According to a third party analysis, Phoenix is in the top 20 for best rental market.

“Where the local economy is still struggling, investors must take a long-term view for any real estate investment.  Our top-ranked cities have the potential to generate higher returns, but that will depend, in part, on how quickly the local economies recover.  Las Vegas and Detroit could still take some time to realize their potential; markets like Bakersfield, Boise, Phoenix and Dallas, which are all in the fourth quarter’s Top 20, have higher job growth rates and may be better opportunities in the short-term,” said Ingo Winzer, president and founder of Local Market Monitor, Inc.

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Our office administration closes December 24 and re-opens Monday January 2.  Ryan Hittel is available Tuesday Dec. 27 through Friday Dec. 30 by calling his direct line 403-212-5383.

Sincerely,

David Udy, Jim Vincent and Ryan Hittel

Last month home construction increased 9.3%, to a seasonally annual rate of 685,000 from October, the Commerce Department said.

“This strong report is the latest in a string of better housing data that suggests activity in that beleaguered sector may be picking up,” economists at the Royal Bank of Scotland wrote in a research note.

The spike last month was a result of a 25.3% increase to multi-family homes. Single family home construction which made up about 65% of the market rose by 2.3%

In comparison from last year, new home starts this past November were up 24.3%.

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“It has become increasingly apparent to us that the pieces for a housing rebound next year are beginning to fall into place,” declared Barclays Capital analyst Stephen Kim in a recent note to investors.

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Ryan Hittel, business development manager, has been hosting educational webinars related to our Saguaro Series 2 opportunities in the Greater Phoenix Area.

“These webinars are a great way for investors, prospective investors and even brokers to better understand our great investment opportunity,” said Mr. Hittel. “It also provides them with the chance to ask questions and hear unbiased information regarding the housing market in Phoenix.”

Topics of discussion during the webinars include: latest housing market statistics, recent news regarding Saguaro Series 2 fund and how real estate is a great way to diversify your investment portfolio, to name a few.

“These webinars are very thorough and cover a wide range of subjects that will help our audiences understand the importance of diversification,” said Mr. Hittel. “At the end of the day, it’s all about transparency, and we pride ourselves on maintaining open dialogue with investors, prospective investors and brokers.”

Capstone Real Estate will be hosting a webinar on Dec. 13. Click here for more information.

There’s quite the demand for homes between $50,000 and $150,000 in the Greater Phoenix area according to the Cromford Report

This market “continues to be particularly strong as investors, many from out of state, seize the profitable opportunity of becoming landlords. Demand from owner occupiers remains relatively weak due to the difficult financing climate,” stated the report.

Foreclosures continue to fall as short sales are gaining momentum and becoming an important part of the housing market’s dynamics.

“Lenders are receiving far fewer homes into REO inventory as a larger percentage of the trustee sales result in a sale to a third party. The market below $200,000 is now highly supply constrained,” said the report.

The report also highlighted that an upward trend has developed related to the price of homes below $200,000, sold by lenders.

“Because of the high sales volumes at the low end, price averages are very likely to push higher which may have a positive effect on sentiment,” said the report.

Foreclosures down by 50%

The level of foreclosures has dropped by 50% from 2009 levels and fewer homes are pending foreclosure since the middle of 2008.

“More of these are finding solutions other than the trustee sale and the completed foreclosure counts are now falling fast,” the report said.

If you’re interested in complementing your investment portfolio with real assets, investing in real estate is a good way to maximize your returns and minimize your risk.

Capstone Real Estate’s offerings are RRSP and TFSA eligible. For more information on our Saguaro Series 2 investment opportunities, request an information package by clicking here.

Disclaimer: All real estate investments are described in greater detail in the Offering Memorandum. Projected returns and the timing thereof involve substantial unknown risks and uncertainties, certain of which are beyond the fund’s control. The fund’s actual results performance and achievements could differ materially from those expressed here. Please refer to Saguaro Capital Fund Series 2 Offering Memorandum for more information and seek advice prior to investing.

Allowing short sales could lead to rising sale prices because homes typically sell for more than properties taken back by lenders and resold.

“Lenders don’t want to foreclose in Arizona anymore. They want to do short sales,” said Steve de Laveaga, senior vice president of Fidelity National Title, who led a panel discussion with lending executives at an industry forecast.

During the event, the consensus was that short sales could lead to an increase in median home price by next year. In addition, it’s believed the losses associated with short sales are not as significant to banks as a foreclosure auction.

“We have approved a record number of short sales this year,” said JK Huey, senior vice president of Wells Fargo Home Mortgage’s REO and short-sale division. “We know short sales are better deals overall. We have had to work on the process so we can do them more quickly with fewer steps.”

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Many investors are missing exempt market products from their portfolios. Well balanced, risk sensitive exempt market investments allow investors to enhance their existing stock/bond portfolios and an opportunity to enhance returns.   
 
Even with a limited view of diversification with stocks and bonds, it’s surprising how narrowly focused some portfolios can become. Many portfolios contain many different equities – typically in Calgary they are all drawn from the oil and gas sector – because that’s an area of expertise and therefore a comfort zone for people. But the ability to pick excellent energy stocks doesn’t shield investors from the notorious volatility of that entire sector in periods when supply exceeds demand. Others seek diversification in an array of mutual funds.

But while each of these funds may be individually diversified to a certain degree, as a group they frequently show alarming overlap in their holdings. They may each hold 20 different stocks but several of them may hold 12 companies in common, creating dangerous overlap in the client’s portfolio and costing significantly more in fees than necessary.
 
Real estate investments can provide much needed diversification
 
Real Estate is the cornerstone of much of the world’s wealth. It has a very low correlation with equity markets and therefore tends to remain stable when markets are not. This is because real estate is moved by different drivers. Shelter is an indispensable human need, whether economies are up or down, and this is true for both individuals and businesses. So real estate tends to be insulated from market volatility. Like bonds, real estate can provide long-term security of capital.

Albertans are investing the most says Tom Ruff, market researcher for The Information Market.

As the Canadian dollar hovers equally (and at times surpassing) the Greenback, Canadians are starting to look at Phoenix’s real estate market as a way to generate returns on their investment.

Charles Duck, full service broker in Phoenix, told the media that Canadians are seeking ways for long term investment growth.

“(Canadians) shouldn’t go wrong having a certain amount of wealth in U.S. real estate,” he said. “As the U.S. economy strengthens and the U.S. dollar grows relative to the Canadian, the value of their wealth will increase too.”

Because of the volatility in the stock markets, Toronto couple David and Leanne Fullerton decided to diversify their portfolio and invest in Phoenix’s real estate market.

“We thought at the time we should get in while all conditions were favourable,” David, 49, told the Times Colonist. “If we hadn’t invested, our stocks would be down 15% from last year.”

Recently U.S. President Barack Obama announced that homeowners will be able to refinance to current low mortgage interest rates. The initiative titled the federal Home Affordable Refinancing Program (HARP) will be granted to anyone, no matter how far underwater they are.

“Some lenders, frankly, just refuse to refinance,” President Obama told media. “So, these changes are going to encourage other lenders to compete for that business by offering better terms and rates, and eligible homeowners are going to be able to shop around.”

The previous plan called for a 105% loan-to-value. That ratio didn’t help out those in the hardest hit markets such as Nevada, Florida, Michigan, Arizona and California. Later it was bumped up to 125%, however, many homeowners still couldn’t qualify.

“If the limit is lifted completely, then that will make a big difference for Arizona,” said housing analyst Michael Orr, who publishes an online daily analysis of metro Phoenix’s housing market called the Cromford Report, told the media. “Many people have a loan-to-value of over 200%.”

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