Written by Mikkie Mills
When Donald Trump said, “Well real estate is always good as far as I am concerned,” he could have been referring to the state of the real estate market today. Unemployment is 4.9 percent as of February 2016. Previously stalled projects are receiving multi-million dollar funding by state and federal governments and sellers are finding highly motivated, if not desperate buyers.
The Urban Land Institute Center (ULI), conducted a survey, ULI Real Estate Consensus Forecast, from August 28 to September 21, 2015. It involved real estate economist and 36 organizations. The experts predicted “three more years of favorable real estate conditions.”
Finding and assessing real estate investment deals can be tricky and time consuming. Yesterday’s software handled the fundamentals but today’s real estate investor software can provide a myriad of results in real-time. From Microsoft Excel to CREmodel and beyond — investors can use an app that calculates figures for ROI, leveraged IRR, cash flows and time value.
For investors who like to build their own models with a package that provides functionality and property software analysis, then Microsoft Excel ranks very high. RealData has two versions of investment property software — Express for smaller portfolios and Professional for all income properties.
REI Wise allows you to crunch numbers in the cloud. It has leasing financial modeling, a transaction platform and marketing options. Real estate software from Privy not only analyzes comparables on all properties on the MLS but it also uses your activity history to determine comps that show spreads, pictures and specific descriptions.
As an investor, a home warranty can increase sales. The majority of buyers, approximately 80 — 90 percent, prefer a home covered with a warranty, especially first-time buyers who may be intimidated by the cost of repairs. At closing, it reduces the chances of equipment problems and guards against any costly delays.
Most importantly, a warranty will allow you to calculate repair costs accurately by keeping records of repairs and projecting expenses for the future. They offer discounts on services and include the use of high quality products.
Correlation of Global Economies and Capital Markets
In a press release by ULI, it said, “From new construction materials to autonomous vehicles, three-dimensional (3-D) printing…change the way real estate is built, sold, managed, and occupied.” Improved lending conditions and global investors spark increased activity.
In 2014, London sold more than 1,600 properties for $5 million or more, according to the World Economic Forum. Manhattan was in second place selling almost 800 comparable properties. Miami sold 55 high-end properties and Los Angeles sold 21.
The median list price increased nationally to $228,000, an increase of 7 percent over the previous year as of May 2015.
These days, tenants’ use of technology contributes to closing a sale. Handheld devices monitor property values and commercial ventures are exploding. Yes, the future of real estate in the U.S. is good.
Commercial Real Estate
- The ULI reported commercial real estate transactions will level off at $500 billion in 2017.
- Commercial real estate prices are projected to rise by 10 percent in 2015.
- Industrial and retail properties are expected to have the strongest returns.
- Hotel RevPAR is projected to increase by more than 7 percent in 2015.
Residential Real Estate
- Apartment vacancy rates are “expected to decline slightly in 2015 but reverse direction and rise slightly in 2016 and 2017,” according to Inside Business in October 2015
- Single-family housing starts will rise to 745,000 in 2015, 842,000 in 2016.
- Rent is expected to increase by 4.6 percent in 2015.