Pricing Back to 2007 Levels in Six Top U.S. Apartment Markets

The US apartment market is making a strong recovery. In fact, in six of the top markets, pricing has recovered to its peak-- reached in December 2007--or gone beyond it, according to Real Capital Analytics' Commercial Property Price Indices for second quarter 2012. The chart appears in RCA's US Capital Trends apartment report for August.   

The most significant thing about RCA's Commercial Property Price Indices, says Dan Fasulo, managing director at RCA, is that the top four markets--Boston, Seattle, San Francisco and Manhattan--are known for high tech and Boston has exceeded its peak pricing by 13%.

Although August can be a sleepy month for commercial real estate, this past August, sales of US apartment properties were $6.4 billion, rivaling May and June as the most active month this year, according to RCA, which only keeps tabs on properties worth $2.5 million or more.

Sales of garden apartment properties in August totaled $4.4 billion, up 76% year-over-year. while sales of mid and high-rise properties were down 26% year-over-year, according to RCA.

Still Hunter, III, senior vice president of investments at Marcus & Millichap in Ft. Lauderdale, says the reason that the sales volume for garden apartments was higher than that for mid and high-rise apartments "is that there are lots more garden apartments than mid and high-rise apartments  in the world."  There are fewer mid and high-rise apartments because rents need to be higher than for garden apartments since they are more expensive to operate, he says.

Lakeside Villas at Kendall

Nationally, cap rates in the apartment sector averaged 6.1% from May through August and average unit prices trended higher, although appreciation seems to have slowed during the summer months, according to RCA. With fewer trophy properties driving mid to high-rise volume and prices, average cap rates did go slightly higher in August.

In South Florida, "Class A multi-family properties can trade for a 4 cap, as high as a 6 cap for a B apartment asset and even a 9 cap for a low C asset," says Hunter. These cap rates are about the same as a year ago, although maybe slightly lower, but prices per unit have increased because there are higher rents, less vacancies, no concessions and ancillary income from apartment properties in South Florida, he says.

In South Florida, there are fewer distress sales in the apartment market, a greater demand for product and more favorable financing, which drives values, says Hunter. Most distressed deals have been worked through and for the ones that are still around, there is enough demand that they are no longer trading at a big discount, he says.

"I have a deal now called Lakeside Villas at Kendall, a 190-unit development, which was a failed condominium conversion," says Hunter. "The development, which is now stabilized, is in bankruptcy and will be sold at auction on October 9th for about $15 million, or $79,000 per unit, which is a market price," he says. The way that Hunter knows that he will get a good price? "There is a stalking horse bidder who will pay $14,250,000 for the whole development," he says. "A year ago, we had offers for millions less," says Hunter.

The rental market in South Florida is very strong, says Hunter. "Rents (in South Florida) will continue to grow as the economy improves although maybe not at the same pace," as over the last year or so.

Talkin' 'Bout Telluride

A Rainbow over Main Street

Telluride is "real."

It's an authentic, unspoiled Western town with a colorful heritage. And it maintains a kind of casual, small-town charm that has long since been lost in more "hip" spots.

Mother Nature has blessed this small town with a stunning setting. Sitting at the end of a box canyon in southwest Colorado's San Juan Mountains, Telluride boasts seven waterfalls - all visible from downtown. Bridal Veil Falls, at 365 feet, is the tallest free-falling waterfall in Colorado. And the town is surrounded by the highest concentration of 14,000-foot peaks in North America.

The entire town is actually a National Historic Landmark District. Fortunes were won and lost here, in the mines that once surrounded the town. Butch Cassidy and his Wild Bunch kicked off their bank-robbing careers here, at the San Miguel Valley Bank on June 24, 1889, making a "withdrawal" of $20,000. And George Westinghouse, L.L. Nunn, and Nikola Tesla built the world's first AC power plant here...making Telluride the first city in the world with electric streetlights.

A charming little town at the bottom of a canyon

You don't really need a car here; it's a great walking town. If you do prefer mechanical transportation, though, there's a free bus system that runs on vegetable oil-based fuel. And it says something about Telluride that there are no chain restaurants, shops, or hotels here; everything is locally-owned.

This place wrote the book on "pet-friendly." The canine population here is thought by most locals to be higher than the human one. Dogs are welcome in most lodging facilities. And "Puppy Parking" spots allow them to wait on the street for a few minutes while their owners pop into the shops.

The town comes alive every summer with great events, starting with Mountainfilm in May and ending with the Blues & Brews Festival in September.

Telluride lives outdoors, on the mountains and bike paths and hiking trails. On weekends, it seems half the town is trying to "bag a 14'er" in the surrounding 14,000-foot peaks. There are plenty of horseback-riding options, too, ranging from a scenic afternoon ride to a chuck wagon dinner to an overnight trip.

You can tee off at one of the highest courses in the country, at the Telluride Golf Club...where your balls will travel 15 percent further than at sea level. And the San Miguel River offers fly fishing, rafting, and kayaking.

In wintertime, Telluride turns into a genuine Alpine village, with skiing, snowboarding, dog-sledding, snowmobiling, ice skating, and Colorado's only heli-skiing outfitter, which will drop expert skiers and snow-boarders into the backcountry to create their own trails. .

The way to go...to town or the slopes!

One of the best places to stay is Mountain Lodge at Telluride, in the Mountain Village community on Telluride Mountain. Mountain Lodge at Telluride is an exclusive slope-side resort steeped in Western elegance. At 9,500 feet, this ski-in, ski-out lodge has private luxury cabins (actually private homes), condominiums, and lodge rooms, with gas fireplaces, private balcony or patio, and jetted tubs. When you step out your door, you're in the midst of national forest land and spectacular scenery...along with the freshest air you've ever breathed and the bluest sky you've ever seen.

While England, Ireland Property Markets Still Dragging From Eurozone Debt Crisis, Scotland Sees Turnaround

First-time buyers in Scotland are finding mortgages far easier to obtain than their counterparts in Ireland and England, according to the most recent analysis from London-based Property Wire.  The Eurozone debt crisis continues to hamper a recovery in most of the United Kingdom.

London-based LSL Property Services reports Scottish home sales increased by 21% in July. . Sales have dropped in the Orkney and Shetland Islands, but overall Scottish residential real estate has recovered to sit just 0.5% below the average overall fall in prices.

The new LSL Property Services/Acadametrics index shows the average house price is now £145,622 ($236,673 US) and it also shows that first time buyer sales have increased by 9% so far this year, bucking the trend in the rest of the UK. (One British pound equals $1.62 US)

Top locations include Midlothian where prices have increased by £17,000 in the last 12 months and Edinburgh where prices are up £14,000 since July 2011. It means the average overall fall in prices in Scotland is down to just 0.5%.

On a monthly basis, the LSL Index shows Clackmannanshire has seen the biggest price increase, up 19.3%, followed by a rise of 13.4% in the Shetland Islands, 11% in Midlothian and 10.4% in Inverclyde.

At the opposite end, prices in the Orkney Islands have fallen 13.3% month on month, in West Dunbartonshire they are down 11.8%, in the Scottish Borders prices are down 9.8% and down 8% in East Dunbartonshire.

In his report, Richard Sexton, director of E-Sure Chartered Surveyors, part of LSL, says, "Life for first time buyers in Scotland has improved markedly this year. There have been 1,100 more loans to new buyers so far this year than in the equivalent period last year. This has helped push up activity throughout the whole market, with July seeing 1,529 more sales than June."

He adds, "While it isn't all sunshine and roses just yet, first timers in Scotland can at least take solace from the fact life is comparably better for them than their English and Welsh counterparts".

Sexton said, "It's been easier for Scottish buyers to access mortgages this year, and, given we're in the middle of a double dip recession, it augurs well for the future.

"New buyers in England and Wales have to stump up £22,000 ($35,710 US) more on average than Scottish buyers to get a loan, which is a major reason why the Scottish first timer market is moving more freely." 

It Is Important To Hire A Real Estate Agent That You Trust

Trying to sell your home for what it is really worth can be hard when the economy is struggling. It is important that you make a selling plan for yourself. This article can help you write that plan, by giving you many tips that you will need to use when selling your house.

When you are trying to sell a home, it is important that you have an agent. If you do not have an agent, you do not get to advertise your homes to all the real estate agents. This can cause a delay in selling your home much longer than it has to be.

Before you sell your house, if there are some things that you know need to be fixed go ahead and get estimates done. If you don't want to fix them, you can work a potential buyer to lower the sale price by how much the estimates are for. This will let them decide if they want to fix the problem, or if is something they can live with.

One way to obtain a more accurate assessment of what your property is worth is to carefully collect and analyze information about comparable properties on your street, in your neighborhood, and within the zip code. Compare stats like the age of the property, square footage, building materials, lawn size, and overall condition.

If you need to add plants to improve your landscaping for showing your house, do not add trees. Immature trees look scrawny, and they really do not add any appeal to the landscaping. Mature trees are too expensive. Instead, consider planting bushes, which will give your landscaping a fuller, more established look inexpensively.

When you are selling your home and working on the outside to add nice curb appeal take a look at your front door. A nice front door can go a long way in making the outside of your house look nice. Choose a bright or contrasting color so that it doesn't match your house. Red looks good with green hues and blue goes well with orange hues.

If you are looking to advertise real estate on the internet, it is important that you address the public's overwhelming fear of purchasing things online. If you do not do this, you may lose thousands of possible customers on your site because they are too afraid to go through with their internet purchase.

You should not rely on placing newspaper ads to get your home sold. This is the computer age and more people rely in the internet to do things. More than 90 percent of all people that have purchased homes in the last few years have done so after finding the homes online.

If you are not comfortable with the idea of negotiating with prospective buyers, selling your own property may not be your best bet. A real estate agent or broker is well-versed in the art of negotiation, which makes it easier to adjust the sales pitch to the needs and motivations of the buyer.

If you are buying and selling real estate as an investment or a business, remember that there will always be another investment property. Do not allow yourself to become emotionally attached to any of your properties, as this will interefere with your ability to make hard business decisions or deal with having a purchase fall through.

When preparing to sell your home, interview a number of real estate agents before you decide which one should have the listing. Find out what each one plans to do to market your home. Also, have each provide you with a market analysis that gives you an idea of the price range in which your house should sell.

When you are trying to sell your house or another property, it is important to make sure you place good advertising. Put ads in the newspaper and mail out flyers. The more people that know your house is for sale, the more people will come to see your open house.

When you have potential buyers coming to look at your home, be sure to maintain your pets. Not everyone likes pets as much as others. You should consider this when showing your home. Animals have a way of getting underfoot, so be sure to either keep your pets outside during your showing, or keep them in a place where they won't be in the way.

Having a poker face while trying to sell or buy a house is something to think about. Don't overtly show your excitement or enthusiasm. It only makes it easier for people to take advantage of you. Keep the poker face on and you'll probably get the best price possible.

Know how long it takes your realtor, on average, to sell an average property. If your prospective realtor does not have this information on hand, or if the time frame for turning over property is longer than comparable properties from the local MLS, then you might be dealing with a realtor who is not on their game.

Do not go into a property sale blind. It doesn't matter if you are selling your family home or a commercial lot. You should seek the help of a real estate professional as they will best be able to help you maximize profit. Selling with no knowledge of the market, or experience closing, is folly.

Dress up bedrooms with brightly colored bed sheets and fresh curtains, and get rid of excess furniture to make rooms appear larger. In the bathroom put your best towels out for display. You should also open blinds and curtains throughout the house before the showing. The sunshine can make your home feel warm, cheerful and inviting to potential buyers.

In the beginning of this article, the importance of making a selling plan was stressed. Doing this will help you get through the selling process. You also learned many tips that can help you successfully sell your home. Make sure that you do all that you can so that you don't end up selling your house for less than you owe.