We are hearing a lot about historically low interest rates and rising existing home prices, so those would typically indicate that you should get in while you still can. In a recent article by Melinda Fulmer of MSN Real Estate, she provides some deeper analysis behind the headlines that would indicate that most buyers still have time.
According to a recent article in the fedgazette, the rental market in the Williston and Dickinson, ND area continues to be a challenge because new housing is not being built fast enough to handle the large demand of workers in the oilfields and related industries. In Williston, simple trailer homes are selling over $100,000 from last winter and two bedroom apartments are renting for over $2,000 a month, triple the rate they were 3 to 4 years ago. Workers can also pay up $1,400 a month to park a camper outside of town. In Dickinson, homes have increased in price more than 25% over the past two years. While dormitory-style settlements are an option for single workers, they are not suitable for families relocating to the area.
The demand for housing in this region has also driven up prices in Minot and Bismarck, cities that are the gateway to the oilfields. Minot has experienced an influx of workers to the area where they are still trying to recover from the flooding last year. Prices are rising for both surviving and replacement housing and the average single family home price has increased 8% over the last year. Williston’s mayor estimates that 1,200 new dwellings will be ready for occupancy this fall.
Kiplinger Personal Finance Magazine released their list of the 10 cheapest U.S. cities to live in based on the cost of living expenses. Those costs include housing, medical care, utilities and groceries among other items. The list is heavy with southern cities and definitely reflects areas where housing prices and rents are well below the national average. The top ten list includes Winston-Salem, NC; Springfield, IL; Wichita Falls, TX; Pueblo, CO; Conway, AR; Temple, TX; Fayetteville, AR; McAllen, TX; Memphis, TN and Harlingen, TX.
According to a recent article in the Boston Globe, the rental market in Boston continues to be a challenge with low vacancy rates and soaring rental amounts. The vacancy rate, low in 2011 at 3.8%, is now at 3.1%. In popular regions such as Back Bay and South End the vacancy rate is barely 1%. The soft housing markets still has first time buyers wary of purchasing and they are choosing to rent. Empty nesters are moving from the suburbs to the city and the area’s many college students also flood the rental market. New apartment construction is slow and the newer buildings coming on the market recently have been luxury styles in the most expensive areas, further driving up rental rates. The average monthly rent jumped more than 7 percent to $1,881 in the past year. A two-bedroom apartment in the Back Bay now rents for $2,857 a month; in Jamaica Plain, for $1,536. Monthly rents in Greater Boston out to Interstate 495 average $1,796. Reis Inc., a New York data firm ranks the Boston area as the fifth-most-expensive rental market in the country, after New York City and San Francisco.
Per a recent article in the New York Times on the healing housing market, both Fannie Mae and Freddie Mac reported some of their best quarterly results since the real estate collapse. Fannie Mae requested no additional money from the Treasury and said it would pay a $2.9 billion dividend to taxpayers. Freddie Mac announced second-quarter net income of $3 billion dollars, up from $577 million in the first quarter of 2011; they in turn did not request further federal aid saying it would pay a $1.8 billion dividend to the federal government. The mortgage giants have moved into the black as American home prices have increased, delinquency rates have continued to fall and what analysts have cautiously described as a housing recovery has begun to take hold. Recently, CoreLogic, a real estate data firm announced that home prices rose 2.5% in June compared with a year ago. There has also been a surge in refinancing, as homeowners position themselves to take advantage of record low interest rates.
Brooklyn neighborhoods that once provided a release valve for Manhattan pricing have now become more expensive then Manhattan apartments. In many Brooklyn neighborhoods, “the rent just keeps going up and up – even in the sluggish economy, even in the slight downturn in the housing market,” according to a recent article that appeared in the real estate section of the Wall Street Journal. Most people who turned to Brooklyn because it was seen as a slight bargain are now being forced to look elsewhere. A $2500-a-month studio apartment in Manhattan’s West Village is now cheaper than a studio apartment in Williamsburg, Brooklyn at $2700 a month!
In reality, though, only a handful of people are leaving Brooklyn for Manhattan. Most others venture into Southern Brooklyn, Queens or the Bronx where rents remain more reasonable.
Craigslist scams are very common in today’s tight rental market, and even outnumber legitimate rental advertisements in certain markets. To avoid potential scams, Dwellworks consultants use a variety of publicly-available resources to research rentals. To avoid Craigslist scams yourself, follow these rules provided by www.Craigslist.org:
- Deal locally with sellers you can meet in person to avoid 99% of scam attempts.
- Never wire funds via Western Union, Moneygram or any other wire service. Anyone who asks you to do so is likely a scammer.
- Watch for fake cashier checks and money orders. Banks will cash them and then hold you responsible when the fake is discovered weeks later.
- Never give out financial information, such as bank account number, social security number, eBay/PayPal info, etc.
- Avoid deals involving shipping or escrow services and know that only a scammer will “guarantee” your transaction.
- Do not rent housing without seeing the property’s interior, or purchase expensive items without examining them firsthand. It is likely that the housing unit is not actually for rent or the cheap item does not really exist.
- Do not submit to credit checks or background checks for a job or housing until you have met the interviewer or landlord / agent in person.
Remember that Craigslist is not involved in any transaction, and thus does not handle payments, guarantee transactions, provide escrow services, or offer “buyer protection” or “seller certification.”
A recent NBCNEWS.com article has presented data to demonstrate that nationally home prices bottomed out in January 2012 and we are beginning the slow climb upward. It would appear that most signs are pointing towards a rebound: Miami, Phoenix and Las Vegas posted home-price gains in May, home prices helped lift 700,000 homeowners above water in the first quarter of 2012, and FHFA monthly House Price Index in May was up 3.7 percent from a year earlier.
All of this is looking positive for the overall real estate market, but it has not yet translated into increased consumer spending. In fact, the Commerce Department released findings that consumer spending declined in July for the first time since August 2011; so it is evident that consumers are remaining cautious to ensure that the market gains are real and sustainable.
Olympic athletes are not the only ones who need to prepare for the 2012 summer games in London. The influx of millions of tourists and media coming to the Olympics will impact the entire operation of the country. The Queen’s Jubilee in June and the Wimbledon Tennis Championships held from June 25 to July 8 were just the lead-off to a packed summer schedule. The Olympics run from July 27 to August 12, followed by the Paralympic Games from August 29 to September 9.
The U.S. Embassy in London has issued a statement that nonimmigrant visa services will be limited during July through the end of August. Travelers requiring visas are advised to apply early to avoid disappointment. U.K. expats planning to return to London to should click here to renew their visas.