Real Estate Blog

Lowell MA Real Estate

The mortgage market in the US is in a state of doldrums. With mortgage refinancers Freddie Mac and Fannie Mae financially bankrupt and companies like Lehman Bros. declaring bankruptcy the scope of recovery in US markets looks very uncertain. Real estate is one of the worst effected sectors in this financial crisis. Property prices are falling and people are not making any fresh investments. Even people who have money are not willing to make any fresh investment. With future looking grim and development looking almost static, the growth in real estate will take place only if there are effects taken by the government and the private concerns to bring about stability in the market. People holding properties should not panic and sell, instead they should wait for the prices to stabilize then decide whether they want to sell the property or not.

One of the cities affected by the recessionary condition is the economy is Lowell. It is a small city in Massachusetts, with a population of over a 10 million people. It is the 4th largest city in the commonwealth of Massachusetts. Lowell during the 19th century was a thriving industrial district. It was famous for textile industry, but with the decline in manufacturing sector in the 20th century the city started facing hard times. People migrated to other cities in search for better jobs and improved standard of living.

Today things have changed in Lowell. The city workers are highly computer literate. The average salary is about 40000$ according to the census taken in 2001. There is also a high student population at Lowell. This is because of presence of university of Massachusetts. Enhanced student purchases have lead to the growth of retail market in the city of Lowell. The culture of Lowell is also very diverse because of presence of students from various countries and culture. This provides good form of recreation for the people of Lowell. Lowell is strategically located and provides easy access to points of interest in Massachusetts, New Hampshire and Maine. Lowell is close to 2 airports, one is the Logan Airport in Boston and the second is the Manchester – Boston Regional Airport in Manchester.

There exist good investment opportunities in Lowell. People make investments in residential homes, condominiums, retirement properties, waterfront properties and multifamily investment properties. Even though there is good investment opportunities people do not want to make any investment in the real estate sector.  The price of property is falling by the day people in Lowell are adopting wait and watch policy. The student population in Lowell is high and this provides for a good retail market but still, with the market conditions deteriorating everyday people do not want to make fresh investments. Also the rising price of commodities like oil, steel and concrete is adding to the burden of the builders. The cost of building new complexes is rising by the day and people not willing to pay a higher price for it, this makes it extremely difficult for the builders to start any new development. So unless market conditions improve you will not see any drastic improvement in the skyline of Lowell.

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September 23rd, 2008

Real Estate is Going Global

The bull market in hotels, offices and malls knows few boundaries. Through early December, European real estate securities jumped an average of 53 percent in dollar terms during 2006, and Asian property shares rose 28 percent.

Fueling the surge are raging development in Europe and Asia, the spread of real estate investment trusts, and abundant liquidity — that is, a lot of money available for investment. A sagging dollar has also helped.

Putting half of your real estate investments in U.S. stocks and half in foreign shares is a wise strategy. Some of the best real estate agents can help you out to make your investments more profitable. The foreign holdings should benefit from the continuing decline of the dollar against many overseas currencies. Moreover, it’s likely that property values somewhere will keep escalating even when U.S. retail and office markets cool, a possibility in 2007. But don’t expect to find greater yields overseas: Foreign real estate stocks yield 4 percent or so, about the same as U.S. REITs.

About a dozen mutual funds focus on foreign property stocks. The one with the longest record, dating to 1989, is Alpine International Real Estate (symbol EGLRX; 888-785-5578), managed by Sam Lieber.

International Real Estate’s results can be erratic. From 1995 through 2002, the fund recorded eight straight years of either single-digit or negative returns. But over the past four years, it returned a torrid 35 percent annualized. With 144 stocks (biggest position: Bermuda-based Orient-Express Hotels), the fund is all over the map. Annual expenses of 1.18 percent are reasonable.

Fidelity International Real Estate is just a bit more than two years old. Like Alpine, it has no load and charges modest fees (1.12 percent annually). The fund (FIREX; 800-544-8544), run by Matthew Lentz over the past year, gained 15 percent in 2005 and 33 percent in the first 11 months of ‘06.

Die-hard indexers should consider Northern Global Real Estate Index. The new fund (NGREX; 800-595-9111) tracks the FTSE EPRA/ NAREIT global index of more than 300 stocks, weighted 50 percent U.S. and Canadian, 30 percent Asian and 20 percent European. Its biggest holding, mall owner Westfield Group, is an Australian company, but 60 percent of its retail space is in the U.S.

The best pure play on Asian property stocks is six-month-old Cohen & Steers Asia Pacific Realty. The fund (800-330-73 is currently focusing on companies in Hong Kong, Japan and Australia. It’s a load fund, but it’s the only fund dedicated to Asian real estate, and Cohen & Steers managers have a long record investing in real estate. The Class C shares (APFCX) charge stiff annual fees of 2.45 percent, but you can bail out without an exit charge after one year.

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January 31st, 2007