The pace of home building rose to its highest level in more than four years in October, according to a government reading issued Tuesday.
The Census Bureau report showed builders started construction at an annual pace of 894,000 homes last month, up 3.6% from the pace in September. Economists surveyed by Briefing.com had forecast a slight slowdown in building.
"The further rise in housing starts in October confirms that the previous month's very strong gain wasnot an unsustainable surge," said Paul Diggle, real estate economist with Capital Economics. "It's clear that the homebuilding recovery is gathering a real head of steam."
The stronger-than-expected report came because of a surge in construction of buildings with five or more residences in them. Single-family home starts remained little changed from September. But the September and October readings were the two best months for single-family home starts since 2008 as well.
Applications for building permits slipped 2.7% to an annual pace of 866,000. Despite that decline, the October reading was stronger than any month other than September over the course of the last four years.
Housing starts have soared about 42% from year-earlier levels, while permits are up about 30%. Joseph LaVorgna, chief U.S. economist for Deutsche Bank, says the recovery in housing is coming at a critical time for the overall U.S. economy, as the lift it was getting from exports and capital spending by businesses had started to slow.
The housing market has been showing numerous other signs of recovery in recent months. Demand for homes have been helped by mortgage rates at record lows.
The Federal Reserve's decision to buy $40 billion in mortgages every month is likely to keep rates low for the foreseeable future. The low mortgage rates, coupled with affordable housing prices and an improving jobs market have helped to restart home sales.
Foreclosures have fallen to a five-year low, reducing the supply of distressed homes available on the market. And four years of depressed levels of home building have cut the supply of new homes on the market to nearly record lows, according to a separate government report.
All these factors have helped to lift home prices and get builders back building again. So Tuesday's report is just one more sign that the long-awaited housing recovery is taking hold.
If you're interested in more information about the real estate outlook locally, please contact your nearest T. C. Lewis & Co. office. Or, if you're interested in construction, T. C. Lewis & Co. is now accepting clients for Fall 2013 start dates.
Source: CNNMoney's Chris Isidore
Tuesday, December 11, 2012
Friday, November 9, 2012
Your Real Credit Score
The credit score you buy may not be the credit score your lender uses when you
apply for credit and, fortunately, most of the time it doesn't matter.
However, for what the Consumer Financial Protection Bureau (CFPB) considers a
"substantial minority," the difference could make or break a mortgage
application or application for other credit.
In from 1 percent to 24 percent of the time, the difference between
consumer-purchased and creditor-purchased credit scores could toss consumers
into one, two or more different credit-quality categories.
Which way the score goes, better or worse, often isn't clear.
The CFPB's new "Analysis of Differences between Consumer- and
Creditor-Purchased Credit Scores" is a follow up to CFPB's report earlier this
year, "The Impact of Differences Between Consumer- and Creditor-Purchased Credit
Scores," which revealed the different sources and types of credit scores and
potential for harm associated with the differences.
The new report attempts to quantify the impact of those differences and says
consumers do not know ahead of time whether the scores they purchase will
closely track, vary moderately or vary significantly from a score sold to
creditors.
What's a credit score? Credit scores are a numerical representation of your credit report. The lower the score, the worse your credit and the greater your risk for default on credit. Conversely, the higher the score, the lower your risk. How you handle your credit raises or lowers your score. Lenders widely use credit scores to make a decision about your application for most types of credit, including mortgages, auto loans, credit cards, personal loans and others. Credit scores are also used to make decisions about insurance, rental applications, even jobs. Scores also determine if your creditor will raise or lower your credit limits, change your interest rate or cut you off from existing credit. High credit scores will also get you the best credit rates and terms, while low scores will make you pay more for credit - if you can get it. By federal law, credit scores are free under certain circumstances, typically after the fact, say, because a lender rejected your application. Otherwise you pay $10 to $20 for the privilege of buying your score, often from companies that attempt to sell you other questionable services bundled with your credit score purchase. Purchased credit scores aren't gospel CFPB's new report advises consumers not to rely upon purchased credit scores as a guide to how creditors will actually view their credit quality. Because credit scores can vary from the scores actually used to approve or decline credit, consumers have no way of knowing if the purchased scores are the same, higher or lower than those used by creditors. • If a purchased score leads the consumer to overestimate lenders' likely assessment of his or her creditworthiness, the consumer might be likely to apply for credit lines that would not be approved, with a cost of wasted time and effort on both the consumer’s and lender’s part. • A consumer who underestimates a lender's likely assessment of his or her creditworthiness, might fail to or delay applying for credit to buy a house or a refinance. A consumer might also apply to lenders who offer less favorable terms than the borrower is qualified for or accept a less favorable offer than necessary. The study also admonishes and advises firms selling scores to consumers to disclose to consumers those credit score differences and the potential impact from those differences. Given the CFPB's new oversight on consumer financial matters, including the operations of consumer credit reporting agencies, regulations to mandate such disclosures are likely. The Dodd-Frank Wall Street Reform and Consumer Protection Act directed the Consumer Financial Protection Bureau (CFPB) to compare credit scores sold to creditors and those sold to consumers by nationwide credit reporting agencies to look at the differences. CFPB analyzed credit scores from 200,000 credit files from each of the three major nationwide CRAs: TransUnion, Equifax, and Experian. CFPB found: • Different scoring models would place consumers in the same credit-quality category 73 to 80 percent of the time. That is, if a consumer had a good score from one scoring model, the consumer likely had a good score on another model. • Different scoring models would place consumers in credit-quality categories that are off by one category 19 to 24 percent of the time.
• Different scoring models would place consumers in credit-quality categories that are off by two or more categories from 1 to 3 percent of the time.
For more information on credit scores and improving your score, contact a T. C. Lewis & Co. office near you.
Source: Realty Times, Broderick Perkins
What's a credit score? Credit scores are a numerical representation of your credit report. The lower the score, the worse your credit and the greater your risk for default on credit. Conversely, the higher the score, the lower your risk. How you handle your credit raises or lowers your score. Lenders widely use credit scores to make a decision about your application for most types of credit, including mortgages, auto loans, credit cards, personal loans and others. Credit scores are also used to make decisions about insurance, rental applications, even jobs. Scores also determine if your creditor will raise or lower your credit limits, change your interest rate or cut you off from existing credit. High credit scores will also get you the best credit rates and terms, while low scores will make you pay more for credit - if you can get it. By federal law, credit scores are free under certain circumstances, typically after the fact, say, because a lender rejected your application. Otherwise you pay $10 to $20 for the privilege of buying your score, often from companies that attempt to sell you other questionable services bundled with your credit score purchase. Purchased credit scores aren't gospel CFPB's new report advises consumers not to rely upon purchased credit scores as a guide to how creditors will actually view their credit quality. Because credit scores can vary from the scores actually used to approve or decline credit, consumers have no way of knowing if the purchased scores are the same, higher or lower than those used by creditors. • If a purchased score leads the consumer to overestimate lenders' likely assessment of his or her creditworthiness, the consumer might be likely to apply for credit lines that would not be approved, with a cost of wasted time and effort on both the consumer’s and lender’s part. • A consumer who underestimates a lender's likely assessment of his or her creditworthiness, might fail to or delay applying for credit to buy a house or a refinance. A consumer might also apply to lenders who offer less favorable terms than the borrower is qualified for or accept a less favorable offer than necessary. The study also admonishes and advises firms selling scores to consumers to disclose to consumers those credit score differences and the potential impact from those differences. Given the CFPB's new oversight on consumer financial matters, including the operations of consumer credit reporting agencies, regulations to mandate such disclosures are likely. The Dodd-Frank Wall Street Reform and Consumer Protection Act directed the Consumer Financial Protection Bureau (CFPB) to compare credit scores sold to creditors and those sold to consumers by nationwide credit reporting agencies to look at the differences. CFPB analyzed credit scores from 200,000 credit files from each of the three major nationwide CRAs: TransUnion, Equifax, and Experian. CFPB found: • Different scoring models would place consumers in the same credit-quality category 73 to 80 percent of the time. That is, if a consumer had a good score from one scoring model, the consumer likely had a good score on another model. • Different scoring models would place consumers in credit-quality categories that are off by one category 19 to 24 percent of the time.
• Different scoring models would place consumers in credit-quality categories that are off by two or more categories from 1 to 3 percent of the time.
For more information on credit scores and improving your score, contact a T. C. Lewis & Co. office near you.
Source: Realty Times, Broderick Perkins
Thursday, October 11, 2012
Guts = Glory, Real Estate Comeback
But it isn't one of the big names in real estate, like Sam Zell or Goldman Sachs, that is poised to rake in hundreds of millions of dollars in profit from a quick sale of the copper-crowned One Worldwide Plaza. Instead, it is a group of investors led by a relatively obscure New York landlord, George Comfort & Sons Inc., which purchased the building in 2009 for about $600 million.
Rob Bennett for The Wall Street
Journal
George Comfort & Sons is expected to realize a large
profit from the sale of One Worldwide Plaza.
George Comfort, which declined to comment on the sale, has received multiple preliminary bids of well over $1 billion, according to real-estate executives informed of the status. The seller's target price for the 1.8 million-square-foot tower on Eighth Avenue is $1.5 billion, and final bids are due Friday.
As commercial-property values continue to rise in major cities around the U.S., gutsy investors who bought office buildings, hotels, stores and apartments when the commercial real-estate market hit bottom following the recession are making huge profits by selling them.
Values of top-quality properties, which fell 38% in the early years of the downturn, are now within 4% of the record highs hit in 2007, according to an index by real-estate research firm Green Street Advisors Inc.
The increase in values is being fueled largely by ever-lower interest rates, which has made debt financing cheaper and helped push up demand for real estate by investors searching for investments with good yields.
At the same time, more credit is becoming available. At the beginning of the year analysts projected that $30 billion to $40 billion of new commercial mortgage-backed securities would be issued in 2012. Now some analysts are saying the figure could rise as high as $45 billion.
The current cast of bottom feeders that are taking advantage of the sharp rise in prices looks different from those that swooped in during the prior real-estate mess in the early 1990s. Back then, it was largely big institutions like Goldman Sachs Group Inc., General Electric Capital Corp. and a venture of Mr. Zell and Merrill Lynch that purchased big portfolios of distressed debt and properties from lenders and the U.S.-controlled Resolution Trust Corp.
This time, while some big names like Starwood Capital Group and Blackstone Group LP did buy at the bottom, much of the quick selling is being done by lesser-known midsize players like George Comfort, which relied on their knowledge of local markets to snap up what are turning out to be huge bargains. Others include San Francisco-based TMG Partners, which made a set of well-time investments in that city's South of Market neighborhood; Savanna, a New York company that bought numerous older Manhattan office buildings; and Pacific Urban Residential, which turned around a big profit on a complex of apartment buildings in the Seattle area.
"We were not quite sure when [the economy] would get better, but we knew at those prices, we couldn't lose money," said Michael Covarrubias, TMG's chairman.
One reason for the success of these investors is that many of the pension funds and insurance companies that were active in the boom pulled back from real estate when prices were cheap. Also, some of the larger private-equity firms stayed on the sideline when the market hit bottom.
The opportunities to buy were "risks that institutional capital was not willing to take in 2009 and 2010," said Dan Fasulo, managing director at the research firm Real Capital Analytics Inc.
Mr. Zell and others have acknowledged that they were expecting lenders to dump assets in the same way they did in the early 1990s. But that never happened in large part because banks and other financial institutions this time were much more prone to extend troubled loans rather than foreclose.
Since hitting their trough in May 2009, commercial-property values have risen 57%, according to Green Street. To date, the largest single-building turnaround since the recession was the 42-story Seattle office building that was headquarters of Washington Mutual Inc. until the bank failed and vacated the tower, according to Real Capital Analytics. Northwestern Mutual Life Insurance Co. bought the building in 2009 for $115 million, filled it with new tenants and sold it in April for $480 million.
Prices haven't rebounded broadly, as properties in suburbs and smaller cities generally are trailing those in prime locations like New York, Chicago and San Francisco.
In those cities, high demand has pushed initial yields on some properties, particularly apartment buildings, down to 3% and even lower. High demand has led owners to put buildings up for sale. For example, Sony Corp. recently tapped Eastdil Secured LLC to market its Midtown Manhattan office tower.
George Comfort increased the occupancy of Worldwide Plaza, which was half vacant when the firm bought it, by leasing most of the empty space by luring Nomura Holdings Inc. from downtown Manhattan.
That empty space was a big reason the price was so low. "There were very, very few that would even look at that deal who would accept that kind of risk," said Douglas Harmon, of Eastdil, which is marketing Worldwide Plaza.
But values of properties in major cities also have been increasing faster than the buildings' income streams. And in some cases, investors didn't do much to the properties and still reaped big profits from selling them quickly.
For example, a venture of TMG and DivcoWest recently sold an empty office building in San Francisco's gritty mid-Market neighborhood to Dolby Laboratories Inc. for $110 million, more than double the amount they paid just last year.
Source: Rob Bennett for The Wall Street Journal
Thursday, September 6, 2012
The Upside of a Down Market
The real estate market experienced such a prolonged downturn that it created a number of new opportunities for those who stopped wallowing in misery and got on with their business. Few areas were hit as hard as Las Vegas yet many investors and realtors are thriving. So many real estate agents left the business that it reduced competition among those who remained. It also allowed the truly skilled to standout. Some whined about the lost commissions of yesterday while others adapted by becoming experts in foreclosures, short sales, and property management. Guess which ones are thriving? Those investing in real estate experienced a similar shakeout. The pseudo-investors and part-time builders and Realtors who flipped houses like pancakes and later lamented the loss of double-digit monthly appreciation are gone. What remains are a lot of true investors who make decisions based on hard facts and numbers that pencil out. Good riddance to those who subscribed to the greater fool theory of finding someone even more reckless than them to pay ridiculous prices for what often turns out to be a terrible product.
Lately I’m seeing something I thought would take a decade or more – stalled projects are coming back to life. Whether investing in a low-cost fixer-upper or a multi-billion dollar project the factors are the same, only the scale is different. There is the cost of acquisition, carrying costs, and development costs. Many of these stalled projects wound up in foreclosure where investors were able to buy them at a fraction of their original price. Interest rates are at historical lows which greatly reduce the carrying costs. There is such a surplus of construction labor that those prices have been slashed as well. This means that the finished product can be sold at a realistic price. When a white elephant comes back to life it changes the way people feel. Who wants to invest in the vicinity of a failed real estate project? When work begins again and a development is completed it contributes to increased optimism. When people are more optimistic they buy and the market improves.
I’m not suggesting that things are going to instantly turn around, and we shouldn't expect instant gratification - that's what got us in this mess to begin with. I am saying we are rebounding. There is no sign of the irrational exuberance that characterized the real estate bubble. The market is strengthening in a way that should be sustainable and that is good for everyone.
-Richard Warren (Las Vegas, NV Broker and Investor) contributed to this post
Lately I’m seeing something I thought would take a decade or more – stalled projects are coming back to life. Whether investing in a low-cost fixer-upper or a multi-billion dollar project the factors are the same, only the scale is different. There is the cost of acquisition, carrying costs, and development costs. Many of these stalled projects wound up in foreclosure where investors were able to buy them at a fraction of their original price. Interest rates are at historical lows which greatly reduce the carrying costs. There is such a surplus of construction labor that those prices have been slashed as well. This means that the finished product can be sold at a realistic price. When a white elephant comes back to life it changes the way people feel. Who wants to invest in the vicinity of a failed real estate project? When work begins again and a development is completed it contributes to increased optimism. When people are more optimistic they buy and the market improves.
I’m not suggesting that things are going to instantly turn around, and we shouldn't expect instant gratification - that's what got us in this mess to begin with. I am saying we are rebounding. There is no sign of the irrational exuberance that characterized the real estate bubble. The market is strengthening in a way that should be sustainable and that is good for everyone.
-Richard Warren (Las Vegas, NV Broker and Investor) contributed to this post
Monday, July 30, 2012
International Investing Mistakes You Don't Know You're Making
What's scarier than making a real estate investing mistake? Easy: It's making a real estate mistake you don't know you are making.
Most buyers looking at property opportunities abroad are full of confidence. The relatively affordability provides strong motivation and they feel sure they'll be able to get a good deal. After all, they've bought property successfully in the US. They know how real estate markets work.
Trouble is; things are a little different in many international markets. If you apply the same strategies as back home, you may inhibit yourself from getting a great property deal. How do I know this? Well, because I made a boatload of mistakes when I first started investing in real estate internationally. But now, with the benefit of hindsight and after working with other international buyers and sellers, along with managing properties worlwide, I've come up with some solutions.
The good news; the mistakes are not that hard to fix. Take a look to see if you're at risk of making one of these common mistakes:
Mistake 1: Only viewing real estate with one agent
This may work in the US where agents are tapped into the MLS - effectively a giant shared database of properties for sale on the market. But in many international markets, MLS type databases do not exist. Instead, each agent maintains his or her separate, private listing database. So by limiting yourself to one agent you are unlikely to see all there is for sale.
It's also important to realize that in many emerging markets anyone can sell real estate. So yes, this means chasing down a listing given to you by your hairdresser or going on a detour to see a property with your taxi driver.
The fix: Book a property viewing with every active real estate agent. Then spread the net even further and tell everyone you meet that you are in the market for a property.
Mistake 2: Buying a vision; not reality
You stand in awe of the glossy rendering. You count out the 18 holes of the golf course on the master plan in front of you. You imagine having a massage at the planned "Wellness Center" to ease out those golfing-induced knots in your shoulder. You start to schedule monthly visits to your vacation home. After all when the new road gets built it will only take an hour to get to your property from the airport …
Hold on a moment. You're about to buy the developers vision of what their project may look like in the future. You've looked past the current reality. Look around. How much of the proposed master plan has actually been completed? Take a worst case scenario and ask yourself how much your vacation property will be worth if the golf course never gets built, the wellness spa never opens and the road from the airport is never paved?
The fix: Pay based only on what you can actually see and touch. Don't pay the price for what your property may be like in the future, if all goes well.
Mistake 3: Catching a case of land fever
Land fever … sunshine fever … we've all had it at some point in our international investing careers. I mean how can you not feel that tingle of excitement when you compare the prices with back home? The anticipation of ownership builds, you see other people hunting down the deals, and suddenly you find yourself caught up in a panic fueled land grabbing frenzy. After all they're not making any more beachfront are they?
The fix: Slow down. Realize that you've let your emotions take over. Start to engage your head. Let the facts, hard data and dry mathematics drive your investing strategy, not hype and raw emotion.
Mistake 4: Not leveraging the current buyers market
The financial crisis has been tough on many international real estate markets. Inventories are high and the gap between asking prices and sales prices has widened considerably since 2008. Use this to your advantage. Remember that many sellers like to keep their 'official' prices firm but will offer incentives on the side. It means they can lower their prices without actually lowering their prices.
The fix: Negotiate hard, especially if you are a cash buyer. The market is advantageous to buyers so use that to your advantage.
Mistake 5: Not getting good legal advice
I've seen buyers purchase property without an attorney. I've seen them agree to use the seller's attorney or the real estate agent's attorney. I've seen them hire attorneys they are unable to communicate with due to a language barrier. These are all big mistakes that can create problems down the line.
You must have the title researched by an independent attorney who is representing your interests before you purchase in any international real estate market. Title insurance is not a requirement in many countries, but I'd strongly recommend it. The process of applying for title insurance will force your attorney to dig deeply into the title history of your proposed purchase. Insurance is typically inexpensive at a cost of around 1% of the insured amount in most regions.
The fix: Hire a competent independent attorney to conduct your due diligence and back this up by applying for a title insurance.
In short, international real estate investing can be an unbelievably profitable and enjoyable experience. But, you can't let your excitement get the better of you. There are a lot of companies in the USA (including T. C. Lewis & Co.) who can point you to the right people in regions of interest around the world, so use them before you plan a trip to visit your dream property abroad.
Trouble is; things are a little different in many international markets. If you apply the same strategies as back home, you may inhibit yourself from getting a great property deal. How do I know this? Well, because I made a boatload of mistakes when I first started investing in real estate internationally. But now, with the benefit of hindsight and after working with other international buyers and sellers, along with managing properties worlwide, I've come up with some solutions.
The good news; the mistakes are not that hard to fix. Take a look to see if you're at risk of making one of these common mistakes:
Mistake 1: Only viewing real estate with one agent
This may work in the US where agents are tapped into the MLS - effectively a giant shared database of properties for sale on the market. But in many international markets, MLS type databases do not exist. Instead, each agent maintains his or her separate, private listing database. So by limiting yourself to one agent you are unlikely to see all there is for sale.
It's also important to realize that in many emerging markets anyone can sell real estate. So yes, this means chasing down a listing given to you by your hairdresser or going on a detour to see a property with your taxi driver.
The fix: Book a property viewing with every active real estate agent. Then spread the net even further and tell everyone you meet that you are in the market for a property.
Mistake 2: Buying a vision; not reality
You stand in awe of the glossy rendering. You count out the 18 holes of the golf course on the master plan in front of you. You imagine having a massage at the planned "Wellness Center" to ease out those golfing-induced knots in your shoulder. You start to schedule monthly visits to your vacation home. After all when the new road gets built it will only take an hour to get to your property from the airport …
Hold on a moment. You're about to buy the developers vision of what their project may look like in the future. You've looked past the current reality. Look around. How much of the proposed master plan has actually been completed? Take a worst case scenario and ask yourself how much your vacation property will be worth if the golf course never gets built, the wellness spa never opens and the road from the airport is never paved?
The fix: Pay based only on what you can actually see and touch. Don't pay the price for what your property may be like in the future, if all goes well.
Mistake 3: Catching a case of land fever
Land fever … sunshine fever … we've all had it at some point in our international investing careers. I mean how can you not feel that tingle of excitement when you compare the prices with back home? The anticipation of ownership builds, you see other people hunting down the deals, and suddenly you find yourself caught up in a panic fueled land grabbing frenzy. After all they're not making any more beachfront are they?
The fix: Slow down. Realize that you've let your emotions take over. Start to engage your head. Let the facts, hard data and dry mathematics drive your investing strategy, not hype and raw emotion.
Mistake 4: Not leveraging the current buyers market
The financial crisis has been tough on many international real estate markets. Inventories are high and the gap between asking prices and sales prices has widened considerably since 2008. Use this to your advantage. Remember that many sellers like to keep their 'official' prices firm but will offer incentives on the side. It means they can lower their prices without actually lowering their prices.
The fix: Negotiate hard, especially if you are a cash buyer. The market is advantageous to buyers so use that to your advantage.
Mistake 5: Not getting good legal advice
I've seen buyers purchase property without an attorney. I've seen them agree to use the seller's attorney or the real estate agent's attorney. I've seen them hire attorneys they are unable to communicate with due to a language barrier. These are all big mistakes that can create problems down the line.
You must have the title researched by an independent attorney who is representing your interests before you purchase in any international real estate market. Title insurance is not a requirement in many countries, but I'd strongly recommend it. The process of applying for title insurance will force your attorney to dig deeply into the title history of your proposed purchase. Insurance is typically inexpensive at a cost of around 1% of the insured amount in most regions.
The fix: Hire a competent independent attorney to conduct your due diligence and back this up by applying for a title insurance.
In short, international real estate investing can be an unbelievably profitable and enjoyable experience. But, you can't let your excitement get the better of you. There are a lot of companies in the USA (including T. C. Lewis & Co.) who can point you to the right people in regions of interest around the world, so use them before you plan a trip to visit your dream property abroad.
Thursday, July 5, 2012
Follow on Social Media for First Dibs on Properties
If you're in the market for real estate and have already checked the local realtor listings without finding the right property, you don't want to go back to Zillow or Trulia every day to see what's new. And, you definitely don't want to look at the homes books in your area because they're always at least 45 days outdated when they first come out because of printing and delivery timelines. Instead, check out www.TCLewisProperties.com and/or follow a few local social media-savvy realtors who tweet or post newly listed properties on Facebook. At the T. C. Lewis & Co. website, you can create an account for yourself with no strings attached that allows you to receive newly listed properties matching your criteria as soon as they come on to the market, as well as saving favorites to revisit and comapre. And, you can search using a map tool, by type (home, condo, sale, lease, commercial properties, etc), by street, MLS number, and more. We currently provide searchable properties for all of Northeast Tennessee, Southwest Virginia, and Western North Carolina - and as we expand the business, we expand the areas that can be searched for properties. You can inquire from each listing for more information, schedule an appointment to see the property, or share the property with friends or family on social media sites of by email right on the property page.
Tenants or prospective tenants can search properties for lease on our site - both commercial and residential properties. We tweet updates of new properties, post them to Facebook, and put them on our site as soon as they become available. We also update existing tenants on our social media sites seasonally.
So, to stay up to date on the newest properties hitting the market before they get picked over, follow T. C. Lewis & Co. on twitter by going to www.twitter.com/tclewisco (@tclewisco). Or, 'like' us on Facebook at www.facebook.com/tclewisproperties. If you've already signed with a realtor you can still use this technique to feed them interesting listings from our office. Happy 4th of July!
Tenants or prospective tenants can search properties for lease on our site - both commercial and residential properties. We tweet updates of new properties, post them to Facebook, and put them on our site as soon as they become available. We also update existing tenants on our social media sites seasonally.
So, to stay up to date on the newest properties hitting the market before they get picked over, follow T. C. Lewis & Co. on twitter by going to www.twitter.com/tclewisco (@tclewisco). Or, 'like' us on Facebook at www.facebook.com/tclewisproperties. If you've already signed with a realtor you can still use this technique to feed them interesting listings from our office. Happy 4th of July!
Monday, May 21, 2012
How to Retire Internationally on a Budget
One corner of France is so tucked away that even the French find it hard to place on a map. The Béarn region has a long and colorful history, from Roman times to the Renaissance to the days of Belle Époque and then Art Deco. This lovely region is often overlooked by foreigners, even though the locals are very welcoming of newcomers. This land of rolling wooded countryside, friendly people, and delicious wines and food is also notable for another reason: It qualifies as one of the most appealing and affordable retirement choices in all of France. This is a region of France where a retiree on a budget of as little as $2,500 per month could consider settling down to enjoy the best of French country life.
The Béarn region is the birthplace of a great French king and a one-time seasonal favorite locale for royalty of all nations. It was once named as “the center of the sporting world,” and is home to the first-ever Grand Prix and the Wright Brothers’ flying school. The Béarn area is also where Napoleon founded the first national stud farm and the British designed beautiful gardens and parks. Rightly proud of its past, this area has also embraced the present and now has impressive 21st century architecture, technology parks, sporting facilities, and a trailblazing communications infrastructure.
The Béarn region is located in the northwestern corner of the Pyrenees-Atlantic department in the region of Aquitaine in southwest France. The majestic mountains of the Pyrenees dominate the views, and beautiful beaches are just a short drive away. There is 3,000 meters between the highest point in the Pyrenees and the lowest on the Plein de Nay. But despite all this variation in geography, the Béarn has a gentle climate. During the winter months, temperatures hover between 32 and 42 degrees Fahrenheit. Springtime is mild, and summers are generally a pleasant 77 degrees. The even precipitation and regular sunshine make this a beautifully verdant region and explain the area’s success in agriculture and wine-growing. There is an amazingly wide variation of plant life. You’ll see palm trees swaying alongside pine trees with the snow-capped Pyrenees rising up behind.
The capital city of Pau is often called the green city or garden city and has one of the highest ratios of greenery per square meter per person of any city in Europe. Pau is also sometimes called English city, referring to the English who settled here during and after the Napoleonic Wars. They were generally well-received, as are English-speaking expats today, and left their mark on the architecture, gardens, and parks that flourish still in this city of 85,000. With so many pretty little towns in the region, it can be difficult to choose a favorite. Morlaas, however, stands out. It is not too big or small and is very welcoming to foreigners and retirees. Plus, Morlaas offers every facility and service you could need, has an interesting historical center, and is set amidst beautiful countryside. Morlaas lies 12 kilometers to the north of Pau, overlooking the Plain of Pau. To the south are views of the Pyrenees, and to the north the undulating wooded farmland continues on toward Bordeaux, 200 kilometers north. Some 4,100 inhabitants, known locally as Morlanais, live in this town that is connected by bus and road to Pau city center, and it’s just 15 kilometers from Pau airport. After the Roman city of Beneharnum was destroyed by the Vikings in 840, Morlaas became the capital of the ancient province of Béarn. During that time, it even had its own mint. Money from Morlaas was a sought-after commodity and used in the Navarre region, Aragon, and Italy. Morlaas remained the capital until the 12th century, when Orthez took over. Since 1154, Morlaas has been on one of the St. James of Compostela routes and was one of the original stopping points for pilgrims.
Today’s travelers are welcomed at a small dormitory-style resting place or the municipal campsite. As you drive into town, off to the right is the main sporting area (rugby and soccer), the open-air market, and the farmer’s market. On through toward the main high street you pass centuries-old buildings before coming to the steps of the 12th-century Romanesque gateway of Ste. Foy church. To the side is the main square surrounded by ancient buildings that now house the post office, the Mairie’s office, and the town hall.
You’ll find everything you need for daily living in Morlaas, including three large supermarkets and a medical center with family doctors, radiologists, physiotherapists, and dentists. There’s also a veterinary center, an animal protection center, schools, banks, bakeries, butchers, newspaper shops, and florists. Morlaas has a very active community center offering classes ranging from classic dance, to swimming, to guitar. There’s something for everyone and every age and interest.
The Béarn area’s position is one hour from the sea and one hour from the mountains, with lots to do in between. Plus, the people are friendly and very open-minded to expats, and there’s virtually no crime. The cost of living for the quality of life would be hard to match elsewhere.
There are many options for Americans looking to retire or invest internationally on a budget. T. C. Lewis & Co. can help advise consumers of the pro's and con's of investing in a variety of domestic and international regions, so please don't hesitate to contact us.
Source: Kathleen Peddicord, US News
The Béarn region is the birthplace of a great French king and a one-time seasonal favorite locale for royalty of all nations. It was once named as “the center of the sporting world,” and is home to the first-ever Grand Prix and the Wright Brothers’ flying school. The Béarn area is also where Napoleon founded the first national stud farm and the British designed beautiful gardens and parks. Rightly proud of its past, this area has also embraced the present and now has impressive 21st century architecture, technology parks, sporting facilities, and a trailblazing communications infrastructure.
The Béarn region is located in the northwestern corner of the Pyrenees-Atlantic department in the region of Aquitaine in southwest France. The majestic mountains of the Pyrenees dominate the views, and beautiful beaches are just a short drive away. There is 3,000 meters between the highest point in the Pyrenees and the lowest on the Plein de Nay. But despite all this variation in geography, the Béarn has a gentle climate. During the winter months, temperatures hover between 32 and 42 degrees Fahrenheit. Springtime is mild, and summers are generally a pleasant 77 degrees. The even precipitation and regular sunshine make this a beautifully verdant region and explain the area’s success in agriculture and wine-growing. There is an amazingly wide variation of plant life. You’ll see palm trees swaying alongside pine trees with the snow-capped Pyrenees rising up behind.
The capital city of Pau is often called the green city or garden city and has one of the highest ratios of greenery per square meter per person of any city in Europe. Pau is also sometimes called English city, referring to the English who settled here during and after the Napoleonic Wars. They were generally well-received, as are English-speaking expats today, and left their mark on the architecture, gardens, and parks that flourish still in this city of 85,000. With so many pretty little towns in the region, it can be difficult to choose a favorite. Morlaas, however, stands out. It is not too big or small and is very welcoming to foreigners and retirees. Plus, Morlaas offers every facility and service you could need, has an interesting historical center, and is set amidst beautiful countryside. Morlaas lies 12 kilometers to the north of Pau, overlooking the Plain of Pau. To the south are views of the Pyrenees, and to the north the undulating wooded farmland continues on toward Bordeaux, 200 kilometers north. Some 4,100 inhabitants, known locally as Morlanais, live in this town that is connected by bus and road to Pau city center, and it’s just 15 kilometers from Pau airport. After the Roman city of Beneharnum was destroyed by the Vikings in 840, Morlaas became the capital of the ancient province of Béarn. During that time, it even had its own mint. Money from Morlaas was a sought-after commodity and used in the Navarre region, Aragon, and Italy. Morlaas remained the capital until the 12th century, when Orthez took over. Since 1154, Morlaas has been on one of the St. James of Compostela routes and was one of the original stopping points for pilgrims.
Today’s travelers are welcomed at a small dormitory-style resting place or the municipal campsite. As you drive into town, off to the right is the main sporting area (rugby and soccer), the open-air market, and the farmer’s market. On through toward the main high street you pass centuries-old buildings before coming to the steps of the 12th-century Romanesque gateway of Ste. Foy church. To the side is the main square surrounded by ancient buildings that now house the post office, the Mairie’s office, and the town hall.
You’ll find everything you need for daily living in Morlaas, including three large supermarkets and a medical center with family doctors, radiologists, physiotherapists, and dentists. There’s also a veterinary center, an animal protection center, schools, banks, bakeries, butchers, newspaper shops, and florists. Morlaas has a very active community center offering classes ranging from classic dance, to swimming, to guitar. There’s something for everyone and every age and interest.
The Béarn area’s position is one hour from the sea and one hour from the mountains, with lots to do in between. Plus, the people are friendly and very open-minded to expats, and there’s virtually no crime. The cost of living for the quality of life would be hard to match elsewhere.
There are many options for Americans looking to retire or invest internationally on a budget. T. C. Lewis & Co. can help advise consumers of the pro's and con's of investing in a variety of domestic and international regions, so please don't hesitate to contact us.
Source: Kathleen Peddicord, US News
Friday, April 27, 2012
Improvements that Entice Buyers
Over the last few years, some homeowners have opted to stay put for the time being and that's caused them to consider remodeling instead of moving. But most homeowners know that one day they might need or want to sell their home so which remodels help to add value and entice buyers? There are a few areas that are better than others to improve. It's pretty easy to understand why these home remodels are enticing buyers when you consider the way the housing market has been for the past several years. Here are a few of the renovations that are adding value to homes and creating appeal from home buyers.
Aging in Place
With the tough economic times, more short sales and foreclosures, extended families are combining homes and reducing their cost of living by residing together in one larger house. The National Association of Home Builders found that 62 percent of builders in a survey were working on home projects that were helping families "age in place". Included in these types of remodels are placing a bedroom on the entry-level of a home, wider doorways that would accommodate a wheelchair, and overall modifications for the elderly including reducing steps outside and inside. At one time, these designs might have been unattractive but with many Americans wanting to "age in place" and extended families living together, remodels like these are becoming common, necessary, and valued.
Savvy Kitchen
The great rooms that bring the kitchen and the eating areas together are still popular. More space is preferred so families can have room to sit and spend time together over a meal even if that means having less space to actually prepare the food. Cabinets and shelving are being customized to suit the homeowners' needs and many are favoring pantries or utility rooms. Kitchens are taking on the look of a chef's cooking space with open shelving and islands to help homeowners be able to quickly prepare meals and still mingle with guests and family.
Totally Wired
Fast-placed, busy buyers who often work from home will find smart homes that are wired and built to handle all the high-technology needs a huge plus when it comes time to market and sell their homes. Another plus is having space-saving workstations in the home. Remodeled homes that feature floor-to-ceiling bookcases and wiring for home offices are increasingly becoming the norm in many homes.
Outdoor Living
This continues to be a popular trend to bring the outside in. Making the most of living spaces, even those in the garage and outside, is a huge benefit. Homeowners are capitalizing on all possible livable space by creating outdoor living rooms complete with wiring for entertainment, cooking, and relaxing. Outdoor furniture is also being featured inside as well as outside the home, blending the line between the two.
Not all remodels add value to the home. The balance of achieving what you like in a home and which improvements can potentially increase the sale of your home, can allow you to make smart home improvement choices. And, try to avoid being so 'user-specific' with changes. Not everybody needs or wants a nuclear holocaust bunker...
Aging in Place
With the tough economic times, more short sales and foreclosures, extended families are combining homes and reducing their cost of living by residing together in one larger house. The National Association of Home Builders found that 62 percent of builders in a survey were working on home projects that were helping families "age in place". Included in these types of remodels are placing a bedroom on the entry-level of a home, wider doorways that would accommodate a wheelchair, and overall modifications for the elderly including reducing steps outside and inside. At one time, these designs might have been unattractive but with many Americans wanting to "age in place" and extended families living together, remodels like these are becoming common, necessary, and valued.
Savvy Kitchen
The great rooms that bring the kitchen and the eating areas together are still popular. More space is preferred so families can have room to sit and spend time together over a meal even if that means having less space to actually prepare the food. Cabinets and shelving are being customized to suit the homeowners' needs and many are favoring pantries or utility rooms. Kitchens are taking on the look of a chef's cooking space with open shelving and islands to help homeowners be able to quickly prepare meals and still mingle with guests and family.
Totally Wired
Fast-placed, busy buyers who often work from home will find smart homes that are wired and built to handle all the high-technology needs a huge plus when it comes time to market and sell their homes. Another plus is having space-saving workstations in the home. Remodeled homes that feature floor-to-ceiling bookcases and wiring for home offices are increasingly becoming the norm in many homes.
Outdoor Living
This continues to be a popular trend to bring the outside in. Making the most of living spaces, even those in the garage and outside, is a huge benefit. Homeowners are capitalizing on all possible livable space by creating outdoor living rooms complete with wiring for entertainment, cooking, and relaxing. Outdoor furniture is also being featured inside as well as outside the home, blending the line between the two.
Not all remodels add value to the home. The balance of achieving what you like in a home and which improvements can potentially increase the sale of your home, can allow you to make smart home improvement choices. And, try to avoid being so 'user-specific' with changes. Not everybody needs or wants a nuclear holocaust bunker...
Wednesday, March 28, 2012
Smart Math of Mixed-Use Development
Are cities across the country acting negligently in ignoring the property tax implications of different development types? Joseph Minicozzi thinks so, and he's done the math to prove it. I can only hope that this reaches the desks of the powers that be involved in downtown Johnson City. Maybe a financial implication will provide the city commissioners with the guts they need to make something happen as opposed to continuing with the urban sprawl through Boones Creek and Gray, TN...
Asheville, North Carolina, like many cities and towns around the country, is hurting financially. It’s not that Asheville is some kind of deserted ghost town. Rather, it’s a picturesque mountain city with a population of about 83,000 that draws tourists from all over the world, especially during the leaf-peeping season. But it’s also a city that appeals to its residents, who revel in strolling about a true walkable downtown chock-full of restaurants and retail shops featuring locally grown and crafted products. Downtown is not only one of Asheville’s main draws; it also serves as a major driver in helping the city overcome its budgetary doldrums.
Most of us – city planners, elected officials, business owners, voters, and the like – understand that the city brings in more tax revenue when people shop and eat out more. However, we often overlook the scale of the property tax payoff for encouraging dense mixed-use development.
Many policy decisions seem to create incentives for businesses and property developers to expand just about anywhere, without regard for the types of buildings they are erecting. In this article, I argue that the best return on investment for the public coffers comes when smart and sustainable development occurs downtown.
We’ll use the city of Asheville as an example. Asheville realizes an astounding +800 percent greater return on downtown mixed-use development projects on a per acre basis compared to when ground is broken near the city limits for a large single-use development like a Super Walmart. A typical acre of mixed-use downtown Asheville yields $360,000 more in tax revenue to city government than an acre of strip malls or big box stores.
Here is a breakdown of comparison of the Asheville Wal-Mart Center vs Mixed-Use Center downtown:
If you were a mayor or city councillor facing a budget crisis, this comparison should serve as an eye-opener, both in terms of your policies and your development priorities. The comparison should also get you thinking about not just how you could encourage more downtown development, but also what kind of development could increase the value of buildings in the surrounding neighborhoods.
It’s not just officials in Asheville who should be asking these questions. In the growing number of diverse cities where we have studied this same equation (such as Billings, MT, Petaluma, CA, and Sarasota, FL) we’ve found that the same principle applies: downtown pays. It’s simple math.
The more valuable downtown properties become, the more revenue the city can generate to address its budget gaps, while also serving the best interests of its citizens. Unfortunately, our public officials may not always make their decisions with full knowledge of the trade-offs.
Consider the story of how Public Interest Projects (PIP), a for-profit development company founded in 1990, first came to uncover this economic inequality.
A few years ago, PIP was looking to develop several parcels in a neglected section of downtown Asheville, just off the main core. At the time, it was filled with decaying auto shops, warehouses and semi-industrial space. In other words, it was ripe for mixed-use redevelopment. Unfortunately, while we saw visions of rehabbed living spaces intermixed with retail and office space, the leaders of Buncombe County had other ideas.
In close proximity to the parcels PIP was considering, the county owned a 1.7-acre parcel upon which leaders first announced plans to build a new jail, then, as an alternative, a 24 hour center for emergency vehicles. While few could argue that the community as a whole would benefit from the addition of such facilities, the county’s plan to plunk one of them right in the middle of an area so ripe for re-development didn’t make much sense to us. Although we weren’t on the same page as our county leaders, that didn’t stop us from trying to get them to see things our way.
Subsequently, we embarked on a comparative analysis of the impact of different development types and scales on the county’s tax rolls as a way to demonstrate the comparable benefits of mixed-use development versus the facilities they we considering. We tried to show them the money.
To do that, we set about analyzing various properties within our community to come up with an estimate of what kind of infill development would be feasible for the county’s site. What we found was striking. If the county continued with its plans for building the more objectionable uses, the loss of this property's tax base plus the detrimental effect on the surrounding property's development potential could actually result in a net loss of more than $1 million each year in property tax revenue for local government. That information got the County's attention and good sense prevailed.
Upon realizing that this equation had broader implication, we began applying the same analysis to other key Asheville landmarks. Our next test case involved a comparison of a high-visibility shopping mall located just outside of downtown with a historic downtown building, dubbed the Old Penney’s building, which we had restored into a six-story mixed-use structure. Once we ran the numbers, just as before, the results were dramatic. Whereas the mall, considered one of the county’s biggest revenue generators, yielded $8,000 an acre in annual County property tax, the downtown building’s yield was $250,000 per acre in County property tax.
It’s easy to see how you might now be scratching your head. How can you compare a mall with a building? Is that really comparing apples to apples? The point is that we have been perpetuating an error when it comes to how we think about real estate. Our mistake has been looking at the overall value of a development project rather than its per unit productivity. Especially relevant in these times of limited public means, every city should be thinking long and hard about encouraging, and not accidentally discouraging, the property tax bonus that comes with mixed-use urbanism. Put simply, density gets far more bang for its buck.
For comparison, let’s consider an everyday example of measuring economic value. When we buy our cars, do we make our buying decisions based on the vehicle’s miles-per-tank rating? If we did, we’d all be driving Ford F-150 Lariats that get, on average, 648 miles per tank versus a Prius, which boasts a modest 571 miles per tank. However when we look at the traditional metric for comparison - how many miles-per-gallon each vehicle gets - the value statement changes. The Lariat achieves a mere 13 miles-per-gallon while the Prius cruises along at 51 MPG. And, since you spend less to fill up the Prius, at today’s gas prices it covers 15,000 miles/year at $3,000 less the annual cost ($4,038/$1,029 respectively). We rank the value of our cars this way because we all know the price of a gallon of fuel. Why wouldn’t we do the same with our land? Shouldn’t we value the consumption of our land the way we value a gallon of gas? After all, an acre of land is far more expensive than a gallon of gas.
The flaw of our current property tax system is that when it comes to assessing how much a property owner owes, we place very little value on the land beneath a building as compared to the building itself. Compounding that issue is the fact that if you construct a building without innovative architecture or sustainable materials, you actually benefit by lower tax value. The combination of these two factors creates a disincentive for good architecture. The result is that the community loses, both in terms of the property tax it collects and the long-term legacy of cheap single-use buildings. In basic terms, we’ve created tax breaks to construct disposable buildings, and there’s nothing smart about that kind of growth.
What can we do about it? Moses did not come down from the mountaintop to deliver our current property tax policy on stone tablets. It’s just another rule we impose upon ourselves. And if we recognize that this policy is harming us in some way, it makes sense to change it. We simply cannot afford how the current system creates incentives for suburban sprawl – which is unsustainable both environmentally and, as I hope I have shown, financially. Communities across the United States are going broke, and we can rightly look to our municipal finance systems and our failure to fully appreciate the payoff for density as a big part of the cause. Let’s all do the math so we can make some positive changes in the system because, in the end, downtown pays!
We need incentives for downtown Johnson City re-development - big, financial incentives that the city is going to have to step up and provide. Here's another analyses from 1964 that discusses how 'vertical infrastructure' is taxable when 'horizontal' is not... http://www.masongaffney.org/publications/E3Containment_policies.CV.pdf
Source: Joseph Minicozzi, AICP, Principal Urban3, LLC via http://www.planetizen.com/
Asheville, North Carolina, like many cities and towns around the country, is hurting financially. It’s not that Asheville is some kind of deserted ghost town. Rather, it’s a picturesque mountain city with a population of about 83,000 that draws tourists from all over the world, especially during the leaf-peeping season. But it’s also a city that appeals to its residents, who revel in strolling about a true walkable downtown chock-full of restaurants and retail shops featuring locally grown and crafted products. Downtown is not only one of Asheville’s main draws; it also serves as a major driver in helping the city overcome its budgetary doldrums.
Most of us – city planners, elected officials, business owners, voters, and the like – understand that the city brings in more tax revenue when people shop and eat out more. However, we often overlook the scale of the property tax payoff for encouraging dense mixed-use development.
Many policy decisions seem to create incentives for businesses and property developers to expand just about anywhere, without regard for the types of buildings they are erecting. In this article, I argue that the best return on investment for the public coffers comes when smart and sustainable development occurs downtown.
We’ll use the city of Asheville as an example. Asheville realizes an astounding +800 percent greater return on downtown mixed-use development projects on a per acre basis compared to when ground is broken near the city limits for a large single-use development like a Super Walmart. A typical acre of mixed-use downtown Asheville yields $360,000 more in tax revenue to city government than an acre of strip malls or big box stores.
Here is a breakdown of comparison of the Asheville Wal-Mart Center vs Mixed-Use Center downtown:
If you were a mayor or city councillor facing a budget crisis, this comparison should serve as an eye-opener, both in terms of your policies and your development priorities. The comparison should also get you thinking about not just how you could encourage more downtown development, but also what kind of development could increase the value of buildings in the surrounding neighborhoods.
It’s not just officials in Asheville who should be asking these questions. In the growing number of diverse cities where we have studied this same equation (such as Billings, MT, Petaluma, CA, and Sarasota, FL) we’ve found that the same principle applies: downtown pays. It’s simple math.
The more valuable downtown properties become, the more revenue the city can generate to address its budget gaps, while also serving the best interests of its citizens. Unfortunately, our public officials may not always make their decisions with full knowledge of the trade-offs.
Consider the story of how Public Interest Projects (PIP), a for-profit development company founded in 1990, first came to uncover this economic inequality.
A few years ago, PIP was looking to develop several parcels in a neglected section of downtown Asheville, just off the main core. At the time, it was filled with decaying auto shops, warehouses and semi-industrial space. In other words, it was ripe for mixed-use redevelopment. Unfortunately, while we saw visions of rehabbed living spaces intermixed with retail and office space, the leaders of Buncombe County had other ideas.
In close proximity to the parcels PIP was considering, the county owned a 1.7-acre parcel upon which leaders first announced plans to build a new jail, then, as an alternative, a 24 hour center for emergency vehicles. While few could argue that the community as a whole would benefit from the addition of such facilities, the county’s plan to plunk one of them right in the middle of an area so ripe for re-development didn’t make much sense to us. Although we weren’t on the same page as our county leaders, that didn’t stop us from trying to get them to see things our way.
Subsequently, we embarked on a comparative analysis of the impact of different development types and scales on the county’s tax rolls as a way to demonstrate the comparable benefits of mixed-use development versus the facilities they we considering. We tried to show them the money.
To do that, we set about analyzing various properties within our community to come up with an estimate of what kind of infill development would be feasible for the county’s site. What we found was striking. If the county continued with its plans for building the more objectionable uses, the loss of this property's tax base plus the detrimental effect on the surrounding property's development potential could actually result in a net loss of more than $1 million each year in property tax revenue for local government. That information got the County's attention and good sense prevailed.
Upon realizing that this equation had broader implication, we began applying the same analysis to other key Asheville landmarks. Our next test case involved a comparison of a high-visibility shopping mall located just outside of downtown with a historic downtown building, dubbed the Old Penney’s building, which we had restored into a six-story mixed-use structure. Once we ran the numbers, just as before, the results were dramatic. Whereas the mall, considered one of the county’s biggest revenue generators, yielded $8,000 an acre in annual County property tax, the downtown building’s yield was $250,000 per acre in County property tax.
It’s easy to see how you might now be scratching your head. How can you compare a mall with a building? Is that really comparing apples to apples? The point is that we have been perpetuating an error when it comes to how we think about real estate. Our mistake has been looking at the overall value of a development project rather than its per unit productivity. Especially relevant in these times of limited public means, every city should be thinking long and hard about encouraging, and not accidentally discouraging, the property tax bonus that comes with mixed-use urbanism. Put simply, density gets far more bang for its buck.
For comparison, let’s consider an everyday example of measuring economic value. When we buy our cars, do we make our buying decisions based on the vehicle’s miles-per-tank rating? If we did, we’d all be driving Ford F-150 Lariats that get, on average, 648 miles per tank versus a Prius, which boasts a modest 571 miles per tank. However when we look at the traditional metric for comparison - how many miles-per-gallon each vehicle gets - the value statement changes. The Lariat achieves a mere 13 miles-per-gallon while the Prius cruises along at 51 MPG. And, since you spend less to fill up the Prius, at today’s gas prices it covers 15,000 miles/year at $3,000 less the annual cost ($4,038/$1,029 respectively). We rank the value of our cars this way because we all know the price of a gallon of fuel. Why wouldn’t we do the same with our land? Shouldn’t we value the consumption of our land the way we value a gallon of gas? After all, an acre of land is far more expensive than a gallon of gas.
The flaw of our current property tax system is that when it comes to assessing how much a property owner owes, we place very little value on the land beneath a building as compared to the building itself. Compounding that issue is the fact that if you construct a building without innovative architecture or sustainable materials, you actually benefit by lower tax value. The combination of these two factors creates a disincentive for good architecture. The result is that the community loses, both in terms of the property tax it collects and the long-term legacy of cheap single-use buildings. In basic terms, we’ve created tax breaks to construct disposable buildings, and there’s nothing smart about that kind of growth.
What can we do about it? Moses did not come down from the mountaintop to deliver our current property tax policy on stone tablets. It’s just another rule we impose upon ourselves. And if we recognize that this policy is harming us in some way, it makes sense to change it. We simply cannot afford how the current system creates incentives for suburban sprawl – which is unsustainable both environmentally and, as I hope I have shown, financially. Communities across the United States are going broke, and we can rightly look to our municipal finance systems and our failure to fully appreciate the payoff for density as a big part of the cause. Let’s all do the math so we can make some positive changes in the system because, in the end, downtown pays!
We need incentives for downtown Johnson City re-development - big, financial incentives that the city is going to have to step up and provide. Here's another analyses from 1964 that discusses how 'vertical infrastructure' is taxable when 'horizontal' is not... http://www.masongaffney.org/publications/E3Containment_policies.CV.pdf
Source: Joseph Minicozzi, AICP, Principal Urban3, LLC via http://www.planetizen.com/
Monday, March 5, 2012
Too many potential real estate buyers pay way too much attention to short-term price changes. People are so worried that prices might drop a little and feel that maybe they should wait to buy something. So if you think you can predict the future, follow your beliefs! However, the reality is that the price, within reason, really should be a secondary matter in your search for a good property to purchase.
The main reason that price is less important is that individuals who want to increase their net wealth from real estate ownership, which is the goal of many buyers, should only be purchasing property that they will hold for a long time. The longer the better and a minimum of five years is probably the breakeven point to start building wealth. It is more likely than not that down the road, years after our economy has sprung back to life, real estate prices should be much higher than what people paid for properties in the next twelve months.
In 2020 or 2022, you won’t even remember the 2012-2013 price fluctuations. You’ll just be gloating to yourself how brilliant you were buying into the market ten years ago. Not only will you have purchased a great property at the most affordable pricing seen in decades, but you will probably have locked in an outrageously low interest rate on a mortgage that can be fixed for thirty years!
But, what if you buy and prices drop a little? Who cares! It won’t matter because you purchased a great property that you love for all the right reasons. You want to own real estate and any slight dip in the next year or two should be a wholly irrelevant short-term blip on the radar of a long term real estate holder.
In addition, in many areas right now, your monthly payment for ownership (including principal, interest, HOA fees if any, property taxes, and repairs) may be close to or less expensive than renting. That alone is an amazing turn of events in the history of personal residence ownership. This is more likely true for moderately priced properties. Even expensive, untouchable properties a few years ago are astonishingly affordable right now.
Now this doesn’t mean that it is the right time for just anyone to buy property. If you are not 100% sure you will own the property for a long time, it is probably smarter to stay a renter. If you move often, renting is probably a better option.
Additionally, this doesn’t mean that you can just buy any property to build wealth. You should probably avoid properties that need:
Significant rehabilitation work
Properties in HOAs where the association is in bad financial shape
Properties in areas where there are lots of foreclosures, high vacancy, near lots of buildable land
Areas where the local economy is in desperate shape.
Rarely are those wealth-building purchases. Go for the properties that are in better shape or in more stable areas with jobs and economic development.
For buyers who are too focused on price, are worried about short-term price drops and are holding off on buying, we long-term holding real estate buyers can only say thank you so much! Please keep obsessing over those monthly housing price reports and stay on the sidelines!
With less competition in the market, it makes the process of finding a great home to secure, and with those incredibly low interest rates, only sweeter for the rest of us who are charging forward to buy a property in the best buying environment in a generation!
The main reason that price is less important is that individuals who want to increase their net wealth from real estate ownership, which is the goal of many buyers, should only be purchasing property that they will hold for a long time. The longer the better and a minimum of five years is probably the breakeven point to start building wealth. It is more likely than not that down the road, years after our economy has sprung back to life, real estate prices should be much higher than what people paid for properties in the next twelve months.
In 2020 or 2022, you won’t even remember the 2012-2013 price fluctuations. You’ll just be gloating to yourself how brilliant you were buying into the market ten years ago. Not only will you have purchased a great property at the most affordable pricing seen in decades, but you will probably have locked in an outrageously low interest rate on a mortgage that can be fixed for thirty years!
But, what if you buy and prices drop a little? Who cares! It won’t matter because you purchased a great property that you love for all the right reasons. You want to own real estate and any slight dip in the next year or two should be a wholly irrelevant short-term blip on the radar of a long term real estate holder.
In addition, in many areas right now, your monthly payment for ownership (including principal, interest, HOA fees if any, property taxes, and repairs) may be close to or less expensive than renting. That alone is an amazing turn of events in the history of personal residence ownership. This is more likely true for moderately priced properties. Even expensive, untouchable properties a few years ago are astonishingly affordable right now.
Now this doesn’t mean that it is the right time for just anyone to buy property. If you are not 100% sure you will own the property for a long time, it is probably smarter to stay a renter. If you move often, renting is probably a better option.
Additionally, this doesn’t mean that you can just buy any property to build wealth. You should probably avoid properties that need:
Significant rehabilitation work
Properties in HOAs where the association is in bad financial shape
Properties in areas where there are lots of foreclosures, high vacancy, near lots of buildable land
Areas where the local economy is in desperate shape.
Rarely are those wealth-building purchases. Go for the properties that are in better shape or in more stable areas with jobs and economic development.
For buyers who are too focused on price, are worried about short-term price drops and are holding off on buying, we long-term holding real estate buyers can only say thank you so much! Please keep obsessing over those monthly housing price reports and stay on the sidelines!
With less competition in the market, it makes the process of finding a great home to secure, and with those incredibly low interest rates, only sweeter for the rest of us who are charging forward to buy a property in the best buying environment in a generation!
Monday, February 6, 2012
Rent v Buy? What Should I do?
In having both rental and sales divisions within T. C. Lewis & Co, we are posed the question all the time about whether someone should rent or buy. What are the pros and cons? What should I do? Why? When will this change? Well the answers aren't simple, but one thing is for sure, paying rent is getting more painful for renters across the country in the face of rising demand and tight supply. This isn't as prevalent in the Appalachian region yet, but it will hapen.
Both the commercial and residential real estate markets are seeing increases, and more are expected in the months and years to come.
Office construction starts were at the lowest level since 1960, the oldest data available from McGraw-Hill Construction; and that means there will be less space available for companies looking to rent or expand their operations.
It’s also bad timing for people who have been spooked by, or pushed out of, the residential housing market and have decided to rent instead of buy. Home ownership in the United States is at historic lows, but at the same time rental prices are on the rise. Rent for a primary residence increased 2.5 percent in December, compared to the same month a year earlier, according to the Consumer Price Index. And Reis Inc.’s research shows that rents hit their highest level since 2007 last year, reaching $1,009 a month average rental price. At the same time, the company found, the vacancy rate dropped to 5.2 percent, from 6.6 percent last year.
“National vacancies continued to tighten sharply in the fourth quarter, bucking seasonal weakness typical of the colder months of the year,” said Victor Calanog, vice president of research & economic for Reis, in a report on the apartment sector. “In just two years after hitting all-time highs of 8 percent at the end of the tumultuous year that was 2009, vacancies have not just recovered, they have surpassed previous lows.”
Ironically, rising rents are actually making homeownership more attractive. One study by Trulia.com, a real estate research firm, found that “based on current market conditions, buying a home is cheaper than renting in 74 percent of major U.S. cities.”On the office rental side, this economic downturn has different from past ones, Calanog wrote, “Previous downturns for the office sector were complicated by overbuilding; this time around, the massive decline in aggregate demand at least isn’t weighed down by a supply glut.”
Unfortunately, that means the squeeze is on for renters from all walks of life as vacancy rates drop in the face of further shrinking of supply. Fewer places to rent means landlords have the upper hand when it comes to what they can ask. And that will probably be the case for the next few years, said Mark Stapp, professor of real estate practice at the W.P. Carey School of Business at Arizona State University.
On the residential side, there will be a push toward higher rents for the next two years, he explained, while commercial real estate rental prices may continue to increase for the next three to five years.
“The supply side is so constrained because no body has been building for years,” he said, because of the economy and the difficulties businesses and developers faced getting loans.
While lending is beginning to open up a bit now, it will take years before real estate firms are able to build enough space to meet the growing demand.
It’s good news for landlords, he added, who were forced to make concessions in recent years because of weakened demand, but it will be tough sledding for apartment and office dwellers who have to pay the escalating rents.
Is your rent bill going up?
Source: Eve Tahmincioglu
Both the commercial and residential real estate markets are seeing increases, and more are expected in the months and years to come.
Office construction starts were at the lowest level since 1960, the oldest data available from McGraw-Hill Construction; and that means there will be less space available for companies looking to rent or expand their operations.
It’s also bad timing for people who have been spooked by, or pushed out of, the residential housing market and have decided to rent instead of buy. Home ownership in the United States is at historic lows, but at the same time rental prices are on the rise. Rent for a primary residence increased 2.5 percent in December, compared to the same month a year earlier, according to the Consumer Price Index. And Reis Inc.’s research shows that rents hit their highest level since 2007 last year, reaching $1,009 a month average rental price. At the same time, the company found, the vacancy rate dropped to 5.2 percent, from 6.6 percent last year.
“National vacancies continued to tighten sharply in the fourth quarter, bucking seasonal weakness typical of the colder months of the year,” said Victor Calanog, vice president of research & economic for Reis, in a report on the apartment sector. “In just two years after hitting all-time highs of 8 percent at the end of the tumultuous year that was 2009, vacancies have not just recovered, they have surpassed previous lows.”
Ironically, rising rents are actually making homeownership more attractive. One study by Trulia.com, a real estate research firm, found that “based on current market conditions, buying a home is cheaper than renting in 74 percent of major U.S. cities.”On the office rental side, this economic downturn has different from past ones, Calanog wrote, “Previous downturns for the office sector were complicated by overbuilding; this time around, the massive decline in aggregate demand at least isn’t weighed down by a supply glut.”
Unfortunately, that means the squeeze is on for renters from all walks of life as vacancy rates drop in the face of further shrinking of supply. Fewer places to rent means landlords have the upper hand when it comes to what they can ask. And that will probably be the case for the next few years, said Mark Stapp, professor of real estate practice at the W.P. Carey School of Business at Arizona State University.
On the residential side, there will be a push toward higher rents for the next two years, he explained, while commercial real estate rental prices may continue to increase for the next three to five years.
“The supply side is so constrained because no body has been building for years,” he said, because of the economy and the difficulties businesses and developers faced getting loans.
While lending is beginning to open up a bit now, it will take years before real estate firms are able to build enough space to meet the growing demand.
It’s good news for landlords, he added, who were forced to make concessions in recent years because of weakened demand, but it will be tough sledding for apartment and office dwellers who have to pay the escalating rents.
Is your rent bill going up?
Source: Eve Tahmincioglu
Wednesday, January 4, 2012
Burying St. Joseph to Sell Your Property?
Cari Luna is Jewish by heritage and Buddhist by religion. She meditates regularly. Yet when she and her husband put their Brooklyn, N.Y., house on the market this year and offers kept falling through, Ms. Luna turned to an unlikely source for help: St. Joseph.
The Catholic saint has long been believed to help with home-related matters. And according to lore now spreading on the Internet and among desperate home-sellers, burying St. Joseph in the yard of a home for sale promises a prompt bid. After Ms. Luna and her husband held five open houses, even baking cookies for one of them, she ordered a St. Joseph "real estate kit" online and buried the three-inch white statue in her yard.
"I wasn't sure if it would be disrespectful for me, a Jewish Buddhist, to co-opt this saint for my real-estate purposes," says Ms. Luna, a writer. She figured, "Well, could it hurt?"
With the worst housing market in recent years, St. Joseph is enjoying a flurry of attention. Some vendors of religious supplies say St. Joseph statues are flying off the shelves as an increasing number of skeptics and non-Catholics look for some saintly intervention to help them sell their houses.
Some Realtors, too, swear by the practice. Ardell DellaLoggia, a Seattle-area Realtor, buried a statue beneath the "For Sale" sign on a property that she thought was overpriced. She didn't tell the owner until after it had sold. "He was an atheist," she explains. "But he thanked me."
Some Catholic clergy are uncomfortable with the St. Joseph's trend. Statues of St. Joseph sold online can be as tall as 12 inches. One, made of colored resin, portrays St. Joseph cradling the baby Jesus. Yet most home sellers favor the simpler three or four inch replicas - most of which are made in China and often depict St. Joseph as a carpenter.
Most statues come in a "Home Sale Kit" that is priced at around $5 and includes burial instructions and a prayer. One site, Good Fortune Online, recently added another kit with a statue of St. Jude - known as the patron saint of hopeless causes - "to help those with a difficult property to sell," the site says. Another site, Stjosephstatue.com, takes orders for its "Underground Real Estate Agent Kits" at 1-888-BURY-JOE.
Demand for the statues has been growing. Ron Weissman, who sells the statues at Good Fortune Online, says about six months ago he switched to online transactions because the increase in calls - from about two a week to 25 calls a day - was too much to handle. Richard Weigang, owner of www.catholicstore.com, says he sells about 400 statues a month, double the amount he sold a year ago.
In Catholicism, St. Joseph, a carpenter, is honored as the husband of Mary and foster father of Jesus. Representing a humble family man, he is the patron saint of home, family and house-hunting, according to the Rev. James Martin, a Jesuit priest and author of "My Life With the Saints." Popular belief holds that people who wish to enlist St. Joseph's help in selling a house should bury his replica upside-down in the yard. (Apartment dwellers are advised to put him in a potted plant.)
But, methods of burying the statue vary. Instructions in one package give buyers several options, including burying it upside-down next to the "For Sale" sign, burying it three feet from the rear of the house and burying it next to the front door facing away from the home. Phil Cates, owner of stjosephstatue.com, says: "I've seen it buried in all types of places with all types of ceremonies." He says the detailed burial instructions are largely intended to prevent people from forgetting where they put their St. Joseph. (His kits advise burying it facing it away from the house, to symbolize leaving.)
Theologians say there's no official doctrine that calls for the statue's interment. The practice may have stemmed from medieval rites of land possession, in which conquerors claimed land by planting a cross or banner, says Jaime Lara, associate professor of Christian Art and Architecture at Yale Divinity School. Mr. Lara also suggests that the tradition may have gotten mixed up at some point with folklore surrounding St. Anthony. St. Anthony, known as a matchmaker, would often be held ransom, upside-down, until he found a husband for someone's daughter, he says.
Some clergy aren't sure how St. Joseph would feel about his replica ending up on its head in the dirt, and suggest displaying it somewhere in the house instead.
"I think it's much more respectful than burying the poor guy," says Msgr. Andrew Connell, the archdiocesan director of the Pontifical Society for the Propagation of the Faith in Boston. Some retailers, such as Mr. Weigang, owner of www.catholicstore.com, also encourage buyers to put the statues in the house.
"We don't advocate burying," he says. "Some of those statues are quite beautiful."
Catholic leaders also say that faith and devotion are necessary, in addition to burying a statue, otherwise the practice amounts to little more than superstition or magic. But they are also enjoying the saint's newfound popularity. "If they have a good result and they think it was St. Joseph, it might inspire them to practice more," says Msgr. Connell.
The St. Joseph "Underground Real Estate Agent Kit" from www.stjosephstatue.com. Once someone's home sells, the custom holds, the statue should be dug up and put in a place of honor in the new home. That's what Ms. Luna did after she and her husband sold their house shortly after burying St. Joseph. She put the statue in her office in their new home in Portland, Ore. But not everyone is aware of the follow-up step. Trudy Lopez and her husband buried a statue of St. Joseph when they were trying to sell their condo, even though Ms. Lopez is Jewish and her husband is a nonpracticing Catholic. They sneaked out late at night, worried they might be breaking a condo association rule. "And I'm thinking, 'If my family knew what I am doing, they'd die,' " she says. Soon they got an offer, but didn't realize they were supposed to bring the statue with them to their new home.
"I'm afraid a lot of the statues won't be unearthed and someone will go over St. Joseph's feet with a lawnmower," says Father Martin.
*Sara Munoz contributed to this entry
The Catholic saint has long been believed to help with home-related matters. And according to lore now spreading on the Internet and among desperate home-sellers, burying St. Joseph in the yard of a home for sale promises a prompt bid. After Ms. Luna and her husband held five open houses, even baking cookies for one of them, she ordered a St. Joseph "real estate kit" online and buried the three-inch white statue in her yard.
"I wasn't sure if it would be disrespectful for me, a Jewish Buddhist, to co-opt this saint for my real-estate purposes," says Ms. Luna, a writer. She figured, "Well, could it hurt?"
With the worst housing market in recent years, St. Joseph is enjoying a flurry of attention. Some vendors of religious supplies say St. Joseph statues are flying off the shelves as an increasing number of skeptics and non-Catholics look for some saintly intervention to help them sell their houses.
Some Realtors, too, swear by the practice. Ardell DellaLoggia, a Seattle-area Realtor, buried a statue beneath the "For Sale" sign on a property that she thought was overpriced. She didn't tell the owner until after it had sold. "He was an atheist," she explains. "But he thanked me."
Some Catholic clergy are uncomfortable with the St. Joseph's trend. Statues of St. Joseph sold online can be as tall as 12 inches. One, made of colored resin, portrays St. Joseph cradling the baby Jesus. Yet most home sellers favor the simpler three or four inch replicas - most of which are made in China and often depict St. Joseph as a carpenter.
Most statues come in a "Home Sale Kit" that is priced at around $5 and includes burial instructions and a prayer. One site, Good Fortune Online, recently added another kit with a statue of St. Jude - known as the patron saint of hopeless causes - "to help those with a difficult property to sell," the site says. Another site, Stjosephstatue.com, takes orders for its "Underground Real Estate Agent Kits" at 1-888-BURY-JOE.
Demand for the statues has been growing. Ron Weissman, who sells the statues at Good Fortune Online, says about six months ago he switched to online transactions because the increase in calls - from about two a week to 25 calls a day - was too much to handle. Richard Weigang, owner of www.catholicstore.com, says he sells about 400 statues a month, double the amount he sold a year ago.
In Catholicism, St. Joseph, a carpenter, is honored as the husband of Mary and foster father of Jesus. Representing a humble family man, he is the patron saint of home, family and house-hunting, according to the Rev. James Martin, a Jesuit priest and author of "My Life With the Saints." Popular belief holds that people who wish to enlist St. Joseph's help in selling a house should bury his replica upside-down in the yard. (Apartment dwellers are advised to put him in a potted plant.)
But, methods of burying the statue vary. Instructions in one package give buyers several options, including burying it upside-down next to the "For Sale" sign, burying it three feet from the rear of the house and burying it next to the front door facing away from the home. Phil Cates, owner of stjosephstatue.com, says: "I've seen it buried in all types of places with all types of ceremonies." He says the detailed burial instructions are largely intended to prevent people from forgetting where they put their St. Joseph. (His kits advise burying it facing it away from the house, to symbolize leaving.)
Theologians say there's no official doctrine that calls for the statue's interment. The practice may have stemmed from medieval rites of land possession, in which conquerors claimed land by planting a cross or banner, says Jaime Lara, associate professor of Christian Art and Architecture at Yale Divinity School. Mr. Lara also suggests that the tradition may have gotten mixed up at some point with folklore surrounding St. Anthony. St. Anthony, known as a matchmaker, would often be held ransom, upside-down, until he found a husband for someone's daughter, he says.
Some clergy aren't sure how St. Joseph would feel about his replica ending up on its head in the dirt, and suggest displaying it somewhere in the house instead.
"I think it's much more respectful than burying the poor guy," says Msgr. Andrew Connell, the archdiocesan director of the Pontifical Society for the Propagation of the Faith in Boston. Some retailers, such as Mr. Weigang, owner of www.catholicstore.com, also encourage buyers to put the statues in the house.
"We don't advocate burying," he says. "Some of those statues are quite beautiful."
Catholic leaders also say that faith and devotion are necessary, in addition to burying a statue, otherwise the practice amounts to little more than superstition or magic. But they are also enjoying the saint's newfound popularity. "If they have a good result and they think it was St. Joseph, it might inspire them to practice more," says Msgr. Connell.
The St. Joseph "Underground Real Estate Agent Kit" from www.stjosephstatue.com. Once someone's home sells, the custom holds, the statue should be dug up and put in a place of honor in the new home. That's what Ms. Luna did after she and her husband sold their house shortly after burying St. Joseph. She put the statue in her office in their new home in Portland, Ore. But not everyone is aware of the follow-up step. Trudy Lopez and her husband buried a statue of St. Joseph when they were trying to sell their condo, even though Ms. Lopez is Jewish and her husband is a nonpracticing Catholic. They sneaked out late at night, worried they might be breaking a condo association rule. "And I'm thinking, 'If my family knew what I am doing, they'd die,' " she says. Soon they got an offer, but didn't realize they were supposed to bring the statue with them to their new home.
"I'm afraid a lot of the statues won't be unearthed and someone will go over St. Joseph's feet with a lawnmower," says Father Martin.
*Sara Munoz contributed to this entry
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