth the money paid the year before?
Subscribe to:
Posts (Atom)