AOL Real Estate - Blog http://realestate.aol.com/blog AOL Real Estate - Blog http://realestate.aol.com/blog/media/feedlogo.gif AOL Real Estate - Blog http://realestate.aol.com/blog en-us Copyright 2013 Weblogs, Inc. The contents of this feed are available for non-commercial use only. Blogsmith http://www.blogsmith.com/Vacation Home Sales Sizzle, Rentals Booking Fasthttp://realestate.aol.com/blog/2013/05/21/vacation-home-sales-rentals/http://realestate.aol.com/blog/2013/05/21/vacation-home-sales-rentals/http://realestate.aol.com/blog/2013/05/21/vacation-home-sales-rentals/#commentsFiled under: ,

By Diana Olick

In the kitschy community of St. Michaels on the Maryland shore, businesses are gearing up for the official start of the season, Memorial Day weekend. Trucks carrying dozens of bicycles are unloading into waterside racks and shopkeepers are moving their bright-colored wares out onto the sidewalks. For real estate rental agents, however, the hard work is largely done. The biggest houses are already booked.

"Those houses do tend to book up in January," said Deborah Lipscomb, owner of Eastern Shore Vacation Rentals. "Because of the Jersey Shore and the things going on there, we are seeing more of a demand for this area."

The recession hit home buying in this area, which actually increased competition in the rental market, but that may be about to change. Low mortgage rates, returning consumer and investor confidence, and the new migration from New Jersey are all combining to turn this Maryland market around. "We're getting the calls again from people looking to really buy, buy into the market and start renting again," said Lipscomb.

The impact of Hurricane Sandy is less apparent further south on Hilton Head Island in South Carolina. "It's a great time to buy, it's a bad time to sell is what I tell people," said James Wedgeworth, who has been selling real estate on the island for over a decade. "There is a light at the end of the tunnel. "The rental market on Hilton Head, which largely caters to the golfing set, has remained strong throughout the recession, likely because so few people wanted to buy. Confidence is slowly returning here, but prices are not.

"It hasn't really started going up, but at least it's not going down. We had seven straight years of prices going down. That's no fun," added Wedgeworth.

Vacation home sales rose 10 percent nationally in 2012, according to the National Association of Realtors, but as with all things real estate, location is key. Prices are just stabilizing in South Carolina, but in the tiny towns of eastern Long Island, N.Y., better known as the Hamptons, home prices are roaring back and rentals are fully booked for the season.

"We've seen bidding wars in the four-to-five-million-dollar range as well as in the overall market," said Laura Nigro, a real estate broker in Bridgehampton. "It's so much better than when the 2008, 2009 economy shrank and people were very much afraid to invest in anything." Nigro pointed to the potential of rising mortgage rates as the key driver. She said the Hamptons are not seeing too many migrants from the Jersey Shore. The newest clients are coming from much farther away: China.

"In the Hamptons, there is a new influx of Chinese buyers. In the past, they haven't been prevalent in this Hampton marketplace, but this season, for whatever reason there is, they are out looking for properties," she said. Neither the Chinese nor the locals seem particularly concerned about more storms coming to the coast. Potential buyers are, however, looking more closely at FEMA flood requirements and coastal erosion zones, according to agents, but they are still ready to buy.

On Hilton Head, James Wedgeworth said clients are asking more questions about storms, but he has the perfect answer: "If you look at a NOAA map of all named hurricanes since 1950, the safest place, believe it or not, is Jacksonville, Fla., to Hilton Head. For whatever reason, they always hit up north."

See more on CNBC:
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America On the Move
Apartment Growth to Boom

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]]>buying a homebuying a vacation homehome+buyingvacation homesvacation rentalsCNBC2013-05-21T15:00:00 00:00Is Canada's Housing Market Falling Apart?http://realestate.aol.com/blog/2013/05/13/canada-housing-bubble/http://realestate.aol.com/blog/2013/05/13/canada-housing-bubble/http://realestate.aol.com/blog/2013/05/13/canada-housing-bubble/#commentsFiled under:



By John Carney

Last summer, a Vancouver real estate agent named Keith Roy sold his house. About a month later, he wrote a blog post about it -- and set off a firestorm of criticism from fellow real estate agents. "I'm a Realtor and I sold my own home 4 weeks ago. It wasn't too big or too small. It's only 6 years old and still feels new. I sold because in 6 months my home will be worth less than it is today. I think it's time to cash out," Roy said.

His argument was really simple: the supply of homes on the market was outstripping demand from buyers. Excessive supply and falling demand would lead prices downward. But his fellow brokers felt betrayed. Some even complained that Roy had been disrespectful to the profession. Selling his home was, however, a prescient move.

Home prices in the greater Vancouver area are down 3.9 percent from a year ago, according to the Real Estate Board of Greater Vancouver. In West Vancouver, which is sometimes said to be the wealthiest municipality in Canada, home prices have fallen 5.6 percent. Sales are down 20 percent from a year ago. Vancouver is not alone. All over Canada there is fear that the country is in a housing bubble that is now in the process of popping. In March, Montreal saw sales decline 17 percent year over year, even while inventory continues to climb. In Ottawa, sales have fallen 16 percent.

"A housing correction -- or, possibly, a crash -- is no longer coming. It's here," Macleans magazine declared this past January. The bubble seems fairly obvious, even if it's existence is still disputed within Canada. Canadian home prices are up nearly 100 percent since 2000. The price-to-rent ratios in major urban population centers are through the roof. In British Columbia, home prices rose 163 percent in the decade from 2001 to 2011, according to a study by the International Monetary Fund.

Although Canada has a reputation for having conservative banks -- its banks weathered the global credit crisis without any bailouts -- low interest rates have fueled a sort of mortgage and borrowing mania. Household debt has risen to a record 165 percent of disposable income. Total mortgage debt stands at $1.1 trillion. The Canadian government is attempting to engineer a soft landing. It has tightened mortgage lending rules four times in the last four years. The maximum length of mortgages is being reduced from 40 to 25 years. Home equity loans were curtailed. And the government stopped backing mortgages on the most expensive homes.

Read the rest of this story on CNBC.

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Another Housing Bubble? Realtor Not Fearful

 

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]]>CanadaCanada housing bubbleCanada real estatehousing bubblehousing recoveryCNBC2013-05-13T17:24:00 00:00Trulia: Housing in 'Early Stages' of Multiyear Recoveryhttp://realestate.aol.com/blog/2013/05/02/housing-recovery-early-stages-trulia/http://realestate.aol.com/blog/2013/05/02/housing-recovery-early-stages-trulia/http://realestate.aol.com/blog/2013/05/02/housing-recovery-early-stages-trulia/#commentsFiled under:

Pete Flint sees housing recovery as being in an early stageBy Paul Toscano

The housing market has come roaring back over the past 12 months and, despite constrained inventory, is set for an uptrend over the next several years, Trulia co-founder and CEO Pete Flint (pictured at left) told CNBC's "Squawk on the Street."

"We don't see significant dollars flow into the system right now, but we fully expect that to happen," he said. "We feel that we are really at the early stages of a multiyear housing recovery."

Though the recovery may not be fully apparent to some, with month-over-month home sales remaining flat based on inventory constraints, this month's Case-Shiller numbers point to a recovery, Flint said. Home construction is weak and sitting far below historical norms, but it's "a market that is for sure ... going to come back," Flint said.

In its most recent earnings report, the real estate website said it had "cracked the code on mobile monetization." Flint said Trulia's mobile audience is growing by more than 120 percent year over year, and subscription products are "performing extremely well." Founded in 2005, the company was developing as the housing market was in turmoil. The experience "created great discipline, great efficiency," he said.

Earlier, CNBC's Jim Cramer called housing one of the hottest sectors in today's economy, and said that companies such as Trulia and Zillow are great plays in the housing gold rush.

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Is a Recession Looming?

 

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]]>home priceshousing markethousing recoverypete flinttruliaCNBC2013-05-02T08:00:00 00:00Why the Fast Rise in Home Prices Doesn't Equal a Bubblehttp://realestate.aol.com/blog/2013/05/01/home-prices-housing-bubble/http://realestate.aol.com/blog/2013/05/01/home-prices-housing-bubble/http://realestate.aol.com/blog/2013/05/01/home-prices-housing-bubble/#commentsFiled under:




By Diana Olick

A fast rise in U.S. home prices has some in the housing market murmuring the dreaded "B" word. New numbers out Monday only add to that "bubble" hypothesis. The nation's top 10 and top 20 market composites on the latest S&P/Case-Shiller Home Price Index recorded their highest annual growth rates since May 2006 -- up 8.6 percent and 9.3 percent respectively. "It is a solid rebound," said S&P's David Blitzer in an interview on CNBC. "I would not call it a bubble, but I'll admit a bubble is one thing you don't see when you're in it. You only see it after it occurs."

housing bubbleLooking back on the index, the biggest home price jumps were in 2004 and 2005, when values were up as high as 16 percent annually. Those prices were fueled by cheap and easy credit, which certainly does not exist today. They were also fueled by speculators who bought and flipped homes at a fast clip, putting no skin of their own in the game.

The concerns today are in certain local markets where gains in home prices look meteoric. In Phoenix, home prices rose 23 percent from a year ago, on the S&P/Case-Shiller index, but you have to put that in perspective. From the peak of the housing boom to the trough in August of 2011, home prices there fell a whopping 56 percent. They are still down more than 40 percent from that peak, despite double-digit percentage gains.

On the other hand, some markets are nearly back to their housing boom peaks, only because they didn't boom all that much back then. Dallas home prices fell 9 percent peak-to-trough and are now just 2 percent below their peak in April 2007. Does that make Dallas a bubble market and not Phoenix?

Related: Another Housing Bubble? Recovery Shows Dangerous Signs, Reports Say

It all depends, again, on what is driving the gains. Dallas, and much of Texas for that matter, is seeing strong employment growth and an influx of companies and workers to the state. Phoenix is seeing a better employment picture, but the gains in home prices can be attributed largely to investors who came in and bought up an enormous supply of distressed properties. Phoenix was foreclosure-central due to heavy overbuilding during the housing boom.

The difference this time around is that the investors are not flipping homes, they are holding them to rent. They are also using mostly cash, and therefore they have all their skin in the game. The reason prices are rising so fast? There is very little to buy and demand is coming back. Inventories are down significantly across the nation, and even in the supposedly busy spring season, fewer new listings are coming on than normally do this time of year.

"From my perspective, prices have not gotten out of line with incomes yet," said Eric Belsky of the Harvard Joint Center for Housing Studies. "When you look at the extent to which prices fell and they've come back, while some of the double-digit gains are sort of eye-popping, both the fundamental price-to-income level and when you layer in mortgage interest rates, I don't see any market being that frothy or that inflated now."

See more on CNBC:
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]]>home priceshousing bubblehousing inventoryhousing recoveryCNBC2013-05-01T08:00:00 00:005 Tips for Buyers Who Want a Million-Dollar Homehttp://realestate.aol.com/blog/2013/04/26/buying-million-dollar-homes/http://realestate.aol.com/blog/2013/04/26/buying-million-dollar-homes/http://realestate.aol.com/blog/2013/04/26/buying-million-dollar-homes/#commentsFiled under: ,,




By Dolly Lenz

Called the "Queen of Real Estate" and even "Jaws" for her aggressively successful tactics, super broker Dolly Lenz (pictured in the inset above) has sold over $8.5 billion dollars in high-end properties, catering to clients like Barbra Streisand, Billy Joel and P. Diddy. Now she's revealing five tips to buying a million-dollar home.

In a Buyer's Market: Be Aggressive

In a buyer's market, sellers have fewer options. Buyers are scarce and, therefore, they have the upper hand in that they are better able to dictate terms. In this instance, buyers can be aggressive in their bidding and are free to probe how motivated a seller is to sell. In this environment, buyers should consider asking the seller to pick up certain closing costs, include furnishings as part of the deal, and even request seller financing.

In buyer's markets, sellers become very competitive with one another and buyers can use this to their advantage. Buyers should not be shy about using one seller against another and see which one will offer a better deal. This is especially advantageous in neighborhoods which have similar homes and buyers are indifferent about which property they prefer.

In a Seller's Market: Be Prepared

In a seller's market, multiple bids on the same property are common as inventory levels are low. Nothing gets a seller's attention more than a buyer who is both ready and able to consummate a deal. For this reason, potential buyers have to be prepared before they start bidding. Obviously, cash is king and those paying cash are in a commanding position to seal the deal with a seller. But for most buyers, financing is a necessary element to a purchase, and those bidding with commitment in hand stand a much better chance of attracting a seller's attention than those without.

Demonstrating an ability to act quickly is also desirable to sellers. This obligates a buyer to be responsive to a seller's communications in real time and be prepared with pre-approved financing, a closing attorney and a flexible closing date. Most people think that the bidder offering the highest price will get the deal but often that is not the case.

Savvy sellers evaluate all the terms of a deal as a package and price is only one factor. For example, most sellers will find a $1 million offer with a commitment letter for 70 percent financing superior to a higher offer of $1,060,000 with a contingency of 80 percent financing, unless the buyer with the higher offer can demonstrate likelihood that they will obtain the necessary financing.

Beware the Onerous Mortgage Contingency

In negotiating a deal, both buyers and sellers assume risk. Just as you are taking a risk by agreeing to buy, a seller takes on risk by agreeing to sell. Naturally, a seller wants a deal with zero contingencies, to eliminate the likelihood of the buyer backing out, while a buyer wants a deal with as many contingencies as possible, should his circumstances change.

The mortgage contingency is a major contract issue for both buyer and seller, and as a buyer you want to obtain terms that are favorable to you. Failure to do this properly could jeopardize your contract deposit. The key element is to establish a maximum amount you are going to finance, and the higher the percentage you can get in the contract, the better off you'll be. The seller will try to negotiate a lower percentage, but the key is to establish a number that you are comfortable with.

See more tips to buy a million-dollar home at CNBC.

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Negotiating a Home Purchase

 

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]]>bidding warsbuyers marketbuying a homehigh-end homeshigh-end real estatemillion-dollar homesmortgagesnegotiating a home purchasesellers marketCNBC2013-04-26T08:00:00 00:00Spring Homebuying 'Stuck' Under Tight Inventory, NAR Sayshttp://realestate.aol.com/blog/2013/04/23/spring-home-sales/http://realestate.aol.com/blog/2013/04/23/spring-home-sales/http://realestate.aol.com/blog/2013/04/23/spring-home-sales/#commentsFiled under: ,,

spring home salesBy Diana Olick

Like everything else in the spring, housing supply is supposed to grow. That's because warmer weather and the convenience for families to move during the summer make spring the busiest homebuying season historically. That is not the case this year. Home sales have been "stuck," according to Lawrence Yun, chief economist for the National Association of Realtors, because there is just not much out there to buy.

The number of homes listed for sale increased by just 1.6 percent in March from February, according to the NAR, but supplies are still 17 percent below where they were a year ago. Realtors usually see listings swell by about 100,000 in March, but this year they saw just 30,000 more. They are hoping to see 200,000 to 300,000 more in April, but that seems unlikely, given potential seller reaction to the recent fast price appreciation in the market.

"If I am underwater in my equity and now suddenly I'm not, but I'm up 5 percent and the market around me is appreciating 6, 7, 8, 9, 10 percent, why don't I wait and perhaps get a 10 percent return on my investment, not a 5 percent return," noted Richard Smith, CEO of Realogy Holdings.

Inventories are tightest on the low end of the market, where investors came in and bought most of the distressed properties and are now holding them as single-family rentals. There is about a four-month supply of homes priced under $100,000, while there is around a 12-month supply of homes priced over $500,000. That's why sales of those low-end homes are down 16 percent from a year ago, and sales of higher-end homes are up 25 percent, according to the NAR.

"The housing shortage is going to continue," claimed Yun, who says the builders need to ramp up housing starts by 50 percent. He admits that is unlikely to happen due to land, labor and supply constraints. Weak supplies are pushing home prices up far faster than wage growth, which is keeping first-time buyers especially on the sidelines. These buyers made up just 30 percent of the market in March, compared to the historical norm of 40 percent to 45 percent. They just can't compete with all-cash investors.

But if prices get too high, investors could leave the market. Their share was already down in March to 19 percent compared to 22 percent just one month ago. The danger is that they will start to unload the homes they own, which would bring much-needed supply back but which could also turn home prices in the other direction.

See more on CNBC:
Why Housing Stalled: $1 Trillion in Student Debt
CNBC Explains REO
CNBC Explains Jumbo Mortgage

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First Time Buyer Recounts Home Buying Process

 

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]]>home priceshome saleshousing inventorylow housing inventoryspring home buyingCNBC2013-04-23T10:00:00 00:00Top 10 ZIP Codes for Expensive Home Sales at $10 Million and Abovehttp://realestate.aol.com/blog/2013/04/11/most-expensive-zip-codes/http://realestate.aol.com/blog/2013/04/11/most-expensive-zip-codes/http://realestate.aol.com/blog/2013/04/11/most-expensive-zip-codes/#commentsFiled under: ,



By Robert Frank

The rich have always liked to live near other rich. It's what F. Scott Fitzgerald referred to as the "consoling proximity of millionaires." But with the housing recovery and global wealth now in full swing, the nation's richest ZIP Codes just seem to be getting richer.

A new report shows that Beverly Hills is still the top ZIP Code in America when it comes to the number of homes selling for $10 million or more. There were 21 homes sold at $10 million or more between January 2012 and December 2012, the latest period measured. The new Luxury Market Report from Coldwell Banker Previews International found that Aspen, Colo., ranked second with 16 sales, followed by Montecito, Calif., with 15.

The rankings are for ZIP Codes, not cities. Ranking cities by sales of $10 million or more, New York ranked first with 71 sales. Manhattan was followed by Los Angeles and Beverly Hills, both with 21. When it comes to the ZIP Code with the largest number of listings, Malibu ranks first. There were 65 listings at $10 million or more in Malibu in March. Beverly Hills ranked second with 58, followed by Aspen with 54. In 2012, there were over 200 sales in the top 15 ZIP Codes for homes priced at $10 million or more.

And the pace shows little sign of slowing. Realtors expect the very top end of the real estate market to continue to shatter local price records. With recent news of a property trading near San Francisco for more than $100 million, the new top price in America may be reset in 2013.

"With the increasingly global nature of today's ultra-luxury market, it is hard to imagine that a $200 million sale would not be possible in the near future," the report said. As Laurent Demeure, president and CEO of Coldwell Banker Previews France and Monaco says: "Today's ultra-affluent buyers can choose almost any property they want, whether it's a penthouse in South Beach, a house in Monaco or a waterfront estate in Malibu." On price, he says, "there is no limit except imagination."

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See more on CNBC:
Why Housing Stalled: $1 Trillion in Student Debt
CNBC Explains REO
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The Cheapest and Most Expensive Places to Live

 

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]]>homes for salemost expensive homesmost expensive homes for salemost expensive ZIP codesrich homebuyersCNBC2013-04-11T13:20:00 00:00Housing's Big Challenge: $1 Trillion in Student Loan Debthttp://realestate.aol.com/blog/2013/04/09/student-loan-debt-housing/http://realestate.aol.com/blog/2013/04/09/student-loan-debt-housing/http://realestate.aol.com/blog/2013/04/09/student-loan-debt-housing/#commentsFiled under:

By Diana Olick

Isaac and Stephanie Adams live in Richmond, Va., and are expecting a baby in June; last year they decided to buy a house. With home prices and mortgage rates both at historic lows, it seemed the perfect time. Unfortunately, student loans stood in their way.

"We were looking at the market going, 'Oh my gosh, the market is awesome right now. We can get some great house that our payments will be, our loan will be great to set us up financially well for our growing family,' and we just weren't able to do it, take advantage of that," Stephanie said. Between the two of them, the Adams' student loan debt tops $100,000. They pay $1,100 a month for the loans, and that, coupled with the fact that Isaac was working a contract job, was enough to disqualify them from getting a mortgage.

Their story is getting ever more common, as total student loan balances nearly tripled between 2004 and 2012, according to a new survey from the Federal Reserve Bank of New York. Now $1 trillion in collective student loan debt is directly affecting the housing recovery. "Short term, you see a decrease in the number of first-time home buyers," said Brian Coester of Coester Valuation Management. "You're going to see somebody who would have been able to afford a more expensive house maybe go for the lower version or the downgraded version."

First-time home buyers usually make up more than 40 percent of the home buying population, but their share has hovered at or below 30 percent during this recovery, according to the National Association of Realtors. The student debt burden has kept many potential buyers out of the market, either forced to rent or to move back in with their parents, like Sophia Chaale. "Without the student loan debt, a year and a half, two years earlier would have been the time I could have afforded to buy a house, and probably something a little bit bigger," Chaale said.

Chaale is facing $60,000 in student loans from graduate and undergraduate schools. She is paying $320 a month on a 30-year loan. Only after living at home for two years was she able to apply for a mortgage and put a down payment on a home. She is scheduled to close at the end of April. "I consider myself lucky that I had a place where I could save, but what about other people who aren't originally from this area, who have to pay an extra $1,500 a month in rent, and that rent money is not going to savings? How are they going to be able to save up or even to make that transition from renting to owning, in addition to all the student loan debt?" Chaale wondered.

The answer is that many won't. Adding to the burden is the fact that one-third of student loan borrowers are delinquent on their debts, according to the Federal Reserve report. That directly affects their credit rating and, in today's strict credit environment, will keep them out of the mortgage market for years to come.

"Long term, it's going to really affect especially the upper end, because people aren't going to have the excess income to buy the jumbo property or buy that high-end property," said Coester. "It's going to affect home prices as a negative, as more of a cap, because it's really debt that they are servicing."

Isaac and Stephanie Adams had to delay their home purchase for a year, while they reorganized their student loan debt and while Isaac found permanent employment. They now have a contract on a house, but they feel like they got in just under the wire, as home prices are suddenly moving up rapidly. "As long as this house closes, I don't think we missed out," said Isaac. "Rates are still fairly low, but I do believe as this year progresses, things will change."

See more on CNBC:
CNBC Explains REO
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]]>housing recoverystudent loan debtstudent loan housingstudent loansCNBC2013-04-09T10:00:00 00:00Spring Homebuying Season Off to a Slow Starthttp://realestate.aol.com/blog/2013/04/02/spring-homebuying-season-home-sales/http://realestate.aol.com/blog/2013/04/02/spring-homebuying-season-home-sales/http://realestate.aol.com/blog/2013/04/02/spring-homebuying-season-home-sales/#commentsFiled under:

By Diana Olick

The U.S. housing market will see no surge at the start of spring, as fewer buyers signed contracts to purchase existing homes in February. An industry index of so-called pending home sales fell 0.4 percent from January but is up 8.4 percent from February of 2012. While the number of for-sale listings increased more than the seasonal norm, Realtors still say a lack of supply is keeping many potential buyers from desired deals. Pending home sales are a one- to two-month forward indicator of closed sales.

"Only new home construction can genuinely help relieve the inventory shortage, and housing starts need to rise at least 50 percent from current levels," said Lawrence Yun, chief economist for the National Association of Realtors in a release. "Most local home builders are small businesses and simply don't have access to capital on Wall Street. Clearer regulatory rules, applied to construction loans for smaller community banks and credit unions, could bring many small-sized builders back into the market."

Sales of newly built homes fell nearly five percent in February, according to the U.S. Department of Commerce. Inventories did rise, but only slightly, as the nation's home builders struggle with labor and land shortages, as well as higher costs for materials. Pending home sales fell 2.5 percent month-to-month in the Northeast, rose 0.4 percent in the Midwest, fell 0.3 percent in the South and rose 0.1 percent in the West, according to the Realtors.

"The volume of home sales appears to be leveling off with the constrained inventory conditions, and the leveling of the index means little change is likely in the pace of sales over the next couple months," Yun added. A better sign for March, after two weeks of declines, mortgage applications to purchase a home jumped 7 percent during the past week, according to the Mortgage Bankers Association. This as interest rates fell slightly, due to concerns over the banking crisis in Cyprus.

"The rebound in mortgage applications is a small piece of a brighter housing outlook," says Bob Walters, chief economist for Quicken Loans. "Interest rates are still at record lows despite their upward trend, and consumers are taking advantage of record home affordability. Look for more buyers to enter the market this spring and a more robust housing recovery to occur."

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]]>home saleshousing markethousing recoveryspring home buyingCNBC2013-04-02T08:00:00 00:00People Are Becoming More and More Confident in Housing Markethttp://realestate.aol.com/blog/2013/04/01/housing-market-confidence/http://realestate.aol.com/blog/2013/04/01/housing-market-confidence/http://realestate.aol.com/blog/2013/04/01/housing-market-confidence/#commentsFiled under:

By Diana Olick

The housing numbers are all heading in the right direction. Home prices up, foreclosures down and, perhaps the most important, consumer confidence in housing swelling. Even as sales of new and existing homes bounce up and down month to month, the desire to buy is growing. The percentage of Americans who say owning a home is an essential part of the American dream has hit a three-year high at 79 percent, and the percentage who say it is better to own than rent grew by four points to 69 percent, according to the CNBC All-America Economic Survey. Perhaps the biggest surprise in the survey is that despite a raging, record-high stock market, more Americans believe a home is a better long-term investment than stocks.

The gains can partially be attributed to a slowly recovering first-time homebuyer cohort. First-time buyers have been lagging the recovery until now, making up barely a third of home buyers in February, compared to the historical norm of 40 percent. First-time buyers accounted for 34.5 percent of home purchase transactions in February, according to a new survey from Campbell/Inside Mortgage Finance. Even more encouraging is that traffic of these buyers is rising as well, hitting a four-year high on the same survey.

"First-time homebuyers are the wildcard in the upcoming spring-summer home buying season," said Thomas Popik, research director for Campbell Surveys. "We see strong first-time homebuyer traffic, but it's still not clear that the traffic will translate into increased purchases, because first-time homebuyers are dependent on low down-payment financing, such as FHA mortgages."

While first-timers are getting more interested, current homeowners are getting less interested, according to the Campbell survey. Meanwhile, investor interest in housing rose to a four-month high, accompanied by a rise in sales of distressed properties. Investors, who largely buy all in cash, have been the main competition for regular homebuyers, and as big hedge funds and private equity purchase lower-end, distressed homes in bulk, that pushes prices drastically higher. Witness a 23 percent jump in Phoenix home prices in January, according to the latest reading from S&P/Case-Shiller.

While the number of distressed homes is falling, the remnants of the housing crash are still weighing on the recovery. There are still 5.1 million properties where the owner is either delinquent on the mortgage or the home is already in the foreclosure process, according to a new report from Lender Processing Services. As banks ramp up the foreclosure process, following delays due to processing fraud over the past few years, more distressed properties will come to the market. That may ease some of the price gains, although investors, still reaping rental rewards, seem ready for all of it.

What remains to be seen is for how long those rents will stay strong? With more Americans looking to buy and souring on renting, rent rates could start to come down. In addition, new supply of rental apartment buildings will be hitting the market in force over the next two years, as developers have been increasing multi-family housing construction.

See more on CNBC:
CNBC Explains REO
CNBC Explains Jumbo Mortgages
CNBC Explains Underwater Mortgages

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]]>first-time homebuyershousing confidencehousing markethousing recoveryCNBC2013-04-01T17:00:00 00:00Younger Buyers Jumping Into Retirement Real Estatehttp://realestate.aol.com/blog/2013/03/28/younger-buyers-retirement-communities/http://realestate.aol.com/blog/2013/03/28/younger-buyers-retirement-communities/http://realestate.aol.com/blog/2013/03/28/younger-buyers-retirement-communities/#commentsFiled under:

By Diana Olick

Charlie Rocque knows a great real estate deal when he sees one -- at one of the largest retirement communities in the nation, Century Village in Boca Raton, Fla. "I bought an apartment that not long ago was valued at around $75,000, and I picked it up for $20,000," Rocque said. "The value comes in surroundings, it comes with the club house, it comes with the peace of mind that I have some place I know that if I need to go there I can go there."

Home values in the area have fallen more than 50 percent from the height of the housing boom, according to Zillow.com. Now they are starting to rise again, and that has buyers of all ages flooding in, even into retirement communities. Roque is 56 years old and works full-time. "This is my little getaway place. It's very quiet where I live; my particular apartment, it's very quiet and I like that," Rocque said.

Alexander Fabian, age 61, also saw the opportunity. For him, Century Village gives him a second home. "I bought because I was here for a year prior, and what I was paying for rent, it was kind of crazy, so I might as well buy, so I live here and I have a home in Vegas also," Fabian said.

In the last 12 to 24 months, the average age of a new buyer at Century Village has gone from the mid-70s to the low 60s, according to Ben Schachter of Century Village Real Estate Inc. Schachter, well under the retirement age, owns six condos in the Village. "People are looking at this in terms of their long-term future," Schachter said. "They recognize that with the time value of money they are better off investing now, taking advantage of 20, 40, $60,000 price points, because if they look back just a half a decade ago, prices were 3-4 times what they are now. They're looking at the market as it increases, as the economy is strengthening, and they want to buy now while it's the best opportunity to do so."

Residents of Century Village must either be 55 years or older or be married to someone that age. However, buyers can be any age, and that has many younger investors jumping in. They are taking advantage of good rental income and the peace of mind from knowing that they already have a place to retire. Ten percent of Century Village residents still work part or full-time. This younger set has already brought changes to the Village.

"We have classes that never existed before: Zumba, Yoga, Ti Chi, unbelievable recreation for these very healthy seniors because they are younger," Schachter said. The community offers tennis, two pools and a full-service gym. As for the group activities, they still tend to skew older. At a water aerobics class, late one Thursday morning, the sun was shining and the water was flying through the blaring rock music, but mostly grey haired heads bobbed back and forth. "I'm in touch with people around here, but I don't associate with them a lot as far as socially here in the club house," said Charlie Rocque. "Because I'm not around. I'm always working."

See more on CNBC:
CNBC Explains REO
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]]>retirement communitiesretirement real estateyounger buyers retirement communitiesCNBC2013-03-28T14:30:00 00:00Another Sign of a Housing Boom? The Miami Condo Markethttp://realestate.aol.com/blog/2013/03/20/miami-condo-boom/http://realestate.aol.com/blog/2013/03/20/miami-condo-boom/http://realestate.aol.com/blog/2013/03/20/miami-condo-boom/#commentsFiled under: ,

MIami condo building boom

By Diana Olick

During the height of the housing boom, some likened the feverish flipping game in Miami's condominium market to a circus. The circus is back, and more high-flying than ever. At a recent party to launch a new project from New York-based developer PMG, acrobats swung over the crowd, and in gravity-defying flourish, poured champagne into the glasses of wide-eyed investors. "It's exactly what we want. We wanted a little bit of show and a lot of flash," said Kevin Maloney, president of PMG, who re-entered the Miami market in 2010 to purchase some of the remaining beachfront and bayside construction sites.

Condominium development in greater Miami seems to defy not just gravity but reason. Cranes swing above the city from every angle, just as they did during the housing bubble in 2006. During the boom, 49,000 units were built as investor-flippers used easy mortgage money to swap properties and push prices. When it all came crashing down, the lights went out in Miami, literally. Tall buildings stood dark at night as banks took back properties and projects. Most thought it was all over for a good long time.

But somehow there are just 2,400 unsold units left, barely a year's worth at the current sales pace. Prices are up nearly 25 percent from a year ago, according to the Miami Area Association of Realtors. How did it happen? Foreign, all-cash buyers like Venezuelans, Russians, Chinese, Canadians and Brazilians. They were either looking for a safe-haven to park their money or were taking advantage of a weak dollar. Whatever the reason, they came, they saw, they bought.

Here's What CNBC Said About the Miami Market Last August


"It's mind boggling. I'm perplexed as to how all this can go forward this quickly," said Peter Zalewski of CondoVultures. He has been qualifying and quantifying the South Florida real estate market for over a decade and said this time around there is less short-term risk because the buyers have a real purpose. "The foreign buyer is deciding to take some chips off the table and park it up here and sort of put it away into a condo in Miami. If they use it or they don't use it, who cares, at least it's stable."

These cash-heavy buyers are allowing developers to require anywhere from 20 percent to 80 percent down, which appeases banks and private lenders alike. "It's much smaller inventory, which is holding the price point, and further, the deposit structure is much more beneficial to the developer at this point, so we're back," said PMG's Maloney.

Maloney has sold 100 of the 190 units that he plans to build in his "Echo" development, and that is without even breaking ground. The rest he hopes to entice with flash and fantasy, which is exactly what Miami is all about. "I believe in the future," said Argentinean Antonio Aguirre at the Echo party. "The prices are going to come up faster, so today is a great time to buy."

Read the rest of this story on CNBC.

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CNBC Explains: REO
CNBC Eplains: Underwater Mortgage

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]]>foreign real estate investorshousing boomhousing recoveryMiami condo boomMiami housing recoveryMiami real estatePMGCNBC2013-03-20T08:00:00 00:00What Is an REO?http://realestate.aol.com/blog/2013/03/15/reo-bank-owned-home/http://realestate.aol.com/blog/2013/03/15/reo-bank-owned-home/http://realestate.aol.com/blog/2013/03/15/reo-bank-owned-home/#commentsFiled under: ,

REO property: house for sale signBy Diana Olick

REO is one of those terms that you hear a lot lately but can't quite place. And for people of a certain age, it calls to mind a certain 1970s and '80s rock band. Alas, that's not the REO of which we speak. So what is an REO? CNBC explains.

What is an REO? REO stands for Real Estate Owned. It is actually short for Other Real Estate Owned (OREO), but that may have been too confusing with the cookie. Unfortunately, there is nothing sweet about an REO, which is when a home is repossessed by its mortgage lender (a bank, government agency or government mortgage insurer, like the FHA or VA).

How does a home become REO? While the foreclosure process varies state to state, generally, after the borrower has ceased paying the mortgage and been served notice of foreclosure by the lender, the home will be put up for auction.

The auction is usually run by the county sheriff's department or by a private auction company. Anyone can bid for the property at auction, but typically the lender will set a minimum bid (price) at the auction for at least the amount of the unpaid balance of the mortgage. If there are no bidders, the lender will repossess the property. As soon as it is taken back, the lender then has to list it on its books as REO. It is a non-performing asset.

Why has the term REO become so common lately? After the real estate bubble in the middle of the last decade, housing crashed badly. That caused a recession, which in turn caused a lot of people to lose their jobs.

This caused them to be unable to pay their mortgages. Also, there were many different mortgage products offered during the housing bubble that had adjustable rates. Those rates adjusted higher for many borrowers, and in turn those borrowers could not make their monthly payments either. Millions of loans went into default, and a large number of them ended up in foreclosure. The banks repossessed millions of homes, listing them as REOs.

Today, as investors look to buy these homes and turn them into rentals, the term REO-to-rent has become quite common. It is not known exactly how many more bank-owned homes will come to the market, as banks have been doing more aggressive loan modifications and other foreclosure alternatives, but the numbers will likely be high until the end of this decade.

What Is bulk REO? Bulk REO is when a lender has so many repossessed properties that it decides to sell them in bulk to investors. The government-sponsored agencies, Fannie Mae and Freddie Mac, as well as the FHA (Federal Housing Administration) have sold REO's in bulk, as have several of the largest banks.

Investors get a slight discount on the properties by buying them in large volumes. These are generally very low-value homes that may be in a state of significant disrepair.

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]]>bank-owned homesforeclosuresreal estate auctionreal estate investingwhat is an REOCNBC2013-03-15T16:00:00 00:00What Is an Underwater Mortgage?http://realestate.aol.com/blog/2013/03/14/underwater-mortgage/http://realestate.aol.com/blog/2013/03/14/underwater-mortgage/http://realestate.aol.com/blog/2013/03/14/underwater-mortgage/#commentsFiled under: ,,

By Diana Olick

An underwater mortgage may sound like you're dealing with beachfront property gone bad, but it's actually a term of art in the world of real estate. You probably heard this term in the aftermath of the 2008 financial crisis and its accompanying real estate bubble. So what is an underwater mortgage? CNBC explains.

What is an underwater mortgage? A mortgage is considered "underwater" when the amount of the mortgage is greater than the current value of the home. Another term for this is "negative equity." For example, a person decides to buy a home for $200,000. They put 20 percent down, or $40,000, and then get a mortgage for the remaining $160,000. Usually home prices rise, but let's say prices begin to fall and the home is now valued at $150,000. The mortgage is "underwater" by $10,000.

Why use the term 'underwater'? Because the value of the home, which the mortgage funds, is below or under the mortgage amount, which could be considered the water line. It is just a metaphor that likely grew out of another metaphor: "drowning in debt."

Why is the term 'underwater' so popular in housing today? During the housing boom, home prices rose dramatically. Much of that was because mortgage lenders held borrowers to very low standards, offering them mortgages for no money down. Anyone could buy a home, and so many people -- who really couldn't afford what they were buying -- did. That pushed prices higher and higher. Many of these mortgages, however, had adjustable rates, which meant that a borrower's monthly payment could suddenly spike after a certain amount of time, usually three to five years.

That is just what happened, causing many people to default on their loans; in other words, they missed payments and couldn't keep up. As more and more people were unable to pay their mortgages, and banks began foreclosing on them, home prices crashed. Since so many borrowers in this period had put no money down when they applied for a mortgage, any drop in home prices caused them to be underwater on their mortgages.

Why is the underwater mortgage issue such a drag on the housing recovery? If a borrower can still make the monthly payment, being underwater doesn't really matter, other than making you feel like you are renting the house (since you don't have any equity in the house). But for many people it makes moving impossible, because if a person owes more on their mortgage than their home is worth, then in order to move or sell, they would have to pay the bank back the difference.

They would have to pay in to their mortgage to get out of their home. Being underwater has also prompted many homeowners to walk away from or abandon their homes because they don't think the home will ever be worth more than the mortgage. They consider the home a bad investment and let it go to foreclosure.

See more on CNBC:
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A New Foreclosure Fix?

 

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]]>mortgagesunderwaterunderwater homeownersunderwater mortgagesCNBC2013-03-14T14:00:00 00:00What Is a Jumbo Mortgage?http://realestate.aol.com/blog/2013/03/13/jumbo-mortgage/http://realestate.aol.com/blog/2013/03/13/jumbo-mortgage/http://realestate.aol.com/blog/2013/03/13/jumbo-mortgage/#commentsFiled under:

Home purchase: jumbo mortgageBy Diana Olick

Sometimes financial terms sound complicated and arcane; other times they sound exactly like what they are. That's the case with a jumbo mortgage. CNBC explains:

What is a jumbo mortgage? A jumbo mortgage is a home loan whose value is larger than that of a conventional mortgage. A conventional mortgage is one that can be purchased by government-sponsored entities Fannie Mae and Freddie Mac. These two entities set the maximum value of loans they will purchase.

At what value does a mortgage become jumbo? The current maximum value for a conventional loan is generally $417,000, but after the housing crash the limit was raised in certain designated "high cost" areas. At first it was raised to $729,750; but then in October 2011, it was reduced to $625,500.

Do jumbo mortgages have higher interest rates? Generally, they do, but the difference between conventional and jumbo mortgage rates has been decreasing because of increasing fees at Fannie Mae and Freddie Mac.

Why do jumbo mortgages have higher rates? The rates are higher because the lender is taking on more risk with a bigger loan. It can also be more expensive to refinance a jumbo mortgage because closing costs can be calculated as a percentage of the loan amount.

Who funds a jumbo mortgage? For now, jumbo loans are largely funded and held by big banks. Investors used to purchase these loans in mortgage-backed securities, but that market disappeared between 2008 and 2010, when the mortgage market crashed. Now investors are slowly coming back. So far there have been just two issuers of jumbo mortgage-backed securities, but that market is expected to grow as investor confidence returns to the housing market.

See more on CNBC:
CNBC Explains Underwater Mortgages
World's Most Expensive Cities
What Homebuyers Want

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How to Shop for a Home Loan

 

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]]>jumbo mortgagesmortgage interest ratesmortgagesCNBC2013-03-13T12:00:00 00:0010 Most Expensive Housing Markets in the Worldhttp://realestate.aol.com/blog/2013/03/08/most-expensive-housing-markets/http://realestate.aol.com/blog/2013/03/08/most-expensive-housing-markets/http://realestate.aol.com/blog/2013/03/08/most-expensive-housing-markets/#commentsFiled under:

Expensive housing markets: Moscow

By Bianca Schlotterbeck

The number of High Net Worth Individuals -- people with more than $30 million in investable assets -- is forecast to rise by 95,000 over the next decade, according to wealth intelligence firm, Wealth-X. The result is that each year there are more people who want -- and, more importantly, can afford -- luxury properties. While demand is ever-rising, the stock of desirable locations remains virtually static, meaning capital inflows concentrate on a few hotspots, pushing prices upwards.

Knight Frank found locations in Asia-Pacific tended to be the biggest gainers, but old favorites such as London continue to perform well. Meanwhile, the biggest threat to property markets is their own popularity, as the lack of local affordability can become a political issue, prompting governments to impose cooling measures. Consequently, several areas in this list were subject to new regulations in 2012. Click through the gallery below to see the world's most expensive property markets in 2012, and find out how much prices rose or fell during the year.

Read the whole story on CNBC.

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Outlook 2013: Hope Springs in Housing Market

 

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]]>most expensive citiesmost expensive cities in the worldmost expensive housing markets in the worldmost expensive real estate marketsCNBC2013-03-08T08:00:00 00:00How the Student Loan Debt Crisis Drags Down Home Priceshttp://realestate.aol.com/blog/2013/03/04/student-loan-debt-housing/http://realestate.aol.com/blog/2013/03/04/student-loan-debt-housing/http://realestate.aol.com/blog/2013/03/04/student-loan-debt-housing/#commentsFiled under: ,,

confronting student loan debtBy Paul O'Donnell

Pity the college graduate, burdened with shocking levels of student-loan debt and looking for a job in the worst employment market in two decades. But save a little pity for the rest of us. The staggering amount of outstanding student debt -- nearly $1 trillion owed -- is beginning to impede the U.S. economy as a whole, a new report from the New York Federal Reserve suggests. That's happening chiefly by robbing the housing market of its richest crop of new buyers: young college graduates.

The statistics in the report are dismaying in themselves. With the number of borrowers approaching 40 million nationally, including more than 40 percent of 25-year-olds, the average balance on their loans has risen to $25,000. About 6.7 million of all student borrowers, or 17 percent, are delinquent on their payments three months or more.

"Delinquent student loan borrowers have a very difficult time accessing credit, and the share of those borrowers is greater today than in the past," said Donghoon Lee, a senior economist for the New York Fed and one of the authors of the report. For the average homeowner, the worst news is that these over-leveraged and defaulting young borrowers no longer qualify for other kinds of loans -- particularly home loans. In 2005, nearly 9 percent of 25- to 30-year-olds with student debt were granted a mortgage. By late last year, that percentage, as an annual rate, was down to just above 4 percent.

The most precipitous drop was among those who owe $100,000 or more. New mortgages among these more deeply indebted borrowers have declined 10 percentage points, from above 16 percent in 2005 to a little more than 6 percent today. "These are the people you'd expect to buy big houses," said student loan expert Heather Jarvis. "They owe a lot because they have a lot of education. They have been through professional and graduate schools, but their payments are so significant, they have trouble getting a mortgage. They have mortgage-sized loans already."

Read the rest of this story on CNBC.

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The Student Debt Bomb - How Student Debt Loans Will Crush A Generation

 

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]]>home prices student loan debthousing student loan crisisstudent loan crisisStudent loan debtstudent loansCNBC2013-03-04T16:15:00 00:00What Homebuyers Want the Most in Their New Houseshttp://realestate.aol.com/blog/2013/02/26/what-homebuyers-want-nahb-survey/http://realestate.aol.com/blog/2013/02/26/what-homebuyers-want-nahb-survey/http://realestate.aol.com/blog/2013/02/26/what-homebuyers-want-nahb-survey/#commentsFiled under:

Homebuyers and for sale sign

By Diana Olick

Now that Americans are buying houses again, the nation's home builders are eager to find out what may have changed on consumers' wish lists and how the recession may have impacted overall attitudes toward lifestyle at home. From new construction to renovation and remodeling, consumers are clearly more cautious and price-sensitive than they once were. "They are doing projects to enjoy themselves, not just to flip [the home]," said Gary Case of Rockville, Maryland's Signature Kitchens, Additions and Baths. "They are also keeping resale in mind."

At the top of the wish list is Energy-star ratings. In a large survey released this month by the National Association of Home Builders, researchers found that Energy-star rated appliances are most coveted, followed closely by energy efficiency in the laundry room. "Nine out of ten buyers would rather buy a home with energy-efficient features and permanently lower utility bills than one without those features that costs 2 percent to 3 percent less," the survey noted. But while buyers like the efficiency to be there already, they are not willing to pay a premium for them.

Related: Homes for Sale in Your Area

What home buyers seem to want most is high-end amenities, even if it means living in a smaller home to get them, according to the survey. Of those polled, 62 percent favored high-quality products over space. They want a double sink in the kitchen and both a tub and stall shower in the bath. They prefer french doors to standard and garage storage systems. They also want technology, from wireless home security systems to whole-house electronic features that control entertainment and utilities.

3 Things Homebuyers Hate



The amenities, however, only go so far for today's cost-conscious consumer. An elevator ranks number one on the list of things home buyers do not want. They also don't want a home in a golf course community. They don't particularly like wine cooler refrigerators and give a big thumbs down to laminate countertops. While they do like some outdoor space, they don't necessarily want an outdoor kitchen.

Perhaps the most surprising finding of the NAHB survey is not what we want in our homes, but where we want our homes to be. Just 8 percent of those surveyed want to live in a city center, 36 percent prefer the outer suburbs, 30 percent the close-in suburbs and 27 percent still want the old-fashioned, rural American living. This counters recent assertions by those in the apartment sector that Americans are increasingly seeking a more urban lifestyle.

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Rising rents and increased demand for rental apartments has fueled the theory that from young Millenials to downsizing Baby Boomers, the recent housing crash has changed the way Americans want to live, shifted attitudes toward home ownership and created a strong new desire for big-city living. Rising gas prices have also pushed more home buyers closer to city centers.

While 23 percent of survey respondents categorically reject the idea of living in a city center, others could be swayed if, again, offered the right amenities. These include walking/jogging trails, nearby parks and an outdoor swimming pool. That bodes well for planned, gated communities. The age of the McMansion may be over, as money spent on space is reallocated to energy efficiency and home technology. Builders today will look to do more with less space, and buyers who can now afford to be picky about amenities, certainly will be.

See more on CNBC:
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]]>features homebuyers wanthomebuyersNational Association of Home Builderswhat homebuyers wantCNBC2013-02-26T17:45:00 00:00Is the Refi 'Apocalypse' Really Upon Us?http://realestate.aol.com/blog/2013/02/21/mortgage-refinance-apocalypse/http://realestate.aol.com/blog/2013/02/21/mortgage-refinance-apocalypse/http://realestate.aol.com/blog/2013/02/21/mortgage-refinance-apocalypse/#commentsFiled under: ,

By Diana Olick

Mortgage rates today are very low, but U.S. borrowers have a very short memory. They forget that the rate on the 30-year fixed, which sits around 3.6 percent today, was a full percentage point higher a year ago, and above 5 percent in January of 2010. The purchasing power gained through today's low rates have arguably helped fuel the recovery in home sales. Low rates have also sparked a boom in mortgage refinancing, which in turn has put more spending money in consumers' pockets. Still, the slightest move higher has dramatic effects.

Witness the 10 percent drop in refinance applications from a week ago, on the Mortgage Bankers Association's weekly report. The rate on the 30-year fixed moved from 3.62 percent to 3.67 percent. "We're busy because we're pushing," says Julian Hebron at California-based RPM Mortgage. "Mostly people have been lulled into complacency by long-term rate lows, and it's common for them to maintain their 'It'll come back down' stance when rates rise. But rates are now up .375 percent, and it may hold, given MBS/Treasury market technicals and moderately improving economic fundamentals. The complacency has a lot to do with rates having been low enough to make no-cost refis easy. But when rates rise this much, the no-cost options go away and people tend to wake up."

Related: Mortgage Calculators

Apex Home Loans CEO Craig Strent says a rise in rates could actually bring in more business in the short term. "There is a huge population that have benefitted from adjustable-rate mortgages. When the rates adjusted, they adjusted down. Those homeowners have been riding those low, one-year ARMs. If they start to hear about rates going up, they may come out of the woodwork to lock into fixed rates," says Strent.

That may be, but 88 percent of loans outstanding today are fixed, according to the Mortgage Bankers Association. Just 12 percent are adjustable rate. Even if rates do not rise any higher than they are today, which they may not, they would have to fall below last year's lows to see the high refinance volume of 2012 continue in 2013.

"The refi apocalypse is upon us," says Mark Hanson, a mortgage analyst in Northern California. "The thought is that there are a bunch of homeowners on the fence who haven't refi'd who will all jump in thinking they will miss out. The theory is 100 percent nonsense. The series will simply plunge. That's because after 16 months of sub 4 percent rates -- and every bank loan officer and mortgage broker doing everything they can after a long mortgage banking income drought that ended with Twist -- there is nobody left to refi. In fact, the only reason refi applications stayed flat in Q3 and Q4 was because they passed a new law allowing refinances regardless of the LTV [loan to value]...the HARP unlimited LTV refi."

Read the rest of this story on CNBC.

See more on CNBC:
Taking the Real Estate Recovery Local
The Real Estate Recovery, in Your Neighborhood
Why Sequestration Will Hot Housing on Several Fronts

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The Best Option for Refinancing Mortgage

 

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]]>mortgage ratesmortgage refinancemortgage refinance apocalypsemortgage refinancingmortgagesCNBC2013-02-21T13:17:00 00:00Conversion Therapy: Turning Old Factories Into Glam Homeshttp://realestate.aol.com/blog/2012/09/14/conversion-therapy-turning-old-factories-into-glam-homes/http://realestate.aol.com/blog/2012/09/14/conversion-therapy-turning-old-factories-into-glam-homes/http://realestate.aol.com/blog/2012/09/14/conversion-therapy-turning-old-factories-into-glam-homes/#comments

By Colleen Kane

When factories are no longer factories, these sturdy structures of antique brick and beam can be converted for many new uses. With regularity they are turned into hotels, office space, shopping centers, restaurants, clubs, cultural and performance centers, and many additional innovative uses.

One of the most common reuses for old factory buildings is private residences, either single-family or as multiple family loft complexes. Many benefits make this use so appealing: Factories have space and light galore, they feature exposed brick and wood, or steel-beam rustic charm while still adapting quite well to modern decor. As generations of creative people can attest, revamped industrial spaces also work great as combined work and studio space. And finally, the sheer amount of raw space, when purchased in need of overhaul, can be a bargain for the enterprising purchaser.

The following sites where products like candy, garments, soap or mayonnaise were made are now places where lives are lived. While this trend has long been associated with New York, these stunning examples are from around the globe.

For more factory conversions not shown below, see CNBC's entire gallery.

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See more on CNBC:
Salvaged Sanctuaries
$8.25 Million Glass House
Most Expensive Apartments in NYC

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]]>factories turned into homesfactory conversionsfactory home conversionhome conversionshome transformationsold factoriesrenovationsCNBC2012-09-14T17:17:00 00:00