NEW CANAAN REAL ESTATE | Investment Time?

New Canaan Real Estate Market Activity | March 26 - April 1

Photos of new market offerings listed during the past week are shown above, and the statistics for market activity are outlined in the weekly charts below.

NEW SINGLE FAMILY RESIDENTIAL LISTINGS 

ACTIVE SINGLE FAMILY RESIDENTIAL LISTINGS

SINGLE FAMILY RESIDENTIAL LISTINGS UNDER CONTRACT

SINGLE FAMILY RESIDENTIAL LISTINGS CLOSED

1 Single-Family Residential Property Transfer • Week of March 26

List $2,100,000 / Sold $2,062,500 . 31 Thurton Drive . Ferm to Johnson

Source . NC FLEX MLS

Readers often send me and ask me to reprint articles that they feel might be of interest to buyers and/or sellers, for a variety of reasons ... below is one such article. Think about rental income ... "with stocks, bonds and interest rates low - real estate is a great buy, especially in a low-tax, great quality-of-life town like ours."  There are many properties offered below the $1M mark that would, when purchased for investment, satisfy our ever-ready rental market, bring in a fetching yield, and grow in value with time. Sounds like a plan, doesn't it? Below is an excerpt from a recent NYT article, and while its slant is on the 'mega' investor dealing with foreclosed properties, that can be redetermined and trimmed down to a local endeavor focusing on 'well-priced' properties - luckily, foreclosures have been few in our immediate area. Please check with your New Canaan Realtor for opportunities here in the village or within our sister towns - or, if you like, contact me and I would be happy to sign you up with 'Listing Book' which gives prospective buyers ready access to our Multiple Listing System.

Excerpts from "Investors Are Looking to Buy Homes by the Thousands"

 by Monica Almeida . The New York Times . April 2

With home prices down more than a third from their peak and the market swamped with foreclosures, large investors are salivating at the opportunity to buy perhaps thousands of homes at deep discounts and fill them with tenants. Nobody has ever tried this on such a large scale, and critics worry these new investors could face big challenges managing large portfolios of dispersed rental houses. Typically, landlords tend to be individuals or small firms that own just a handful of homes.

But the new investors believe the rental income can deliver returns well above those offered by Treasury securities or stock dividends. At the same time, economists say, they could help areas hardest hit by the housing crash reach a bottom of the market.

This year, Waypoint (Real Estate Group) signed a $400 million deal with GI Partners, a private equity firm in Silicon Valley. Gary Beasley, Waypoint’s managing director, says the company plans to buy 10,000 to 15,000 more homes by the end of next year. Other large private equity investors — including Colony Capital, GTIS Partners and Oaktree Capital Management, in partnership with the Carrington Holding Company — have committed millions to this new market, and Lewis Ranieri, often called the inventor of the mortgage bond, is considering it, too.

In February, the Federal Housing Finance Agency, which oversees the government-backed mortgage companies Fannie Mae and Freddie Mac, announced that it would sell about 2,500 homes in a pilot program in eight metropolitan areas, including Atlanta, Chicago and Los Angeles.

And Bank of America said in late March that it would begin testing a plan to allow homeowners facing foreclosure the chance to rent back their homes and wipe out their mortgage debt. Eventually, the bank said, it could sell the houses to investors.

Waypoint executives say they can handle large volumes because they have developed computer systems that help them make quick buying decisions and manage renovations and rentals.

“We realized that there is a tremendous amount of brain damage around acquiring single-family homes, renovating them and renting them out,” said Colin Wiel, a Waypoint co-founder. “We think this is a huge opportunity and we are going to treat it like a factory and create a production line to do this.”

Mr. Hladik, who is one of seven inspectors working full time for Waypoint’s Southern California office, is one cog in that production line.

On a recent morning, he walked through a vacant three-bedroom home with a red tiled roof here about 60 miles east of Los Angeles, one of the areas flooded with foreclosures after the housing market bust. Scribbling on a clipboard, he noted the dated bathroom vanities, the tatty family room carpet and a hole in a bedroom wall. Twenty minutes later, he plugged these details into a program on his iPad, choosing from drop-down menus to indicate the house had dual pane windows and that the kitchen appliances needed replacing.

The software calculated that it would take $25,413.53 to get the home in rental shape. Mr. Hladik adjusted that estimate down to $18,400 because he deemed the landscaping in good shape. He uploaded his report to Waypoint’s database, where appraisers and executives would use the calculations to determine whether and how much to bid for the house.

With just three years of experience, Waypoint is one of the industry’s grizzled veterans. But critics say newcomers could stumble. “It’s a very inefficient way to run a rental business,” said Steven Ricchiuto, chief economist at Mizuho Securities USA. “You could wind up with an inexperienced group owning properties that just deteriorate.”

The big investors are wooed by what they see as a vast opportunity. There are close to 650,000 foreclosed properties sitting on the books of lenders, according to RealtyTrac, a data provider. An additional 710,000 are in the foreclosure process, and according to the Mortgage Bankers Association, about 3.25 million borrowers are delinquent on their loansand in danger of losing their homes.

With so many families displaced from their homes by foreclosure, rental demand is rising. Others who might previously have bought are now unable to qualify for loans. The homeownership rate has dropped from a peak of 69.2 percent in 2004 to 66 percent at the end of 2011, according to census data.

Economists say that these investors could help stabilize home prices. “If you have a lot of foreclosures in one community you will improve everybody’s home values if you take them off the market,” said Diane Swonk, the chief economist at Mesirow Financial. “If those homes are renovated and even rented, it is a lot better than having them stand empty.”

Read the full article here ... 

 Thank you for taking the time to read my column in Patch, new posts of 'brokerbeatNewCanaan on Patch' publish weekly on Friday mornings.

My very best, Regina

brokerbeatNewCanaan ... bringing real estate to life.

All information is deemed reliable but is not guaranteed and should be independently verified.