I knew the housing market was loosening up when one of the condo owners in my building said he'd sold his unit a few days ago - after it sat on the market for months. He immediately bought a full sized home - a vintage 1950s ranch that will get a gut rehab in a hurry in time for their new baby.
That glut of vacant repossessed homes is being addressed with a number of natural, market-driven resolutions. As these homes stop blocking the sales pipeline, we'll see more new construction and continued recovery. And we'll see cabinetry, closets and interior remodeling for the existing homes being sold or rented.
Waypoint, an Oakland, CA real estate firm, uses a high tech assessment tool to rapidly calculate the remodeling costs and potential return on investment for bringing vacant and repossessed homes up to ready-to-rent condition. Functions calculate the cost for kitchen cabinet and vanity upgrades or repairs, window and flooring modernization, and other mechanical and decorating factors.
This allows Waypoint to determine in a flash whether to move ahead with a purchase, and a rehab. Using this tool it can buy five to seven houses daily. With a January infusion of $250 million in investment capital from GI Capital Partners, Waypoint expects to buy 15,000 homes by the end of next year, with a value of $1 billion. (It had bought 1,000 homes prior to the investment.) The goal is to turn them to lease-to-own offerings.
Free smart phone apps from Zillow and Trulia allow regular buys to make rapid assessments in home purchases, too - factoring in whether a kitchen update is required or other work needs to be done.
Another real estate bright spot: foreign buyers, from China, Russia and other lands who are feasting on attractive U.S. housing prices. In the past two years alone, China nationals have acquired $8 billion in residential real estate in the U.S. (The Canadians have acquired $18 billion.) Wealthy Russian business owenrs are snapping up pricey real estate in major U.S. cities. That's good for balance of trade and helps resuscitate the home construction industry.
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