Commercial Investment Real Estate is the magazine of the CCIM Institute, the leading provider of commercial real estate education. CIRE covers market trends, current developments, and business strategies within the commercial real estate field.
Issue link: http://cire.epubxp.com/i/92705
"When Warren Buffett and Sam Zell comment about distressed single-family homes being one of the best investment opportunities in the market, people tend to listen," says Ken Wimberley, CCIM, managing director of Noble Crest Property Group/KW Commercial in Arlington, Texas. "We are seeing strong sales as a result of investor purchases for single- family residential homes." Like most CCIMs, Wimberley doesn't work in the residential market, but as a KW Commercial affi liate, he has a strong rela- tionship with its residential division and keeps abreast of housing trends and how they aff ect the commercial market. One of the strongest trends to come out of the residential market this year is the inves- tor interest in single-family homes. Home sales are up 6 percent this year, and about 30 percent of all sales are cash, says Kevin J. T orpe, chief economist for Cassidy Turley, meaning that some investors are parking their money in residential. "Investors have been very active in the Twin Cities buying single-family homes as investments," says Herb Tousley, CCIM, director of the Shenehon Real Estate Center at the University of St. T omas in Minne- apolis. "Many of these sales have been dis- tressed properties that are renovated and converted into rental properties. Low prices have made these properties very attractive as investments and many of these sales have been cash sales. T e rental market is very strong and these investors are achieving favorable rents." CCIM.com From local mom-and-pop investors to private equity funds such as Colony Capi- tal, which owns about 3,600 single-family homes, investors have turned to residential and for those who got in early, it's begin- ning to pay off: In September, existing home sale prices rose for the seventh con- secutive month year over year, according to the National Association of Realtors. T at number of back-to-back monthly increases hasn't happened since the height of the hous- ing boom from November 2005 to May 2006, says Lawrence Yun, NAR's chief economist. Even Las Vegas, hit very hard by the housing collapse in 2007, has seen a dra- matic turnaround, according to Soozi Jones Walker, CCIM, SIOR, with Commercial Executives. "T is is a very strong market," she says. "Investors from all over the world have been purchasing homes for long- and short-term investments. T e buy-and-fl ip market is strong and due to short inventory, multiple off ers are back." Walker says the housing inventory has gone from 24,000 to 4,000, due in part to Nevada's anti-foreclosure laws that restrict banks from foreclosing on properties. T e limited inventory has pushed up housing prices, according to the Greater Las Vegas Association of Realtors. In September, the price of Las Vegas single-family homes was up 13.5 percent from a year ago, and condo and townhome prices rose 24.3 percent YOY. Like many CCIMs, Walker has her roots in residential, and although her firm is strictly commercial now, she understands the relationship between the two markets. November | December | 2012 23 Barry Blackman/Corbis