ARAMCO Report - The Mother of ALL Mortgage Blogs!

San Diego housing trend spells good news for entry-level buyers

Posted by Mehran Aram on Sun, Jun 9, 2019 @ 07:06 AM

A recent study from Realestate.com shows that the rate of home price appreciation in San Diego for dwellings in the lower third of prices is slowing. Homes in the bottom-third of the market appreciated at a rate of 2.2 percent annually as of April, that’s down significantly from the 10.4 percent price jump seen between 2017 and 2018. The slowdown in price growth for these entry level homes may make it easier for first-time buyers to get in the market.

Of course, entry-level homes in San Diego still come with a nearly half-million dollar price tag. Although the San Diego Housing Commission offers down payment assistance and that can potentially be coupled with programs like an FHA loan which allows buyers to purchase a home with as little as 3.5 percent down.

Meanwhile, conforming no-point 30-year fixed mortgage rates are averaging 3.875 percent and 15-year rates are near 3.375 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.

Topics: San Diego, real estate, Mortgage rates, San Diego Housing Market, San Diego Housing Commission, Housing Trends, San Diego Housing

Luxury home sales down for first time in 2 years

Posted by Mehran Aram on Sat, Feb 9, 2019 @ 05:02 AM

The sales volume of the priciest homes in the U.S. is falling but their price tags are rising. Real estate brokerage Redfin released data this week that showed a four percent decrease in sales of homes priced at $2 million or more during the fourth quarter of 2018. This is the first time in more than two years that home sales at that price point have declined on a year-over-year basis. Uncertainty on Wall Street may have been a factor for the decline according to Redfin.

“In the fourt quarter of 2018 there was a lot of economic uncertainty – the stock market was all over the place,” said Daryl Fairweather, Redfin’s chief economist. “This may have encouraged luxury sellers to hold on to their real estate assets and also caused luxury buyers to be reluctant to make major home purchases.”

Nonetheless, luxury home prices continue to rise. The average sale price for the top 5 percent most-expensive homes in the U.S. rose 4.7 percent in Q4 to an average of $1.772,000.

Today, conforming no-point 30-year fixed mortgage rates are averaging 4.375 percent, 15-year rates are near 3.75 percent and the 5-year ARM is averaging 4.25 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.

Topics: home sales, home prices, real estate, Mortgage rates, Luxury Homes, Real Estate Assets, Average Sales Price, Sales Price, Home Sales Volume

Most expensive home in U.S. sold for $238 million

Posted by Mehran Aram on Mon, Feb 4, 2019 @ 05:02 AM

The most expensive piece of real estate in the U.S. just sold for a staggering $238,000,000. No, it’s not a palatial estate in Beverly Hills. In fact, it’s not a home at all. It’s an apartment. Specifically, it’s a high-rise in New York City. The property at 220 Central Park South sold last month to hedge fund billionaire Ken Griffin.

The nearly 24,000 square foot apartment takes up the top several floors of a Manhattan tower overlooking central park. Not only was Griffin’s purchase the most expensive in U.S. history but it shattered the previous record by $100 million.

“Paper wealth doesn’t show; real estate does,” said Lawrence Yun, chief economist for the National Association of Realtors, describing the property as a showcase and an example of confidence in the long-term housing market. Yun predicts the apartment will double in value in 15-years.

Meanwhile, conforming no-point 30-year fixed mortgage rates are averaging 4.375 percent, 15-year rates are near 3.75 percent and the 5-year ARM is averaging 4.25 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.

Topics: real estate, Mortgage rates, Central Park, Most expensive home, Ken Griffin, New York Real Estate, Manhattan

Using equity to pay for home repairs

Posted by Mehran Aram on Wed, Nov 14, 2018 @ 21:11 PM

The real estate market continues to be a battlefield for some with rising rates and prices. As a result, more homeowners are choosing to fix up their current home rather than look for a new one. Making much needed repairs or adding upgrades are generally thought of as good investments. In a survey conducted by NerdWallet, more than 70 percent of homeowners said the best way to add value to their existing properties is through home improvement projects.

Data from the U.S. Census Bureau shows that Americans spent approximately $450 billion on their homes between 2015 and 2017.

Financing these projects is made a little easier by utilizing the equity built up in a home. Establishing a home equity line-of-credit or applying for a cash-out refinance can help fund a kitchen remodel, a leaky roof repair or any other array of projects that is on the homeowner to-do list.

Meanwhile, conforming no-point 30-year fixed mortgage rates are averaging 4.875 percent, 15-year rates are near 4.325 percent and the 5-year ARM is averaging 4.325 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.

Topics: real estate, homeowners, Mortgage rates, home owners, HELOC, home remodel, home repair, cash out refinance

Sellers dropping prices

Posted by The Aramco Group on Tue, Oct 9, 2018 @ 08:10 AM

In yet another sign that the housing market may be shifting to one that favors buyers, a Redfin report for September shows that the share of homes with price drops reached a record high. According to the online real estate site, more than one in four home-sellers dropped their prices last month, the highest level on record since Redfin began tracking this metric in 2010.

“After years of strong price growth and intense competition for homes, buyers are taking advantage of the market’s easing pressure by being selective about which homes to offer on and how high to bid,” said Taylor Marr, Redfin senior economist. “Many [sellers] are finding their homes are sitting on the market without much interest until they start reducing prices.”

The price drops across the housing market may be a relief to house hunters who are looking for a way to offset recent increases in mortgage rates. Today, conforming no-point 30-year fixed mortgage rates are averaging 4.75 percent, 15-year rates are near 4.25 percent and the 5-year ARM is averaging 4.15 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.

Topics: real estate, Mortgage rates, home price appreciation, Sellers

Real Estate’s Status in Light of the Current Economic Climate

Posted by The Aramco Group on Wed, Nov 1, 2017 @ 09:11 AM

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The economy is cyclic, always fluctuating between highs and lows — though the length of time varies for each high period and low period, some lasting much longer than others. Currently, the U.S. economy is sitting in an unusually long period that doesn’t match many of the expected rates for an average economic cycle; causing many industries unrest and difficulty predicting the future.

Some industries are immune to changes in the economy, but most — including the real estate industry — see changes based on the ups and downs of economic conditions.

Broadly speaking, when the economy is in a downturn, real estate is also down. The state of the economy is measured by several economic indicators, including employment figures, manufacturing levels, and the prices of goods.

Different Real Estate Sectors React Differently

The ups and downs of the economy don’t affect all types of real estate equally. For example, a Real Estate Investment Trust (REIT) with a large proportion of its assets invested in hotels will be hurt more by an economic slump than a REIT invested in commercial real estate.

Here’s why: In an economic downturn, potential hotel customers may decide to avoid staying at a hotel. When the hotel stops leasing rooms, its source of income stops. Compare this with commercial real estate, where a company typically holds a multi-year lease — one that’s not easily terminated just because the economy has changed — and you get an idea of how different types of real estate will react quite differently to changes in the economic landscape.

Understanding the Economic Cycle

Before we can go into detail about the effects the economy has on real estate, it’s important to understand the nature of the economy.

Stages of the Economic Cycle

The economic cycle is the continual fluctuation between periods of growth (expansion) and stagnation (contraction). This cycle can be broken down into four stages:

  • Expansion: This period is characterized by an increase in production and prices and low interest rates.
  • Peak: In the peak of the cycle, growth has reached its highest level. Unemployment is at (or near) zero, and there is an increase in inflationary pressure, causing an imbalance in the economy.
  • Contraction: This is a recession, characterized by a decline in economic activity for six months or more. During this stage, production and economic activity will slow down, and unemployment will increase.
  • Trough: In this period, the economy has reached its lowest point, and a recovery can begin. A trough marks the end of the recession. Typically, the trough stage lasts for a short period, before the expansion stage begins again.

Length of the Economic Cycle

Some of the factors used to determine the current stage of the cycle include:

  • Gross domestic product (GDP)
  • Interest rates
  • Employment levels
  • Consumer spending

The Economic Cycle is measured by the National Bureau of Economic Research (NBER). On average, it takes about 5 and a half years to run through the four stages of one economic cycle — although there have been extremes. One of the longest cycles the U.S. experienced lasted 10 years, from 1991 to 2001.

Where is the Cycle Now?

At the start of 2017, we are currently in the expansion stage of the cycle — and we have been since June 2009, making this particular cycle already longer than the usual cycle.

Since we don’t currently have inflation, this suggests that we are not yet at a peak. Although, we are seeing asset bubbles. Remember the real estate bubble prior to the 2008 recession? That was an asset bubble in housing prices. An asset bubble is created when the prices of an asset — like stocks, housing, or gold — become over-inflated. In the current year, we’re seeing asset bubbles in the U.S. dollar. Sometimes an asset bubble may suggest we are close to entering a peak stage, but in the current cycle, this is difficult to predict; the growth that has occurred during this expansion stage doesn’t match the rate of growth we’ve come to expect.

What Does this Mean for Real Estate?

The Great Recession of 2007 destroyed savings and home equity for many people — and we have not yet seen the growth normally expected in the aftermath of a recession. Increases in the Gross Domestic Product (GDP) have been weak, growing in the first quarter of this year by only 0.8%, according to Capital Gazette. For the past nine years, the average GDP growth has been about half of the expected growth following a recession. We are also seeing a low number of full-time jobs, and weak growth in wages. As a result, most Americans are not able to purchase a new home at this time.

In the type of stagnant economy we have been experiencing for years, people don’t move homes as often. In a weak economy, new jobs don’t pop up as frequently and employees don’t see as many promotions, all of which causes a drop in home sales. In addition, more people are working remotely; they don’t need to move because it doesn’t matter where they are located geographically. With all of these factors combined, fewer homes are being sold, and overall the real estate market is stagnating.

A quick look at Capital Gazette’s numbers relating to home sales serves to support this point:

  • Existing home sales have fallen flat, sitting between 5 and 5.5 million since January 2013. This is about the same number as between 1998 and 2001.
  • In 2005, at the height of the housing bubble, the rate of home sales was 8 million per year.
  • New home sales were hit particularly hard when the housing bubble burst, dropping from a national annual rate of about 1.2 million in 2005 to just 300,000 in 2011.
  • New home sales have been increasing — very slowly — since 2011. Sales increased sharply in April of 2016, to an annual rate of 619,000.
  • New home sales need to increase much more drastically in order to keep up with population growth and to supply housing to millennials who are outside the real estate market.

What the Future Holds

No one can say for sure what the future holds for the economy. The International Monetary Fund (IMF) has predicted downward GDP for most of the world for 2016-2017. Global political conflicts weaken economic stability. The following analysis comes from the Counselors of Real Estate (CRE):

  • There is the possibility of a global economic slowdown.
  • Declining exports could cause slower and/or smaller investment in ports and infrastructure, as well as declining real estate investment.
  • While the United States is still attractive to global investors, and investments are still robust, they may experience pressure from China, Europe, and the Middle East.
  • According to a study from the Asia Society and Rosen Consulting Group, a flood of Chinese buying of commercial and residential real estate in 2015 brought their total investments in five years to over $110 billion.

Topics: real estate, U.S. economy

Calling All Seniors: Ask Your Real Estate Agent These 9 Questions

Posted by The Aramco Group on Fri, Oct 20, 2017 @ 09:10 AM

An older couple talks with their real estate agent

Are you looking to finally buy a new home and begin a new chapter in life?

Moving house is an exciting time, but it also comes with many challenges from the constant changes within the world of technology and real estate. Working with an agent who understands your needs and concerns will help you get to grips with the process and make your move a lot easier. In order to find the right agent though, you’ve got to ask the right questions – which is why we’ve listed the top 9 things to check with any potential candidate.

Getting to Know Your Agent

These first 3 questions will give you a better idea of the agent’s background and will help you determine whether they are qualified enough to support you during this transition.

1. Can You Tell Me About Your Previous Experience?

First and foremost, your agent must know what they’re doing. With real estate, this typically comes with experience. Ask your agent how many years they’ve been in the industry and what their schedule is like. Is real estate their full-time job or really more of a hobby?

Included with experience should be their rate of success. Agents should tell you how many homes they have closed in the last year, the average number of days it takes to sell a home, and the average difference between the listing and closing price. Reputable agents should have no issue sharing this information, and will provide statistics from local multiple listing services (MLS) for comparison.

2. Do You Have Any Special Certifications?

Real estate, like other professions, offers areas of specialization that agents can pursue. Your candidate may be qualified as:

  • An Accredited Buyer’s Representative (ABR): These agents work with buyer-clients along the entire process.
  • A Certified Real Estate Brokerage Manager (CRB): These agents have completed extensive educational and professional requirements. The CRB certification is one of the most respected in the industry.
  • A Seniors Real Estate Specialist (SRES): These agents have completed real estate training geared toward serving clients over 50 years of age.

While missing extra certifications shouldn’t be a deal-breaker when choosing an agent, they can be helpful if you’re looking for someone who caters more specifically to your requirements.

3. Do You Have Any References?

Real estate is a people-facing business, and the best agents should have a list of previous clients. Typically you should ask for no less than three references, and the more recent they are, the better. When speaking with references, be sure to find out:

  • If they had a pleasant experience working with the agent
  • If they felt their needs were met
  • If they would work with the agent again

Knowing Your Agent’s Process

Understanding how your agent works is important when it involves such a life-changing decision. The following 4 questions will demonstrate whether you and your agent would be a good fit during the process.

4. What is Your Marketing Strategy?

If you’re looking to find a new home, you need to ask your agent about their market plan and strategy. Specifically, they should tell you their initial search strategy, how many homes you should expect to view, and how much buyer competition there is in the area.

Hearing your agent’s selling strategy can also help you gauge their experience. Today’s marketing involves so much more than word-of-mouth and lawn signs. Do they use social media platforms like Facebook? What about email campaigns or direct mail flyers?

5. How Do You Communicate With Clients?

Agents should understand that every client is different, and should therefore adjust their communication practices accordingly. This is particularly important if you prefer phone calls and voice messages over newer communication methods like texts.

Once communication methods are decided, you need to lay the groundwork on protocol. What hours are best for you? Are certain contact numbers better at different times? Even if you do prefer emails and texts, you need to establish timeframes as to when to expect replies.

6. Are Our Devices Compatible with Each Other?

Every piece of technology, from smartphones and tablets to laptops, is different. Yet understanding the difference between Apple and Android products is beside the point: you need to ask your agent if they’ll check to make sure your devices are compatible with each other. This is especially important later in the buying process, which brings us to our next question.

7. Can You Walk Me Through Using Necessary Technology?

Technology has changed the way people do business, and real estate is no exception. Document signing, for example, is oftentimes done online, though some may also prefer using paper. Either way, your agent should be open to using whatever methods you feel most comfortable with.

In some cases, using new technology is unavoidable and agents may be required to use paperless methods by their agency. If this is the case, make sure they are willing to teach you how to use the required programs.

Offers and Closing

Once you’ve found the house of your dreams or are coming close to selling your home, it’s a crucial time for your agent to act. Knowing how they deal with this part of the process is essential to your confidence in their skills. Ask these 2 questions and you’ll see how experienced, considerate, and transparent they are.

8. How Do You Handle Offers?

While buyers typically present their own offers, some agents may want to present on their client’s behalf. It’s important to know early on how your agent expects to move forward.

Equally important is understanding how your agent handles multiple offers. Will your agent inform you if there are other offers on the table and how will this be dealt with? You need to feel that your agent has your best interests in mind and that they aren’t helping other clients interested in the same home without you knowing.

9. Can You Recommend Service Providers?

Closing a sale is only one part of buying or selling your home. Your real estate agent should be able to direct you to professionals in other areas involved in the real-estate process. If you’re buying a home, professionals you should be referred to include:

  • Mortgage brokers
  • Loan officers
  • Home inspectors
  • Home appraisers
  • Insurance agents
  • Title companies

An added benefit to asking for recommendations is that you can further gauge an agent’s experience and network. Also be sure to ask whether the agent has any affiliations with the companies they recommend, as this could mean the agent or agency receives compensation for referrals, resulting in you paying a premium to make up the difference.

The Right Agent is Out There

Moving isn’t always the easiest of times, but that doesn’t have to affect your excitement. By asking these 9 questions, you can decide much more easily if an agent is a good fit for your needs. The right agent will keep you well informed along every step of the process, all while using the technology and communication methods that you prefer.

Topics: real estate

12 Cities With Booming Real Estate Markets

Posted by The Aramco Group on Wed, Oct 11, 2017 @ 09:10 AM

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Real estate is making a comeback. At least, that’s how it feels in some areas of the United States. People are flocking west and south, whether it be to the sunny beaches of Florida or the mountain landscapes of Colorado. Perhaps you’ve considered making a similar change.

Whether you’re looking to relocate for work, be closer to family, or just experience something new, there’s sure to be a booming real estate market in a city that’s right for you. So which markets are booming this year? Let’s read on to find out.

Jacksonville, FL

Real Estate markets across the Sunshine State are expanding. Jacksonville is no exception: with a 2016 job growth rate of 3.8%, people from across the nation are flocking for new work opportunities. Let’s not forget Jacksonville has the same amenities offered in larger cities, including sports teams (go Jaguars!) and universities. Couple this with beaches to the East and sunny weather, and it’s no wonder Jacksonville has grown in popularity.

Cape Coral–Fort Myers, FL

Another sweet spot in Florida is Cape Coral-Fort Myers, located on the Gulf Coast. Vacancy rates have dropped over the past year, thanks in part to its job growth rate stemming from the hospitality and real estate industries. Baseball fans are also in luck: Fort Myers is home to the Boston Red Sox and Minnesota Twins’ spring training sites.

Nashville, TN

The capital of the Volunteer State was predicted by Zillow to be the hottest housing market in 2017, with a forecasted home value appreciation of 4.3%. Employment opportunities are available in the strong healthcare industry, which has contributed to the city’s overall growth. While country music is a mainstay in the Nashville’s culture, the city has so much more to offer. Residents can also enjoy a rich, diverse music scene, and independent restaurant options.

Knoxville, TN

This Tennessee city is expected to see a 4.4% increase in home value this year, and it’s not hard to see why. Knoxville has a diverse culture and a rich music scene. For those looking to enjoy the outdoors, The Cumberland Gap and the Smoky Mountains are just 90-minute drives away. Sports fans will also enjoy the local teams and the University of Tennessee Volunteers. Best of all, Knoxville has a lower cost-of-living compared to other southern cities like Nashville and Atlanta.

Seattle, WA

At 5.6%, this Washington State city has the nation’s largest expected home value growth rate. Unlike other cities mentioned on this list, however, Seattle’s cost of living is expected to rise in the near future. This is due to tech companies like Amazon growing and constantly hiring new employees. Nevertheless, Seattle still boasts beautiful scenery and a laid-back attitude that makes for a great living situation. Better yet, Seattle gets less annual rainfall and fewer rainy days than cities along the Great Lakes.

Portland, OR

Yes, Portland is known for its hipster vibes, but that’s no reason to ignore this booming city. Zillow projects home values to increase 5.2%. The city features lush, green parks and is within a few hours of the Pacific Ocean and Mt. Hood National Forest. Portland is perhaps most known for it’s “Keep Portland Weird” mentality, and is therefore home to independent breweries, restaurants, and shops. Though down from 2016’s whopping 15% growth rate, Portland still remains of the most popular cities in the nation.

Sacramento, CA

The Golden State’s capital is growing in popularity, with an expected 4.8% rise in home value this year. Similar to California’s large cities of San Francisco and Los Angeles, Sacramento is known for its rich culture and diversity. Yet a lower cost of living makes Sacremento a perfect spot for residents looking to keep their spending in check. Let’s not forget the 28-acre Old Sacramento State Historic Park, simply known as “Old Sacramento”, which is now a national landmark.

Denver, CO

The capital of Colorado has become one of the fastest-growing cities in the nation, contributing to its projected 3.6% increase in home values this year. Don’t let its location fool you: Denver is home to beautiful year-round weather. Close proximity to the Rocky Mountains allows for residents to take up snowboarding and skiing in the winter, and hiking and camping in the summer. Denver is also a bustling city, complete with distinct neighborhoods that feature their own personalities. It’s no wonder U.S. News ranked Denver the second best place to live in the nation!

Colorado Springs, CO

About 90 minutes south of Denver is another Colorado hotspot: Colorado Springs. Similar to Denver, this city enjoys year-round mild weather and close proximity to outdoor activities (including Pikes Peak). Yet Colorado Springs also enjoys a lower cost of living, allowing residents to save a bit more. The city itself is home to beautiful parks, local entertainment options, and great schools. Complete with easy drives to Denver and ski resorts like Aspen, it’s easy to see the appeal of Colorado Springs.

Ogden, UT

Forty miles north of Salt Lake City is the mid-size city of Ogden. Zillow estimates this town’s home value to rise by 4.7%. Similar to Denver and Colorado Springs, Ogden features easy accessibility to the outdoors, making it a great location for mountain bikers, skiers, and snowboarders. Ogden also features a low unemployment rate (2.9%) coupled with growing income (1%). New families should take a second glance at Ogden, too, as Forbes named it one of the best cities for raising a family.

San Antonio, TX

Residents of this Texas city enjoy a low cost of living compared to other cities in the state, thanks in part to Joint Base San Antonio. Employment opportunities are also available from large companies like USAA and Toyota. What’s more, new and established residents alike can always take advantage of the rich history and diverse culture this city has to offer.

Grand Rapids, MI

Located on the western side of the state, Grand Rapids enjoyed steady job growth (2.7%) in 2016 across various industries from education to manufacturing. Residents of this growing city take advantage of excellent craft breweries and the local art scene. Despite being the second-largest metro area in the state (after Detroit), Grand Rapids has an easy-going charm that’s reminiscent of the Midwest at large.

With a wide variety of climates, landscapes, and entertainment options to choose from in this list of booming real estate markets, where will you decide to live and work?

Topics: real estate

ARAMCO Report - Monday May 11, 2015

Posted by The Aramco Group on Mon, May 11, 2015 @ 13:05 PM

San Diego’s vacancy rate must be incredibly low

Residential rents have gone up, renters will pay more, and—paradoxically—investments in real estate are down. How? The vacancy rate must be very low. The San Diego County Apartment Association (SDCAA) will conduct its next survey in June.

Rental Rates are up 5.4 percent in San Diego and nationally compared to one year before according to Zillow.com and the National Association of Realtors, respectively. In San Diego that means that rent in March 2015 was on average $2,339/month up from $2,218/ month in March 2014. 

At the same time, Rent.com released a survey during the week of May 4, 2015 that 55 percent of millennials would pay $150 more per month for their rent. That would equal to another 6.4 percent increase to the current prices cited above for San Diego.

However, the National Association of Realtors reports that the number of real estate sales made to investors is down to 14 percent in April 2015 from 20 percent at the same time last year.

Potential homebuyers looking for rest from the rental market will find conforming no point 30-year fixed mortgage rates average 3.875 meanwhile 15-year rates are closer to 3.125 percent.

For more information on a home purchase, refinance, or a reverse mortgage, visit our website at Aramco.Biz or call me at (877) 700-0942. This is Mehran Aram with today's ARAMCO Report.

Ask Mehran Aram

Topics: real estate, investing, 30 year fixed rates, National Association of Realtors, Vacancy Rate, Investors, Rent, Renters

ARAMCO Report - Tuesday April 21, 2015

Posted by The Aramco Group on Tue, Apr 21, 2015 @ 15:04 PM

The Big, Rich and Local of Real Estate investment

Institutional investors—such as pension funds, and major endowments—are recently investing more in private equity funds that have large real estate portfolios. Funds over $1 billion with strong track records through the recession are getting more than 64% of the capital raised so far this year according to data tracker Preqin.

Larry Fink, CEO at BlackRock—a hedge fund—claimed on April 20th that real estate is a better investment than gold for wealthy individuals. This investment strategy is not viable to many but the wealthiest, and location is hugely important to his argument. The Knight Frank Luxury investment index tracks the historical performance of luxury items used for investment, and while prime international real estate locations like London have appreciated more than gold has, local San Diego real estate conditions have not.

San Diego real estate is up 25 percent since April 2010, but is down 9.2 percent compared to prices during the real estate bubble in April 2005.

Conforming no point 30-year fixed mortgage rates average 3.75 percent while 15-year rates average 3.0 percent.

For more information on a home purchase, refinance, or a reverse mortgage, visit our website at Aramco.Biz or call me at (877) 700-0942. This is Mehran Aram with today's ARAMCO Report.

Ask Mehran Aram

Topics: San Diego, real estate, investment, institutional investors, Housing Market, 30 year fixed rates, Housing, gold, luxury