Metro Chicago Real Estate Market Registers Solid 9-Month Gain in 2010

November 10, 2010 - Home sales activity in the metropolitan Chicago real estate market registered a solid gain of 11 percent for the first nine months of 2010 when compared to the same period in 2009. That was achieved even as third-quarter transaction volume was 22.8 percent lower than the same period last year.

The sales figures, analyzed by RE/MAX, are for the seven-county Chicago metropolitan area and are based on information supplied by Midwest Real Estate Data, LLC. The seven-county metropolitan area includes the Illinois counties of Cook, DuPage, Kane, Kendall, Lake, McHenry and Will.

The median sales price for homes in the metro area during the January-September period was $190,000, 5.7 percent lower than the median of $201,500 recorded for the same months in 2009. However, the average price of homes sold was more resilient, falling just 1 percent to $255,684 from $258,354 a year earlier.

"The market can now fully appreciate the impact of the homebuyer tax credit," said Jim Merrion, regional director of the RE/MAX Northern Illinois real estate network. "Although it helped sales generally, especially sales of attached units (which consist primarily of condominium apartments and townhouses), once the tax credit expired, sales of attached units fell more sharply than sales of traditional detached homes. When you look at the first three quarters of 2010, attached homes registered a larger percentage sales increase than did detached homes."

Sales of detached homes were 34,922, up 10.6 percent for the January-September period in the metro area, while sales of attached home increased 11.5 percent to 19,520 when compared to 2009 results. During the third quarter, however, sales of attached homes were 5,580, 28 percent below the 2009 level, while sales of detached homes dipped 19.9 percent to 10,793.

The average price of a detached home increased slightly $266,444 for the first nine months of 2010 from $265,639 during the same period in 2009. For attached homes the average price for the first nine months of the year slipped to $236,434 in 2010 from $245,215 in 2009, a 3.6 percent decline.

The average time on the market for detached homes sold during the third quarter was 148 days, down from 168 days a year earlier. The average market time of attached homes sold in the July-September period was 168 days, up from 165 days in 2009.

"The third-quarter slowdown in home sales was felt broadly," said Merrion. "All seven counties in the metro area recorded an increase in sales activity for the first nine months of the year when compared to the same period in 2009, but all counties also showed declines in sales activity during the third quarter. Kane County turned in the best nine-month performance with a 31 percent total increase to 3,667 homes from 2,795 a year earlier."

Of the 258 suburban market areas and 77 City of Chicago neighborhoods that RE/MAX tracks on a quarterly basis, 185 towns and 56 neighborhoods had increased sales activity during the January-September period when measured against 2009, but only 42 towns and 16 neighborhoods recorded gains in sales transactions when the third quarter of 2010 is compared to that same portion of 2009. source: www.sfgate.com

Vancouver the most expensive commercial real estate market in Canada: Avison Young

Vancouver’s pricey commercial real estate market is driving investment volumes across Canada.

This according to commercial real estate firm Avison Young, which released a report Tuesday morning indicating the Canadian commercial real estate market in 2010 had already surpassed 2009 sales totals.

At the end of the third quarter, more than $12 billion in commercial real estate assets had changed hands in 2010, a 57% increase when compared with the same nine-month period in 2009.

Although Toronto remains the most active commercial real estate market across the country, Vancouver is the most expensive.

According to Avison Young, Vancouver accounted for $2.4 billion in commercial real estate sales in the first nine months of 2010.

That represents a 34% increase when compared with the same period last year and is 20% of the total investment volume across the country in 2010.

As well, the national average cap rate for major property types, that is the ratio between a property’s net operating income and its capital cost, has declined 50 basis points to 6.75%.

Across Canada, cap rates range from an average low of 5.97% for multi-residential properties to 7.47% for multi-tenant industrial buildings, Avison Young said.

Vancouver’s 6.12% average cap rate makes it the highest-priced market in Canada.

Avison Young principal Mike Gill explained, "The recent influx of foreign capital from Europe, the far east and the Middle East, together with competition from local investor capital, has applied further pressure to already declining cap rates for the premier assets."

The real estate firm predicts further “compression” of cap rates across Canada based on increased bids for assets, low interest rates, ample liquidity and a steady flow of product to the market.
source: www.bivinteractive.com

Resale market slows, but prices stay strong

Montreal's housing resale market continued to slow in October, year over year, but prices remain strong because of "market conditions" favouring sellers, the Greater Montreal Real Estate Board said yesterday.

Sales of residential homes dropped 19 per cent in October, compared with the same month in 2009, with plexes the hardest hit housing category, Multiple Listing Service data show.

Year to date, sales are still up three per cent over last year, because of a sizzling first quarter.

"After posting record sales levels in October 2009, it's normal that the Montreal real-estate market was less active this October," said Diane Menard, vice-president of the GMREB's board of directors.

"Furthermore, 2009 and 2010 were very different years on the real-estate market: 2009 began with a significant decrease in sales due to the recession and ended with record-high sales. Conversely, 2010 started off strong with record-breaking months but sales have returned to their usual levels."

The median price of a single-family home in the Montreal area grew eight per cent compared with October 2009, reaching $260,000.

The median price of condominiums increased by 12 per cent to reach $218,000, while the price of plexes increased by nine per cent to reach $380,000.
source: www.montrealgazette.com

Asia’s real estate investment market activity rose 53% in Q3

Activity in Asia’s real estate investment markets rose significantly in the third quarter of 2010 amid noticeable improvement in investor sentiment. In the quarter, most of the region’s major real estate markets regained momentum after the brief period of uncertainty following the onset of the eurozone sovereign debt crisis. Direct real estate investment in the region, excluding land transactions, grew by 53 per cent quarter-on-quarter to an estimated US$18 billion, according to CB Richard Ellis’ Asia Investment MarketView report for the third quarter of 2010. Overall transaction volume in the first nine months of 2010 reached US$46 billion, a 102 per cent surge compared with the same period of 2009.

Investors gravitated to the most liquid locations. Hong Kong was the most active market in terms of investment volume, accounting for US$5.2 billion, or 29 per cent of the total regional volume, followed by Singapore and Japan, which accounted for 22 per cent and 20 per cent respectively. China, South Korea and Singapore all posted strong quarter on- quarter increases in transaction volume, rising by 191 per cent, 165 per cent and 161 per cent respectively, as institutional investors continued to display a strong appetite for prime investment property in these markets. However, it should be noted that the significant quarterly increase in investment volume could be partly attributed to the strengthening of Asian currencies against the US dollar in the review period, which substantially inflated the overall volume in US dollar terms.

Cross border real estate investment activity in Asia surged in the third quarter, accounting for US$3.1 billion. This signalled an 80 per cent quarter-on-quarter rise, although this figure was still relatively low compared to the 2007 peak of US$6.3 billion. Investment by non-Asian investors also picked up markedly to an estimated US$1.7 billion, while investment activity by institutional investors and REOCs (Real Estate Operating Companies) also took off, with total investment volume reaching US$7.8 billion, a surge of 66 per cent from a year ago.

The office sector attracted US$7.4 billion in investment in the third quarter, representing 41 per cent of the total investment volume. The sector also accounted for six of the ten largest transactions recorded in the period. Deals involving office properties were most prevalent in Singapore, Hong Kong and South Korea, and these markets collectively accounted for US$5.3 billion in transactions. With the exception of Japan, office capital values continued to recover strongly in the third quarter, and the rate of increase was noticeably faster than that seen in the previous two quarters. The overall weighted average office yield fell for the fifth consecutive quarter by a marginal 5 basis points to 4.80 per cent.

Investment in retail assets also improved noticeably in the third quarter, underpinned by robust domestic demand and rise in the number of inbound tourists. Transactions of major retail properties accounted for US$4.3 billion or 24 per cent of total investment turnover. Japan recorded the largest proportion of retail investment in the region during the period, accounting for US$1.7 billion. The industrial sector also recovered steadily with transactions for industrial assets amounting to US$1.1 billion, similar to that in the first and second quarter of 2010, but jumping 65 per cent year-on-year from US$668 million recorded in the third quarter of 2009.

“We saw noticeable improvement in investor sentiment and transaction volume in the third quarter but weakening economic indicators could still have negative impact on growth. In particular, risks associated with volatile exchange rates and monetary policy settings by major Asian governments remain a cause for concern,” said Andrew Ness, Executive Director of CBRE Research Asia. “Nevertheless, we remain generally optimistic about the market outlook and continue to retain our earlier forecast that real estate investment in the region should reach a total of around US$60 billion for 2010.”source: www.property-report.com

Steady Improvement Predicted for Commercial Real Estate Market

NEW ORLEANS, LA -- (Marketwire) -- 11/05/10 -- While still experiencing challenges, the commercial real estate market could see signs of steady improvement in the near future, specifically concerning lending. This is according to two economists at the Economic Issues and Commercial Real Estate Business Trends Forum at the 2010 Realtors® Conference & Expo in New Orleans today.

Realtors® Chief Economist Lawrence Yun and Hugh Kelly, clinical professor of real estate at New York University Schack Institute of Real Estate, shared their predictions surrounding the commercial market, indicating a slight improvement in commercial lending.

"Banks' profits have returned to healthy levels. As a result, it is inevitable they will return to the business they were created for, which is lending," said Yun. "Commercial real estate has experienced a sharp price correction, but there is still a shortage of buyers because of lack of adequate capital resources."

Kelly pointed out that most commercial mortgages have been random and idiosyncratic, stressing that the lending environment should not remain that way. "The banks are in the driver's seat, meaning they can cherry-pick deals and there is no stigma to turning away business," said Kelly. "The capital flow in the commercial real estate market has been very selective. To achieve full recovery, lending practices must improve."

In addition to capital flow, the commercial market depends largely on job creation. Yun stated that since the beginning of 2010, 1 million jobs have been created, yet this number is not high enough. "We have turned a corner and while some job creation is good, we are still at close to 10 percent unemployment," said Yun. According to Yun, the country needs to create much more than 100,000 jobs per month to have a meaningful impact on vacancy rates.

Another challenge affecting the commercial market is corporate profits versus business spending. Yun said in an ideal market, corporate profits and business spending correlate; however, business spending currently is stagnant. Corporate profits have returned to normal, yet companies are not spending their cash. Yun described several reasons for why businesses are not spending, but he said it comes down to consumers and companies being unsure of the future economic climate.

A majority of the commercial real estate sectors are still experiencing hardships with office and retail vacancies continuing to rise. However, Yun said with imports and exports in the U.S. rising, the demand for industrial space will improve. The only sector continuing to perform well is multifamily. Vacancy rates for multifamily properties are falling and rents are expected to rise. Yun said this was mostly due to home ownership rates falling and people postponing home purchases.

Yun's 2011 commercial forecast shows steady improvement in the market with rents stabilizing and net absorption slowly improving. Yun also predicts a moderate GDP expansion of 2 percent to 2.5 percent in the next two years and an unemployment rate of eight percent in 2012 and six percent in 2015.

The National Association of Realtors®, "The Voice for Real Estate," is America's largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.

Information about NAR is available at www.realtor.org : . This and other news releases are posted in the Web site's "News Media" section in the NAR Media Center.

REALTOR® is a registered collective membership mark which may be used only by real estate professionals who are members of the NATIONAL ASSOCIATION OF REALTORS® and subscribe to its strict Code of Ethics. Not all real estate agents are REALTORS®. All REALTORS® are members of NAR.

For further information contact:
Leanne Jernigan
202/383-1290
Email Contact :

source: www.live-pr.com

Good News (No, Really) for Real Estate Market

source: seekingalpha.com

November 05, 2010 - MIT’s Center for Real Estate announced Thursday that commercial property values sank by 7.3% during the third quarter. The news isn’t as bad as it sounds, though—and provides another reason for confidence about acquisitions by publicly traded REITs going forward.

The Transactions-Based Index (TBI) measures changes in property values that are revealed by transactions from among the properties in the data base of the National Council of Real Estate Investment Fiduciaries (NCREIF) — primarily properties owned by large pension funds. The TBI shows that property values are still 36.3% below their peak in 2007Q2, though 4.7% above their 2009Q2 trough.

In a commentary published along with the TBI, MIT Professor David Geltner pointed out the good news in the dismal numbers: “the number of transactions in the TBI was greater, both in number and in percent of the stock, than in any quarter since the end of 2007.” Increased transaction volume means that sellers are finally becoming more willing to part with their assets, and that investors with access to capital are finally getting the chance for accretive acquisitions.

Dr. Geltner noted that “trophy” properties actually continued to increase in value, and now are worth roughly 14% more than at their trough. In fact, he thinks that the improvement in the “trophy” market is what has made it possible for pension funds and their investment managers to start putting other properties on the market: “NCREIF members used the opportunity of greater-than-expected profits on larger properties to allow them to cull” properties that don't fit as well in their portfolios.

This dynamic is important for REIT investors. REITs’ access to capital on favorable terms gives them a competitive advantage over other real estate investors. Until recently, however, about the only assets available for purchase have been those “trophy” properties, whose values have been pushed up by the general “flight to quality.” So the fact that transaction volume is up—especially in the non-trophy part of the market—suggests that REITs will have more opportunities to pick up good acquisitions before the recovery spreads to non-trophy properties—which, eventually, it will. Those accretive acquisitions will likely be a significant part of what REIT investors think will become strong earnings growth going forward.

Disclosure: Author is long ING Real Estate Fund and Vanguard REIT Index Fund.

Local real estate market takes another dip

source: www.thedestinlog.com

November 05, 2010 11:00 AM

Although it’s no longer making national headlines and further derailing the Emerald Coast’s booming tourist season, the Deepwater Horizon Oil Spill is still having an impact on the real estate market along the coast. According to statistics released by the Emerald Coast Association of Realtors, sales along the Emerald Coast for September were down two percent, with single family residential sales down approximately 10 percent, when compared to September 2009.

“According to the September sales statistics, sales were up in South Walton County and Crestview despite low tourism and traffic caused by the oil spill,” said Mary Anne Windes, ECAR president.

South Walton County and Crestview sales both increased by 10 percent over last year. Destin was down 10 percent; Fort Walton Beach was down 15 percent; and North Walton County was down nearly 20 percent.

Even with the less-than-stellar real estate sales across the area, a definite bright spot was in condo sales. Across the Emerald Coast, condo sales were up 15 percent in September when compared to 2009. Both Fort Walton Beach and South Walton County saw an increase in condo sales.

“With the oil/media crisis behind us, many consumers are regaining confidence in our (South Walton) market,” said Marilue Maris, Realtor with ResortQuest Real Estate. “So many buyers were ‘on the fence … waiting.’ They are now writing up offers and making purchases of a lifetime.”

While some of the immediate effects of the oil spill are no longer noticeable and the nation has moved on to a newer story, the residents of the Emerald Coast will not forget the impact the oil spill had on our area, in all facets of life. Like every other industry, the real estate market will recover, stronger and better than ever before.

“The real estate market seems poised now to put the oil spill behind it and move forward with the promise of a strong finish, much like the first of the year started out,” said Windes, broker/owner of The Real Estate Professionals of Destin.

This article was contributed to The Log by the Emerald Coast Association of Realtors.