Rising Trends in Real Estate 2009

Real estate markets in the United States might hit to bottom in 2009 and then splash for much of 2010, according to the Emerging Trends in Real Estate 2009 report by the ULI and New York-based PricewaterhouseCoopers LLP. For the duration of this phase, current drops in property values, foreclosures, delinquencies, and a limping economy will continue to crimp property cash flows
"Commercial real estate faces its most horrible year since the wrenching 1991–1992 industry depression," bring to a close industry experts interviewed for the report, which projects losses of 15 percent to 20 percent in real estate values from the mid-2007 peak. "Only when property financing gets restructured will pricing recorrect so we can find the floor, and this evolution might wipe out companies and people," says one respondent interviewed for the report.

Prior to a rebound, Emerging Trends says the subsequent requirements to happen:
• Private real estate markets need to correct-–lenders must compel distressed owners to become motivated sellers.
• Debt capital needs to flow-–lenders will need to learn to deal in a more stringent regulatory landscape. The commercial mortgage-backed securities (CMBS) market must "reformulate."
• Regulators have to to restore confidence in the securities market. The government will put in itself into overseeing mortgage securitization markets. Systemic overhaul promises more measured debt flow.
• The economy needs to advance. Falling demand for space won’t affect real estate markets severely until 2009.
• The housing situation is no better and shows no signs of recovering quickly. For lenders, the "sub prime mess is the tip of the iceberg." Stricter lending standards and the weak economy will keep on draining the homebuyer market. "Forget the quick fix!"
The report acknowledges that commercial markets will recover more quickly than most housing markets, and homebuilders may have to sell land tracts for "cents on the dollar" or face foreclosure on their holdings, adding to the previously high rate of mortgage defaults and foreclosures.

Best guidance for 2009:
• Investors should sit firmly. Opportunities will surface at significant discounts.
• Buy discounted loans.
• Recap distressed borrowers: invest in maturity defaults, construction loans/bridge loans, or take mezzanine positions and equity stakes in properties.
• Invest in publicly-held real estate investment trusts (REITs). They will lead the market’s recovery.
• Focus on global pathway markets: 24-hour coastal cities.
• Staff up asset managers, leasing pros, and workout specialists. Separate good assets from bad.
• Retrench on development and reorient to mixed-use and infill. Higher-density residential with retail will gain favor in next round of building.
• Go green. Cutting energy expenses is likely to be a priority.
• Buy or hold multifamily, hold office, hold hotels, and/or buy residential building lots, but be prepared to hold.
• Purchase distressed condos in urban areas near transit.
• Focus on neighborhood retail centers with strong grocery anchors and chain drugstores

Now in its 30th year, Emerging Trends is the oldest, most highly regarded annual industry outlook for the real estate and land use industry and includes interviews and survey responses from more than 600 leading real estate experts, including investors, developers, property company representatives, lenders, brokers and consultants.

Guidelines to Real Estate Agents' Success

1. First and Foremost YOU are a business: Real estate agents work for a broker, but are self-determining, custom-made sales people. This means that you are a small business and must put into practice as a business. Again, remember you are a small business owner.
2. Embrace a Planning Attitude: If you don't have a plan, then you are on some else's plan - usually the successful real estate agent's. For the duration of last 10 years, what I have learned as a performance development consultant or coach is that most people place more value in forecast a trip to the grocery store or a vacation than planning their lives either professionally or personally.
3. Research Your Market Plan: Since you, as the real estate agent, are responsible for your own everyday expenditure, do your research specific to your marketing plan within your strategic plan. Time spent in constructing your marketing plan is definitely well spent. NOTE: Remember a business plan usually is data driven, while a strategic plan identifies who does what by when.
4. Establish Sales Goal: Using your strategic action plan, establish sales goals. If you are new to this industry, it may take 6 months before the first sale. SUGGESTION: Use the W.H.Y. S.M.A.R.T. criteria for goal setting.
5. Create a Financial Budget: Budgeting is critical given the up and down of this volatile market place. Your financial budget should plan for your marketing costs, any additional costs such as education and your foretasted income.
6. Make Managing Yourself a Priority: Building a business is not easy. You must learn how to manage yourself especially in the area of time management, ongoing real estate business training coaching continuing education units, and personal life balance. Real estate is said to be a 24/7 business much like any small business. However, it is important not to lose sight of your personal life including family, friends, physical health, etc.
7. Find a Mentor or a Real Estate Coach: Going it alone is not easy. Take the time to find a mentor who can help you steer through some of the known obstacles and help you during the "peaks and valleys." If you have the resources, you may wish to hire a real estate coach or an executive coach who specializes in small business help and sales.

Top secret ways to make money in Real Estate

It is general knowledge that for a well-versed investor there are multiple ways to make earnings in the real estate market if only you are willing to learn the various strategies of real estate investment. It is valuable to know a few of the secret ways to make money in the real estate market:

Renovating / renting: - This is the most widely practiced method of real estate investment. Buy a house which is in need of repairs at below market price, undertake some renovation work and sell the house when the real estate markets experience an upward swing.

Real Estate Agent – Instead pf actively investing in the real estate market and running the concomitant risks, it is safer to turn into a real estate agent. Real estate agents do not invest neither buy nor sell properties but earn attractive commission amounts by helping people to buy and sell in the real estate market.

Buying wholesale - This is a secret way to make some instant profits in real estate market. To put it less charitably, you truly become the middleman by identifying a lucrative deal, enter into a contract and then advertise it for more money than you are paying. This method is considered somewhat unethical- more so, if the buyer comes to know what you are doing.

Leasing – This is indeed a wise method as you lease a property keeping the option to buy it below market value at an opportune moment. Lease optioning is practiced by many, particularly by people who do not qualify for a mortgage.

Money lending – You are nothing more than a financier or more plainly, a money lender. You lend the required amount and get paid for putting deals together. The one shortcoming is you need to have a large sum of cash at your disposal. But it is a fact that after being a successful investor in real estate investing for many years, people turn into hard money lenders.

Flipping Houses - This method can be successfully practiced if you have a sound knowledge of home prices, repair and upgrade costs. This strategy involves finding houses and reselling them to other investors on an as-is basis. Depending upon the market swings and your negotiating skills, you can flip houses faster.

Buying Land – Some real estate investors merely buy vacant land and do no construction but sell it after a couple of years when the market becomes bullish. If you are able to buy a few acres of undeveloped land and then sell it by convenient lots, you can expect a windfall profit.

Buying while under-construction – You buy properties in early stages of construction, by paying a deposit which may range from 5% to 30%. Suppose you have contracted to buy a house that is under construction and the developer raises the prices within a year, you can go ahead and sell your contract for more than what you secured it for. Or if you can afford to wait longer till construction is over, you can immediately sell the house without occupying it and also avoiding mortgage payment.

Consultation work – After being in the real estate business for a few years, people and gaining some valuable experience, it will be lucrative to turn into a consultant and offer advice to people wanting to buy or sell real estate properties. There are instances of consultants who have reaped rich dividends in the real estate market.

Current Trends in Real Estate Marketing

Now that you have been discussed about some of the internet marketing trends, let’s move on over to some of the other trends that taking place in the marketing world for real estate. For example, appearing on a local radio station or even on a location TV talk show is a fantastic way that you can get your name out there and ensure that people know who you are – after all, that is the entire point of being in the real estate market.

Advertising and selling yourself is something that many real estate agents have a hard time doing in the beginning, however that is something that you have to do in order to gain prospects, you truly have to ensure that people know who you are. Talking to everyone and anyone and truly making connections is what real estate is all about.

So make sure that you get yourself out there and I can promise that you will gain all sorts of different prospects!

Targeting a Niche Market

Finding a Good Niche Market

While location is the most obvious divider for real estate, perhaps your niche involves other factors. You can target specific property types, such as income properties, condos, waterfront homes, luxury homes, or new developments. Perhaps you specialize in different demographics such as Spanish speaking, senior citizens, or first time buyers.

A well-defined niche should consist of people with the same specialized needs that you offer. You should be able to provide a compelling reason for individuals in this group to do business with you instead of your competition. Also make sure that the target group is large enough to sustain the volume of business needed to meet your goals

Using Multiple Websites for Better Targeting

One option that is often overlooked is to have more than one domain name and web site. If you would like to target a large market or area, it may be a good idea to create multiple sites each targeted to a more specific market. This way you can use each web site to establish yourself as the expert in each of the smaller communities without sacrificing the larger area.

Distressed Investors Still on Sidelines as Commercial Real Estate Decline Continues

Investors anticipate further deterioration in the underlying fundamentals of the commercial real estate industry through the remainder of 2009 and into 2010 as investors remain on the sidelines, a new survey shows.

Those seeking to acquire quality assets at distressed prices are hoping that expected near-term defaults and looming due dates on commercial mortgage-backed securities will jump-start buying opportunities that so far have been absent, according to the new PricewaterhouseCoopers (PwC) Korpacz Real Estate Investors Survey.

Investors are also looking to the 2012 due date for $153 billion of CMBS loans to spur buying opportunities. Since commercial banks account for a much greater percentage of the total looming debt, however, they could provide distressed sales sooner than 2012.

Separately, research firm Real Capital Analytics forecast that commercial-property sales in the U.S. this year will fall to the lowest level in almost two decades as the industry experiences its worst slump since the Savings and Loan crisis of the early 1990s.

The firm forecast that only about $16 billion of office transactions will be completed by year-end, Bloomberg News reported. Firm officials said that may be the lowest volume since at least 1991.

The PwC Korpacz survey found that the majority of the commercial real estate industry is expected to remain in recession through 2011. While an industry-wide recovery is not expected to begin until 2012, the pace of the recovery will vary for each property sector, as well as across individual geographies.
In the industrial and office sectors, a more pronounced recovery is expected to materialize in 2011, but is not expected to dominate these sectors until 2012. In the retail sector, the recession phase of the cycle is expected to linger through 2011, giving way to a slight recovery in 2012.

In contrast, the U.S. multifamily sector is expected to lead the industry out of the recession as its recovery starts to take hold in 2010 and continues through 2012.

So far, the de-leveraging of the commercial real estate industry has disappointed many investors, said the PwC analysts.

“Investors seem surprised at the lack of quality buying opportunities, given the problems in the financial markets and the continued weakening of the industry’s fundamentals,” said Susan Smith, editor-in-chief of the survey. “Some investors sense that near-term defaults with commercial banks will allow them to acquire quality.

Assets at steep discounts, as banks may no longer be able to continue to ‘pretend and extend’ troubled loans and would be forced to place assets up for sale.”

Luxury real estate vultures

A Fortress Investment veteran is now at an auction house that hopes to feed off of distressed estates.

(Fortune Magazine) -- When an ex-managing director of evade fund Fortress teams up with Sotheby's in a real estate business enterprise, you know something funny is going on in the luxury residential market.

But that's basically what happened last month when George Graham, formerly of Fortress's Drawbridge Special Opportunities Fund, joined a real estate auction house that works closely with Sotheby's (BID) International Realty and other firms to sell off luxury homes.

Graham is CEO of Concierge Auctions, founded in 2006 by a well-connected broker in South Florida. The company is looking to make hay from an up tick in luxury real estate auctions.

"There is a pipeline of multimillion-dollar properties that are underwater," says Graham. "In most of these areas the homes aren't selling. There's a multiyear supply."

Concierge's pitch to a seller is simple: Your house won't sell on the open market for years. You may not get the price you want with an auction, but it's better to have an exit than to be stuck with the carrying costs on, say, a $20 million home -- or worse, enter foreclosure.