The Worst Cities in America?

Detroit’s abandoned train station

A new study from 24/7 Wall Street identified what they say are the 50 worst cities in America to live in.  To come up with their list they looked at data on 551 U.S. cities with a population greater than 65k.  Then, they looked at a whole range of quality of life variables that included schools,  local economy, job market, public safety and even its climate.  They said that cities that perform well on these measures are more likely to attract new residents while those that don’t tend to drive residents away. Oh, and their number one worst city;  Detroit.  That’s brilliant…you be the judge.

“Quality of life in an American city often depends on the neighborhood one lives in, as abject poverty and crime can be found just blocks away from prosperity. Still, as much as a city can be judged on the whole, some cities face widespread problems that detract from their residents’ overall quality of life.”

Click here to read the full story on USAToday.com.

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CRE’s Annual List of Top 10 Issues Affecting Real Estate

The professional association Counselors of Real Estate (CRE) recently issued their annual Top Ten Issues Affecting Real Estate for 2018-2019.  In a break with previous years, their new list separates issues by current and long-term concerns.   Topping their list of current concerns was “Interest Rates and the Economy” while long term they view “Infrastructure” as a major issue.  Indeed…their entire list is worth a strategic look.

“Leading the list of current issues is Interest Rates and The Economy.  As interest rates rise, the commercial and residential real estate markets are already experiencing changes – decreasing demand for commercial property, and higher home mortgage rates. Rate increases also limit value appreciation for commercial real estate and make housing less affordable…”

Longer-term, however, Infrastructure – and the lack of serious effort by the U.S. to address its condition and much-needed revitalization – leads the list of broader and emerging issues affecting real estate. Roads, bridges, airports, water and sewer lines, electricity, even public transit…are rapidly deteriorating…”

Top 5 right now:

  1. Interest Rates and The Economy
  2. Politics and Political Uncertainty
  3. Housing affordability
  4. Generational Change and Demographic
  5. E-commerce, and Logistics

Top 5 going forward:

  1. Infrastructure
  2. Disruptive Technology
  3. Natural Disasters and Climate Change
  4. Immigration
  5. Energy and Water

Click here to read the full list at CRE.org.

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Ten Metros Where Home Prices are Falling

Leave it to Realtor.com to identify the few places in America where prices are actually going down.  In fact, there are only 27 of the country’s 350 metros that saw price drops.   They do, however, point out that in each of these areas there was some sort of legitimate reason for the decline – whether it was from overbuilding, mass job losses, natural disasters, you name it. To come up with their top-10 list, Realtor.com compared two years of median list prices in the 350 largest metros areas over the 12-month periods of May 2016 to April 2017 and May 2017 to April 2018. With that data in hand, they ranked the areas with the largest price cuts.

“We are in a full-fledged housing boom, and home prices are skyrocketing. At a national level it is blue skies with no real big clouds on the horizon,” says Daren Blomquist, a senior vice president at the real estate information firm ATTOM Data Solutions. “But an act of God can stall a region’s housing market, something you can’t predict well: mudslides, wildfires, hurricanes…”

Their top ten metros here home prices are falling are:

  1. Santa Barbara, CA
  2. Pottsville, PA
  3. Napa, CA
  4. Austin, TX
  5. Beckley, WV
  6. College Station, TX
  7. Corpus Christie, TX
  8. Anchorage, AK
  9. Houma, LA
  10. Bismarck, ND

Click here to read the full story on Realtor.com.

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Military & Veteran Homeownership

The National Association of Realtors recently released their 2018 Veterans & Active Military Home Buyers Profile, which evaluated the differences between recent active-service and veteran home buyers & sellers to those who have never served.  Among their findings, out of all home buyers, 2% are active-duty military, 17% are veterans, and the remaining 81% are non-military.  Happy Friday!!!

Hat tip/salute to the NAR.

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Seattle Tells Small Landlords Criminals are Welcome

We have had several posts on REI2Day about important legal issues brought to the public’s attention by the Pacific Legal Foundation – including warrantless searches of apartments, 4th amendment rights and property takings.  In a recent opinion article on FoxNews.com, Ethan Blevins, an attorney with PLF, says that a “smug” city of Seattle is telling mom & pop landlords that criminals are welcome but your rights not so much. In essence, Seattle recently passed an ordinance called the The Fair Chance Housing Ordinance that forbids landlords from checking criminal backgrounds or considering prior criminal convictions when selecting tenants.  In other words, legitimate concerns about

“…[these laws]curtails landlords’ rights to their own property and raises serious safety and financial risks…..[and]…make the risks of renting out property utterly intolerable for the average mom-and-pop landlord.”

Click here to read the full story on FoxNews.com.

Click here to visit the Pacific Legal Foundation.

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Landlord Hank: Where Do You Draw the Line On Normal Wear & Tear?

Dear Landlord Hank: Where Do You Draw The Line On Normal Wear And Tear?

The definition of what is normal wear and tear in a rental can be somewhat subjective at times. That’s why veteran landlord and property manager Hank Rossi answers questions from other landlords and property managers around the country about their rentals.

Dear Landlord Hank:

Where do you draw the line on what is normal wear and tear, what is not, and what tenant should pay for?

We had a long-time tenant who lived alone and recently moved into an assisted living facility. While cleaning his rental, we found multiple red wine stains in the 5-year-old carpet in different rooms that are not going to come out so carpet has to be replaced. He is asking for his full deposit back. Seems to us five years is pretty good for useful life of carpet and probably due for replacement anyway. Place is fine otherwise. But where is the line on what is normal wear and tear and what is not?

-Landlord Sam

Dear Landlord Sam,

Normal wear and tear is not really defined anywhere regarding all the components of a property.

All landlords should expect for a unit not to look brand new when a tenant moves out.

In most cases, they have been living in a property, not taking their shoes off outside, hanging pictures, etc.

You probably will notice “heavy traffic patterns” in your carpeting as tenants have moved through doorways and around furniture. That would be normal and you can’t bill the tenant for that.

But any damage to your property due to tenant /tenant guests, accidents, carelessness, or negligence would be recoverable from damage deposit, following proper procedure.

Carpet wear and tear

Regarding the carpet: burns, stains, bleach marks, rips, loosened from tack strips, snags would normally be considered damage.

The quality of the carpeting is also an issue-very cheaply made carpeting will snag very easily sometimes with vacuum cleaners!

In another example, to me, if a tenant hangs a few pictures in every room, that I would consider normal wear and tear.

Hanging a TV from the wall is not normal wear and tear

Hanging a TV from the wall is a much more extensive repair and that is not normal wear and tear.

Sometimes tenants try to “fix” things by patching and painting.

I ask them not to do so, as their repairs usually cost more to fix correctly than if maintenance doesn’t have to re-do.

If I have a great long term tenant like your older gentleman, I would be very generous with “normal wear and tear.”

I think after 5 years, your carpet could be expected to be replaced, in most cases.

Sincerely,

Hank Rossi

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Zillow Says Home Values Climbing at Fastest Rate in 12 Years

According to the latest Zillow Market Report, the median U.S. home value rose 8.7% to $215,600, representing the fastest year-over-year increase since June, 2006.  Zillow says this gain is part of a general upward trend that started in early 2015 when values were climbing at less than 5% year-over-year.  In addition to rising values, Zillow says the median U.S. rent grew by 2.5% (year-over-year) to $1,449 a month and has been growing by more than 2% since September 2017.  Be sure to click on the interactive map below for more detail.

Click here to read the full report on Zillow.com.

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Right Now, It is a Seller’s Market

According to Gallup’s annual Economy and Personal Finance poll, 45% of non-homeowners say they plan to buy within the next 5 years, however only 22% of current homeowners plan to sell during that same time frame.  Gallup says that a favorable market for sellers will continue in the near future….Indeed!

“One reason homeownership rates have not increased is that the supply of available homes has not kept up with demand. This has led to higher home prices, which — along with higher interest rates — are making homes less affordable overall…”

Click here to read the full story on Gallup.com.

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10-Step Foreclosure Buying Process

Understanding the foreclosure process is a must for real estate investors who hope to pursue this profitable & tricky investing opportunity. The folks over at FortuneBuilders put together this handy infographic outlining the 10-step foreclosure buying process in order help develop a strategy that works for you.  Happy Friday!!!

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Best & Worst States to Flip a House

What are the best and worst states for flipping a house?  That could be a loaded question depending on what criteria you’re using.  With that in mind, the folks over at GOBankingRates, using data from Zillow and ATTOM, evaluated all 50 states by looking at a combination of metrics including medium listing price, average number of days to flip, and average gross return.  They found the best states for flipping houses were mostly in the East and the worst states for flipping were predominantly landlocked states west of the Mississippi.

“Flipping houses often sounds like easy money: Buy an older home, do a little fixing up, make it look pretty and sell it shortly thereafter. However, it’s not that easy — especially if you live in a state where house flipping just isn’t that profitable.”

Their 5 best states for flipping are:

  1. Tennessee
  2. Pennsylvania
  3. New Jersey
  4. Louisiana
  5. Colorado

Their 5 worst states for flipping are:

  1. Mississippi
  2. Hawaii
  3. Montana
  4. Wyoming
  5. South Dakota

 

Click here to read the full story on GOBankingRates.com.

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