World property markets frozen: Mack
Bid-ask price gaps are too wide, many are sitting on the sidelines
(NEW YORK) Global real estate markets are frozen because buyers and sellers remain far apart on price and aren't ready to concede values won't return to levels achieved in 2007, Apollo Real Estate Advisors LP senior partner William Mack said.
Slow market: Confidence is not expected to return to real estate until everybody believes the blood-letting is over
'The markets are kind of stuck,' said Mr Mack, who has helped raise almost US$6 billion for new real estate investments. 'The bid-ask spread is too wide. A lot of money and a lot of people are sitting on the sidelines trying to establish where the next move is.'
Mortgage-related losses have forced financial institutions to write down more than US$300 billion in assets and constrained lending for property acquisitions. In New York City, Manhattan office building sales fell in the first quarter to the lowest since 2005, according to data from Real Capital Analytics.
Recent signs of recovery in shares of real estate investment trusts are 'a bounce off the bottom', said Mr Mack, 68, in an interview last week. The Bloomberg Reit Index has risen 9.8 per cent this year, after falling 22 per cent in 2007, the steepest dive in the 14-year history of the measure.
'The sales market is very, very slow,' said Mr Mack. 'The leasing market has slowed down because there have been a lot of layoffs, and people are not as confident they need extra space and that's throughout the world.'
Confidence won't return to the market until 'everybody believes that the blood-letting and the writing down of assets is over, or near-over', said Mr Mack. 'We need a realisation that terms and conditions that existed a year ago are not going to come back in the near future.'
Property values have fallen and lenders are willing to lend only about 65 per cent of value, compared with 90 per cent in the past. 'Unless you have a good deal of equity, you're going to be out of the game,' Mr Mack said. 'That is the penalty for rolling the dice.' Apollo is waiting for the right moment to start making acquisitions and Mr Mack said he thinks the East and West coast property markets will offer some of the best opportunities.
The gap between sellers and buyers remains 'very large', said Mr Mack, who founded Apollo's real estate unit in 1993 as property markets were recovering from a recession.
The group's investments have included New York's Time Warner Center, the St Katherine Dock office/retail development in London, and the Pascal Tower in Paris.
Apollo Real Estate was founded in 1993 by Mr Mack and Apollo Management LP, a private equity firm. -- Bloomberg
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Real Estate ( General News )
Real Estate ( General News )
by winston » Tue May 20, 2008 8:45 pm
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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winston - Billionaire Boss
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Real Estate
by winston » Sat Jun 28, 2008 8:14 am
b]Six Problem Areas to Watch When Buying a Home[/b]
06/27/08 ; John Morell
If you've got your eye on a house, of course you'll want to look it over carefully, but you may not know exactly what to look for. Here's a guide on how to be like a home inspector, and learn how to spot potential problems.
Good home inspectors are trained professionals who can walk through a property and assess within an hour whether a home is a beauty or a beast. When the time comes, make sure your potential purchase is checked out from roof to basement by one of these skilled specialists.
But what about before that point, when you're just at the open house or the Realtor is showing you around? Can your untrained eye spot potentially serious problems in a quick walk-through?
"There are plenty of obvious problems that you can see beforehand," says Rich Lee, a home inspector based in Sonoma, Calif. "Your first clue is to walk down the street looking at the neighboring houses first. Are they in good shape? Is the landscaping taken care of? Is the paint still bright? These facts will give you an idea of how the previous owners handled maintenance in comparison with their neighbors."
Before marching into that house you like, take a small notebook and watch out for these six hot-spot areas where trouble can lurk:
The Roof
On asphalt shingle roofs, look for patched areas where the colors don't completely match, as well as shingles with warped, upturned edges. On tile or shake roofs, look for breaks that may have a pattern (where a worker may have recently walked). Also, be sure to look up under the eaves.
"You may see water stains, which could indicate a leak farther up the roof," says Mike Lauby, a Phoenix, Ariz., home inspector.
The Walls
Use your eyes and your nose. Look for areas of "fuzzy" drywall or plaster, which can indicate that water is getting behind the walls.
If a room, closet or under sink cabinet has a mildew smell, that's a red flag. Mold and mildew remediation can be expensive and it's a problem you'll want to know about before all the paperwork is signed.
You may see fine cracks around doors and window casements as a result of the house "settling." But as long as they're no wider than the width of a dime, it's usually not a problem.
Turn On the Water
Try out each faucet you find, especially in houses that have been vacant for a long period. If the water comes out rusty then old galvanized pipes will need to be replaced with copper.
See if the water pressure is the same all around the house. If the water in one sink trickles while it flows in the bathroom downstairs, that's not necessarily a huge problem. The aerator, the inexpensive screw-in filter where water flows out of, may just need changing.
The Furnace
It may be hot out, but turn the furnace on. When turning on either the furnace or air conditioner, listen for pounding noises coming from the vents. You don't have to know what's causing it -- you just need to make a note for the home inspector to do a full check of the unit.
On the Floor
If the home is built on a cement slab foundation, you're unlikely to hear any creaking on the ground floor.
If there is it may be cause for alarm. If there's a wood subfloor, walk carefully around, especially in bathrooms and kitchens, feeling for areas where the floor might seem to "sink" in more than the other areas. This could be water damage, and another area that needs closer inspection. If it's in a bathroom near the shower, the shower pan could be leaking which is an expensive project.
Pool Patrol
If there's a pool or spa and the home has been vacant for a while, there's a good chance the bank has drained it for safety. If it's a plaster pool, the sun could cause the plaster to dry and crack, which means a new plastering job.
06/27/08 ; John Morell
If you've got your eye on a house, of course you'll want to look it over carefully, but you may not know exactly what to look for. Here's a guide on how to be like a home inspector, and learn how to spot potential problems.
Good home inspectors are trained professionals who can walk through a property and assess within an hour whether a home is a beauty or a beast. When the time comes, make sure your potential purchase is checked out from roof to basement by one of these skilled specialists.
But what about before that point, when you're just at the open house or the Realtor is showing you around? Can your untrained eye spot potentially serious problems in a quick walk-through?
"There are plenty of obvious problems that you can see beforehand," says Rich Lee, a home inspector based in Sonoma, Calif. "Your first clue is to walk down the street looking at the neighboring houses first. Are they in good shape? Is the landscaping taken care of? Is the paint still bright? These facts will give you an idea of how the previous owners handled maintenance in comparison with their neighbors."
Before marching into that house you like, take a small notebook and watch out for these six hot-spot areas where trouble can lurk:
The Roof
On asphalt shingle roofs, look for patched areas where the colors don't completely match, as well as shingles with warped, upturned edges. On tile or shake roofs, look for breaks that may have a pattern (where a worker may have recently walked). Also, be sure to look up under the eaves.
"You may see water stains, which could indicate a leak farther up the roof," says Mike Lauby, a Phoenix, Ariz., home inspector.
The Walls
Use your eyes and your nose. Look for areas of "fuzzy" drywall or plaster, which can indicate that water is getting behind the walls.
If a room, closet or under sink cabinet has a mildew smell, that's a red flag. Mold and mildew remediation can be expensive and it's a problem you'll want to know about before all the paperwork is signed.
You may see fine cracks around doors and window casements as a result of the house "settling." But as long as they're no wider than the width of a dime, it's usually not a problem.
Turn On the Water
Try out each faucet you find, especially in houses that have been vacant for a long period. If the water comes out rusty then old galvanized pipes will need to be replaced with copper.
See if the water pressure is the same all around the house. If the water in one sink trickles while it flows in the bathroom downstairs, that's not necessarily a huge problem. The aerator, the inexpensive screw-in filter where water flows out of, may just need changing.
The Furnace
It may be hot out, but turn the furnace on. When turning on either the furnace or air conditioner, listen for pounding noises coming from the vents. You don't have to know what's causing it -- you just need to make a note for the home inspector to do a full check of the unit.
On the Floor
If the home is built on a cement slab foundation, you're unlikely to hear any creaking on the ground floor.
If there is it may be cause for alarm. If there's a wood subfloor, walk carefully around, especially in bathrooms and kitchens, feeling for areas where the floor might seem to "sink" in more than the other areas. This could be water damage, and another area that needs closer inspection. If it's in a bathroom near the shower, the shower pan could be leaking which is an expensive project.
Pool Patrol
If there's a pool or spa and the home has been vacant for a while, there's a good chance the bank has drained it for safety. If it's a plaster pool, the sun could cause the plaster to dry and crack, which means a new plastering job.
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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winston - Billionaire Boss
- Posts: 118906
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Re: Properties - General News
by winston » Fri Jul 18, 2008 1:06 pm
US Properties
How to Play the Real Estate Rebound...
by Louis Basenese
The real estate black hole keeps getting deeper. In the past year, housing starts are down 32.1%. Building permits are down 36.3%. And foreclosures are up 48%.
Even worse, the dastardly mix of tighter lending standards and an increasingly cautious consumer has led to a supply glut. Inventories sit at 4.55 million homes, representing an 11.2-month supply.
So much for the long-believed notion that "real estate always goes up."
The industry giants are feeling the pain, too, right where it hurts the worst - in the wallet...
Collectively, the five largest homebuilders lost $3.4 billion in the latest quarter. No wonder home-builder sentiment is at a 22-year low, according to the latest National Association of Home Builders survey.
It's hard to believe that just three years ago, on July 28, the Philadelphia Housing Sector Index peaked. I remember this well because two days prior - in a stroke of pure, unrepeatable luck - we sold our first home for 88% more than we paid for it 14 months earlier.
I can assure you, however, that my wife and I weren't part of the ill-fated horde that mistook the lucky timing for skill and became full-fledged speculators. Those folks got an expensive lesson in supply and demand dynamics.
But who knew that just days after our windfall gain, the easy lending-induced mania would finally roll over? And today - one subprime fiasco and a credit crunch later - the industry is still paying the price.
All the pain is making value investors salivate. They're just waiting for a telltale sign that the market has finally bottomed.
But we're not going to wait. Because,
1) the clear-cut signal isn't coming, and
2) whether the housing rebound starts tomorrow, next week, or two years from now, it doesn't matter. We can position our portfolios to profit no matter what.
The Federal Reserve Weighs in for a Fight
The latest 127-page Anderson Forecast out of the University of California indicates the leading edge - the California housing market - may be showing the first signs of a recovery.
"The combination of steep price declines, lower interest rates and an easing of the credit crunch may now be bringing bargain-hunter buyers back into the market," said Ryan Ratcliff, an Anderson Forecast economist.
The lagging edge - the Manhattan housing market - might finally be showing signs of cracking. The Big Apple is now littered with price reductions in the middle market (apartments below $1 million), according to a report by Barron's.
So is it time to act on this data and speculate on the coming real estate rebound?
Not so fast. Because fighting in the other corner, we have the University of Wisconsin and the Federal Reserve, whose recent analysis of the real estate market paints a murkier picture.
Their study suggests that the housing bust may only be half over. The study's conclusions are based on very strong data, too - historical rent/price yields, the typical pace of rental growth and the S&P/Case-Shiller Home Price index.
My point is that making an airtight case for either side is nearly impossible. Conflicting outlooks are regrettably the norm, not the exception. Just ask CNBC's Maria Bartiromo, who got the lowdown (if you want to call it that) on real estate right from the horse's mouth.
In an interview in March 2007 with the CEOs of homebuilders Toll Brothers and D.R. Horton, Robert Toll said, "It'll be another four or five months before you finally burn off inventory in most of the markets." Guess again!
DR Horton's president and CEO Don Tomnitz, had a different outlook, saying "I don't want to be too sophisticated here, but 2007 is going to suck, all 12 months of the calendar year." Ding, ding, ding, we have a winner!
A Real Estate Turnaround Signal in 2008...
I hate to break the news to you, but no single data point or insider perspective is going to fortuitously signal an unambiguous bottom. Not new home sales... not building permits... not the latest inventory data... nothing. And nobody's going to give us the "all clear," either.
Waiting for irrefutable proof of the turn is flawed anyway. The stock market is a forward-looking beast. When housing prices "officially" bottom, real estate stocks will likely have already run-up in price. But there's a surefire way not to get caught watching the paint dry...
Stick to the tried and true. Buy sound companies and have the discipline to stick to proven asset allocation. It makes all of the market indicators and posturing above pointless.
But that also means committing to owning shares of companies that are out of favor with the investing public. And no sector has been more discarded than real estate.
I suggest a low-risk, low-hassle, low-cost approach. Leave active management behind and consider the Vanguard REIT Index (VGSIX). It will give you the broadest real estate exposure possible for an almost negligible expense ratio of 0.2%.
Public Storage and Equity Residential Properties are among its top five holdings. Both have returned over 12% this year. The fund also maintains consistent dividend strength, yielding more than 5% right now.
And here's another little portfolio-boosting secret: This year's big losers are often next year's Wall Street darlings. Historical data bears that out. And so will holding a part of your portfolio in real estate.
How to Play the Real Estate Rebound...
by Louis Basenese
The real estate black hole keeps getting deeper. In the past year, housing starts are down 32.1%. Building permits are down 36.3%. And foreclosures are up 48%.
Even worse, the dastardly mix of tighter lending standards and an increasingly cautious consumer has led to a supply glut. Inventories sit at 4.55 million homes, representing an 11.2-month supply.
So much for the long-believed notion that "real estate always goes up."
The industry giants are feeling the pain, too, right where it hurts the worst - in the wallet...
Collectively, the five largest homebuilders lost $3.4 billion in the latest quarter. No wonder home-builder sentiment is at a 22-year low, according to the latest National Association of Home Builders survey.
It's hard to believe that just three years ago, on July 28, the Philadelphia Housing Sector Index peaked. I remember this well because two days prior - in a stroke of pure, unrepeatable luck - we sold our first home for 88% more than we paid for it 14 months earlier.
I can assure you, however, that my wife and I weren't part of the ill-fated horde that mistook the lucky timing for skill and became full-fledged speculators. Those folks got an expensive lesson in supply and demand dynamics.
But who knew that just days after our windfall gain, the easy lending-induced mania would finally roll over? And today - one subprime fiasco and a credit crunch later - the industry is still paying the price.
All the pain is making value investors salivate. They're just waiting for a telltale sign that the market has finally bottomed.
But we're not going to wait. Because,
1) the clear-cut signal isn't coming, and
2) whether the housing rebound starts tomorrow, next week, or two years from now, it doesn't matter. We can position our portfolios to profit no matter what.
The Federal Reserve Weighs in for a Fight
The latest 127-page Anderson Forecast out of the University of California indicates the leading edge - the California housing market - may be showing the first signs of a recovery.
"The combination of steep price declines, lower interest rates and an easing of the credit crunch may now be bringing bargain-hunter buyers back into the market," said Ryan Ratcliff, an Anderson Forecast economist.
The lagging edge - the Manhattan housing market - might finally be showing signs of cracking. The Big Apple is now littered with price reductions in the middle market (apartments below $1 million), according to a report by Barron's.
So is it time to act on this data and speculate on the coming real estate rebound?
Not so fast. Because fighting in the other corner, we have the University of Wisconsin and the Federal Reserve, whose recent analysis of the real estate market paints a murkier picture.
Their study suggests that the housing bust may only be half over. The study's conclusions are based on very strong data, too - historical rent/price yields, the typical pace of rental growth and the S&P/Case-Shiller Home Price index.
My point is that making an airtight case for either side is nearly impossible. Conflicting outlooks are regrettably the norm, not the exception. Just ask CNBC's Maria Bartiromo, who got the lowdown (if you want to call it that) on real estate right from the horse's mouth.
In an interview in March 2007 with the CEOs of homebuilders Toll Brothers and D.R. Horton, Robert Toll said, "It'll be another four or five months before you finally burn off inventory in most of the markets." Guess again!
DR Horton's president and CEO Don Tomnitz, had a different outlook, saying "I don't want to be too sophisticated here, but 2007 is going to suck, all 12 months of the calendar year." Ding, ding, ding, we have a winner!
A Real Estate Turnaround Signal in 2008...
I hate to break the news to you, but no single data point or insider perspective is going to fortuitously signal an unambiguous bottom. Not new home sales... not building permits... not the latest inventory data... nothing. And nobody's going to give us the "all clear," either.
Waiting for irrefutable proof of the turn is flawed anyway. The stock market is a forward-looking beast. When housing prices "officially" bottom, real estate stocks will likely have already run-up in price. But there's a surefire way not to get caught watching the paint dry...
Stick to the tried and true. Buy sound companies and have the discipline to stick to proven asset allocation. It makes all of the market indicators and posturing above pointless.
But that also means committing to owning shares of companies that are out of favor with the investing public. And no sector has been more discarded than real estate.
I suggest a low-risk, low-hassle, low-cost approach. Leave active management behind and consider the Vanguard REIT Index (VGSIX). It will give you the broadest real estate exposure possible for an almost negligible expense ratio of 0.2%.
Public Storage and Equity Residential Properties are among its top five holdings. Both have returned over 12% this year. The fund also maintains consistent dividend strength, yielding more than 5% right now.
And here's another little portfolio-boosting secret: This year's big losers are often next year's Wall Street darlings. Historical data bears that out. And so will holding a part of your portfolio in real estate.
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
-
winston - Billionaire Boss
- Posts: 118906
- Joined: Wed May 07, 2008 9:28 am
Retirement & Financial Planning
by tangoandrew » Tue Jul 29, 2008 8:55 pm
hi folks,
just share an encounter with a mortgage broker that convinced me, that it maybe better to go to the bank direct than thru a MB...
i emailed the MB about re-financing my loan, followed up thru the phone & even smsed my cpf interest accrued, amt of cpf used, etc as requested by the MB. but after more than i week, no news...so i called up the MB...and guess what? MB forgot...and told me that he's actually waiting for my reply, etc.
so ok...i ask him to go ahead and apply to re-finance & at the same time apply for a term loan (i.e. using my property as collateral). but the MB told me the bank will not likely to approve my request for a TL as i'm on no-pay-leave for this year. i felt the MB is not willing to go the extra mile...he should at least give a try..before telling me it is not likely to be approved.
so...first, forgot about my loan case....& now...not very willing to try. so i got fed up with this kind of attitude, and decided to call the bank direct...i explained about my no-pay-leave, etc to the loan officer...and today, the bank called that both the housing loan & TL are approved...and even gave me a 0.1% off the rate. so moral of the story, don't believe MBs will always get the best rate for you & give you the best service.
sorry cannot mention name..as cannot advertise services in the forum mah, and so also cannot dis-advertise or un-advertise in the forum, right? mr GD. btw, feel free to shift this to the appropriate thread...also pm me if you really want to avoid this MB.
just share an encounter with a mortgage broker that convinced me, that it maybe better to go to the bank direct than thru a MB...
i emailed the MB about re-financing my loan, followed up thru the phone & even smsed my cpf interest accrued, amt of cpf used, etc as requested by the MB. but after more than i week, no news...so i called up the MB...and guess what? MB forgot...and told me that he's actually waiting for my reply, etc.
so ok...i ask him to go ahead and apply to re-finance & at the same time apply for a term loan (i.e. using my property as collateral). but the MB told me the bank will not likely to approve my request for a TL as i'm on no-pay-leave for this year. i felt the MB is not willing to go the extra mile...he should at least give a try..before telling me it is not likely to be approved.
so...first, forgot about my loan case....& now...not very willing to try. so i got fed up with this kind of attitude, and decided to call the bank direct...i explained about my no-pay-leave, etc to the loan officer...and today, the bank called that both the housing loan & TL are approved...and even gave me a 0.1% off the rate. so moral of the story, don't believe MBs will always get the best rate for you & give you the best service.
sorry cannot mention name..as cannot advertise services in the forum mah, and so also cannot dis-advertise or un-advertise in the forum, right? mr GD. btw, feel free to shift this to the appropriate thread...also pm me if you really want to avoid this MB.
- tangoandrew
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Re: House
by millionairemind » Tue Jul 29, 2008 9:02 pm
Hello TA,
Thanks for the info.. Will keep it in mind when I need a mortgage refinanced next time.
Cheers,
mm
Thanks for the info.. Will keep it in mind when I need a mortgage refinanced next time.
Cheers,
mm
"If a speculator is correct half of the time, he is hitting a good average. Even being right 3 or 4 times out of 10 should yield a person a fortune if he has the sense to cut his losses quickly on the ventures where he has been wrong" - Bernard Baruch
Disclaimer - The author may at times own some of the stocks mentioned in this forum. All discussions are NOT to be construed as buy/sell recommendations. Readers are advised to do their own research and analysis.
Disclaimer - The author may at times own some of the stocks mentioned in this forum. All discussions are NOT to be construed as buy/sell recommendations. Readers are advised to do their own research and analysis.
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Re: House
by tangoandrew » Tue Jul 29, 2008 9:02 pm
thanks, winston...for shifting it to the right thread..
sorry....i think title should be "Refinancing: Maybe better DIY than thru Mortgage Broker?
sorry....i think title should be "Refinancing: Maybe better DIY than thru Mortgage Broker?
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Re: House
by ehchang » Thu Jul 31, 2008 9:17 am
winston wrote:Six Problem Areas to Watch When Buying a Home
06/27/08 ; John Morell
Turn On the Water
Try out each faucet you find, especially in houses that have been vacant for a long period. If the water comes out rusty then old galvanized pipes will need to be replaced with copper.
[[[/b]
I can't remember where and why about copper pipes could be a cause for health problem and was recommended stainless steel pipes instead.
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Re: House
by helios » Thu Jul 31, 2008 9:33 am
ehchang wrote:I can't remember where and why about copper pipes could be a cause for health problem and was recommended stainless steel pipes instead.
yo ehChang pal,
u got a good point. yeah, do you remember that Copper can leach from the plumbing tube?
So, Copper toxicity has the same accumulative and internalisation effects, as per the convertible bonds lor ... ... it affects the central nervous system of our bodies.
- Copper toxicity in humans takes the form of stomach upset, nausea, and diarrhea, and stops when the high copper source is removed. These effects are noted at copper levels far in excess of the World Health Organization limits for copper in drinking water.
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Re: House
by LenaHuat » Thu Jul 31, 2008 10:22 am
SanSan mei
Wow, I'm astounded with your medical/chemical knowledge
Wow, I'm astounded with your medical/chemical knowledge
Copper toxicity has the same accumulative and internalisation effects, as per the convertible bonds lor
Please be forewarned that you are reading a post by an otiose housewife. 
****@@
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Re: House
by helios » Thu Jul 31, 2008 10:30 am
LenaHuat wrote:SanSan mei
Wow, I'm astounded with your medical/chemical knowledge
lena jie,
don't make me peng okie?
mei mei is still quietly following your steps in the US market. Believe you are a very timely, instinctive person.
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