Apartment Building, Commercial and Residential Real Estate state of the market video from Tom Barrack of Colony.

Tom Barrack was on CNBC last week to talk about real estate with the traders. Great TB quote to open the show: “It’s always great to be the slowest guy on Fast Money”. There’s more wisdom in that statement than any of the show’s regulars understood.

A couple bullet points but definitely worth watching the video. The link on the image below goes to the Colony website where they edited the three segments together (commercial free too):

  • Housing [of all types] is the best opportunity. Today there might be a Fed bubble but there isn’t a housing bubble.
  • The rise in interest rates while not big and still low historically speaking, will hit entry level housing. 100bp (basis point, where 100bp = 1%) rise in interest rates will cost a borrower an extra $150+/- a month on their mortgage payment for a $200,000 home. That will keep more people renting.
Apartment Building Investment and single family
Click on the image to go to the Colony website video (no commercials)

The secret about home ‘affordability’ they don’t want you to know- Good for Apartment Building Investment

Home prices have crashed. Interest rates are at all-time lows. If you’re in the market to buy, homes are more affordable than they’ve been in years. Or are they?

From a WSJ report posted by Motley Fool:

The median down payment in nine major U.S. cities rose to 22% last year on properties purchased through conventional mortgages. … That percentage doubled in three years and represents the highest median down payment since the data were first tracked in 1997.

The average down payment for a US home is now 20%

Up 22%! yowza! More from MF:

The average home in America now sells for $272,000, so a 20% down payment totals about $55,000. The median household net worth, meanwhile, was $67,000 in 2010, suggesting the average homeowner needs to tie up a tremendous amount of their net worth in a down payment. Can you really Continue reading The secret about home ‘affordability’ they don’t want you to know- Good for Apartment Building Investment