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Best of the Blogs, Real Estate: Mortgage Rates Hit Record Lows as Home Values Creep Up


Plus, is there really a rental property boom? If so, where is it?

This column highlights the most interesting and useful financial commentary on real estate from around the Web every Friday.

Multi-Housing News Online
Link: Economy Watch: No QE3 Just Yet, But More Twist
"As scheduled, the Federal Open Market Committee issued a statement on Wednesday about the economy and what it plans to do in the near future about its stubborn sluggishness. The answer (for now): more of the Twist. 'The Committee… decided to continue through the end of the year its program to extend the average maturity of its holdings of securities,' the FOMC noted in its statement.

"On Wednesday, the Census Bureau released 'Sharing a Household: Household Composition and Economic Well-Being: 2007–2010,' which reported that the number of shared US households spiked in response to the Great Recession. An entirely rational (and in some cases, urgently necessary) response, but at the same time bad for the recovery, since shared households tend to buy less of certain goods (such as furniture or electronics)."

"Wall Street couldn't quite make up its mind on Wednesday about the FOMC statement and Bernanke's pronouncements. The equities indexes dropped after the FOMC announcement, bounced back, then dropped again during the chairman's speech. After that, the day ended with markets roughly where they started. The Dow Jones Industrial Average (^DJI) was down 12.94 points, or 0.1%, while the S&P 500 (^GSPC) lost 0.17% and the Nasdaq (^IXIC) gained a scant 0.02%."

Housing Wire
Link: Mortgage rates return to record lows
"Easing Treasury bond yields resulting from worsening economic indicators pushed mortgage rates back down to record low territory.
The Freddie Mac (FMCC) survey showed 30-year fixed-rate mortgages averaged 3.66% for the week ending Thursday - a new low - falling from the prior week's average of 3.71%. Last year at this time, the 30-year FRM averaged 4.50%."

"However, some positive indicators hit the housing market.

Construction on single-family homes rose for the third consecutive month in May to an annualized pace of 516,000. And homebuilder confidence rose in June to its highest reading in over five years."

Reality Biz News
Link: Is There Really A Rental Property Boom? If So, Where Is It?
"Frankly, in my market, metro Atlanta, GA, the only boom I am seeing is the number of investors from all over the world attempting to buy up vacant properties in Atlanta's sprawling 13 county metro area. Atlanta is near the top of the foreclosure list, and as such, is also nearing the top of the investor activity list as well."

"Presently, according to the city of Atlanta has 1584 properties available for rent. Of those, 771 are houses. The Atlanta Housing Authority website has a total of 939 properties listed for rent, and that is only the list up to $1,100 per month. There are plenty more if you expand the rent up to $2000 a month. This site also indicates that there are dozens of properties that have been on the market for over a year, waiting for a tenant. And this is ONLY inside the city limits. There are 12 other counties in metro Atlanta, with a few thousand properties currently available for rent."

Zillow Reali Estate Research
Link: Home Values Continue to Rise; May Marks Third Consecutive Month of Increases
"Zillow's (Z) May Real Estate Market Reports, released today, show that home values increased 0.5% to $148,100 from April to May (Figure 1), marking the third consecutive month of strong monthly appreciation. Compared to May 2011, home values are still down by 0.9% (Figure 2). Home values across the nation are experiencing upward pressure due to low for-sale inventory with many buyers facing multiple offer situations. Inventory shortages are being fueled both by negative equity which is keeping people in their homes and by rational seller behavior at a market bottom. According to Zillow's first quarter Negative Equity Report, 31.4% of homeowners with a mortgage are underwater. A more in-depth analysis of the impact of negative equity on inventory shortages can be found here. In conjunction with rising home values, rents also rose significantly in April, appreciating by 1.8% from April to May. On an annual basis, rents across the nation are up by 4.6%."

NuWire Investor
Link: Investing In Real Estate Doesn't Have To Be A Local Endeavor
"If you are looking at investing in real estate, please take this word of advice - real estate investing doesn't have to be local. Many real estate investors make this mistake, and as a result miss out on a world of opportunity. Sure, there are some appealing reasons to buy properties in the city your live in, but there are even more reasons to expand your borders. In this article -- which is the second in our series about mistakes real estate investors make -- we will go through some common misconceptions real estate investors have about localized investing, and then talk about why you need to look outside your own backyard."

"What we urge you to avoid is to only look in your city, and stop the search there. The country (and world for that matter) is a huge place with thousands of individual real estate markets. Chances are, the best market to invest in is not the city you live in. Once you get over the initial fear factor involved with investing in places you aren't necessarily familiar with, there will be a world of opportunities open to you. You will likely be overcome by the sheer volume, and sometimes that too becomes a struggle for investors. This is why companies like ours (HomeUnion Services) exist - to help investors weed through the multitude of opportunities. Don't be afraid to ask for help. The biggest hurdle is to accept that investing in real estate doesn't have to be local, then the rest will come."
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