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Corey Dutton
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  • Lender
  • Salt Lake City, UT
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What Are Real Estate Values Doing in Your Area?

Corey Dutton
Pro Member
  • Lender
  • Salt Lake City, UT
Posted Mar 14 2012, 08:52

I’m trying to get a read on what real estate values are doing in each geographic area where we do business. It’s one thing to read reports compiled by third parties, but it’s an altogether different story from the agents, hard money lenders, or real estate investors on the ground in the area. I thought this would be the perfect place to ask this question.

Please share your opinions on how either residential or commercial real estate values are doing in your area now and what the future will bring. I’d love to hear from you!

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Geof Greeneisen
  • Investor
  • Howell, MI
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Geof Greeneisen
  • Investor
  • Howell, MI
Replied Mar 22 2012, 20:04

I agree with Tom A, acquisition prices in our market in SE Michigan have increased 20% since January 1. We've been able to raise our average rents from $775/mo. to $800/mo. which represents a pretty drastic increase in overall revenue for us.

We are anticipating acquisition prices as well as rents to continue increasing over the next 12-24 months. We're buying as much as we can.

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Corey Dutton
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  • Lender
  • Salt Lake City, UT
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Corey Dutton
Pro Member
  • Lender
  • Salt Lake City, UT
Replied Mar 22 2012, 21:12

Tony,
I'm impressed with your assessment of the hawaii market but even more impressed with your info-graphic. Very cool...how'd you do that?
Thanks for the great feedback all. GREAT discussion.

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Robert Adams
  • Real Estate Broker
  • Henderson, NV
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Robert Adams
  • Real Estate Broker
  • Henderson, NV
Replied Mar 23 2012, 00:08

Tony what is the median price of homes there currently?

Originally posted by Tony Kawaguchi:
Here in Hawaii, the real estate market is a bit more vibrant than in the rest of the country thanks to a few unique features (warm weather, idyllic tropical setting, extremely low crime rates, etc.), so demand is consistently higher than in most other places. With that said, the housing market in Hawaii was hit by the recession, prices did drop a bit, and there was a brief spike in foreclosures... However, things have been recovering steadily since then, with building starts up, home sales up, and other industries - like tourism and hospitality - recovering now as well. It's funny, I actually recently made an infographic (for those who don't know, that's an image that displays facts in an easy-to-read manner) about this very topic:
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Rich Weese#2 Off Topic Contributor
  • Real Estate Investor
  • the villages, FL
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Rich Weese#2 Off Topic Contributor
  • Real Estate Investor
  • the villages, FL
Replied Mar 23 2012, 04:24

When everyone is getting on the train, I start thinking about getting off, and vice versa. I stopped buying in FL 6 months ago, due to investors bidding up the prices too fast/much. This does make me worry about a bubble, even if it is small. The thing that offsets that concern at present, in my mind, is the unbelievable demand for rentals! As long as that stays high, all is well. With 250 doors and ZERO vacancy, it is hard to complain.
We are being told that an additional onslaught of REO's may be placed on the market, so that may effect status. Again, another offset to that may be the demand by renters that are still out there. When do the 2 level out- renters and inventory? That will cause the second obvious thing to happen- over construction of new rentals!
Not picking a side here. Just mentioning the wierd economy we're in with new trails being travelled for the first time. Find your niche that works, but to be safe, keep looking over your shoulder and be prepared to change the niche before it turns on you. RESERVES always help you to sleep better at night. Don't be a fool by going all in currently. Live to fight another day and time, imo. Rich

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Mike McKinzie
  • Investor
  • Westminster, CO
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Mike McKinzie
  • Investor
  • Westminster, CO
Replied Mar 23 2012, 08:02

Recently, I talked to one of the top Realtors in Orange County (SFR properties) and they said (husband and wife team) to expect OC properties to drop another 10-20 percent before a real upswing in prices. This is in the $400,000 to $500,000 price range. Houses below that are seeing a small uptick in prices but you have to realize that a house that sells for $500,000 in 2012 sold for $900,000 in 2008. My Realtor friends work with a lot of Banks and average getting 10 REO listings a month. Their Bank Clients tell them that they have so much inventory that it seems almost unending. The main problem in Southern California is just the sheer number of houses here. Add to that the REAL unemployment numbers in California are nearing 20% and you still have a lot of market weakness. Investors can gobble up all the property they want, but how many of you would pay $500,000 for a house that rents for $2,000 to $2,500 a month?

But as others have posted, a good investor can make money in all kinds of markets, I have been investing since 1982 and bought and sold in all types of markets since then. There are just two basic rules to be successful in real estate investing. 1: You make your money on the BUY, not the sell. 2: Have multiple exit strategies when you BUY.

I hope all of you are enjoying the Conference and learn a lot. I am sure the speakers are telling you HOW to "BUY RIGHT."

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Robert Adams
  • Real Estate Broker
  • Henderson, NV
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Robert Adams
  • Real Estate Broker
  • Henderson, NV
Replied Mar 23 2012, 09:34

Rich,
Great post!

I would just like to add that the very low inventory and the very high demand right now should balance out when the REO mess gets sorted out and we have a new wave of REO inventory hit the market. A lot of people are saying that it will dip again when the REO invetory hits the market but I doubt it will (at least in my market Las Vegas). If it dips at all it will be slight and temporary as even before AB284 stopped NOD's, inventory was still decreasing monthly and demand was still growing monthly.

I agree that is always best to have a back up plan with plenty of reserves and don't go too hard too fast. We are running a marathon here not a 50 yard dash. It is all about longivity.

Originally posted by Rich Weese:
When everyone is getting on the train, I start thinking about getting off, and vice versa. I stopped buying in FL 6 months ago, due to investors bidding up the prices too fast/much. This does make me worry about a bubble, even if it is small. The thing that offsets that concern at present, in my mind, is the unbelievable demand for rentals! As long as that stays high, all is well. With 250 doors and ZERO vacancy, it is hard to complain.
We are being told that an additional onslaught of REO's may be placed on the market, so that may effect status. Again, another offset to that may be the demand by renters that are still out there. When do the 2 level out- renters and inventory? That will cause the second obvious thing to happen- over construction of new rentals!
Not picking a side here. Just mentioning the wierd economy we're in with new trails being travelled for the first time. Find your niche that works, but to be safe, keep looking over your shoulder and be prepared to change the niche before it turns on you. RESERVES always help you to sleep better at night. Don't be a fool by going all in currently. Live to fight another day and time, imo. Rich
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Charles Smith
  • Property Manager
  • Chicago, IL
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Charles Smith
  • Property Manager
  • Chicago, IL
Replied Dec 5 2012, 17:18

Corporate raiders are buying houses by the lots,50--1000 at a time,so where
the market goes is a mystery with that type of involvement.It,s common
knowledge,just goggle it (corporate home buying )we are watching the next
level of domination of the middle class.I am in desperate need to know what
you and our colleagues think and what course of action would be feasible.I
am in the Midwest,Chicago

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Albert Hasson
  • Investor
  • Paradise Valley, AZ
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Albert Hasson
  • Investor
  • Paradise Valley, AZ
Replied Dec 5 2012, 20:08

I don't think there is any "course of action". I wish I has the money to join your so called corporate raiders. I call this capitalism.