REPOST: Why New York's Expensive Real Estate Is Going Crazy

Buildings nowadays are reaching new heights, literally and figuratively. Learn more about the super tall New York skyscrapers from this Gizmodo article below.

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Traditionally, space in skyscrapers has been the preserve of too-big-to-fail corporations and law firms with triple-barrelled names. But, as you probably realize if you’ve taken a turn round Central Park lately, the latest and greatest supertalls don’t house hedge funds — they house a different kind of wealth altogether.

In this month’s New York Review Of Books, Martin Filler has a thorough examination of the trend in skyscraper apartment blocks, and the factors behind the remarkable takeoff in building height and price. He argues that a combination of super-rich individuals — the 0.01% — and conservative condo boards are making wannabe buyers look to new buildings, and the inexorable increase in land value in Manhattan is driving those new constructions ever higher.

The super-skinny, supertall trend has been facilitated by engineering advancements, which can cram a 1,400 foot building onto a footprint a quarter of a football field big, thanks to some seriously impressive technology. But it also comes at a cost to the rest of us.

432 Park Avenue’s most noticeable architectural feat is its uniform profile, which rises without deviation to the full height — crucially, without the tapering seen in most skyscrapers. That tapering is thanks to a regulation introduced in 1916 to allow sunlight to filter into an overgrown Manhattan. But the small footprint of 432 means the law doesn’t apply to it, so the building is free to cast a shadow across half the city.

Economists have long noticed that skyscraper booms are inevitably followed by economic bust — so much so there’s an entire index named after the concept. Whether New York’s supertall boom is a harbinger of recession remains to be seen. But either way, Filler makes a compelling case that condos in the sky are a product of different factors altogether — and we’d be wise to pay attention.

House-hunting fails: How to avoid them

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There are many things that can go wrong when you're house-hunting but there are ways to ensure you don't commit mistakes. Having awareness and keeping an open mind are some of the things you have to have when scouting for your new home. The following are common house-hunting mistakes and how to avoid them:

Going beyond your budget

Falling in love with a house you can't afford is heartbreaking. The easiest remedy for that is only to look at houses within your price range. Going over your budget will be a huge financial burden on you in the future. You may not be able to buy your dream house, but you can build one slowly but surely from the house you can afford.

Putting limits on your options

Thinking that the first house you've seen is the perfect house will limit your options. Make sure that you visit other available houses, too, before deciding which one is the right one for you. This is especially important if the house you found is over your budget and you assume that nothing could be better. Exhaust all your options before making a decision.

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Overlooking flaws

Ignoring leaks or other potential problems in the house is a bad move. Don't assume that you can get it fixed or that you can do it yourself. Be realistic. If the house you want has a major damage, check if the repair costs would still fit your budget. If not, move on.

Rushing into a purchase or being too slow.

You can't rush an important decision like buying a house. Don't be desperate if it's taking you a while to find the right home. Weigh the pros and cons of every potential purchase and don't rush to make offers. Likewise, don't be too slow lest you want to lose the house of your dreams. Finding the right balance between thinking it through and making quick decisions is key.

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REPOST: Canada Top Global Investor in U.S. Commercial Properties in 2014

 The U.S. commercial real estate market saw the influx of foreign investors in 2014. The World Property Journal reveals the biggest direct investor in the article below.

Image Source: worldpropertyjournal.com

According to CBRE, Canada is the unrivaled global investor in U.S. real estate with nearly $10 billion of direct investments in 2014, ahead of Norway, China, Japan and Germany.

Global direct investment in U.S. real estate totaled $41 billion in 2014, about 11% of all investment in U.S. property assets. This represents a 6% increase in global investment when compared to 2013.

Canada was the lead global buyer of U.S. real estate last year with 26% of direct foreign investment - $9.7 billion. Canadian investors have already transacted a significant $2.75 billion in U.S. real estate as of mid-January 2015. Canadian real estate investment in the U.S. was one of the largest cross-border capital flows in the world in 2014 after U.S.-to-U.K. and Hong Kong-to-China capital flows.

Image Source: worldpropertyjournal.com

Norway was the second largest global investor in U.S. real estate in 2014 with 11% of direct foreign investment--$4.4 billion and a 120% increase year-over-year. China and Japan reached total investment levels in the U.S. of $3.8 billion (+6%) and $3.5 billion (+397%), respectively, each representing 9% of the global total. German buyers transacted $2.9 billion (+5%) in U.S. real estate, representing 7% of the global total.

"While we have seen rapidly rising Chinese global investment and oil-rich countries in the Middle East or Norway increasing their allocations to global real estate, Canadian buyers continue to dominate foreign investment in the U.S. and should remain on the radar screens of American investors and owners of U.S. real estate," said Chris Ludeman, Global President, CBRE Capital Markets.

"Canadians, other global investors and Americans share the same challenge--finding attractive opportunities with reasonable pricing that can produce a favorable risk-adjusted return. That said, we expect the investment climate to remain brisk and U.S. volumes will continue rising in 2015."

The U.S. is by far the largest destination for Canadian global capital. Of the $22 billion that Canada invested outside of its borders in 2014, 44% went to the U.S. The next highest shares--17% and 14%--went to Australia and the U.K., respectively. It should be noted that the U.S. market share of Canadian global investment dropped below its 2007-14 average of 48% in 2014.

"Canadian investors find U.S. real estate attractive for many of the same reasons that other countries do. The U.S. offers opportunities for value creation, healthy cash flows and favorable risk-adjusted returns," said Ross Moore, CBRE's Director of Research for Canada. "The level of Canadian investment is highly correlated with the health of the American economy and exchange rates, but the overriding motivation is that Canadian institutional investors need to look beyond their borders to find product and achieve greater diversification."

Canadian investment is more geographically widespread across the U.S. than other global capital. This should not be surprising given the magnitude of Canadian investment, its high degree of familiarity with U.S. markets beyond the gateway cities, and the relatively low cost and time commitment for Canadian investment professionals to travel to U.S. markets.

For all property types combined, as with total global capital flows into the U.S., New York is the leading destination for Canadian real estate capital, followed by Boston and Broward County in Florida, which made the list due to a significant hotel acquisition. Seattle is somewhat unusual for global capital, but not unusual for Canadian capital given its proximity to Canada and, in particular, Vancouver.

Image Source: worldpropertyjournal.com

Jeff Yarbrough is a top real estate professional from West Hollywood, California.

California housing market: Affordability rate decreasing

Image Source: articles.latimes.com

High income earners may have no problem finding a home and settling comfortably in California. Middle- and low-income earners, meanwhile, may have to settle for less than what they want in a home to be able to afford it.

According to a report from HSH.com, a mortgage research firm, buyers need to have an annual take home salary of about $97,000 to reasonably afford a median-priced home in the Los Angeles and Orange counties. In the third quarter of 2014, a buyer would have been able to purchase a typical house at $10,000 less, indicating a rapid increase in home prices.

Image Source: nationalmortgageprofessional.com

Federal data show that higher home prices have driven hundreds of thousands of low- and middle-income workers to other states. California has been losing residents to other parts of the country since the 1990s and more than half of the most expensive real estate markets in the US are found in California.

This trend highlights a challenge to the economy: keeping workers of moderate means in some of the nation’s most expensive housing markets. For cities like Los Angeles, being able to attract the tech industry and its high income earners is well and good but its leaders also need to make sure that the city is supporting a housing and transportation infrastructure for middle- and low-income earners who contribute to the local economy.

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Jeff Yarbrough is a top-producing licensed realtor who has knowledge of all of Los Angeles’ most desirable neighborhoods.

REPOST: Why You Shouldn't Mix Real Estate with Relatives

Mixing family and any kind of business is never encouraged. The same can be said for getting family member as your real estate agent. This article from Life Hacker explains why.

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If you're shopping for a home or selling your current one, it can be helpful to have a family member or friend of the family that's a real estate agent. However, if they don't specialize in your community or know your market, think twice about straining your relationship by asking them to work with you.

Over at US News Money, they offer up a few reasons why you may want to avoid asking relatives—or even just friends of friends—to be your agent, especially if you're selling. For one, they may not know the neighborhood, and beyond that, you don't want to endanger your relationship with them with something that's often stressful for everyone involved. Imagine how well that would go over at the dinner table for the holidays:

Unless your relative is a crackerjack full-time agent who specializes in your neighborhood, he or she is unlikely to do as good of a job as another agent. That can breed resentment, as well as derail your transaction.

... Finding a neighborhood expert is especially important in areas where moving a block can raise or lower the value of a home by $100,000. An agent who specializes in a neighborhood may also be in touch with buyers who are looking for a home just like yours or sellers who haven’t put their home on the market yet.

The guide also suggests keeping your distance from part time agents, as they may be slower to react to news about your home, or sales and listings in the area if you're on the hunt in a competitive market. That one might be a bit tougher though, many real estate agents also work other jobs, so take that one with a grain of salt. Either way, you can check out all of the tips at the link below.

Choosing the right neighborhood: A guide for first-time home buyers

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A house may have everything one needs, but is it located in the right neighborhood?

While an apartment in a chic, busy neighborhood might be perfect for a millennial with no dependents, a family with small children has different needs that have to be addressed.

Before starting a home search, home buyers should make a list of what they're looking for in a neighborhood. The following are some factors to consider:

Access and transportation

Image Source: rejournals.com

Suburban communities are usually designed around a town center, where residents can shop, dine, and socialize, and its residents typically drive to work. Neighborhoods located near or in cities typically benefit from numerous public transit options.

The presence and proximity of grocery stores, banks, parks, and other amenities, and the cost of transportation to access them should be considered when choosing the right neighborhood.

Safety

Image Source: cbslocal.com

 
No one wants to live in an unsafe neighborhood. Home buyers should research online to determine a community's violent and property crime rates and compare the numbers with those of other communities. The local police department will also be able to provide valuable information on the safety of the area.

Education

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A home buyer who has children or is planning to have children should consider homes near good schools. If a home is on the bus route, that translates to more convenience for both parents and children.

Proximity to top-ranked schools is important, whether or not the home buyer has or is planning to have children. A study has shown that people are willing to pay more for homes located near good schools, so buyers who are planning to sell their homes in the future would do well to invest in a home in this type of neighborhood.

Once home buyers have made a list of what they want in a neighborhood, they should consult with their realtor or real estate agent to help them find a home in a community where they can confidently put down roots.

Follow this Jeff Yarbrough Twitter account for discussions on home buying.

Two walkable L.A. neighborhoods for millenial home buyers

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The surveys revealed that millennials want to live in walkable neighborhoods.

Millennials, also called Generation Y, are a group of young adults born from 1980 to 2000. The generation's personality is defined as culturally-diverse, upbeat, confident, liberal, and open to changes.

A survey by the Rockefeller Foundation found that 66 percent of millennials said that access to efficient transportation services is one of the top criteria they would consider when deciding where to live, while 54 percent of respondents would consider moving to another city if it had better transportation options. Another survey, conducted by the American Planning Association, found that baby boomers and millennials want many of the same things, one of them being walkable communities.

Walkscore, a website dedicated to promoting walkable neighborhoods, has compiled a list of Los Angeles neighborhoods with high walkability and easy access to public transportation. The following are two neighborhoods from the list that could pique the interest of millennial home buyers (and renters.)

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With a walk score of 93 (walker's paradise, according to Walkscore,) and a transit score of 99 (world-class public transportation,) Downtown L.A. tops the list of walkable communities in Los Angeles. The area has more than 800 dining establishments, 47 buses, two subways, and two light rail lines. Downtown L.A. is safer than other neighborhoods as well, with a lower personal property crime rate per person than the city average. This might be due to the presence of members of the Purple Patrol, a troop composed of "district safety" officers and maintenance staff who ensure that the area remains clean and safe for residents and tourists alike.

Chinatown is the second most walkable neighborhood in Los Angeles, with a walk score of 91 and a transit score of 91. Residents do not need a car to do errands, and the area has more than 130 restaurants, coffee shops, and bars. The area also has grocery stores, dry-cleaners, art galleries, schools, and a hospital. The personal crime rate is slightly higher than the national average.

Image Source: wikipedia.org

Los Angeles is known for being car-friendly, but that may soon change as more and more neighborhoods are promoting walkability over drivability and more millennials are making their needs known to the real estate world.

Jeff Yarbrough is a real estate professional and philanthropist from West Hollywood. Subscribe to this blog for more articles on California real estate market.