Greenspan Says Recovery Coming in Early 2009 For Real Estate

Take this with a grain of salt.

Alan Greenspan is still trying to spin his magic as the economic orator and has come out saying that the real estate market will start it’s recovery in early 2009.

I hope he is right for all of our sakes but I do have to admit that Greenspan’s reputation has taken a hit in the past few weeks in our household. Hindsight is 20/20 but the mess he left Bernanke is coming home to roost now and we are all paying the price.

Greenspan wrote that the recent slowing in the rate of decline in U.S. home prices is the first positive note in the year-long trauma and that eventually, frozen credit markets will thaw “as frightened investors take tentative steps toward reengagement with risk.”

“More conclusive signs of pending home price stability are likely to become visible in the first half of 2009,” he wrote.

Positive Real Estate Trends in a Negative North America

North America is currently in a massive real estate crunch, with sales plummeting to one of the lowest points the industry has seen in decades. There exist, however, a few choice spots sprinkled across the continent where real estate prices are actually on the rise, and where home values are continuing to increase. Factors such as amenity proximity, tax rates, interest rates, and urban location all contribute to a property’s appreciation in value.

Over the course of the past decade, new concerns such as the effects of global warming and geopolitical instability have changed the face of the real estate market, significantly affecting property values like never before. With all this taken into account, take a look at some North American cities whose real estate value will actually appreciate, going against the trend of a continent whose overall market seems to be crashing.

Vancouver, British Columbia

In 2010, Vancouver will play host to the Winter Olympic Games. This is driving the city’s (as well as the province’s) economy on all fronts, not just real estate. If you’re a savvy investor who’s studied the trends of previous host cities after the Olympic Games, you might be wise to pick out your plot as soon as possible, before they all get snatched up.

Vancouver is expanding vertically, and not just with higher commercial skyscrapers and ever-developing condominium complexes, but with many new homes being built on the mountain backdrop itself. The median cost for a condo in Vancouver as of July 2008 is about $445,000. Although the price is down from last year when the housing market was more stable, it’s still impressive when you compare it with the median price of $183,000 for condos in a city like Montreal, for example. Vancouver prices are more like those for luxury condos in places like Mont Tremblant.

Vancouver is definitely worth keeping your eye on. There are plenty of jobs available in the public job sector, with an expected job boom leading up to the Olympics. Well-educated and experienced people can also find comfortable positions as the trickle-up from base industries runs its course. It is expected that prices for condos in Vancouver will rise next year and will continue to increase in price and value well into the next decade. The BC credit union is already expecting a rise in price of about 12% for the remainder of this year and is expecting a further increase of about 12%-14% for 2009. With these projected trends, home owners can expect significant amounts of capital return.

Your two best options in Vancouver are to either earn off of the upswing before the Olympics with a well-timed sell schedule, or to search for a nugget that will level out to a higher average once the Olympics has left. Vancouver will attract a lot of spectators for the Games, and the beautiful combination of ocean and mountains will certainly attract many potential home buyers.

North Dakota

With both natural gas reserves and crude oil supplies, the market in North Dakota is doing very well this year, and is one of the only three states to have experienced any real estate appreciation, along with Texas and Oklahoma. This is an impressive feat considering the United States is currently in the worst foreclosure crisis in its history.

While their energy industry continues to create new jobs, the mortgage lenders have refrained from offering any subprime financing. As a result they’ve maintained a strong economy, they’ve avoided the current deflation hitting most real estate markets across the US, and they’ve remained independent from any problems suffered at the banks. Toronto, Ontario For the last ten years Toronto has been building condos like mad. The construction alone is offering a wealth of job opportunities. The average selling price for larger homes is expected to cool down somewhat, but prices for property in the Toronto area this year were on average 11% higher than the year before.

Since Canadian banks never issued subprime mortgages, the Canadian real estate market has been capable of absorbing the cost of unsold units and has not suffered mass foreclosures. Toronto is the center of economic power in Canada, and is one of the more dense cities on the continent with a highly effective public transport system. Couple these with the fact that Canada is expected to profit the most from the advent of global warming, and you have a vibrant city whose real estate market and home values have nowhere to go but up.

Google Earth and Google Maps Are About To Get Much Better For Real Estate Agents

Wow!

I just ran across an image from the Google sponsored satellite being run by GeoEye. The quality is truly amazing. The picture below is one of the first taken by the high quality camera and will be offered with detail down to 20 inches.

This is not shabby for use for real estate professionals across the country when the images start rolling into Google Maps.

GeoEye says this image of Kutztown University, Pennsylvania, is the first image taken by GeoEye-1. It was collected on October 7, 2008, from 423 miles in space as their satellite moved down the eastern seaboard of the United States.

The Geo-Eye1 is described as the world’s highest-resolution commercial satellite. GeoEye spokesperson Mark Brender tells Wired.com that the satellite can take photos at a resolution of up to 41 centimeters — close enough to zoom in on the home plate of a baseball diamond. Due to federal law, though, Google will “only” get images that have a 50-centimeter resolution — meaning the imagery will capture details down to about 20 inches.  via Search

Pending Home Sales Up 7.4 Percent, 18.4 Percent in West

This is good news as the combination of lower prices, low interest rates, and pent up demand may be coming to a head.

Pending homes sales in a report issued by the National Association of Realtors are up 7.4 percent in August compared to July, 2008. The numbers are up 8.8 percent over August, 2007.

While it is not time to crack open the champagne bottles, it is a sign that consumer demand and pricing are finding an equilibrium. Now we need to hope that the other external forces in the economy do not drag down the momentum that seems to have been built.

But after the meltdown on Wall Street does real estate look like the better investment now?

Pending home sales for August rose in all four of the regions tracked by the NAR.

Gains amounted to 18.4% in the West, 8.4% in the Northeast, 3.6% in the Midwest and 2.3% in the South.

July’s pending home sales index was revised to a decline of 2.7% from a prior estimate of a 3.2% decrease.

NAR says pending home-sales activity rose because of buyers taking advantage of low prices and affordable interest rates. August’s results show an “unleashing of pent-up demand” before the credit crisis worsened in September, Yun said