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Fractional Ownership Beats the Credit Crunch

One area of the real estate market is bucking the generally negative trend, with values and sales volumes up. Fractional ownership of luxury real estate has been slowly gaining in popularity over the last 10 years or so, but now seems set to reach a tipping point and become a mainstream concept.

What is the Credit Crunch?

In case you’ve been living in the wilderness for the last year, a short history of the credit crunch! It all started with a relaxation of lending criteria, both with regard to the size of loans compared to income and the credit rating of the borrowers. People who 10 years ago wouldn’t have been able to get a mortgage at all were offered large loans with very little proof of income. These loans were then packaged up by “clever” bankers and sold on to financial institutions around the world. This fueled a boom in asset valuations and while this continued everything appeared OK - if people couldn’t afford to pay their mortgage interest they simply rolled up the interest into a new loan. The party ended when interest rates in the US were raised and some of the more ridiculous deals that had been sold (balloon/deferred interest schemes) started to go wrong. Bring on a period of falling real estate values (both in the US and in the UK) and panic in the banking world. Some of the losses for individual banks on mortgage-backed securities are truly amazing, running into tens of billions of dollars.

What Effect is it Having on Real Estate Values?

Whilst all the chaos has been going on in credit markets banks have been unwilling to grant new mortgages without the security of large deposits. This is continuing to this day, with rates on mortgages increasing (in the UK) whilst the official rate charged by the Bank of England falls. Sales of homes are forecast to be down 40-50% in 2008 compared with 2007, with the decline in prices being put at between 5 and 10%. All connected with home sales are feeling the effects, and there is no end in sight to the crisis.

Why is Fractional Ownership Different?

Fractional ownership so far seems to be less affected by the problems in the credit market, and is still growing in popularity. This seems surprising, given that the main selling point of fractional ownership is that you own a fraction of the real estate - an asset that is declining in value. There are however genuine reasons for the continuing success of fractional ownership:

1. Many purchasers of fractional ownership have been “cash buyers” and are therefore not dependent on getting a mortgage. If they do need to raise mortgage finance against their primary home, they probably fall into the category of consumers that banks are still willing to lend to (large amount of value in the home, and a perfect credit record).

2. The people buying fractional ownership are not (or should not) be motivated mainly by investment concerns. Whilst it is true that the value of fractions over time should increase, and should be much better than timeshares, it is still not primarily an investment. People should regard fractional ownership as a life investment.

3. Fractional ownership is growing from a relatively small base. Market penetration is still small when compared to timeshare. The negative effects of the current credit crisis are more than offset by the rapidly increasing reach and acceptance of the fractional concept.

A Real Example

Steve Navaro runs Paris Home Shares LLC, a company specializing in fractional developments in Paris. After a recent article in the New York Times featuring his developments, Steve was overwhelmed with enquiries and quickly sold out one development. Steve admits that the exposure from the article made a big difference, “I think that if the product is done well, and priced fairly, it will sell, but only if there is plenty of exposure. Up until the article, things had been pretty slow”. Interest has continued at a high level, and Steve’s next Paris development is 50% sold out even though the renovation is not complete.

This example supports the idea that the limiting factor for fractional ownership sales is market awareness. The fractional market looks set for more years of growth whatever the fate of the wider economy and real estate market.

Neil Robertson is a fractional ownership consultant who runs his own website promoting fractional ownership schemes and giving advice and information on the fractional ownership of real estate, yachts, cars etc.

Fractional Ownership Beats the Credit Crunch / Author: Neil Robertson

Information on Ottawa Townhouses

Townhouses in Ottawa often can a superb “middle way” between a detached single family home and a full condominium, because to a sure degree, they offer attributes of both. A townhouse is by meaning a house that in one or more other houses, but which sits straight on a section of land that you own (if you do not own land, it is a condominium). For this conversation, townhouses can range from duplex and triplexes all the way through huge townhouse communities, consisting of hundreds of comparable houses. It is a good degree of difference in the way townhouse communities are structured. It can be a simple contract (as is often the case, the duplex and triplexes), that every part of land and sits at home, it is owned separately.

In the case of larger municipalities’ townhouse, you will normally have an additional general ownership in the common areas of the complex and all amenities such as swimming pools, parks, etc. This property let together with all other owners in the town house complex. In each purchase town house, where an Ottawa owners’ Association, it is vital to as much information as probable, the club can have a significant impact on your individual needs.

Ottawa – The Townhouse Capital of Canada

Montrealers and Vancouverites have the distinction have the fewest single-family houses: 59% and 61% owned by homes in these cities or single. Toronto and Ottawa follow and are strikingly similar: 66% owned houses in both cities are singles. The proportion of individual apartments to rent apartments below 80% in Calgary and 82% in Edmonton.

It may come as a shocker that Toronto, where 12% of owner-occupied housing allowances are owned apartments, is closer to Ottawa-Gatineau -9% in this regard as to Montreal - 23% and Vancouver -21%. The percentage is identical (9%) for Ottawa as Ottawa-Gatineau.

Ottawa is the undisputed townhouse capital city of Canada. Almost 18% of city apartments are rented town houses. The percentage for the Ottawa-Gatineau is 14%, suggesting that town houses are mostly in Ontario the side of the CMA.

Next-highest and back, Toronto and Vancouver - 8%, Calgary – 7%, Edmonton -6% and Montreal -5%. Where in other cities in the Townhouse is a fairly marginal product, here in Ottawa is really a niche for itself.

These figures suggest that Ottawa house owners are eager to embrace denser types of housing in the form of town houses in the first place, but also housing properties.

CLV Group Ottawa - Your Full Service Real Estate Provider. Ottawa Apartments For Rent & Townhouses for Rent, Apartments in Ottawa for rent in from over 4800 units of CLV Group.

Information on Ottawa Townhouses / Author: Chris

West Ottawa – A best place to select Apartment for rent

Major shopping centers

If you live in an apartment for rent in Westboro or Nepean, you will be pleased to know that these districts are full of activity shopping street with many opportunities. In addition to the many small independent shops (including several outdoor sports shops), there are many huge shopping centers in the area, including Bayshore Shopping Center. A three-level mall with more than 150 shops and services, it is preferably located along the highway 417th you can also visit Carling Wood Shopping Center, more than 125 shops and services with ample of free parking.

Other Ottawa West malls include Lincoln Fields Shopping Center (includes a Wal-Mart and a Loeb), Pine Crest Shopping Center (with the famous IKEA hoard with a view of the Queensway), College plaza (a popular destination for Algonquin College students and people with rental holiday near Baseline and Woodroffe) and Westgate Shopping Center (featuring a extremely valuable 24-hour Shoppers Drug Mart).

Museums and art centers

For those who live in an apartment Nepean to look for and study a little bit more about the history of their society, the Nepean Museum (16 Rowley Avenue), where several antiques (including some over 100 years old), is the ideal afternoon weekend.
For the outdoor sports fan, head of the Canadian Ski Museum (200-1960 Scott Street). Founded in 1971, it is the biggest public album of mementos skiing in Canada, housing more than 6000 photos and ski equipment from more than 150 years.
Theater-lovers will want to trip the Center Pointe Theatre (101 Center Pointe Drive). The 1,000-seat theater is home to several outstanding local groups, including Orpheus Musical Theatre Society, society and Savoy Les Petits Ballets.

Schools

A vital Properties West Ottawa apartment is ideal for students Algonquin College, as our Maples Apartments are only a few minutes walk from the school and our Green Bank, Wellington Park and Carling homes, you can speedily on the campus by bus. And for those with young families, West Ottawa also has about 20 public main schools, 9 Catholic elementary schools, 5 public high schools and 2 Catholic high schools.

Other attractions

If physical action is your thing, and you’re looking for an apartment to rent in Nepean, you can not go wrong by one day on the Nepean Sports Plex (1701 Woodroffe Avenue). This huge deal includes the lot you want to enjoy a game of baseball, hockey, football, basketball, curling, soccer, squash, lawn bowling and much more! The Sports Plex also offers a wealth of superb programs for children and seniors.

Along the Ottawa River is the gorgeous beach Westboro, which is the city of Ottawa and became a place of public swimming since the early 1920s.
Britannia Park is a heaven for picnicker, with many tables dotted on the grass and trees a bunch to offer gloomy on hot sunny days. There are two play structures and swings for children to have fun, and it is a great place for swimming or surfing, as there is a rescue swimmer in service from mid-June to Labor Day. Also in the park is the Ron Kolbus Lakeside Center, a banquet hall and society Center can lodge up to 300 people for special occasions.

The Ottawa River Parkway is a partial access parking services from Carling Avenue to the Portage Bridge near downtown Ottawa. Packed with scenic lookout points, the Parkway is maintained by the National Capital Commission (NCC) and is balanced by more than 20 km cycling paths, making it possible to drive all the way from downtown to Kanata. On Sundays through the summer months, the Parkway is closed to all vehicle traffic for the Alcatel Sunday Bikedays - the preferred day of the week for pedestrians and cyclists alike.

CLV Group Ottawa - Your Full Service Real Estate Provider. Ottawa Apartments For Rent & Townhomes for Rent, Apartments in Ottawa for rent in from over 4800 units of CLV Group.

West Ottawa – A best place to select Apartment for rent / Author: Chris

High-End Foreclosures

With 1 in every 483 households in the U.S. facing foreclosure, it only stands to reason that us common folk aren’t the only ones affected by the housing crisis. It’s just as easy to create a mountain of debt by borrowing against a multi-million dollar estate, as it is for a moderately priced home. Here are some of the celebrities added to the country’s growing list of foreclosures.

Sadly Ed McMahon, former Tonight Show announcer, is facing foreclosure for $4.8 million dollars of mortgage loans on his Beverly Hills estate. Plagued with bad press, this luxury home overlooking Coldwater Canyon and Mulholland Drive has been up for sale for $6.25 million for the last two years. Initially McMahon faced problems due to mold infestation which he claimed killed his dog and affected the health of both him and his wife. Then he fell and broke his neck and was out of work for 18 months. How would any of us deal with a back mortgage and loans totaling $4.8 million after being unemployed that long? Ed, take this as a sign, maybe it’s time to down size and retire.

Evander Holyfield, former heavyweight boxing champion is facing foreclosure on his Atlanta, Georgia estate. This 104-room, 54,000 square-foot home worth approximately $10 million, goes up for auction on July 1.

Jose Canseco, former major league baseball player recently lost his 7,300 square foot home in Encino to foreclosure. As he stated, “It didn’t make financial sense for me to keep paying a mortgage on a home that was basically owned by someone else.” He didn’t mention how much the home was actually worth, but he owed the bank $2.5 million on the house.

Michael Jackson - In 2007 after borrowing against it, to the tune of $23 million, the ranch valued at only $6 million faced foreclosure. Recently, however, a private equity group bought the loan on Neverland Ranch and is discussing the option of a Las Vegas casino gig as repayment.

In May of 2008, the $600,000 home of NBA star Latrell Sprewell went into foreclosure. This came only months after his 70-foot yacht, “Milwaukee’s Best” was also repossessed. Sorry Latrell, maybe you shouldn’t have turned down the $21 million contract extension Minnesota offered you.

Grammy Award-winning Aretha Franklin received a notice of foreclosure against her Detroit mansion after failing to pay a $162.14 tax bill dating back to 2005. Last we heard, the bill was cleared up.

Veronica Hearst, step mother of SLA hostage Patty Hearst, faced foreclosure on her 28,000 square foot, 52-room villa in Palm Beach. Her defaulted mortgage payments totaled about $33,000,000. It’s hard to believe the deficit was allowed to get that high before the bank stepped in.

Nicole Murphy was unable to make payments on the 11,158 square foot mansion she was awarded in her 2006 divorce settlement from Eddie Murphy. Last October the house was put on the market for the bargain price of $6,500,000.

Learn more about For Sale By Owner Tacoma homes at HomesByLender.com, a website with regularly updated For Sale By Owner listings in every state in the nation - buyers and sellers interested in FSBO can use this site as their primary source.

High-End Foreclosures / Author: M Shane

Backyard Additions That Make Buyers Run

Now that summer’s here, it’s time for your backyard to shine. The right mix of greenery and space for entertaining can put the final twinkle in a potential buyer’s eye. No longer just a yard for the kids to run around in, or a garden to plant a few shrubs, backyards are quickly becoming extensions of the home. Outdoor rooms are increasingly common around the country, with features like built-in fire pits, kitchens, and weather-proof furniture that would blend in with the most elegant interior designs.

With outdoor rooms becoming the latest ‘it’ factor in home decor, it’s important to know which additions to your outdoor space will bring value to your home, and which ones will send buyers running in the other direction.

Items that are permanent features could deter potential buyers. They don’t want to be stuck with remnants of your tenancy there; they need to feel like the home is theirs, and always has been. Buyers need to be able to see your home as a blank canvass for them to put their personal stamp on, while still being able to see the design potential of the property.

Built-in fire pits are one permanent addition that has become quite popular in the last year or two. Fire pits help create a cozy atmosphere, and can make your outdoor space comfortable all year long. Unfortunately, these units are expensive to install, and not suitable for homeowners who don’t entertain on a regular basis.

It is a much better idea to purchase a portable fire pit instead of a built-in one. Much more affordable, these units can be moved to your next home, where they’ll help create fond outdoor memories at your next place.

The effect that an in-ground swimming pool can have on a home’s property value is difficult to gauge because their perceived value is so subjective. For some buyers, swimming pools are a dream come true, and see it as a kind of one-stop-shop for fun, exercise, and relaxation.

For others, a pool can seriously detract from the property because they only see the costs involved with pool upkeep, as well as the time and hassle that year-round maintenance requires.

If you do decide to add a pool, make sure that you do it for the enjoyment of it rather than for any value it may add to your house. You may also want to consider adding incentives to the deal in order to make nervous pool buyers more relaxed. Incentives can include a year’s worth of chemicals or other pool supplies and accessories.

Finicky plants that have very particular lighting and watering needs will add beauty to your yard, but will make potential buyers uneasy. If they are new to gardening or limited on time and money, they will likely prefer to buy a house that has hearty, low maintenance plants. If a buyer is unable to easily maintain your garden’s current state, the whole yard will appear unkempt and uninviting. The buyer could hire a gardener to take care of it properly, but this is an added expense that most buyers simply aren’t interested in.

If you like to garden, but are thinking about selling your home in the near future, keep things simple. Only purchase plants and trees that can withstand a little neglect, but will still give the yard a lush and tranquil feeling. Imagine potential buyers as knowing nothing about gardening, and plan your landscaping design from there.

PorchLight Real Estate Group combines local market knowledge with cutting edge marketing skills. For more information on Denver CO real estate or to do a Denver MLS search, visit us online at PorchLightGroup.com.

Backyard Additions That Make Buyers Run / Author: Carol Freyer