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Category: Real Estate

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Finance Personal Finance Real Estate Surveys

Americans’ Strong Personal Finance Sentiment and Housing Optimism

Americans’ Personal Finance Sentiment Strengthens, Housing Optimism Follows Suit

Confidence in Home Selling Environment Hits New Survey High

WASHINGTON, Nov. 7, 2014, Results from Fannie Mae’s October 2014 National Housing Survey show Americans’ optimism about the housing market continued its gradual climb amid greater confidence in household income and personal finances. The share of respondents who say they expect their personal financial situation to improve during the next 12 months climbed to 45 percent – seven points higher compared to one year ago – while the share expecting their financial situation to worsen decreased to 10 percent last month. Although consumer attitudes about the direction of the economy remain subdued, with only 40 percent of survey respondents saying the economy is on the right track, the October results mark a 13 percentage point improvement compared to the same time last year.

“Consumers are growing more optimistic about the housing market in the face of broader improvement in economic sentiment,” said Doug Duncan, senior vice president and chief economist at Fannie Mae. “The share of consumers who expect their personal finances to get better is near its highest level since the survey’s inception, while those expecting their finances to get worse reached a survey low. Home price expectations rose significantly this month, largely reversing the dip witnessed over the past four months, and the share of consumers who think it’s a good time to sell a home reached another survey high. The narrowing gap between home buying and home selling sentiment may foreshadow increased housing inventory levels and a better balance of housing supply and demand. These results may help drive a healthier housing market in 2015.”

SURVEY HIGHLIGHTS

Homeownership and Renting

  • The average 12-month home price change expectation rose to 2.8 percent.
  • The share of respondents who say home prices will go up in the next 12 months fell by one point to 44 percent. The share who say home prices will go down decreased by one point to 7 percent.
  • The share of respondents who say mortgage rates will go up in the next 12 months rose by three percentage points to 48 percent.
  • Those who say it is a good time to buy a house fell to 65 percent. Those who say it is a good time to sell increased to 44 percent—a new all-time survey high.
  • The average 12-month rental price change expectation rose to 3.7 percent.
  • The percentage of respondents who expect home rental prices to go up in the next 12 months decreased by six percentage points to 49 percent.
  • The share of respondents who think it would be difficult to get a home mortgage today increased by two percentage points.
  • The share who say they would buy if they were going to move fell to 65 percent, while the share who would rent increased to 30 percent.

The Economy and Household Finances

  • The share of respondents who say the economy is on the right track held steady at 40 percent.
  • The percentage of respondents who expect their personal financial situation to get better over the next 12 months increased to 45 percent.
  • The share of respondents who say their household income is significantly higher than it was 12 months ago remained at 25 percent.
  • The share of respondents who say their household expenses are significantly higher than they were 12 months ago fell slightly to 36 percent.

The most detailed consumer attitudinal survey of its kind, the Fannie Mae National Housing Survey polled 1,000 Americans via live telephone interview to assess their attitudes toward owning and renting a home, home and rental price changes, homeownership distress, the economy, household finances, and overall consumer confidence. Homeowners and renters are asked more than 100 questions used to track attitudinal shifts (findings are compared to the same survey conducted monthly beginning June 2010). To reflect the growing share of households with a cell phone but no landline, the National Housing Survey has increased its cell phone dialing rate to 60 percent as of October 2014. For more information, please see the Technical Notes. Fannie Mae conducts this survey and shares monthly and quarterly results so that we may help industry partners and market participants target our collective efforts to stabilize the housing market in the near-term, and provide support in the future.

For detailed findings from the October 2014 survey, as well as a podcast providing an audio synopsis of the survey results and technical notes on survey methodology and questions asked of respondents associated with each monthly indicator, please visit the Fannie Mae Monthly National Housing Survey page on fanniemae.com. Also available on the site are in-depth topic analyses, which provide a detailed assessment of combined data results from three monthly studies. The October 2014 Fannie Mae National Housing Survey was conducted between October 1, 2014 and October 25, 2014. Most of the data collection occurred during the first two weeks of this period. Interviews were conducted by Penn Schoen Berland, in coordination with Fannie Mae.

Opinions, analyses, estimates, forecasts, and other views of Fannie Mae’s Economic & Strategic Research (ESR) Group included in these materials should not be construed as indicating Fannie Mae’s business prospects or expected results, are based on a number of assumptions, and are subject to change without notice. How this information affects Fannie Mae will depend on many factors. Although the ESR Group bases its opinions, analyses, estimates, forecasts, and other views on information it considers reliable, it does not guarantee that the information provided in these materials is accurate, current, or suitable for any particular purpose. Changes in the assumptions or the information underlying these views could produce materially different results. The analyses, opinions, estimates, forecasts, and other views published by the ESR Group represent the views of that group as of the date indicated and do not necessarily represent the views of Fannie Mae or its management.

Fannie Mae enables people to buy, refinance, or rent a home.

Visit us at http://www.fanniemae.com/progress.

Follow us on Twitter: http://twitter.com/FannieMae.

SOURCE:

Fannie Mae http://www.fanniemae.com

 

Categories
Finance Investing Personal Finance Real Estate

Top Places Where Mom-and-Pop Landlords Make the Most Money

Zillow Ranks Top Places Where Mom-and-Pop Landlords Make the Most Money

Homeowners turned landlords are most profitable in Oklahoma City, Okla. in short-term profit; San Jose, Calif., in the long-term profit, according to a Zillow Rentals Analysis

SEATTLE, Aug. 15, 2014, Zillow today named the Oklahoma City area the top place where mom-and-pop landlords stand to make the most money on their rental property on a month-to-month basis.  A Zillow Rentals analysisi looked at the top 50 U.S metros to determine which areas provide the best short-term return on investment for landlords. Rental property owners in the Oklahoma City metro area can expect to profit $536 per month on the median home when comparing anticipated rental income versus their assumed monthly mortgage payment.

Mom-and-pop landlords are homeowners who have turned their personal home into a rental rather than selling it when they move.

Zillow has also named the best places for landlords interested in long-term profitsii. When looking at rental income, tax benefits and accumulated home equity (thanks to rapid home value appreciation), landlords in San Jose, California, make the most money: $8,927 per month, or $107,122 per year. The majority of this “profit” is derived from earned but unrealized equity distributed evenly each month over the next six years. Most, if not all, of this profit will not be realized until the landlord sells the property.

“When deciding if they should sell their home or rent it out, most mom-and-pop landlords are primarily concerned with whether or not they can cover their mortgage payment each month – they simply can’t absorb monthly losses like professional investors,” said Zillow Chief Economist Dr. Stan Humphries. “However, the greatest returns are actually in markets like San Jose and San Francisco where there are short-term monthly losses, but the long-term earned equity makes them the best markets to invest in.”

Nationally, the Zillow Rent Index has increased 2.5 percent since June 2013 and 9.1 percent since June 2011. On a local level, the Zillow Rent Index has gone up as much as two to three times that amount over the past year in rental hotspots such as metro Chicago (+6.3 percent) and San Francisco (+11 percent).

The full list of best places to own a rental property can be found by visiting Zillow Real Estate Research.

Top 10 Markets for Short-term Financial Gain (difference between rent and mortgage payment on the median home, accounting for property and income taxes, maintenance and vacancy)

Release contains wide tables. View fullscreen.

Rank Metro Area Short-term profit (monthly) Short-term profit (annually)
1. Oklahoma City $536 $6,431
2. Miami-Fort Lauderdale, Fla. $515 $6,184
3. Tulsa, Okla. $396 $4,753
4. Cincinnati $385 $4,621
5. Denver $355 $4,258
6. Rochester, N.Y. $349 $4,182
7. Tampa, Fla. $287 $3,448
8. Dallas-Fort Worth, Tex. $264 $3,166
9. Indianapolis $251 $3,014
10. Memphis, Tenn. $242 $2,901
11-50 Can be found by visiting: http://www.zillow.com/research/landlord-profit-7357/

Top 10 Markets for Long-term Financial Gain (includes home equity gains, tax benefits, and the difference between monthly rental income and mortgage payments after holding onto the property for six years on the median home. Also accounting for property/income taxes, maintenance and vacancy)

Release contains wide tables. View fullscreen.

Rank Metro Area Long-term profit (monthly) Long-term profit (annually)
1. San Jose, Calif. $8,927 $107,122
2. San Francisco $6,078 $72,939
3. Los Angeles $4,328 $51,938
4. San Diego $4,165 $49,983
5. Riverside, Calif. $3,659 $43,907
6. New York $3,179 $38,147
7. Boston $3,009 $36,109
8. Seattle $2,861 $34,335
9. Sacramento, Calif. $2,694 $32,328
10. Honolulu $2,512 $30,144
11-50 Can be found by visiting: http://www.zillow.com/research/landlord-profit-7357/

About Zillow, Inc.

Zillow, Inc. (NASDAQ: Z) operates the largest home-related marketplaces on mobile and the Web, with a complementary portfolio of brands and products that help people find vital information about homes, and connect with the best local professionals. In addition, Zillow operates an industry-leading economics and analytics bureau led by Zillow’s Chief Economist Dr. Stan Humphries. Dr. Humphries and his team of economists and data analysts produce extensive housing data and research covering more than 450 markets at Zillow Real Estate Research. Zillow also sponsors the quarterly Zillow Home Price Expectations Survey, which asks more than 100 leading economists, real estate experts and investment and market strategists to predict the path of the Zillow Home Value Index over the next five years. Zillow also sponsors the bi-annual Zillow Housing Confidence Index (ZHCI) which measures consumer confidence in local housing markets, both currently and over time. The Zillow, Inc. portfolio includes Zillow.com®, Zillow Mobile, Zillow Mortgage , Zillow Rentals, Zillow Digs®, Postlets®, Diverse Solutions®, Agentfolio®, Mortech®, HotPads™, StreetEasy® and Retsly™. The company is headquartered in Seattle.

Zillow.com, Zillow, Postlets, Mortech, Diverse Solutions, StreetEasy, Agentfolio and Digs are registered trademarks of Zillow, Inc. HotPads and Retsly are trademarks of Zillow, Inc.

i For short-term financial gain, Zillow identified the top places where landlords make the most money on their rental property based on several assumptions including that the median valued property was purchased five years ago in May 2009, with a 30-year fixed rate mortgage, a 20 percent down payment, and an interest rate of 4.5 percent, roughly the rate that prevailed at the time. For tax purposes we assume that the homeowner is married with a gross annual income equal to the metro-area median and that the property is vacant at a rate equal to the metro-area average vacancy rate. Finally, we assess the net profit excluding equity earned if the homeowner rents out the property for an additional seven years during which home values and rents increase at their historic rates.

ii For long-term financial gain Zillow identified the top places where landlords make the most money on their rental property based on several assumptions including that the median valued property was purchased five years ago in May 2009, with a 30-year fixed rate mortgage, a 20 percent down payment, and an interest rate of 4.5 percent, roughly the rate that prevailed at the time. For tax purposes we assume that the homeowner is married with a gross annual income equal to the metro-area median and that the property is vacant at a rate equal to the metro-area average vacancy rate. Finally, we assess the net profit and accumulated home equity if the homeowner rents out the property for an additional seven years during which home values and rents increase at their historic rates.

SOURCE:

Zillow, Inc. http://www.zillow.com

 

Categories
Banking Mortgages Real Estate

Mortgage Rates Slightly Higher Following Strong Jobs Report

Bankrate: Mortgage Rates Slightly Higher Following Strong Jobs Report

NEW YORK, July 10, 2014, Mortgage rates moved higher following a stronger than expected jobs report, with the benchmark 30-year fixed mortgage rate rising to 4.31 percent, according to Bankrate.com’s weekly national survey. The average 30-year fixed mortgage has an average of 0.33 discount and origination points.

To see mortgage rates in your area, go to http://www.bankrate.com/funnel/mortgages/

The average 15-year fixed mortgage rate inched higher to 3.41 percent, while the larger jumbo 30-year fixed mortgage rate increased to 4.33 percent. Adjustable rate mortgages were mixed, with the 5-year ARM holding steady at 3.33 percent and the 10-year ARM climbing to 3.88 percent.

So why did a blockbuster jobs report have such a muted impact on mortgage rates? In large part the flood of cheap money from central banks around the globe is keeping a lid on rates, even in the face of the type of economic news that historically has pushed rates higher in a more pronounced way. Many investors around the globe are parking this cheap cash in the safety of U.S. Treasury securities, at yields that are favorable to what can be found elsewhere around the globe. Mortgage rates are closely related to yields on long-term government debt.

As 2013 came to a close, the average 30-year fixed mortgage rate was 4.69 percent. At that time, a $200,000 loan would have carried a monthly payment of $1,036.07. After drifting lower throughout the first half of 2014, the average rate is now 4.31 percent, and the monthly payment for the same size loan would be $990.92, a savings of $45 per month for anyone that waited.

SURVEY RESULTS

30-year fixed: 4.31% — up from 4.28% last week (avg. points: 0.33)

15-year fixed: 3.41% — up from 3.40% last week (avg. points: 0.19)

5/1 ARM: 3.33% — unchanged from last week (avg. points: 0.21)

Bankrate’s national weekly mortgage survey is conducted each Wednesday from data provided by the top 10 banks and thrifts in the top 10 markets.

For a full analysis of this week’s move in mortgage rates, go to http://www.bankrate.com/mortgagerates

The survey is complemented by Bankrate’s weekly Rate Trend Index, in which a panel of mortgage experts predicts which way the rates are headed over the next seven days. According to the panelists, don’t expect any sharp pullback in mortgage rates. The majority – 80 percent – expect mortgage rates to remain more or less unchanged over the coming week, while the remaining 20 percent predict mortgage rates will rise. Interestingly, none of the respondents predicts a decrease in mortgage rates over the next seven days.

For the full mortgage Rate Trend Index, go to http://www.bankrate.com/news/rate-trends/mortgage.aspx

To download the Bankrate Mortgage Calculator & Mortgage Rates iPhone App 2.0 go to https://itunes.apple.com/us/app/bankrate-mortgage-calculator/id551454062?mt=8.

About Bankrate, Inc.

Bankrate (NYSE: RATE) is a leading publisher, aggregator, and distributor of personal finance content on the Internet. Bankrate provides consumers with proprietary, fully researched, comprehensive, independent and objective personal finance editorial content across multiple vertical categories including mortgages, deposits, insurance, credit cards, and other categories, such as retirement, automobile loans, and taxes. The Bankrate network includes Bankrate.com, our flagship website, and other owned and operated personal finance websites, including CreditCards.com, Interest.com, Bankaholic.com, Mortgage-calc.com, CreditCardGuide.com, InsuranceQuotes.com, CarInsuranceQuotes.com, InsureMe.com, and NetQuote.com. Bankrate aggregates rate information from over 4,800 institutions on more than 300 financial products. With coverage of nearly 600 local markets in all 50 U.S. states, Bankrate generates over 172,000 distinct rate tables capturing on average over three million pieces of information daily. Bankrate develops and provides web services to over 80 co-branded websites with online partners, including some of the most trusted and frequently visited personal finance sites on the Internet such as Yahoo!, CNN Money, CNBC, and Comcast. In addition, Bankrate licenses editorial content to over 500 newspapers on a daily basis including The Wall Street Journal, USA Today, The New York Times, The Los Angeles Times, and The Boston Globe.

For more information contact:

Kayleen Yates Senior Director, Corporate Communications kyates@bankrate.com (917) 368-8677

SOURCE:

Bankrate, Inc.

http://www.bankrate.com

 

Categories
Real Estate

Example of a Sale-Leaseback For a Major Commercial Real Estate Transaction

American Realty Capital Properties Announces Agreement to Acquire Red Lobster Real Estate In Approximate $1.5 Billion Sale-Leaseback Transaction

Acquisition Includes Over 500 Properties

Aggregate Acquisition to be Completed at a GAAP Cap Rate of 9.9% and a Cash Cap Rate of 7.9% Transaction to Complete ARCP’s $3.0 Billion Acquisition Target for 2014 Well-Ahead of Schedule

 

NEW YORK, May 16, 2014, American Realty Capital Properties, Inc. (NASDAQ: ARCP) (“ARCP” or the “Company”) announced today its entry into an approximate $1.5 billion sale-leaseback transaction for over 500 Red Lobster restaurant properties. This transaction will be consummated in conjunction with Golden Gate Capital’s (“GGC”) acquisition of Red Lobster from Darden Restaurants, Inc. Red Lobster is the leading operator of seafood restaurants, with high-quality real estate located at main intersections in strong markets.

The transaction’s purchase price represents a GAAP cap rate of 9.9% and a cash cap rate of 7.9%. Approximately 93.5% of the $1.5 billion portfolio’s leases will be structured with a 25-year initial term and approximately 6.5% (constituting leasehold assets) will have a weighted average 18.7-year initial term. The portfolio master leases will also include 2% annual contractual rent escalations, providing built-in income growth. Through executing this transaction, ARCP will achieve its 2014 $3.0 billion acquisition target well-ahead of schedule.

Nicholas S. Schorsch, Chief Executive Officer and Executive Chairman of ARCP, said, “This transaction further demonstrates our team’s ability to execute on our investment strategy. As corporate America continues to sell its owned real estate, our team has shown its strength in seizing these opportunities, evidenced by this deal, and due largely to our inherent advantage as the largest net lease REIT.”

David S. Kay, President of ARCP, added, “As we have continued to discuss, our ability to transact large-scale sale-leaseback transactions like the Red Lobster transaction, demonstrates our competitive advantage in the marketplace. With strong financial metrics, built-in 2% annual rent growth and long-term lease commitments, this acquisition affords shareholders value and supports our future earnings growth. When consummated, the Red Lobster transaction will allow us to achieve the high end of our acquisition guidance which we set at $3.0 billion for the entire year of 2014. We previously promised acquisitions at cap rates north of 8% and have done so this year in small self-originated transactions; now, we have duplicated that effort on a large scale.”

Lisa E. Beeson, Chief Operating Officer of ARCP, commented, “The Red Lobster acquisition was made possible by the combined efforts of our restaurant and retail divisions. Both teams diligenced and underwrote this transaction in a thorough and thoughtful manner, all while doing so quickly and efficiently, ensuring that we secured this large-scale deal in a competitive process. Those efforts also afford long-term flexibility through an acquisition structure highlighted by multiple homogeneous lease pools, supported by the protection of master leases. Further, we are excited by the partnership created with GGC in acquiring Red Lobster, an iconic restaurant operator. GGC is a San Francisco-based private investment firm with $12 billion of AUM and remains one of the most active investors in multi-unit consumer companies and casual dining restaurants, having acquired leading brands such as California Pizza Kitchen, Payless ShoeSource and Eddie Bauer.”

“We are excited to be partnering with ARCP, a leading real estate operator, on this compelling transaction,” said Josh Cohen, Managing Director at GGC.  “This deal represents our fourth transaction with ARCP and we look forward to continuing to work collaboratively with them going forward.”

The purchase agreements relating to the Red Lobster transaction contain customary representations and warranties by the sellers. The Company’s obligation to close the transactions contemplated by the purchase agreements remains subject to a number of conditions, including the consummation of GGC’s purchase of Red Lobster.

About the Company ARCP is a self-managed publicly traded Maryland corporation listed on The NASDAQ Global Select Market, focused on acquiring and owning single tenant freestanding commercial properties subject to net leases with high credit quality tenants. Additional information about ARCP can be found on its website at www.arcpreit.com. ARCP may disseminate important information regarding it and its operations, including financial information, through social media platforms such as Twitter, Facebook and LinkedIn.

Forward-Looking Statements Information set forth herein (including information included or incorporated by reference herein) may contain “forward‑looking statements” (as defined in Section 21E of the Securities Exchange Act of 1934, as amended), which reflect ARCP’s expectations regarding future events. The forward-looking statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those contained in the forward-looking statements. Such forward-looking statements include, but are not limited to, the Company’s plans, market and other expectations, objectives, intentions, and other statements that are not historical facts, and the Company’s ability to consummate the Red Lobster transaction as currently structured, including the number of properties expected to be acquired and the total investment therein, and realize the benefits therefrom, including challenges faced by the parties with whom we have contracted to consummate the Red Lobster transaction. Additional factors that may affect future results are contained in ARCP’s filings with the SEC, which are available at the SEC’s website at www.sec.gov. ARCP disclaims any obligation to update and revise statements contained in these materials based on new information or otherwise.

SOURCE:

American Realty Capital Properties, Inc. http://www.arcpreit.com

 

Categories
Investing Real Estate Stocks

Interested in Buying Stock in Real Estate Properties?

ETRE Financial Launches Real Time Platform for Commercial Real Estate

Enables Trading of Shares of Individual Commercial Real Estate Assets and Improves Transparency of the Overall REIT Market

NEW YORK, Oct. 23, 2013, ETRE Financial, LLC (“ETRE”), a real estate financial services and technology company, today announced the launch of a first-of-its-kind exchange-traded real estate platform for investing in shares of individual commercial real estate assets and portfolio REITs listed on national exchanges. The ETRE platform incorporates capital advisory, asset management, trading and credit analysis to provide an end-to-end solution for liquid, transparent and accessible real estate investing and information analysis.

ETRE seeks to broaden the investment opportunity in commercial real estate through creation of the Electronic Traded Property (“ETP”) and through a new process for investing in individual commercial real estate assets. To facilitate investment in individual commercial assets, ETRE has introduced mark-to-market technology for ETP and REIT equity shares that innovates mark-to-market simultaneous pricing in price per share, price per square foot, price per unit, and price per key in real time.

“ETRE is the next evolutionary step in real estate investing,” said Paul Frischer, ETRE’s co-founder and Chief Executive Officer. “Building on the established framework of REIT equities and the benefits of underlying pooled real estate assets, investors in the public market have sought the opportunity to have access to individual commercial real estate properties as part of their portfolios. ETRE has filled this market demand through the introduction of Electronic Traded Properties, leading the way to listing and trading of single property REITs on national exchanges.”

ETRE’s proprietary trading platform and advisory services provide a complete order management system with an extensive collection of trade and market information to support superior analytics and trading for ETPs and portfolio REITs. The platform runs in a cloud environment that is available to institutional investors, traders, property owners, brokers, financial advisors and individual investors globally as a secure internet browser-based system.

“The ETRE platform delivers unprecedented transparency into publicly-traded real estate in real-time metrics for both equity and real estate investors,” said Jesse Stein, ETRE’s co-founder and Executive Managing Director. “The platform provides investors with the ability to create their own diversified real estate portfolios and allocate investments based on geographic, asset type, and yield criteria. The ETRE advisory service builds on these key factors to support owners and investors seeking to list individual commercial real estate assets on national exchanges.”

To learn more about ETRE advisory services or to register for a trial demo of the ETRE Trader OMS platform, please visit www.etrefinancial.com.

About ETRE Financial
ETRE Financial, a real estate financial technology company, was founded in 2012 by a team of real estate professionals who sought to bring the benefits of the equities market – including liquidity, transparency and investor accessibility – to the commercial real estate market. ETRE encompasses capital advisory, asset management, trading and credit analysis systems to provide an end-to-end solution for liquid, transparent and accessible real estate investing in publicly-traded REITs and exchange-listed single asset commercial real estate properties. To learn more, please visit www.etrefinancial.com.

Media Contacts:

Konstantin Shishkin
212.445.8462
kshishkin@webershandwick.com

David Brodnick 
212.445.8018
dbrodnick@webershandwick.com

SOURCE:

ETRE Financial, LLC
http://www.etrefinancial.com