MHN Blog

Will A Soft Dollar And Strong Foreign Interest Save The Housing Market?

The dollar is weak--it fell against the euro by the biggest amount since March last week due in part to increased credit market issues and oil costs--which means foreigners can get big deals on U.S. products, vacations and property.

In April, the National Association of Realtors said a U.S. home could be bought by a foreigner for an average discount of 30 percent, according to USA Today.

The foreign-buyer trend isn't exactly a new one:

• The euro been stronger than the dollar lately; but the foreign buyer wave dates back to the housing boom. According to the NAR 2007 Profile of International Home Buying Activity, non-U.S. buyers were heavily interested in the market during the 2000 to 2005 real estate boom.

• Between April 2006 and April 2007, 30 percent of non-U.S. buyers were European, a NAR survey found.

• The results were especially prevalent in vacation areas. In spring 2007, 7.3 percent of all Florida home sales were to foreign buyers, the NAR said.

Yet now, in some areas-- such as beach and ski towns, which had previously shown significant second-home buyer appeal--foreign investment isn't as enthusiastic, according to the New York Times.

They're looking--according to agents, more overseas buyers have been physically seeing beach and ski properties this year.

But because of the shaky U.S. economy and widely publicized housing slump, they're not eager to actually buy in pricey places like East Hampton and Beverly Hills.

However, even though there's no official record of how many people from outside the U.S. bought second homes here, economists feel foreign buyers are helping to give the overall market a boost.

It may not be as big as sellers had hoped for, but it's a boost nonetheless.

"The circumstantial evidence strongly argues that global investors are indeed supporting these second-home markets," chief Moody’s Economy.com economist Mark Zandi told the Times.

• According to the National Association of Realtors, one-third of the country's agents worked with one or more international buyers last year.

• Mexico, Britain, Canada, India and China's residents were the most interested, MSNBC.com reported in early June.

The trend is becoming so prevalent, according to MSNBC, that some agents are setting up satellite offices in places like South Korea and Dubai.

For foreign investors, condos--which are a fairly low-maintenance second home--in American cities seem to have a huge draw.

Perhaps that's why one Maui-based Keller Williams agent told MSNBC that 90 percent of the crowds at his recent open houses have been Canadian; or why developers of Dallas' 120-unit Museum Tower luxury condo project plan to "actively market ... in Monterrey and Mexico City."

Just look at New York City. For months, some areas escaped the national housing decline--eight-figure apartments are still selling well in Manhattan, according to the Washington Post.

And, not surprisingly, foreign investment is still strong in the city. It has helped keep Manhattan apartment prices at astronomically high levels, according to the Times.

Housing isn't the only market that is benefiting from overseas intervention in New York.

A sales clerk at the NBA store at 52nd and Fifth in Manhattan recently told the Washington Post that two-thirds to three-quarters of the store's customers were foreigners. "We'd be dead without them," another store manager confessed.

Like a pair of new, high-tech sneakers, New York real estate is, for some, a pleasure purchase.

A resident from London or France may not need a summer condo in New York--but if they've ever wanted it, now is certainly the time to buy. Home prices are down; and the exchange rate is in their favor.

The question is: Aside from setting up an office overseas--which realistically isn't in every developer or real estate agent's budget--how do we market to this thriving group of buyers? In this case, word of mouth probably just won't cut it.

What would you suggest?

As Gas Costs Rise, Buyers Look At Downtown Living

Urban multifamily developers, start your engines: Demand is about to increase, and we have the astronomically high gas prices to thank.

Americans are looking at homebuying in a new light, according to an Associated Press article reprinted in the San Jose Mercury News today. They don't want to commute--partially because of the time it takes, but more often, because it's just getting too expensive to drive far.

Gas has risen by more than a dollar this year; this week, it hit a new high of $4.08 per gallon on Monday.

As a result, Americans are driving less. Compared to April 2007, we drove 1.4 billion fewer highway miles this April, and 400 million fewer miles than we drove a year ago in March, according to the Transportation Department.

Prospective buyers are well aware of how expensive gas is. A recent survey of 900 Coldwell Banker agents found that 96 percent cited rising gas prices as a big client concern.  

And that's giving urban living a big boost.

Eighty-one percent of the agents in the Coldwell Banker survey said clients mentioned minimizing their work commute as a reason for being interested in urban living.

That's giving a boost to homes near "urban centers and subway, train and bus stops," AP says, which "are often selling faster and at better prices than those in the distant suburbs."

That's not necessarily true for all downtown areas. Smaller cities and burbs that are too far to offer a decent commute are suffering. An article in today's Boston Globe touches on the struggle cities like Franklin, Mass.--which is located more than 40 miles from Boston--are having to revitalize their downtown areas.

Mixed-use developments may offer Franklin residents the same quality of life and convenience a mixed-use development would offer a resident in a larger city like Boston--but it's also going to offer them a hefty drive of an hour or more to commute if they're working there.

This week, the Commerce Department said that multifamily starts fell 8 percent in May. However, multifamily permits increased 3.9 percent. Could urban demand be responsible for the rise?

It's possible. In large U.S. cities, the urban housing market has traditonaly been dominated by multifamily structures because of space constraints and design. It just makes sense: With a higher population, you need a bigger amount of smaller homes.

We know overall housing demand has been rocky for some time. But if we know that demand for one sector--urban multifamily properties--is beginning to vastly increase, how should the industry prepare?

Should we be planning more rental properties? Increasing the offerings in mixed-use condo projects--adding restaurants, coffee shops, gyms and other neighborhood-enhancing items that will let residents walk where they need to--to increase their draw?

Should the design of new downtown multifamily structures reflect some of the convenience suburbanites are used to--such as ample parking and open space?

Or will the location alone--and shorter or nonexistent commute--be enough to lure residents from the suburbs?

The Condo Market's Challenge: Buy or Borrow?

As financing becomes harder to get, potential buyers may instead choose to rent--which, according to some reports, is killing the condo market in some large cities.

An article in Tuesday's Atlanta Journal-Constitution about the trend declared the city's condo market all but dead.

Given that last month, multifamily housing was cited as the reason residential building rose in May, the rapid decline of condo sales and construction--in a city as large as Atlanta--is somewhat of a shock.

But it turns out Atlanta's entire multifamily market isn't declining. Only its for-sale sector is.

Renting Rises

The problem? Financial backing for condos has become nearly impossible to get, according to local developers.

Luxury rental apartment financing, however, is a different story.

• In Atlanta's metro area, hundreds of units are in the works to fulfill the city's growing rental need.

• "The new darling child of multifamily residential is rental," local developer Franco DeFoor told the Journal-Constitution.

• Developers can't get funding to build condos; buyers also can't get funding to buy them. But apartment project funding is widely available.

Still, it's an interesting shift for a city that had a condo boom at the beginning of the decade. As urban living became more popular, young professionals and retirees flocked downtown to condos to be able to walk to entertainment and work.

Could Condos Collapse In Your City?

Atlanta may have had a unique period of condo market growth, but the current condo decline isn't specific to Atlanta.

The rental market is taking over in cities like Orlando, too. Just this week a developer in the city got approved to change the condo portion of its mixed-use project into rental units.

Jon Wood, vice president of the Houston-based The Morgan Group, told the Orlando Business Journal that its 200 planned condo units are transforming into 202 apartments because financing was impossible to get for condos.

Condos comprised 25 percent of multifamily housing starts in the first quarter of 2008; in 2006, they were more than 50 percent, according to the National Multi-Housing Council.

A Need--But Not A Necessity

We've discussed how the declining housing market and rising foreclosure rate are likely to give the rental market a boost. And a recent National Apartment Association survey found 69 percent of renters have no plans to buy a home in the next year.

We'll need apartments--that's clear. But it's surprising that financing appears to be completely drying up for condo projects.

After all, some buyers will still want condo units: Young professionals, urban dwellers, empty-nesters looking to downsize.

And granted, some markets--like Atlanta--are probably suffering from an oversupply built by zealous developers during the housing boom, but does that really mean lenders should label condos as high-risk investments?

Some of the high-end apartments mentioned in the Journal-Constitution come with rents of $1,500 to $2,000. That's mortgage money in most cities!

True, financing isn't easy to get these days, which may block many buyers from buying--scraping together a down payment in today's economy isn't easy, either.

But if they can afford $2,000 in rent, they can afford monthly mortgage payments. And before long, won't they start to think that might be a more economical, long-term financial choice?

Then what will we do with all these luxury apartments that are being built--turn them into condos?

Have you found condo projects are being scrapped or converted in your area? Do you have a project that's switched over from for-sale to rental?

We want to hear about it. Post about your experience below.

Focusing on Green Building Means Encouraging Green Living, Too

Last Sunday, I had brunch at my friend's somewhat-new apartment--she moved in a couple of months ago--and although the building may be older, her unit is cutting-edge green from back to front.

I've known for years that Michelle preferred locally grown, organic produce; but this place takes that mentality to a whole new level.

Although she doesn't have a car, Michelle has made two trips to recycling centers to drop off bottles and cans since moving in. And, even more amazingly, there is a worm bin on the back porch that is used to turn fruit and vegetable waste into compost, a process which I've since learned is called vermicomposting (and the EPA says is great for apartment-dwellers).

In contrast, my building--which is significantly larger--posted an announcement last week in the elevators that although the board is looking into other options, for now, all recycling can be placed in blue bags and thrown in with the rest of the trash.

The garbagemen, we're told, will take those bags to a separate site.

Riiiight.

"Do not do that," Michelle said, laughing, as she served up our omelets. "Seriously. That's a total waste of time."

I have to admit, I think she's right.

Not just because I'm a doubting person by nature--but because the city recently decided to end a similar program, introduced by Mayor Richard Daley in 1995, in which citizens were told to place recyclables in blue bags and--you guessed it--assume they'd find their way to the proper recycling centers.

Not surprisingly, many of them didn't. According to the Chicago Tribune, the city actually kept just 8 percent of waste from landfills--not the 25 percent officials claimed.

Which is why I don't believe my cans are going to end up anywhere but a dump, no matter what color bag I toss them out in.

In our recent annual condo board meeting, we were told that the reason our mid-rise building didn't have a recycling program was because there is an extra charge for a truck to come pick up the recyclables.

So am I supposed to assume that the current waste management guys, out of the goodness of their heart, will take it somewhere else for free? Probably not.

The blue bag program, in fact, was thought to be so infective that local environmentalists aren't even upset that, because of its phasing-out process, the city will be without any recycling for a few years until the new system--which involves blue bins--begins.

"It's taken 16 years," a recent post on the Chicago Recycling Coalition's homepage said, "but the City of Chicago announced on May 2nd the end of the Blue Bag program and its replacement with the Blue Cart program, just as the Chicago Recycling Coalition has been advocating."

Until I receive my blue recycling bin, I'm told I should drop my trash off at one of the city's 16 recycling drop-off centers.

And I should. But realistically, we all know that the harder you make it for people to recycle, the less likely they are to do it. Which is unfortunate, because larger buildings like mine could really have an effect if they did recycle.

But it's hard. Our building doesn't have balconies or fire escapes, so there's no outdoor space to store old cans or utilize Michelle's worm box; and that garbage chute down the hall is pretty tempting when the garbage gets stinky.

So what gives, Chicago? Everybody's green. Best Buy is now taking old computers and electronics for free.

Sam's Club is letting members exchange used digital cameras, laptops, MP3 players and printers for gift cards ranging from $1 to $1000, CNNMoney.com reported Wednesday.

And Mayor Daley--whom I feel is a generally good mayor--gets the importance of being green. This is a man who has said that he wants Chicago to be the greenest city in the U.S.--and planted 500,000 trees to prove it, according to the New York Times.

Granted, he was talking about building--the city has focused on growing green construction and wind and solar energies, according to a 2006 Time article--but still. How many cities have a City Hall with a green roof? (We do.)

For a city of this size to have such a fragmented recycling program it's a shame. OK, so the blue bag program didn't work--but why isn't the city offering financial incentives for buildings like mine to recycle? Think of the impact our multifamily structures could have!

According to the Trib, only a third of Chicago's 600,000 homes with city garbage service will have the new blue bins by the end of the year. That leaves a lot of citizens without easy recycling options.

Which is--pun intended--really a huge waste.

A New Resident Who Could Cause Big Problems (Or Help Buildings Run Smoothly)

On Sunday, the New York Times ran an article about neighborhood-based social networking Web sites and their impact on the rental/multifamily community.

This isn't a new phenomenon--shortly after moving into my condo building nearly three years ago, I was told we had a message board-based Web site for unit owners, which I promptly joined--but the article got me wondering about the long-term success and potential impact of such sites.

One of the online communities listed in the article--LifeAt--currently only has five Chicago properties on its roster. I don't live in any of them.

So I checked out another one of the sites mentioned in the article, MeetTheNeighbors.org. My area has added a number of large rental and condo buildings to its roster in the past two years, but I was surprised to find my neighborhood was not only low on members--it didn't exist.

So I went through the site's brief registration process, created an entry for the area and waited. Surely, I thought, two days after a mention in a major newspaper, people would--as I had--be flocking to the site to check it out. Right?

Not really. As of today, the neighborhood has just one registered member--me.

In fact, the only residents I could find anywhere close didn't seem to be interacting as much for general neighborhood betterment but for other purposes. Two posted what looked like online dating ads. One woman's profile contained little information except for a plug for her sister's dogwalking service.

Where were the events I was told the site listed? Or the community action it was supposed to incite?

At the end of the day, these sites will live or die based on resident involvement--and it appears no one in my community is aware they even exist.

Which, for our building may be a relief. One thing that struck me as particularly odd about the Times article was how upbeat it was: Most of the sources cited social networking sites' ability to help managers address problems early and give residents a way to offer painter and insurance recommendations.

But surely (which the article does touch on briefly) many are using such sites as a way to semi-anonymously complain? Or could?

Remember that Web site that I accessed after moving in--the one where I posed questions about our satellite service and others questioned building rules? It disappeared suddenly and has yet to be replaced with anything similar.

Maybe the site was phased out--or maybe it just got too critical for comfort. Who knows? But it sure would be useful now, as the building gears up for a major hallway renovation. They've laid out samples in the lobby and on one floor of the building and distributed paper ballots. I can't help but think a Web site would make the process so much easier.

It would, of course, also give people a chance to complain about the fact the hallways have been so outdated for so long (the '80s were a great decade, but I really don't need them to start right outside my doorframe) and ponder what this is going to cost us. And that's a real risk property managers should consider.

Which brings me to my big question about building-based networking sites: It's clear from the Times article that if enough join one, residents love building- and community-based social networking sites.

But do property managers feel that they're a good idea, or a bad one? What do you think?

How Money-Strapped Unit Owners May Be Killing the Condo Market

Today's New York Times article about the problems condo owners are facing as the economy slows sheds light on a growing issue: Defaults and foreclosures and the multifamily market.

For months, we've heard about how bad foreclosures can be for a neighborhood of single-family homes: Unprepared to deal with property maintenance, banks sometimes let foreclosed properties fall into disrepair.

A foreclosed home drags the value of areas homes down and can hurt the neighborhood--for every one foreclosure out of 100 properties, the violent crime rate grows by 2.33 percent, according to a 2005 study by Dan Immergluck of the Georgia Institute of Technology and Geoff Smith of the Woodstock Institute, the Tuscon Citizen reported recently.

But little has been said about how such issues are affecting buildings with several units or more--until now.

Part of the appeal of living in a condo involves the fact you don't have to handle some of the general maintenance: Somebody else vacuums your hallway. Somebody else mows any lawn out front. And somebody else tackles tough decisions about getting a new roof, repainting a foyer or hiring a contractor.

That's one reason they're selling big to young, urban dwellers and older, retired residents who don't have the time or just don't want the responsibility.

But, as more and more owners face financial troubles because of the weakening economy--just today, the Labor Department said that initial jobless benefit claims grew by 6,000 to 371,000 in the week ended May 10--buildings are feeling the burn.

Some of the resulting issues include:

• Extra fees. One source quoted in the article--Barbara Sanz--lives in a Miami building where almost one in six residents are facing foreclosure, and as their monthly condo assessment payments slow or stop altogether, the remaining owners' have gone up. Sanz is one of the residents who not only had to kick in an extra $1,000 but has to also pay an additional $50 a month for cable and Internet, the Times said.

• Reduced maintenance. Because some buildings now lack the capital they used to have as a result of the reduced assessments, common areas like pools and laundry rooms may become dirty or broken.

• Bargaining with the bank. Banks don't want to mow lawns, and banks don't want to assume condo maintenance fees--even if that's part of the deal with owning a foreclosed-upon unit. In some cases, banks are just overwhelmed because they're foreclosing more properties than they're used to assuming responsibility for. But some buildings live or die by condo maintenance fees--especially smaller buildings that don't have large reserves to buffer a loss. Just ask Doris Wilson, who owns a one-bedroom apartment in Chicago. Wilson had to fight to get a lender to pay $2,500 in assessments after it foreclosed on one of her building's seven units, which was needed to clean its sewer system.

In some buildings, things are so tough that residents are signing up for front door duties, according to the Times; and it's likely to get worse.

Existing condo sales are down in the U.S.; and although buyers are becoming more excited about the deals they can get on foreclosed homes, condos just aren't packing the same punch because of the potential extra costs and maintenance issues, the Times said.

Which is too bad. Condos are an important housing market component. For one, there are a lot of them--one in eight homes in the U.S. is a condo; and during the slump, they've held on to their value better than single-family homes have. Since early 2007, median condo prices have fallen just 3 percent, CNNMoney.com says.

But make condos seem like a high-risk investment, and that trend is unlikely to continue.

Exciting amenities, reduced responsibility and an urban location (location, location) are all great selling points--but if a unit comes with the potential for extra fees and the possibility that the water will be shut off, it's not really going to be an easy sell, is it?

Switching Gears From a Residential For-Sale Property to a Rental: Part Two

On Friday, we touched on why some new condos are transforming into rental buildings. Can single-family homes make a similar switch?

Yes--and no. If a new single-family home doesn't sell, turning it into a rental can be difficult. They're just not quite as versatile, for a number of reasons:

• It could be costly, thanks to extra fees. Single-family homeowners don't want a large number of rental properties on their street because rentals often aren't maintained as well as owned homes--which can drive property values down for an entire area.

Yet the foreclosure rate has caused that to happen in a number of U.S. neighborhoods.

Some cities are responding to the change. In February, Minneapolis instituted a $1,000 fee when a home is changed into a rental property, the Minneapolis Star-Tribune reports.

• And renters may not want to live in a single-family home. Phoenix, for example, is suffering from an oversupply of single-family homes, according to MSNBC; the city received roughly twice the amount of new homes it could accommodate between 2005 and 2007, many of which were bought as investment properties.

But home values in the area are down--and those homes aren't selling.

To cover the monthly mortgage payment, many owners are renting their investment properties out, a practice that has created a "shadow market" that is competing with the city's apartment rentals, MSNBC said.

Yet the costs for renting a single-family home or an apartment just don't match up.

Given today's 5.72 percent average 30-year fixed mortgage rate, for a buyer taking out a $165,000 loan, the monthly payments would be $959.75, Bankrate says.

Or more--the National Association of Realtors' March median single-family home price was $200,700. Depending on how much of a down payment the buyer put down, the monthly payments easily could be higher than $959.

Rents have risen, too--but they're still at more affordable levels.

Because of bankruptcies and other issues, U.S renter households grew by almost 1 million last year--four times the pace of renter growth from 2003 to 2006, according to a recent Harvard University's Joint Center for Housing study.

The higher demand has driven average U.S. rents up to $775 a month, the Wall Street Journal recently reported.

• Yet condos are a slightly different story. The median existing condo price in March was $219,400, according to NAR, making condo prices more competitive with luxury apartment prices, which in most markets will rent for more than the $775 average.
  
  Thus renting a brand-new condo--comparable in many cases to a luxury rental unit in terms of amenities and appearance--for $100 or $150 more than the average apartment rent isn't so unlikely. It may, in fact, actually be the same cost as renting a luxury apartment, depending on the area.
  

In the end, though, price may not even be the deciding factor.

The cost of renting a house in many areas will be higher than renting a condo or apartment; but in some markets where single-family home prices have fallen considerably and/or the market is really overloaded with inventory, the cost of renting a single-family home could possibly be close to the cost of renting a condo.

But that doesn't mean people will want to. Renters have different needs--and ones looking to live in an apartment may not want the responsibility of renting a home, which involves upkeep. (Getting more space is one thing; having to mow a lawn that isn't really yours is another.)

A condo, however, is likely to include general maintenance. It is also more likely than a house to provide a location closer to public transportation or an urban setting--which, for work or social needs, renters may prefer.

More units, more versatility: That could be one big reason for the Commerce Department's March multifamily permit increase.

What do you think? Is the multifamily market be benefiting from its various moneymaking opportunities--ones that extend beyond basic unit sales?

Rental Conversions, Condos and the Future of the Housing Market

As overall residential building declines, the multifamily and single-family housing markets are having two very separate experiences: Although both were down in March, they were down in varying amounts, and for different reasons.

And that's painting an interesting picture of how each may start to recover as we tentatively try to claw out of the housing slump.

Thursday's news showed that building in general has slowed considerably: Total housing starts fell 34.5 percent to 1.035 million in the first quarter.

They'll probably remain under 1 million until the middle of 2009, according to The Wall Street Journal.

But single-family starts fell 5.7 percent in March. Multifamily unit starts declined much more--24.6 percent.

Permits for single-family homes dropped 6.2 percent in the month; but multifamily permits only fell 5 percent, according to government data released in mid-April.

Why the difference?

Consider the new $20 million, 75-unit condo building in Charlotte, N.C.

Condo sales began in November; since home sales have slowed nationally and lending standards have become stricter, risk has risen--which caused the project's developers to radically alter their plans.

They've stopped selling units--and are officially becoming a rental property, according to the Charlotte Observer.

"We are returning deposits and releasing buyers from their contracts," Terrence Llewellyn, whose company is developing the project with Dean Kiriluk of Kirco, told the paper.

In some places, like Miami, luxury real estate helped keep the condo market going during the housing slump--at least for awhile.

As condo prices in the rest of the state fell 25 percent or more, Miami prices grew by 6 percent in 2007, according to the Florida Association of Realtors--but in January, the median condo price dropped by $32,000. Sales fell 30 percent.

That shift is causing some developers, like Llewellyn, to switch gears--and change their for-sale projects into rental ones.

Which may explain why multifamily starts would be down in March, but multifamily permits--indicative of future construction activity--would show an increase that the single-family home market did not.

More profitability options; more faith in the industry--and more funding.

But why? Is changing a multifamily unit into a rental property really more profitable than converting a single-family home into one?

Join us Monday for the answer--and part two of our look at how condos may be able to recover sooner, even if foreclosures continue to rise  ...

Multi-Housing Forum Gives Industry Members an In-Depth Look at Building Challenges, Financing Options

Multi-Housing News' parent company, Nielsen Business Media, sponsored an event in Chicago today called Multi-Housing Forum, featuring sessions on branding, debt and more.

I attended the forum's very compelling 2 p.m. session, "The 2008 Multifamily Debt Update," which was an interesting look at how GSEs are navigating the current market--a hot topic for the multifamily sector.

During the hour-long session, moderator Glenn Housman, Senior Vice President, Richard Ellis Inc., took questions and chatted about financing options and advice along with Freddie Mac Senior Producer Laura Cathlina and Jimmy Mayfield, managing director of Greystone Servicing Corp.

A few highlights:

• 125 on they way: Starting May 1, the new 125 percent regulation goes into effect at Fannie Mae--and Housman advised audience members looking at a refi to get their items in order "lickety-split." (Freddie Mac has yet to confirm its participation, Mayfield said.)

• Rate locks are working "very fast" these days, according to Cathlina. And with Freddie Mac, the deal is a deal when the lock is in place. "Once we rate lock, we're rate locked," she said. "If something comes up in the marketplace, we're not going to come back and change it."

• Price saver tip: Points are negotiable from lender to lender, as are processing fees and all other "nickle-and-dime issues," Housman said, pointing out that with a Freddie Mac loan, "Laura is controlling the deal--but not all costs."

• Shopping around: Housman advised participants to keep in mind that to an extent, you can get different quotes from different lenders. However, he reminded the crowd that there are limitations to that rule. "Once it's in Laura's system, you can't [cancel it] until you write a letter and say 'I want to switch,'" he said.
  

• Looking to get in and out of a deal in a few years? Consider Freddie Mac's ARM program, rolled out five years ago. "If you know you want to purchase a property and be out of it in five years, that's the best program for you," Housman said.

• Know your schedule. A 365 schedule compared to an actual 360 is not "apples to apples," Housman said. One is based on 365 days, the other--which is quoted more often--is based on 12 30-day months. A 360 will include more days, but usually offers a better interest rate, Housman said.

• Size limits? Call Fannie Mae, which is set up to handle them efficiently. "No deal is too big," Housman said. "A billion, $2 billion, they can do it." According to Mayfield, Fannie defines a small loans as "$3 million or less in most markets. In larger markets such as Chicago, $5 million or less."

Aside from helpful tips and GSE news, the session contained one other general theme: Fannie and Freddie are doing just what they're supposed to, according to Cathlina.

"Fannie Mae and Freddie Mac are both publicly held," she said. "Our first obligation is to our investors."

That said, they were formed to add liquidity to the market--and have. "In the past nine months, we have been doing just that," she said. "Exactly what we were created to do."

The agencies have both come under fire in recent month for various reasons--but they've also been given more lending power to help troubled homeowners. And their influence in the multifamily market can't be denied: Last year, both GSEs provided $60 billion collectively just to the apartment market, Housman said.

Their role will undoubtedly grow as the market increases--and lenders continue to tighten restrictions. Have you considered Fannie or Freddie financing options? It may be time to ...

Good News, Bad Mood for Housing Industry

Homebuilders may not be feeling great about the residential industry, but the multifamily sector received some good news this week: Construction of housing with two ore more units rose 14.4 percent, and multifamily home groundbreakings increased 14.5 percent.

Yet overall builder sentiment is low, according to the National Association of Home Builders, who said  that its housing market index for March was the third lowest reading on record. Buyers are either waiting it out to see if prices fall more or just plain can't get financing to buy homes, USA Today says.

And homebuilders are feeling the effect: The index came in at 20 in March for the second month in a row. It's been at 20 or below since September. A reading of more than 50 indicates builder confidence is healthy.

That low confidence was reflected in the Commerce Department data reflected today--which showed future groundbreaking permits reached their lowest level in 16 years. Also:

• Overall construction declined, with starts dropping 0.6 percent after going up 7.1 percent in January.

• That January number was higher than originally thought--the Commerce Department had reported that housing starts were 0.8 percent higher in January. But the increase provided little comfort because of last month's drop in starts. January, it seems, may have just been a blip on the radar--and we didn't even realize it was a decent blip at the time.

• And the annual comparison isn't very hopeful, either: Housing starts last month were 28.4 percent lower than in February 2007.

Homebuilders don't feel the slump is near over. Buyers clearly don't either, if they're still waiting for prices to fall further before they buy.

The same can be said of lending institutions--if they're still being strict about loans, which is preventing home purchases for some buyers, it doesn't seem they're so sure the situation is close to being straightened out, either.

What needs to change first--buyer enthusiasm? Lender availability? Builder confidence? Homebuilder positivity will probably come last; but who most needs to light a fire under themselves to get the housing market moving: Banks or buyers? What do you think?

Making the Repair Process a Breeze, Not a Bust

Condo and apartment property managers deal with many resident repairs--some of which are the building's responsibility, some of which aren't.

As I type this, a contractor is replacing my front door--in part because my circa-1985 door began splitting like a wishbone a week ago (the hallway got the larger half--so make a wish, elevators!), and in part (of course) because I believe in supporting the remodeling and repair industry.

Yet the experience has illustrated a few methods that can make the repair/remodel process smoother for property managers, contractors and residents--who are often all working independently for the same goal: A safe, reasonable repair that won't disturb the building's character or quality of living.

That said, because everyone is working independently, there can be a lot of back and forth, confusion and sometimes costly mistakes. So I've compiled the following suggestions for property managers, contractors and residents. Feel free to read them, develop them into a client handout, forward them, comment on them, add to them--I'd love to hear your input.

Ways Property Managers Can Make Their Lives (and Their Residents' Repairs) Easier

You're the source of knowledge for renters and for owners (maybe owners should know what repairs you cover and what ones you don't, but more often than not, they'll shoot you an e-mail or call to ask.)

As such, even if you're not responsible for a repair (like, say, a condo unit's front door), you can provide helpful guidance to residents to get the job done the way the building wants it done--and hopefully reduce future problems or eating up your time handling the issue. Some things to consider:

• Have standard (but customizable) responses to common questions. When my door first began having issues, my building manager told me it was common in our building, and that I could swap it out with any solid wood core door. I assumed I'd also need to find a doorknob that looked like my old one--but the building didn't have information on where to find it (or let me know most residents who replace doors swap it out from the current door, along with the peephole). As it turns out, the knob, peephole and deadbolt had to match the previous versions--which the contractor I hired told me. Had I done the repair myself, I wouldn't have done that--resulting in more work for my property manager to let me know it had to be replaced and possible fines for my unit.

• Provide a general timeline. The residents request may not be first priority on your list due to other pressing concerns--but you can bet it's first on theirs. For repairs the building is responsible for, even if there will be a wait for the unit repair to be made, giving owners or renters an accurate estimate of when the problem will be fixed goes a long way toward building trust and resident satisfaction.

• Keep a database of renter repairs. Have you had a lot of window frame issues in recent years? Are plumbing issues on the 4th floor becoming an increasing issue? Tracking unit issues can help you gauge overall building needs.
  

• Consider doing an annual resident repair survey. In addition to finding out how residents feel about your level of service, an annual survey can help property managers find out what problems unit owners or renters are having and also can allow managers to develop a list of frequently used (and liked) contractors.

• Go the extra mile on the first request. If a resident e-mails to ask about a repair that isn't the building's responsibility, providing a complimentary list of building-approved contractors and information on where to order any replacement parts the building requires isn't just being proactive--it's doing the job to the fullest and best extent possible.

Ways Contractors Can Make The Repair Process Easier

Always remember that residents have different levels of repair know-how--don't assume they have too little or too much. They're often desperate for a fix to be made or totally confused; other times, they're debating doing it themselves, and you're going to get hired based on your expertise. A few thoughts:

• Be in touch--as promptly as possible. It's hard to call potential clients back when you're out working on jobs, but being in contact is important. One contractor I talked to Friday promised to call back with a quote either Saturday or Monday; I never heard from him. I moved on to another contractor, but even if I hadn't, I took that as a sign of irresponsibility.

• Be realistic about deadlines. If you're not going to be able to get to the area for three days to do the repair, don't say you'll try to stop by that day.

• Consider giving a quick quote. Obviously, you'll need to come look at the unit for some repairs before giving a price estimate; but if it's a fairly fast, standard job you've done many times in the building, give the unit owner an approximation or range. I called several contractors about the door; only one wanted to make an appointment to come see it, even after I told them it needed to be replaced very soon and they told me they'd done dozens in my building. When I pushed for a price estimate, it was so much higher than the other contractors I'd talked to, that--coupled with the fact they wanted to come out later in the week before starting work and my door was barely functional now--I took them off my list.

• Make sure you include any extras. If your price includes a post-job cleaning service, special features or other services, tell the client on that first call. Always highlight your high level of service--almost all the contractors I spoke to made sure I knew they would also paint the door once it was installed.

• Develop relationships with large buildings. Rental buildings may outsource a number of their repairs; condo buildings often recommend contractors regularly who are known for doing good work--which can significantly cut the amount of time you spend on marketing yourself to new clients.

And Finally, Ways Residents Can Make Life in General Easier for Everyone

You may want the repair done yesterday--but you want it done right.

• Confirm all repairs with the building. It's better to check beforehand about approved materials and installation methods--before you do the work and risk a fine.

• Don't panic, and be polite. When you contact your property manager, realize the situation will be fixed, if it is by the building or you. Hysteria isn't going to help.

• Consider using a building-approved contractor. It's less paperwork and you may get them sooner if they're already there working on other projects. (Mine came the next day because they were working on someone's unit on the 6th floor.)

• Do your homework. Figure out what's wrong, look up any related terms and be able to describe the problem to any contractors or the property manager--it makes everyone's life easier.

• Confirm the services are what you want. Are you responsible for clean-up? Do you need to sand or paint anything, or will the contractor do that before leaving?

Have any other tips or suggestions for property managers, renters or contractors? Share your industry knowledge by posting below!

Moving Into a New Community Without Ever Leaving Your Unit

An interesting article in today's New York Times outlined the rising popularity of social networking sites designed for residential buildings -- and the article makes a good case for building-exclusive online communities.

Since March, more than 335 buildings have signed up for the Brooklyn-based LifeAt.com service for the $6,000 start fee, according to the Times. Since, as of now, LifeAt doesn't charge an annual fee, that isn't a bad investment for a building to make, considering the potential payoff with owners.

Who could benefit from a social networking site? A number of residential buildings:

• Small Buildings. Condos with just a few units -- for example, my hometown, Chicago, is ripe with two- and three-flats that have anywhere from two to six units -- often bypass hiring a management company. The residents instead form a condo board, setting up point persons for collecting fees, handling repairs and more.

The only problem? When your building has six residents, things may feel a little too close for comfort.

A couple I know lives in a small building and had to twice deal with personally confronting residents about unpaid assessments (awkward) and deal with a faulty accusation that funds had been mismanaged (even more awkward).

Imagine how easily both situations could have been avoided if the building had set up a community Web site, listing expenditures and sending out e-mail notifications about late payments from an official association address?

• Buildings looking to protect the board's time and streamline processes. Some condos won't give out their board members' phone numbers or e-mails -- and with good reason. Owners have a number of reasons to contact board members: to submit complaints (isn't it easier to call a neighbor who you know is on the board than to look up the formal submission method?); to check on the status of the board approving or not approving requested renovations; even for something as simple as asking for building-related forms. 

However, getting residents to sign up to be on the board can be a difficult task if it means being hounded by owners. Most of the time, the matters in question will likely be things that need to be voted on by the entire board or part of the board anyway -- subverting the proper channels is just a waste of everybody's time.

An online community would allow residents to offer suggestions for the building, submit official complaints, ask questions and more -- contacting each other and the board via a simple, organized format.

It also would provide an easy way for the board to track such input and would remove any personal responsibility busy board members may feel to respond to requests.

• Buildings looking to provide full disclosure. Hand a new resident a four-inch thick packet of condo bylaws, rules and regulations and you're almost guaranteed to be in for some confusion later. Yes, you've done your due diligence by providing the rules; but wouldn't every condo association board and apartment management company like to see fewer rules broken?

Posting guidelines in an easily accessed, public place like a community Web site not only offers unit owners and renters the chance to frequently check them but also gives residents a forum to ask questions about the rules to clear up any misunderstandings or misinterpretations before they happen.

Residential social networking sites aren't the perfect solution for every building -- as the article noted, it would seem to make more sense in large cities, and selling ads to local vendors, which often don't advertise online, could be tricky.

However, it would seem that some advertisers -- like contractors, cleaning services and real estate agents -- could greatly benefit from reaching a condo or apartment building's small, localized audience. A building-owned Web site provides a targeted advertising opportunity a local paper couldn't.

Will condo sites be the next MySpace? It's to hard to say -- but it could make everything from borrowing a cup of sugar to finding a plumber a lot easier for residents.

The Newest Residential Buyers: Sports Cars?

This summer, a New York Times article about parking introduced non-New Yorkers to a shocking concept: the $225,000 parking space.

Think that sounds high? Some New Yorkers don't -- there's a waiting list for those spaces in Manhattan.

If that price tag blows your mind, considering we're in the midst of  a national housing decline in which homes are losing value, the concept of the auto condo -- essentially a purchasing living space for several high-end cars -- likely won't make much more sense.

But some developers are revving up to build them all the same.

• Luxury on Main, opening late next year in Los Angeles, will have 80 "auto condo" units. Most will be 650 square feet, Autoblog reports.

• San Jose's Club Auto Sport will feature up to 70, 660- to 10,000-square-foot car condos in addition to a clubhouse, concierge, electronic security systems owners can access 24 hours a day and a conference facility, the San Jose Mercury News reports. Condos will be priced from $250,000 to $2.8 million.

• And then, there is Dream Garage in Dallas. The $10 million complex will feature 54 units, each a minimum of 1,050 square feet (enough for four cars), priced at $230,000, according to the Dallas Morning News.

Many condos will feature bathrooms, showers and kitchens or bars, and Dream Garage is going to build a club area for socializing. Owners will also be able to use the Dream Garage dual dynamometers, which will tally horsepower as cars drive on to large floor rollers.

Cars, Not Consumers

The housing market news seems worse every day -- new construction has dropped because housing demand has dropped, and reports of condo developments being canceled as a result are rampant. (The Washington Post reported in August that nearly 20,000 condo units in the past 12 months have been removed from the construction schedule in the DC area alone.)

How, then, did former racer Jack Griffin, who owns a Dallas real estate and brokerage company, get funding for a residential structure for cars?

Fairly easily, it seems. Several months ago, Griffin approached Tres Vista Group to garner additional resources for Dream Garage. It signed on as a partner.

Dream Garage, in fact, now has all its financial backing and zoning approvals in place, Tres Vista partner Jerry W. Mooty Jr. told the Dallas Morning News.

That's more than we can say for a number of new residential complexes. Why?

Smart Development, High Demand

One possible reason Dream Garage got support: it's hitting a niche audience. Collectible cars are a $3.5-billion industry, according to American Collectors Insurance. Offering high-end storage space is an untapped market.

Plus, given that owners can easily spend more than $230,000 on their car collection, it stands to reason they'd spend that to store it.

"We think this concept is unique," Griffin said. "Warehouses are just storage. They're dark, they're dusty. People want more than that now."

Another possible reason: Dream Garage will be a mixed-use complex, also housing the American Driver magazine offices, a paintless dent-removal company and an Autoscope, which is a garage specializing in BMW, Audi, Porsche and Mercedes-Benz repairs and high-performance work.

The commercial space use is likely to provide an additional revenue stream and also, because the residents are auto industry-related, give car fanatics an extra purchase push. That's clever planning.

And it's planning some developers may want to consider. Packaging commercial, which has remained stronger through most of the slump, with residential projects may make investors feel more secure, help safeguard against market instability -- and spark that rise in new construction we need.

Likewise, planning highly targeted projects -- addressing the needs of consumers who are still looking to buy despite the slump, from first-time buyers looking for no-frills property at reasonable prices to retirees looking to downsize -- is now more essential than ever to a project's success.

That's a concept Griffin understands.

"We envision [Dream Garage to be] a lot more than just a place to store a car," Griffin said "A lot of us view cars as art, and we want to have a place where we can see these rolling galleries."

Which might explain why his development, unlike so many other new construction projects is rolling along.

Talk to us: Do you think auto condos will be a hit with buyers? Will they have a high resale value? Post your thoughts below.