Pressures That Dominate Real Estate Value

When people usually think of real estate value they think of two forces; supply and demand. Yes, this is correct; however supply and demand only fall under the one of the four main categories that drive/depress real estate value. Supply and demand fall under the economic category of influences in real estate value. The other three include; social impact, government subjection and environmental forces.

When looking at social impact, there are a few things one would want to consider determining the effect it will have on real estate value. Most of all the value would fluctuate accordingly with population characteristics. This tie into the potential for demand in the economic section of value; the more demand, the more value a property can derive. Population however should be looked at in more depth by breaking down the sample by age and gender, rate of household formation and partition, as well as analysis of the social values such as education, law and order, and lifestyle preferences. Careful consideration of these factors will help establish trends in what would be reflected in real estate values.

Next is the government subjection, accounting for a large aspect of real estate value. This includes political and legal activities on several levels of government. These government influences have the power to overwhelm natural market forces such that you would find in the economic category. Government has their hand in providing facilities and services that affect values as well as a one of the main contributors to patterns of land use (zoning, by-laws, etc). The following are some things to look out for when assessing the government subjection of a market; fire and police services, garbage collection, transportation arrangement, utilities, zoning, building codes, health codes, and fiscal policies. Also the legislation that is set forth by the governmental factor must be accounted for, this would include; rent control laws, rights to farm, rights for managing forest, rights to agricultural land, restriction on ownership, new development laws, control of hazardous and toxic materials, and laws affecting investment power, loan terms, and mortgage lending institutions. All in all this is quite the category and its understanding will provide for a great idea of where values are currently and where they are headed.

In addition to the social impact, as well as government subjection, the environmental forces also play a part in real estate values. These can be natural or man-made and are analyzed by observing several aspects. Climatic conditions (snowfall, rainfall, temperature, humidity) would be an obvious one that would affect the values of building somewhere as well as maintenance and carrying costs, as well as the quality and type of build. Topography, soil and consideration of any toxic contaminants would also be of great importance as well as natural barriers, such as rivers, mountains, lakes, etc.

Just to get out of the 4 factors of real estate value; it is important to mention that there are some overlying factors that would be part of 2 or more of the categories. Once such factor is location, this is the link of a property in time/distance to any given origin or destination of a resident/user of the property. Location could fall under for environmental and economic, if not all categories. Due to the area and property type, properties access to public transport, schools, hospitals, stores, employment, suppliers, recreational and cultural facilities, parks, and places of worship would of importance.

This would also lead us back to the economic factor of influence on real estate value. The fundamental aspects to look for here include: employment, price levels, wage levels, industrial and commercial expansion, mortgage credit availability and cost, stock of vacant property, stock of improved property, occupancy rates, construction costs and rental/price trajectories of existing properties.

And there you have it, the 4 major pillars of real estate value; social, governmental, environmental, and economic. Taking a deep look at each of these sections one would assemble the entire spectrum of current real estate values and more importantly future real estate values.

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The Best of Milton Real Estate

How special it feels to be living or moving in to a place which is the fastest growing municipality in the Golden Horseshoe. Fastest growth means more development, better opportunities and modern architecture. You will be able to find various kind of flats, apartments and houses fulfilling all of your needs.

Whether you want compact apartments and houses for your single use or your small family, maybe you want a massive house built with wide rooms and bedrooms for your large family, or maybe you want to go for more luxurious villas… you will get well-built real estate of your choice in Milton.

Population

Milton is the fastest growing municipality according to the census conducted in 2006 and 2011. The census showed that Milton is experiencing approx. 71% rise in population from the year 2001 to 2006 and saw roughly a 56% surge in population from 2006 to 2011. The population of Milton, in 2014, is approximately 100,000, but as it is growing rapidly, its population in 2031 is forecasted to be approx. 220,000.

You will also have no problem communicating with the people in Milton as approximately 70% of the population are native English speakers, according to the census of 2011. The remaining 30% people can also communicate in English as their secondary language.

Residency and Growth

With population, the residential growth also saw a massive increase in Milton. This is also due to the successful completion of the project dubbed “the big pipe”, which was about making a piping structure which will deliver water from Lake Ontario to Milton.

By 2006, Milton had 7 new subdivisions, which included Hawthorne Village. Many new subdivisions from the list are developing, which means that there will be constant development – which is the secret of developed regions.

The council of Milton, in 2014, approved the making of more homes in Milton, which saw a surge of 25,000 residents. Moreover, there are vast numbers of home constructions at any given time in Milton, which is attracting more and more residents. In the numbers of residents, there is a fair amount of people coming from other areas of Ontario too.

Transportation

The town has an easy access to the highway 401 and 407 from Oakville and Hamilton. The town has its carriage railway lines for consignments. It has railway transportation service for passengers from Go transit and Via Rail.

If you take the highway 401, you are only 40 km far from the largest International airport (according to the passenger volume) Toronto Pearson. However, the town has a closer airport in the neighboring Burlington, the Burlington airport. The airport does provide passenger services but the services are not regular.

Why it is Becoming So Popular among New Residents?

1. Many people want to live in Toronto or near it. As Milton is 56 km away from Toronto, it is becoming a favorite choice of many.

2. As it is one of the developed towns out there in Ontario, people here can earn better and can improve their lifestyle.

3. As it is a town, it is getting much attraction from people who don’t like the city thing, but still want to live in an advanced but less ‘noisy’ place.

4. For retired and rich people, this place has its attraction as a suburb where they can live in peace and tranquility.

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The Next Real Estate Collapse

As daily commutes go, I have nothing to complain about when I point my car toward Sovereign HQ each morning. The traffic congestion on Interstate 95, South Florida’s main artery, is horrendous. So I take the scenic route, the coastal beach road known as A1A.

The views of the Atlantic Ocean are nice. But more recently, I enjoy the drive for a different reason. It’s a ringside seat to the extravagance of the now-deflating luxury housing bubble I warned about three months ago. Recent data point more ominously to a serious problem in this sector.

Each day, my drive on A1A takes me past what is the single most expensive new home for sale in the United States: Le Palais Royal, under construction for the last five years.

Situated on 4.4 acres of beachfront, the “spec mansion” features the Atlantic Ocean as its backyard. The front yard is a nearly 500-foot deep-water expanse of the Intracoastal Waterway – perfect for even the largest private super yacht.

The mansion’s soaring front gates, accented in 22-karat gold leaf, make it sort of hard to miss as you drive by. Just beyond the gates is a 60,000 square foot home with 11 bedrooms, 17 bathrooms, an 18-seat IMAX home theater (with its 50-foot-wide screen), and a 30-car subterranean garage. The building plans call for a second phase on the vacant beachfront lot next door. That’s where the ice-skating rink, go-cart track, bowling alley and private nightclub are supposed to go.

And it can all be yours for just $159 million.

But the tide of money fueling the purchase of luxury homes, big or small, is receding as we speak.

Luxury Homes: The Next Real Estate Collapse?

Largely ignored in the holiday rush was the news that luxury home prices fell 2.2% during the third quarter – the first such decline in nearly four years.

According to the Redfin real estate brokerage, wealthy clients are stepping back out of fear from stock market volatility, and are worrying about tying up too much of their wealth in non-liquid assets, especially if another real estate collapse appears.

The decline is even more notable because luxury homes serve as something of a bellwether for the rest of the “non-lux” real estate market (which still rose just under 4% for the same period).

The original housing-bubble stocks of a decade ago might offer a clue on the timing. Shares of Toll Brothers (NYSE: TOL), the nation’s largest builder of luxury homes, peaked in July of 2005 before starting their precipitous decline. But the stock prices of builders focused on the low- and mid-priced ends of the market stayed strong – at least at first. For instance, the shares of Lennar Brothers (NYSE: LEN), one of the biggest homebuilders in the country, didn’t crack until April of 2006.

Interestingly, Toll Brothers’ shares today are down nearly 25% from their post-recovery highs (to the lowest price in 13 months), while Lennar shares are just starting to break down.

California Dreamin’?

Chinese buyers have been key players in the run-up of America’s luxury home prices. And their influence is felt most strongly in California and the San Francisco Bay area, the hottest of America’s real estate markets this go-round.

Not coincidentally, it appears Chinese buyers may now be pulling back there as well, possibly ushering in the next real estate collapse. Home sales in California fell 20.5% in November – more than twice the monthly average (it’s traditionally a weak month prior to the end of year holidays). October’s home sales also fell a little over 5%, while dropping 1.5% in September.

For now, the real estate community appears to be dismissing the collapse of sales as the result of changes in new loan disclosure rules by the Consumer Financial Protection Bureau, and what is usually a softer seasonal period for home sales anyway.

I don’t blame them. As a media consultant once told me back in my reporting days, “Never let too many facts get in the way of a good story.”

But the “Chinese buyers” real estate gravy train is grinding to a halt fast. Last summer’s 40% decline in the Shanghai Composite Index should have been the first clue. The second was the relentlessly positive “it’s just temporary” narrative spun by so many brokers and property developers who don’t want the ride to end. The third clue may be upon us here at the start of 2016 as the Shanghai index lurches lower yet again.

So what’s it all mean to you?

As Jeff Opdyke has warned, don’t get comfortable with the Federal Reserve’s spin on things. As Chinese buyers retreat from American real estate, it kicks out yet another leg of support for the U.S. economy.

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