Fanwood, NJ

Probably the most upbeat crystal ball reading of all comes from the country's top group of forecasters, the National Association of Business Economists, which has a great track record in calling trends and market turns. After its latest survey of members released last week, the association said the following: "The good news is that the deep and long recession appears to be over, and with improving credit markets, the U.S. economy can return to solid growth next year without worrying about inflation."

The consensus forecast from the business economists is for the Gross Domestic Product, GDP, that's the main measure of the economy's output and activity -- to grow by 2.9 percent, and for new housing starts to jump by an impressive 38 percent.

That is good news because home resales tend to be closely tied in with GDP: If the overall economy is flush and growing, that supports higher home purchases and sales.

The big negative at the moment, of course, is jobs. We may be pulling out of recession, but we're not yet growing new jobs in large numbers. An unemployment rate stuck near 10 percent is a big factor holding back the pace of the housing recovery.

But, on the other hand, there are important bright spots in housing: For example, home prices continue to bounce back in major metropolitan markets, according to the latest data from the IAS 360 survey, which is based on information from 15,000 neighborhood areas.

In metropolitan Boston, prices rose 1.1 percent year over year in the latest study. New York metro prices were up 1.3 percent. Fairfield County, Connecticut, a New York bedroom suburb, saw prices up by 5.1 percent. Warren County, New Jersey, another New York suburb, was up 7.4 percent.

San Diego prices were also up for the year - by 1.3 percent.

Of course, some other large cities saw the opposite: Las Vegas lost another 2 percent for the 12 months, Los Angeles was down 1 percent and Miami - which is still struggling with unsold condos by the thousands, lost nearly 2 percent.

Without question, though, the biggest positive for housing right now continues to be the bargain-basement interest rates available for mortgage money. Fixed 30 year rates averaged 5 percent last week, and 15 year rates came in at 4.4 percent.

That's about as good as it gets.


Written by Kenneth R. Harney
October 20, 2009

Here's an interesting profit niche for rental property owners that doesn't get a lot of media attention: Corporate housing.

That means you target your furnished rental unit not at long-term tenants, but at people who've been transferred for short to medium-term assignments by their companies, or who have moved themselves to a new work location, and want to take a few months to get their bearings.

Or maybe they just need a place to stay while they're waiting for their house to sell ... or get remodeled.

The good news about this real estate segment: Corporate housing rentals are more than holding their own in tough economic times, and they often yield more revenue for investors than conventional rentals.

According to the industry's trade group, corporate housing rentals had an average occupancy rate of 88.5 percent last year, while standard lodging and hotels were lucky to break 70 percent in many locations.

The best-known forms of corporate housing are the extended-stay units run by national companies such as Oakwood or Equity Corporate Housing.

But there are also plenty of opportunities for individual investors -- people with one to ten units who want to maximize income while also keeping a close management eye on their property.

For do-it-yourselfers, the biggest marketing resource in the field is the online CorporateHousingByOwner.com, which has more than 20,000 registered users -- primarily executive relocation directors, plus employees and others who travel frequently -- and 4,000-plus rental listings.

The Colorado-based company takes no commissions, just an up-front annual listing fee of $329, with discounts for "power owners" who list multiple units.

Unit owners have total control over lengths of stay, pricing, and availability of their properties. They supply photos and property descriptions for the website listings. They also handle all reservations, tenant screening and management issues, and pocket all the rental income.

Kimberly Smith, the company's CEO, told Realty Times in an interview last week that her marketing platform has opened the door to much higher returns for some individual investors - thirty to fifty percent higher annual revenues per unit than they'd been getting with conventional rentals.

Listings tend to be apartments, townhouses or detached homes in or near major employment centers, but there are also some properties that are a little different - such as a 10,000 square foot mansion in Southhampton, Long Island, with 10 bedrooms, 12 baths, pool and estate-type acreage.

Just in case you're interested: the place rents for $4,000 a night, eighteen to twenty-five thousand a week. Or a flat 350 grand if you want it for the whole year.


Written by Kenneth R. Harney
October 9, 2009