I’m reluctant to pick anything out of the news to write about these days because I find so much of what’s in the news to be neither entertaining nor enlightening. Maybe I’m just starting to get tired of summer already.
Real estate prices seem to be on the rise again. I’m hopeful that the problems that have appeared in bullish real estate markets in the past won’t reoccur, but they usually do.
Nathan Hannah, Attorney
I get unsolicited bulk-mail letters almost every day from people who say they want to buy my house. That could definitely be an indication that once again, too many people are making speculative investments in residential real estate. On the other hand, it could be an indication of a shift away from the traditional commissioned salesperson structure of residential real estate sales, toward a lower-cost, lower-price model. I’m not saying that’s necessarily good or bad, but it does seem like there is a trend toward treating houses as more of a fungible commodity.
In fact, if you look at the inroads that have been made by high-volume online sellers in the market for cars, it makes sense that the same trend could take hold in the market for houses. There is definitely a lot more price information available on the internet for both cars and houses than there was just a few years ago.
That makes me think of something else that I have heard: large-scale investment groups are buying up rental houses at an unprecedented rate. That also makes sense to me economically. It could be just an attempt to apply the rules of economy of scale to rental houses. Operating 100 rental houses should be cheaper on a per-house basis than operating two or three, right?
However, there could also be price speculation behind that trend, just like price speculation could be behind those unsolicited offers to buy my house. Maybe those prospective buyers are just trying to capitalize on the existence of a lot of houses that need improvements to be competitive in the market.
One area where the market appears to really be shifting is in student rental housing. I have commented before that the current massive construction of new, high-end student housing gives the appearance that there is no limit to the demand for that type of housing. I predict that one result of that activity will be redevelopment of a lot of property that has now-obsolete rental housing on it, or at least substantial new money flowing into ownership and improvement of older rentals.
Rental housing is getting more commodified, too. Technology is changing how consumers find and acquire rental housing, just as it’s changing how homeowners and investors are buying and selling houses.
I’m not an expert on any of this. I’m just putting down on paper what I’m thinking about as I observe what’s going on. I guess we’ll see if there is a significant, long-term change in how houses are bought, sold, and rented, or if the same market cycle will just repeat itself yet again.
If you are thinking about buying or selling a house, townhouse, condominium, co-op apartment, or vacant lot (with or without a commissioned salesperson), and you need help with the contract, don’t understand the title report, or just need the process explained, I can help.
What papers should I have available for my attorney to look at
when I am asking for advice on a real estate matter?
If it’s property you own:
- your policy of title insurance
- your deed
- your most recent property tax bill
- any written communication concerning the property
If it’s property you are intending to buy:
- all marketing materials you received
- the contract
- the preliminary title report
- any written communication concerning the property
It’s also a good idea to keep all those papers for as long as you own the property.
Nathan B. Hannah is a Shareholder in the Tucson office, and practices in the areas of estate planning and administration, real estate, and commercial transactions. He is also a noted blogger, and you can find more of his articles on his private blog,
Contact Attorney Hannah: nhannah@dmyl.com or 520/ 322-5000
This communication is designed to bring legal developments of interest to the attention of our clients and others. It should not be relied upon as a substitute for specific legal advice in a particular matter. For further information on any of the subjects discussed, or for legal advice in connection with any particular matter, please contact us.
