Daily Real Estate News | Monday, November 07, 2011

Many of the housing markets projected to have the biggest gains into 2012 tend to be the home to major universities, strong private sector employment, or have nearby military bases, according to a list of the healthiest housing markets by Builder Magazine. Builder teamed with Hanley Wood Market Intelligence to compile its annual list of the healthiest housing markets in the country, factoring in housing projections from Moody’s Economy.com. The list was based on projected price appreciation, population growth, income growth, and improving employment picture.

The following are the eight cities that topped Builder’s list, including projected housing permits in 2011 and 2012.

1. Minneapolis-St. Paul-Bloomington Minn.-Wis.

2011 Building Permit Forecast: 4,511

2012 Building Permit Forecast: 10,118

Home prices here are expected to rise 8 percent next year, the highest growth projected in the 100 cities analyzed. As a hub for medical technology and headquarters for several large companies, employment is expected to grow 2.5 percent in 2012.

2. Fort Collins-Loveland, Colo.

2011 Building Permit Forecast: 1,004

2012 Building Permit Forecast: 1,650

With Colorado State University the major employer here and often ranked as one of the best cities to live in the country, households are expected to grow by 2.7 percent in 2012 and employment is expected to grow 2.6 percent. Housing permits are expected to rise 50 percent as well, according to Moody projections.

3. Salt Lake City, Utah

2011 Building Permit Forecast: 1,294

2012 Building Permit Forecast: 1,181

With lots of high-tech businesses, Salt Lake City is poised to have some grains in employment and income in the coming year. After a drop in home prices, prices are expected to rebound and increase 4.7 percent next year.

4. Jacksonville, Fla.

2011 Building Permit Forecast: 2,284

2012 Building Permit Forecast: 4,363

Jacksonville has a strengthening employment picture, with a military presence and a growing financial services sector. Employment is expected to increase 3.2 percent in 2012. With stabilizing home prices already, prices are expected to rise 5 percent next year and housing permits are expected to double.

5. Miami-Fort Lauderdale-Pompano Beach, Fla.

2011 Building Permit Forecast: 2,708

2012 Building Permit Forecast: 7,522

This metro area is expected to reverse course with jobs forecasted to grow by 2.7 percent, home prices stabilizing, and housing permits expected to double. The rebound is expected to be mostly driven by two major projects, the CitiCentre and Resorts World Miami, are expected to add tens of thousands of jobs in coming years.

6. Charlottesville, Va.

2011 Building Permit Forecast: 634

2012 Building Permit Forecast: 798

The city is home to the University of Virginia and also continues to attract a surge in second-home buyers from the Washington, D.C., area. Home prices are expected to rise 1 percent in 2012 and median income is forecasted to grow by 3.7 percent.

7. Colorado Springs, Colo.

2011 Building Permit Forecast: 2,099

2012 Building Permit Forecast: 3,639

The biggest employers in Colorado Springs are military bases and the Air Force Academy, which are expected to see big growth when the troops from Afghanistan return. Home prices are expected to rise 2.6 percent, employment to grow by 1.4 percent, and households to increase by 1.8 percent in 2012.

8. Oklahoma City, Okla.

2011 Building Permit Forecast: 3,417

2012 Building Permit Forecast: 5,284

At 6.1 percent, Oklahoma City has one of the lowest unemployment rates in the country. Furthermore, the job market is expected to continue to rise there, and incomes are projected to increase 3 percent next year. While the area has a seen a drop in home prices recently, housing prices are projected to rebound and increase 2.6 percent as Oklahoma City’s low cost of living continues to attract businesses and new households.

Source: “Healthiest Housing Markets: Mid-2011 Update,” Builder Magazine (2011)

Purchasing and managing a rental property can be an intimidating process and it may not be for everyone. Here are some things to consider if your thinking about buying a rental.

1. Financing for investment properties has changed dramatically over the past few years. During the housing boom qualifying to purchase a rental was very easy, too easy in fact. Many people overleveraged and speculated on the market. Now in order to purchase a rental you will likely need 10-20% down and be able to demonstrate your credit worthiness as well as income to service the loan. The good news is these stricter lender guidelines will hopefully help set up investors to be more successful.

2.  The type of property you choose will have a big impact on the experience you have owning your rental. Single family homes may command a higher rental rate and a higher rate of return but require more maintenance and you have to depend on your tenants to take care of things like the landscaping. Alternatively patio homes or condos will be maintained by the HOA which will be a cost you the owner incur. The location, age and condition of the home will also have a big impact on your investment. Many “good deals” require a large investment to remodel and may not be in a desirable area for renters.

3. Do you feel comfortable managing your own property. This means you will have to collect rents, hire contractors, evict non-paying tenants, handle damage deposits, credit and reference check applicants and execute rental agreements. If these tasks are not within your comfort or time constraints you can hire a property manager. The typical rate for these services is around 10% of the collected rents plus various ala carte fees.

This is a very brief list of consideration and anyone considering investing in a rental should consult with their agent. As with any investment there is always risk but the rental market in Northern Colorado has been hot to say the least. Prices are relatively low and interest rates are at rock bottom. Earlier this year the Coloradoan released an article stating vacancy rates to be at a 9 year low in Fort Collins.

Contact Eric or Nathan if you would like to learn more about owning a rental.

ERA Herman Group Real Estate Relocation is nominated for the SIRVA Relocation
“Preferred Broker of the Year Award”

Local real estate relocation department, of ERA Herman Group Real Estate in Denver, Southern and Northern Colorado and Southern Florida recently earned a national performance nomination from the global relocation leader SIRVA Relocation, LLC.
ERA Herman Group Relocation was nominated for the SIRVA Relocation Preferred Broker of the Year Award which is based on quality of service and other various performance metrics.  The top 10 brokers throughout the United Sates are nominated for this award and the award is presented to the winner at this year’s 2011 ERA Conference in Las Vegas, Nevada on May 18, 2011.
“ERA Herman Group Relocation’s achievement is truly noteworthy,” said Roger Herman, CEO. “Our Relocation Department and Relocation agents continue to meet the challenges of today’s real estate market and this nomination proves we have the experience and knowledge required to serve transferees, their families, employers and third-party relocation companies nationwide.  We are committed to the service often required for incoming and out going transferred employees and are focused on the details which can go well beyond the normal, local real estate transaction”.