3 Big Predictions for Real Estate

Here's a link to an article generated as a result of a panel discussion that kicked off Inman's Real Estate Connect event yesterday morning in San Francisco. The session, moderated by Inman News founder Brad Inman, featured experts from the worlds of real estate and finance. Here were some of the most important forecasts for the real estate industry:  3 Big Predictions for Real Estate.

Infographic: California Median Home Prices by County



Housing Roundup: Home Values Up; Investors Eye Residential Real Estate

By Gino Blefari
President & CEO
Intero Real Estate Services, Inc.

A lot of positive statistics about housing were released this past week, including stronger prices and values. In addition, two unrelated reports showed some other interesting happenings in real estate: foreign buyers seem to be showing a loss in appetite for U.S. homes, while Wall Street investors are hungrier than ever.

Sales fall with tight supply
Total existing home sales declined 5.4% in June from May, but were 4.5% higher than in June a year ago, according to stats from the National Association of Realtors. Lower inventory has likely caused some of the decline, NAR said.

Home prices and values rise
While sales fell in June from May, the good news is that home prices were up. The national median existing-home price was $189,400 in June, up 7.9% from a year ago, according to NAR. This marks four monthly price increases from a year earlier, and June's gain was the strongest since February 2006 when the median price rose 8.7% from the previous year.

Zillow's home value report released this week also showed its first annual increase in nearly five years. U.S. home values rose 0.2% in the second quarter this year from the same quarter a year ago, Zillow said. Median home values rose for four consecutive months, causing Zillow to declare a bottom in values.

Foreign buyers lose interest
Trulia reports this week that online searches for U.S. homes from buyers abroad fell nearly 10% in the past year. Miami topped the list of most searched cities by foreigners, though traffic from abroad for that city fell to 15.7% during the second quarter of this year from 16.3% the same period last year.

Wall Street invests in foreclosures
A Fortune report reveals that, in the past six months, a number of investment firms, hedge funds, private equity partnerships and real estate investors have been snapping up single-family foreclosure homes as part of their portfolios.

Private equity firm Blackstone Group now owns 2,000 single-family homes, totaling about $300 million in value. It's a small slice compared to the mega-firm's overall real estate portfolio of about $50 billion, but it's one of the largest pools of homes every intentionally put together by an institutional investor, according to the Fortune report. (Note: Banks and Fannie and Freddie have a much larger pool, of course, but that's a different situation.)

Fortune notes there are likely more and even larger investment portfolios of residential real estate out there.

This latest housing investment discovery is noteworthy because it's unusual. Normally, investors of residential real estate tend to be smaller mom-and-pop shops or single investors who then fix up and manage the properties themselves. Institutional investors like Blackstone historically have focused on apartment buildings and commercial properties like office parks and malls.

Yes, the times they are a-changing.