Mark Mashiter, Director at Qualitas Property International, one of the top UK based professional real estate investment companies, working in the US market buying and selling land and property, talks about the state of the US market and the opportunities that currently exist for investors there.
“Prices today in the US are up to 80% under their peak values before the market crash in 2006. With signs of recovery already being reported, (house prices have again showed their second year-on-year increase), prices will continue to steadily increase making this a unique window of opportunity to invest in the USA if you can find the right deal.”
Investing in real estate has up until recently been the preserve of those chasing high risk, high yield deals and those investors who choose to invest counter cyclically. This is because the scale and depth of the housing crash has caused home prices to drop almost 80% in some areas. However since the 4th quarter last year positive news regarding the fundamental economic markers for the housing market have started to appear with greater and greater regularity. So much so in fact that many market observers from Warren Buffet to the Wall St Journal have called the bottom of the market and in some States area price rises have occurred.
However the U.S. is not one homogenous market, rather a series of small independent markets, therefore while in some areas such as Arizona and Florida the recovery is in full swing, others such as Indiana, Michigan and Illinois are still in the mire of the crash.
Key indicators such as Housing Starts, Population Growth, Household Formations, Jobs Growth, Median House Price and Inventory are all important factors to look at when looking at a market.
In July 2012 the Florida Realtors Association Chief Economist Dr John Tuccillo, said: “The trend we’ve seen established over the past year is continuing…. “In June, every housing market indicator moved in the right direction. Closed sales are up, but so are pending sales, median prices, average prices and the ratio of sales price to list price. Conversely, listings are down, days on market are down and – most important – inventories are down. We have now reached a six months’ supply of inventory for existing single-family homes and 5.9-months’ supply for townhouse-condos.”
Dr Tuccillo went on to say: “With an improving employment environment in Florida, we expect that the housing market recovery will continue in the future.” So good news for Florida – but what about the rest of the country…
In many areas of the US there is a large pent up demand from people looking to buy their homes. This demographic includes those who have delayed buying a home through lack of availability of credit, turmoil in the market, lack of new housing stock as builders haven’t built, as well as a lack of affordability as house prices came off an all time high. Although difficult to quantify precisely, a recent Hanley Wood survey carried out in May 2012 found that as many as 2 million potential owners in the US are waiting for the right time to buy a home, with 29% of renters and 19% of homeowners planning to purchase a home during the next couple of years.
The housing market will only be seen to be truly recovered when builders large and small pick up their tools again. The statistics nationwide are looking up with the number of building permits issued at a seasonally adjusted annual rate of 780,000, 7.9 percent above the April rate and 25.0 percent greater than the prior-year month.
David Crowe, the Chief Economist of the National Association of Home Builders in America, said in a separate statement: “While many challenges continue to weigh down the housing recovery – including those related to builders’ and buyers’ access to credit, poor appraisals and the number of distressed properties in certain markets – production of single-family homes is now the strongest it has been since 2010 due to rising consumer demand brought on by improving market conditions.”
Doug Duncan, SVP and Chief Economist of Fannie Mae says: “While consumers remain cautious about the general economy, their attitudes toward the housing market continue to improve. Although this positive trend may be short-lived if the general economy falters, one might ask whether consumers are increasingly seeing the current environment as a unique opportunity to buy a home while home prices remain depressed, rental costs are increasing, and interest rates are near historic lows.”
Florida – the biggest opportunity for investors…
In South West Florida’s Lee County, which was once the poster boy region for the housing crash, the statistics are even more positive with building permits for single family homes in the first 2 quarters of this year having increased by more than 70%. According to MetroStudy’s Chief Economist, Brad Hunter, “The builders that I have talked to are managing to push their prices up. I think that is a good sign because builders would not be raising their prices if there was not demand to support that.”
Mr Mashiter concludes: “First and foremost we are property investors ourselves so we look carefully at the underpinning fundamentals and localised trends of any market in which we buy property for ourselves or recommend to others, following are some of our recommendations.”
Cape Coral, a city in Florida, which consistently ranks in the top ten places to open a business and CNN.com called it the 5th fastest growing US city in the past decade. The land in Cape Coral is currently up to 75% under its peak values since 2006, meaning that once construction starts, land values in desirable areas will increase dramatically. Land in Cape Coral has the potential to at the very least double in value in the next 3-5 years making it a sound investment.
“Cape Coral – Land investment focus, we can currently purchase a 10,000sq.ft land plot with full planning permission to build a 3-4 bedroom home for just $15,000. This same plot would have sold for $90,000 back in 2006!”
Orlando is still one of the most popular destinations in the States to visit with Disney remaining one of the most popular tourist destinations in the World. However, what makes Orlando one of the best places to buy now is that it saw one of the largest drop in prices during the crash, meaning that prices will increase dramatically over the next 5 years, and there is a consistently strong rental demand. This means now you can buy a property up to 70% under its peak values in 2006 ensuring massive gains.
“We can purchase a 2 bedroom condo in Orlando with up to a 70% discount from peak prices in 2006, currently for $59,000 (50% below construction costs) with a tenant in place generating between $6,000 – $8,000 a year. Expect prices to increase strongly over the next 5 years, as these deals disappear and the market returns to levels above the cost of construction.”
Miami still has unbelievable deals around, with the ability to purchase incredible homes which are already tenanted and will consistently achieve a secure rental income whist prices increase. This is the higher end of the market in Florida with heavy competition from South American investors, so finding a strong investment property is becoming increasingly difficult in a city that is seeing property values increase and that offers top tier rentals.
“We can pick up 3 bed luxury town homes in gated community at $102,900 (70% discount from 2006 peak values) with long term tenant generating $8000 per year rental income.”
For further information on the US market or any of these investment deals please visit www.qualitasproperty.com or call 0207 993 4192.
What is the procedure for proving a missing or lost Will?
By Alexa Payet, Partner at Bolt Burdon and listed specialist in the Certainty
Contentious Probate Hub & Area
When an individual dies it is necessary to search their paperwork to establish whether they made a Will and gather information regarding their estate. This is important because the personal representatives of the estate have a legal duty to distribute the estate correctly and could be held financially responsible for any mistakes made through any breach of duty.
Where a Will cannot be found but is believed to exist there are a number of steps that can be taken to help confirm its existence, including (but not limited to) the following:
- making enquiries of the deceased’s family and friends;
- making enquiries with the deceased’s professional advisors;
- instructing The National Will Register to undertake a Certainty Will Search.
Presumption of revocation
Where the original Will is known to have been in the testator’s possession before their death and cannot be located afterwards, there is a rebuttable presumption that the Will was destroyed by the testator with the intention of revoking it. If an order for the proof of a copy is to be obtained then this presumption must be rebutted.
Procedure for proving a copy Will
The procedure for proving a copy Will is set out in Rule 54 of the Non-Contentious Probate Rules 1987 (‘NCPR’).
The application is made to the Probate Registry at which the application for the grant will be made and the order can be made by a district judge or registrar.
The application must be supported by evidence in the form of an affidavit (although during the global pandemic the rules have been amended by the Non-Contentious Probate (Amendment) Rules 2020, SI 2020/1059, to provide for the use of witness statements as an alternative to affidavits).
The evidence must set out the grounds of the application and any available evidence that the applicant can adduce as to the Will’s existence after the death of the testator or, where there is no such evidence, the facts on which the applicant relies to rebut the presumption that the Will was destroyed by the testator during his/her life.
The applicant must ensure that the Court has the best available evidence of what happened to the testator’s Will in order that effect may be given to his/her testamentary wishes.
It is important to understand that the applicant does not need to demonstrate that the Will has been lost (it is the fact of its loss which gives rise to the presumption of revocation). Instead, the applicant must establish, by evidence, that the Will was not in fact revoked.
What is a Certainty Will Search and why is it necessary?
A Certainty Will Search searches for Wills that have been registered on The National Will Register (circa 8.7 million Will registrations in the system) and for Wills that have not yet been registered in geographically targeted areas where the deceased used to live and/or work. A Certainty Will Search is extremely important as it will be necessary to notify the probate registry of any persons who would be prejudiced by the grant if the copy Will is proved. If no such person exists then the registrar is more likely to grant the application. Alternatively, if such a person does exist then you should seek to obtain their written consent to the application. The written consents can then be lodged with (or following) your application.
Oil prices rise as investors look to higher demand seen in second half
By Shadia Nasralla
LONDON (Reuters) – Oil prices climbed on Tuesday as optimism that government stimulus will eventually lift global economic growth and oil demand trumped concerns that renewed COVID-19 pandemic lockdowns globally are cooling fuel consumption.
Brent crude futures for March rose 72 cents to $55.47 a barrel by 1152 GMT after slipping 35 cents in the previous session.
“The perception that any retracement will be quick as confidence in economic and oil demand recovery is unlikely to fade away,” said PVM analysts in a note.
U.S. West Texas Intermediate crude was at $52.65 a barrel, up 29 cents. There was no settlement on Monday as U.S. markets were closed for a public holiday. Front-month February WTI futures expire on Wednesday.
Investors are upbeat about demand in China, the world’s top crude oil importer, after data released on Monday showed its refinery output rose 3% to a new record in 2020.
China also avoided an economic contraction last year.
Investors are watching out for U.S. oil inventory data from the industry association API, due on Wednesday, the same day U.S. President-elect Biden’s inauguration speech will likely give details on the country’s $1.9 trillion aid package.
The International Energy Agency cut its outlook for oil demand in 2021, but pointed to a recovery in demand in the second half of the year to an annual average of 96.6 million barrels per day.
“Border closures, social distancing measures and shutdowns…will continue to constrain fuel demand until vaccines are more widely distributed, most likely only by the second half of the year,” it said in its monthly report.
(Additional reporting by Florence Tan, editing by Louise Heavens)
Can Thematic Investing provide investors with growth opportunities in uncertain times?
New whitepaper from CAMRADATA explores
CAMRADATA’s latest whitepaper on Thematic Investing, considers the role this type of investing can play in asset management and explores trends that can permeate society and traverse sectors. The whitepaper includes insights from guests who attended a virtual roundtable on Thematic Investing hosted by CAMRADATA in November, including representatives from CPR Asset Management, Sarasin & Partners, Impact Investing Institute, PwC, Quilter Cheviot, Scottish Widows and Stonehage Fleming.
Sean Thompson, Managing Director, CAMRADATA said, “In these seminal times, thematic investing has the potential to shape how the future unfolds. Yet running a successful thematic fund is no easy feat – it is a bit like navigating unchartered waters trying to identify the trends and the long-term opportunities.
“Trends such as AI and biotechnology are still in their relative early days, for example, and global economies are undergoing dramatic changes. But mapping out certain trends, identifying potential sustainable returns through a unifying thread that spans multiple sectors, could help future-proof investments. “Our roundtable guests considered current key themes, which themes worked well, and which have not and how thematic investors could identify trends with the potential to offer future growth.”
The guests named themes they currently like which included artificial intelligence, China, climate change, clean energy, automation, evolving consumption, ageing, digitalisation, water, waste management, biodiversity, and board diversity.
After discussing themes that have worked or not, the guests looked at total allocation to themed funds, and whether clients might be blinded by themes to the overall risk exposure in their portfolios.
Key takeaway points were:
- Themes have a habit of coming and going. One guest recognised that automation and robotics, for example, were cyclical, which means that investors will have to think carefully about entry-points.
- It was agreed that the commodities ‘super cycle’ of the 2000s came about with the economic development of China. Many commodities-based products found their way into mainstream investing, but this is unlikely to happen again.
- One guest was surprised by some of the themes that interested their customers; with their research showing that Board Diversity was almost the lowest-ranking concern among the ESG choices they listed.
- There was correlation between environmental impact and social benefits to investing. The theme that concerns the Impact Investing Institute, which is less than two years old, is improved measurement of such relationships.
- In terms of successful themes, one clear winner due to COVID had been digitalisation.
- One theme that has not done so well is the Ageing theme focused on older people travelling and enjoying experiences abroad later in life.
- One guest said their firm used themes for ideas generation, not as a shortcut for portfolio construction. They said themes lead to good ideas, but they then spend at least three months researching a stock, so that the best themes are represented by the best investments.
- The final point was that there are sensitivities for any global investor in allocating to themes, even the biggest one of all, Climate Change.
- But on a positive note, one guest added if all stakeholders can resolve their differences on definitions such as impact and ethical investing, then more capital will be readily transferred into opportunities.
The whitepaper also features two articles from the sponsors offering valuable additional insight. These are:
- CPR Asset Management: ‘Central Banks: leading the path towards Impact Investing’
- Sarasin & Partners: ‘Theme or fad? How to invest for the long term’
To download the Thematic Investing whitepaper, click here
For more information on CAMRADATA visit www.camradata.com
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