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Real Estate Report

Friday, March 15, 2013 - Article by: Mohammadian - cmg financial - Message

Employment Shocker? Last week we wrote that we were surprised that the stock market had fared so well in the face of the sequestration impasse the government did not seem to be able to resolve. Sometimes the stock market can be a good bellwether of news that is coming. Sometimes not so much. In this case, the by Shopping Sidekick Plugin">employment report capped a two week period of surprisingly good news. Instead of companies shaking in fear of government cutbacks, they added almost a quarter of a million jobs in February, bringing the unemployment rate to 7.7%. This was the lowest level since 2008. The good news is emanating from the housing industry and the rise in construction jobs was a significant factor in the strong employment report. Two questions follow -- are these numbers real and can the government mess things up by being their dysfunctional selves? Many did not believe that the real estate recovery was real especially because so many had predicted that sales would languish for as much as a decade. But now that we have had a full year of solid growth in sales and prices, most analysts are changing their tune. With regard to employment growth, one month of solid jobs growth could be just that--or could even be revised downward next month. However, if the real estate recovery is for real, it is logical to assume that jobs will by Shopping Sidekick Plugin">continue to expand and the unemployment rate will continue to sink. Can the government throw a wrench into the works? We know that there will be continued shrinkage in the government sector whatever solution is adopted or if the budget cuts stay in place because the government can't get their act together. One would surmise that contraction of government spending will hurt the economy in the short run but make way for more solid long-term growth. For now, the argument for short-term growth is winning out. Among renters who one day hope to own a home, a poll finds a dramatic increase in the number who now say that they intend to buy in the near future. Offering more evidence of a swing toward homeownership as the housing market continues to recover, the by Shopping Sidekick Plugin">survey by PulteGroup reports that about 6 in 10 of those renters plan on buying a home in the next two years. That's a 60 percent increase among those potential homebuyers in the past year, PulteGroup reports. "We're definitely seeing a renewed sense of optimism," said PulteGroup spokeswoman Jacque Petroulakis. The PulteGroup survey's results fit other findings in 2012 that bode well for home prices and sales in 2013, according to Jed Kolko, chief economist of listing service Trulia. Kolko attributes the reported rise in renters' interest in homebuying to an improved economy, which has helped potential buyers save for down payments, as well as to rising home prices, which have bolstered consumer confidence in the housing market. A Trulia survey conducted in 2012 also showed a significant increase in renters who intend to buy, he said. The top reasons renters polled in the survey cited for wanting to buy in the near future were: o They like being able to call themselves homeowners (49 percent). o They view it as a good financial investment (44 percent). o They need more space for their family/children (36 percent). The PulteGroup survey also found that, compared to two years ago, twice as many homeowners now expect to have adult children or aging parents living with them. Thirty-one percent of respondents to the 2012 survey said that they anticipate at least one adult child moving back home in the future, while 32 percent expect to take in an aging parent. The demographic shift to multigenerational homes is likely to spark construction of more "smart" homes that break from recent tradition, Petroulakis said. "What's important is that the home is planned smart ... that it really maximizes your communal space." Source: AOL Real Estate A bad neighbor can bring down the value of a home, possibly by even up to 10 percent, according to the Appraisal Institute."I've seen many situations where external factors, such as living near a bad neighbor, can lower home values by more than 5 to 10 percent," says Richard L. Borges II, president of the Appraisal Institute. "Home owners should be aware of what is going on in their neighborhood and how others' bad behaviors could affect their home's value." What qualifies as a bad neighbor -- or "external obsolescence" in appraisal speak? Home owners with "annoying pets, unkempt yards, unpleasant odors, loud music, dangerous trees and limbs, or poorly maintained exteriors," according to the Appraisal Institute.The organization recommends home owners take action. For example, banding together with other neighbors to approach the "bad neighbor" together and check if the home is violating any municipality codes or subdivision restrictions that you can report. In some cases it may be worth hiring an attorney. "If all else fails, the cost of an attorney likely will be less than the home's potential loss in value," according to the Appraisal Institute.Source: The Appraisal Institute The apartment market is proving to be a major source of economic activity, jobs, and personal earnings.Apartment housing contributed $1.1 trillion to the national economy and it has supported 25.4 million jobs. What's more, apartment residents spend more than $420 million on goods and services, such as furnishings, moving, and cleaning costs -- 70 percent of which remains in the local economies, according to the National Multi-Housing Council and the National Apartment Association.The apartment industry spent $67.9 billion to operate and improve the 19.3 million apartments across the nation, more than quadruple the amount spent on construction, according to the report.Stephen S. Fuller with George Mason University's Center for Regional Analysis told Realty Times that attention is focused on homebuilding and the single-family sector but the economic impact and contributions of multi-family housing often gets overlooked.Source: Realty Times

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