Real estate agents who are new to the industry often quickly realize how difficult it is to establish a viable client base. One of the key challenges for REALTORS® is choosing the right marketing options that set them apart from competing professionals who are seeking to net the same clientele. Where to begin and how to maximize investments in these initiatives is important, as no one wants to waste their time or resources on tactics that will not bring listings and sales to their business.

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Both bubbles (rents and housing) are vulnerable to popping.

Here is the conventional narrative about rents and housing valuations:

1. Rents have soared because people can’t afford to buy a house and have to rent

2. Based on soaring rents, housing is fairly valued

In other words, rents and housing are tautological: rents are rational because housing values are rational, and housing values are rational because rents are rational.

Nice, but wrong: rents and housing are self-reinforcing bubbles: rents are soaring because housing is unaffordable, i.e. echo-bubble valuations. Soaring rents then justify bubblicious home prices.

Is the Echo Housing Bubble About to Burst?

One way to establish fair value of a home is to multiply the rental income the house can fetch in the open market. Multiply gross rents (before expenses, property taxes, etc.) by 8 to 15 (depending on the desirability of the locale and property) and you get an investment-based valuation.

So if a property earns $50,000 annually in gross rental income, the property is worth around $500,000, with premiums being added for low vacancy rates, desirable neighborhood, well-maintained home, etc.

Another approach is to calculate the net rent (total rent minus all expenses except mortgage) and base the value on the net rental income. Any property yielding 5% after expenses (i.e. 20 times net income) is an attractive investment in a world of negative short-term interest rates and 3% returns on 30-year bonds.

Rental demand is reflected by vacancy rates; low vacancy rates reflects high demand. Vacancy rates are low, but not at historic lows except in certain high-demand urban zones.

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There are more Millennials than there are boomers or Gen Xers, which may be one reason we in the real estate industry are so laser-focused on engaging them. We hear these 16- to 34-year-olds mostly live at home. (And not just the teenage ones!) Sometimes we hear they actually like the burbs. Reports say changes to down payment requirements may actually push them into the real estate market. City planners and developers take note: Millennials want to walk.

That’s the word from Tuesday’s report from the National Association of Realtors® and the Transportation Research and Education Center at Portland State University, which states that “millennials prefer walking over driving by a substantially wider margin than any other generation.” They surveyed 3,000 adult Americans in the 50 biggest metro areas.

“Millennials are also shown to prefer living in attached housing, living within walking distance of shops and restaurants, and having a short commute, and are the most likely age group to make use of public transportation,” they write. Also: They like biking.

No, that doesn’t mean they can only live in the most walkable cities such as New York City and San Francisco. The whole country has gotten hip to the upsides of walkability: better for health, better for the environment, and more fun, too! Famously sprawling cities like Atlanta and Miami, and their suburbs, are being reinvented as more walkable and transit-friendly.

The specific millennial demands offer developers a strict guide to follow. “Forty-eight percent of respondents reported that they prefer to live in communities containing houses with small yards but within easy walking distance of the community’s amenities,” the report says. “And while 60 percent of adults surveyed live in detached, single-family homes, 25 percent of those respondents said they would rather live in an attached home and have greater walkability.”

What does walkability entail? Sidewalks, for one thing: 85% of those surveyed said that particular amenity was a positive factor in home shopping; 79% said being within walking distance of destinations was important. For most of them, the real goal is to have options: to take transit when they want, to bike sometimes, and, when need be, to get behind the wheel. And guess who wants walkability most? Women. Some 61% of them.

So if such development isn’t on the rise, it sure should be. The NAR reported similar preferences as far back as 2013.

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Is it still a good time to put your money in real estate? Here are four reasons why it might be a good idea:

Interest Rates Are Low

“Interest rates have been creeping up, but they’re still extremely low,” said Svenja Gudell, senior director of economic research at Zillow. Right now, mortgage rates across the nation are at about 4%. Gudell believes the Federal Reserve will begin raising short-term interest rates by the end of the year, but she expects them to stay relatively low.

According to Doug Lebda, founder and CEO of LendingTree, this historically-low interest rate environment can provide a compelling reason to lock into a real estate investment.

“At some point we’ll look back and say ‘wow, rates were really low,’” he said.

Home Prices Are Stabilizing  

The latest S&P Case Shiller home price index shows prices increased less than analysts expected in May, but are still up almost 5% year-over-year, for residential real estate in 20 metropolitan regions across the U.S.

Some hot markets, like New York and San Francisco, are seeing record-high prices and bidding wars due to low inventory. But Lebda says builder confidence is growing, and as new homes are added to the market, price appreciation will slow down.

“Builders are buying big swaths of land and building homes, so supply will come up,” he said.

James Zboril, president of Tavistock Development Company, is one of those developers adding to the country’s housing supply. Zboril says his firm is on track to sell 475 new homes this year in the Lake Nona development near Orlando, Florida.

And in Manhattan, Leslie French, founder and CEO of East Egg Realty in New York, says while she’s seen record high prices, “new condos have been entering the market and there are many more slated for 2016, which should create a better balance between supply and demand, possibly slowing the rise in home prices.”

Owning Is Cheaper Than Renting

Zillow’s Gudell says buying is more affordable than renting. In fact, she says home buyers are spending about 15% of their monthly income on their mortgage payment, while renters are spending 30%.

“Currently, homebuyers can breakeven on a home purchase in two years or less in 23 of the top 35 housing markets,” she said.

Of course, there are barriers to owning, including difficulty saving for a down payment, especially with higher rents, Gudell said.

It’s Easier to Get a Mortgage

Lebda says financing is getting easier as lenders are taking on more risk than they had been following the financial crisis. He said while the average down payment is 15% of the purchase price, there are new rules that allow some people to buy with a down payment as low as 3%.

According to Holden Lewis, senior mortgage analyst at in Palm Beach Gardens, Florida, deciding whether it’s a good time to buy is personal.

“It’s not unsafe like it was in 2004 or 2005,” he said. “It has more to do with whether a person is ready and whether or not their job is secure.”

Kristin Bianco is a financial news anchor and contributor.

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Estate agent Countrywide was the biggest faller on the FTSE 250 today with shares down more than 6 per cent after it posted a sharp fall in profits amid a slowdown in the housing market.

The group, which owes several High Street estate agents including Bairstow Eves and Hamptons International, said lower housing transactions due to home buyers and sellers holding back in the run-up to May’s general election had dragged on profits in the first half of the year.

Pre-tax profit to the end of June dipped 9 per cent to £41million from £45million a year ago, with housing transactions down 12 per cent.

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The nation’s recovering real estate industries are starting to add oomph to the overall economy.

Newly released detail data on the gross domestic product calculation – the broadest measure of the national business output – show two key real estate factors in the GDP math performing better than the nation as a whole in the first quarter.

Overall GDP fell at a 0.2 percent annual rate in the first three months of the year after growing 2.4 percent in 2014 and 2.2 percent in 2013, the Bureau of Economic Analysis reported.

Construction grew at a 3.9 percent rate in the first quarter, its third-best performance in the past nine quarters.

Only agriculture, retailing, information, management and health care grew faster in the first quarter among 25 slices of the private-sector economy tracked in the GDP math.

Construction, by GDP math, added $686 billion to the economy in the first quarter – or 3.9 percent of GDP. The category’s value to the economy fell 0.7 percent in 2014 and grew 1.9 percent in 2013.

Real estate renting and leasing businesses grew at a 0.7 percent rate in the first quarter, the fourth consecutive quarterly gain.

Real estate renting and leasing, by GDP math, added $2.33 trillion to the economy in the first quarter – or 13.2 percent of GDP.

The category’s value to the economy grew 1.6 percent in 2014 and 1.5 percent in 2013.

While there’s no comparable Orange County data, the surging local real estate industry – trades that employ 1 in 7 locally – had produced 1 in 4 of the new jobs created in the county in the past five years.

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