Is the Real Estate Market Going to Get Cold During Summer 2016?

There is an interesting look at the current state of the US real estate market by Andrew Hecht on seekingalpha.com. He writes about some concerns he has about the current state of today's market.

Markets have recovered since 2008 as central banks around the world lowered interest rates and policies of quantitative easing dealt with the effects of the financial meltdown. Today, we are still feeling the consequences of the events that transpired eight years ago; interest rates remain at or close to historical lows. 

Many of the issues that caused the housing crisis in the U.S. have been addressed by increased regulation, particularly on the lending side. While before 2008, anyone with a pulse could get a mortgage, today credit is tight, and only the most qualified borrowers can finance a home. 

However, the low interest rate environment and improving economy has caused real estate values to come storming back and now they are approaching highs once again. There are some signs that housing could be overheating as the Fed is now in a tightening cycle that began with the first rate hike in nine years last December.

If you are not familiar with Andrew Hecht, he is the Chief Market Strategist at Carden Capital and Carden Futures. He has an interesting history with the real estate market...

In 2003, I wrote a provisional patent for the development of a trading market for real estate derivatives...The rationale behind the product was that it would provide a method for hedging real estate values for those with large and small exposures...They all told me the same thing in 2003; real estate never goes down in value.

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Crowdfunding Continues to Change Real Estate Investing By Empowering Investment

Great insights into the changes crowdfunding is bringing to real estate...

The Power of Crowdfunding in Real Estate

Within a decade, they expect online fundraising to become not just accepted, but ubiquitous throughout the industry, as part of a multi-channel approach that will include both traditional sources such as banks and private equity firms, and a direct-to-investor channel.

 “What we’re really talking about is the modernization of how you fund commercial real estate,” said Darren Powderly, co-founder of CrowdStreet, a three-year-old Portland, Oregon–based firm that provides an online platform for real estate developers and managers to raise capital from investors. “Ten years from now, it’ll be a no-brainer. People will be saying, ‘Of course, I raise money online.’ ” 

In some ways, CrowdStreet exemplifies the conceptual evolution of real estate crowdfunding. The venture capital–funded startup’s main thrust has been building a marketplace in which institutional-quality real estate investments—both debt and equity—are offered to a database of accredited investors. In that fashion, CrowdStreet has done 40 deals with an average raise of about $850,000, Powderly said. “We could have done 400 deals, but our marketplace is highly curated,” he said. Last year, CrowdStreet debuted a new product called Sponsor Direct, a “white label”—that is, rebrandable—version of its software that allows developers to do crowdfunding on their own websites as well.

According to GeekWire, more than 20 real estate firms already are using it. “Clearly, technology is dis-intermediating, disrupting,” Powderly said. “This is happening in every industry. It’s shocking that it isn’t happening even more rapidly in our industry, commercial real estate. But it is happening.” Panel moderator Martin S. Burger, chief executive of New York–based real estate development, investment, and management firm Silverstein Properties, said that one of crowdfunding’s advantages is the potential ease of providing investors with documentation.

As an example, he cited the platform developed by Fundrise, which allows investors to pull up information such as construction budgets and commitment letters for projects. “You could touch the transaction,” Burger said.

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Crowdfunding Real Estate Platforms Continue to Evolve With Propellr Becoming Broker-Dealer

Crowdfunded real estate platforms continue to evolve. As Crowdfund Insider is reporting, Propellr Becomes a Broker Dealer Raises $1.6 Million in Convertible Debt.

Propellr, an accredited investment crowdfunding platform focusing on the real estate sector, has now registered as a broker-dealer. Simultaneously, via a small group of existing investors, Propellr has raised $1.6 million in convertible debt. Proceeds from the new funding will be utilized for business expansion including compliance and engineering.... Propellr, while having focused solely on real estate, said it intends to broaden its approach and is in the “process of rolling out multiple innovative alternative asset classes previously limited to a select few.”

Is New Jersey Ripe for Real Estate Investing?

The article takes a local look at how the Southern New Jersey real estate market is still feeling the impact from the real estate meltdown.

From Philly.com: 

Still No. 1: New Jersey's supply of 'zombie' homes The number of U.S. houses left vacant because of foreclosure was down at the start of the second quarter compared with the same period last year. But New Jersey's share of these "zombies" continues to be tops in the nation, real estate information provider RealtyTrac said Thursday.

There was an interesting takeaway from the RealtyTrac report, "Investment Properties Account for 75 Percent of all Vacant Properties Nationwide." For that reason it is important to carefully consider any real estate investments in 2016.