Myrtle Beach gets "friendly" with Bike Week visitors

A group of Myrtle Beach volunteers is working to bring bike week visitors and local residents together.

The Friendship Team has been around for twelve years.

Coleman Randall, with the City of Myrtle Beach says volunteers work to bridge the gap between bike week visitors and residents whose relationship has had some friction in past years.

"Bottom line, they are here they are coming here and they are contributing to the economy and we want them to feel welcome to recognize that this too is a community," Randall said.

There are about 60 Friendship Team volunteers that will be chatting with visitors and handing out bike week survival guides this weekend.

They'll be on Ocean Boulevard for a few hours every night through Sunday.

DNR courtesy boating inspections

DNR courtesy boating inspections set during Memorial Day weekend

In an effort to keep state waterways safe during the upcoming Memorial Day holiday weekend, the S.C. Department of Natural Resources Law Enforcement Division will again be conducting courtesy safety inspections at some public boat landings.

The Memorial Day holiday weekend is considered the first blast of summer and one of the busiest weekends of the year on state waters.

DNR boating safety and enforcement officers will perform a quick, but thorough, inspection for items such as required safety equipment and proper boat and motor registration. "Those who are not in compliance with safety regulations or registration requirements will not be ticketed during the complimentary inspections," said Col. Alvin Taylor, deputy director of the S.C. Department of Natural Resources (DNR) Law Enforcement Division. "Instead, they will be given an opportunity to correct the problem before they launch their boat." DNR officers will also be available to answer questions and give boaters tips on how to stay safe on the water.

To report boating violations such as reckless operation or an intoxicated boat operator, call the DNR toll-free, 24-hour hotline at 1-800-922-5431. For a copy of South Carolina’s boating regulations, to find out about local boating safety courses or to obtain a free float plan form contact the DNR Boating Safety Office at 1-800-277-4301.

Courtesy safety inspections at the following locations and times:

Beaufort & Colleton Counties
Bennetts Point - (9 a.m. – Noon – May 24)
Pinckney Island - (9 a.m. – Noon – May 25)
Lemmon Island Landing - (9 a.m. – Noon – May 26)


Broad River
Cherokee County/Pick Hill Landing – (8 a.m. – 10 a.m. – May 24)
99 Island Landing – (8 a.m. – 10 a.m. – May 26)


Congaree River
Rosewood Landing – (4 p.m. -7 p.m. – May 23)
Bates Bridge/601 Bridge – (8 a.m. – 11 a.m. – May 24)
Rosewood Landing – (8 a.m. – 11 a.m. – May 25)
Billy Tolar - (8 a.m. – 11 a.m. – May 26)


Hampton & Jasper Counties
Sand's Boat Landing - (9 a.m. – Noon – May 24)
Stokes Bluff Boat Landing - (9 a.m. – Noon – May 25)
Battery Creek Landing - (9 a.m. – Noon – May 26)


Horry County
Craig Campbell Landing – (9 a.m. – Noon – May 24)
Conway Marina - (9 a.m. – Noon – May 25)
Enterprise Landing - (9 a.m. – Noon – May 26)


Georgetown County
Georgetown Ball Park – (9 a.m. – Noon – May 24)
Murrells Inlet - (9 a.m. – Noon – May 25)
Wacca Wache - (9 a.m. – Noon – May 26)


Lake Blalock
Main Ramp – (Noon – 2 p.m. – May 23) – (10 a.m. – Noon – May 24) – (10 a.m. – Noon – May 25) – (10 a.m. – Noon – May 26)


Lake Bowen
Main Ramp - (Noon – 2 p.m. – May 23) – (11 a.m. – 1 p.m. – May 24) – (11 a.m. – 1 p.m. - May 25) – (11 a.m. – 1 p.m. – May 26)


Lake Hartwell
Hurricane Creek Landing – (Noon – 2 p.m. – May 23) - (11 a.m. – 1 p.m. – May 24)
Twelve Mile Park – (10 a.m. – Noon – May 24)


Lake Jocasee
Main Ramp – (10 a.m. – Noon – May 25


Lake Keowee
Gap Hill Landing – (10 a.m. – Noon – May 25)
South Cove Park – (10 a.m. – Noon – May 24)


Lake Greenwood
Reeders Boat Landing - (Noon – 2 p.m. – May 23) – (11 a.m. – 1 p.m. – May 24) Greenwood State Park - (10 a.m. – Noon – May 24) - (Noon – 2 p.m. – May 25) – (10 a.m. – Noon – May 26)


Lake Marion
Alex Harvin Landing (Clarendon Co) - (9 a.m. -12 p.m. – May 23) – (9 a.m. – 12 p.m. – May 24) – (9 a.m. – 12 p.m. – May 25) – (9 a.m. – 12 p.m. – 26)
State Park (Orangeburg Co) – (5 p.m. – 8 p.m. – May 23) – (8 a.m. – 11 a.m. – May 24) – (8 a.m. – 11 a.m. – May 25) – (8 a.m. – 11 a.m. – May 26)
Packs Landing (Sumter Co) - (9 a.m. -12 p.m. – May 23) – (9 a.m. – 12 p.m. – May 24) – (9 a.m. – 12 p.m. – May 25) – (9 a.m. – 12 p.m. – 26)
Low Fall Landing (Calhoun Co) – (5 p.m. – 8 p.m. – May 23) – (8 a.m. – 11 a.m. – May 24) – (8 a.m. – 11 a.m. – May 25) – (8 a.m. – 11 a.m. – May 26)
White Oak (Clarendon Co) – (9 a.m. – 12 p.m. – May 26)


Lake Murray
Lake Murray Dam (Irmo Side) – (4 p.m. – 7 p.m. – May 23) – (8 a.m. – 11 a.m. – May 24) – (8 a.m. – 11 a.m. – May 25) – (8 a.m. – 11 a.m. – 26)
Billy Dreher Island (Newberry Co) – (8 a.m. – 11 a.m. – May 23) – (8 a.m. – 11 a.m. – May 24) – (8 a.m. – 11 a.m. – May 25) – (8 a.m. – 11 a.m. – 26)
SCE&G Ramp #3 (Saluda Co) – (4 p.m. – 7 p.m. – May 23) – (8 a.m. – 11 a.m. – May 24) – (8 a.m. – 11 a.m. – May 25) – (8 a.m. – 11 a.m. – 26)


Lake Robinson (Greenville Co)
Main Ramp – (Noon – 2 p.m. – May 23) – (11 a.m. – 1 p.m. – May 24) – (11 a.m. – 1 p.m. - May 25) – (11 a.m. – 1 p.m. – May 26)


Lake Robinson (Darlington/Chesterfield Cos)
Johnson's Landing – (1 p.m. – 3 p.m. – May 25)
Morrison Bridge – (1 p.m. – 3 p.m. – May 24)
Black River at Andrews – (9 a.m. – 11 a.m. – May 24)
Black River at Kingstree – (4 p.m. – 6 p.m. – May 23)
Little Pee Dee at Galivants Ferry – (4 p.m. – 6 p.m. – May 25) – (1 p.m. – 3 p.m. –May26)
Dewitts Landing Big Pee Dee - (1 p.m. – 3 p.m. – May 24) – (10 a.m. – 12 p.m.– May 26)


Lake Secession
Barton's Landing - (Noon – 2 p.m. – May 23) – (11 a.m. – 1 p.m. –May 24)


Lake Thurmond
Parksville Boat Landing – (10 a.m. – noon – May 26)
Scotts Ferry Landing - (Noon – 2 p.m. – May 25)
Dorn Landing – (10 a.m. – 12 p.m. – May 24)


Lake Wallace
Lake Wallace Public Ramp – (1 p.m. – 3 p.m. – May 25)
Dargan's Pond - (8 a.m. – 10 a.m. – May 24)
Hwy 34 Big Pee Dee – (4 p.m. – 6 p.m. – May 24)


Lake Wateree
Dutchman Creek Landing – (2 p.m. - 4 p.m. – May 23)
Clearwater Cove – (9 a.m. - 11 a.m. – May 24) – (9 a.m. - 11 a.m. – May26)
Wateree State Park – (2 p.m. - 4 p.m. – May 25)


Lake Wylie
Ebenezer Boat Landing – (4 p.m. - 6 p.m. – May 23) – (10 a.m. – Noon – May 24) – (1 p.m. – 3 p.m. – May 25) – (9 a.m. - 11 a.m. – May 26)


Lower Charleston County
Cherry Point - (9 a.m. – Noon – May 24)
Wappoo Cut - (9 a.m. – Noon – May 25)
Limehouse - (9 a.m. – Noon – May 26)


Saluda Lake
Main Ramp - (Noon – 2 p.m. – May 23) – (11 a.m. – 1 p.m. – May 24) – (11 a.m. – 1 p.m. - May 25) – (11 a.m. – 1 p.m. – May 26)


Union County
Neal Shoal Landing – (8 a.m. – 10 a.m. - May 26)
Lake John D. Long – (8 a.m. – 10 a.m. – May 24)


Upper Charleston & Berkeley Co.
Moore's Landing – (9 a.m. – Noon – May 24)
IOP Marina - (9 a.m. – Noon – May 25)
Bushy Park Both Sides - (9 a.m. – Noon – May 26)
DNR protects and manages South Carolina's natural resources by making wise and balanced decisions for the benefit of the state's natural resources and its people.

Short Sales Rise as Homeowners Seek Alternative to Foreclosure

In real estate, it’s the sale of a home or property for less than the amount owed the lender. The owner nets nothing on the sale and until recently, it also meant a tax liability, as the IRS considered the difference between the sale price and outstanding loan amount as income.

It’s not a favorable option, but a short sale can be the best way for a homeowner to get out from under a loan and avoid foreclosure, according to local real estate representatives.

Trouble is, a successful short sale is entirely dependent on the lender’s authorization. A seller may find a willing buyer, but unless the lender agrees to take a loss on the property, the sale won’t happen.

And as more homeowners near foreclosure — in Deschutes County, there were 528 notices of default, a precursor to foreclosure proceedings, filed between Jan. 1 and Thursday, a 303.5 percent increase over the same period last year — more homeowners are pursuing short sales.

Tom Greene, the president of the Central Oregon Association of Realtors, said roughly 7 percent of the homes currently listed in Deschutes County are short sales. That represents a huge jump, he said, as short sales used to be exceedingly rare.

“This is a new phenomenon,” Greene said. “You used to run into them once every six months.”

Short Sale 101 The reason most homeowners ask a lender for a short sale — be it hardship, a job transfer or a bad investment — is to avoid foreclosure, said Cat Zwicker-Grant, principal broker with Desert Sky Real Estate in Redmond.

The upside of a short sale is it doesn’t negatively affect a homeowner’s credit score, the way a foreclosure would.

The downside is the homeowner surrenders their investment in the home and has to certify he or she has not profited from the sale in any way. In addition, most lenders want proof a homeowner doesn’t have other financial means to pay for the loan, Zwicker-Grant said.

“You are asking the bank to accept a loss on your behalf, so if they do that, they want to know you are worthy,” she said.

In other words, if it’s a second home a homeowner is trying to short-sell, the chances a bank would accept one are slim, Zwicker-Grant said.

Filing for bankruptcy won’t help, either. If you can’t make mortgage payments, you can’t keep your home, said Deidra Cherzan, a Bend attorney who specializes in bankruptcy filings.

Bankruptcy law does provide exemptions for primary residences but only if the mortgage is in good standing and the filer can continue to make payments, she said.

The key to a successful short sale is to start the process early, Zwicker-Grant said. Contact the lender, and begin the application process. The next step is to list the house and find a buyer. If one is found, the buyer submits the offer to the lender, which approves or rejects the sale.

The trick is timing, Zwicker-Grant said. Most homeowners don’t begin the short-sale process until they are behind on payments. This often puts homeowners up against the clock.

A notice of default is generally sent out after 90 days of nonpayment, and a house can be put up for auction by a lender 90 days later. If no one bids on the home, it is foreclosed on by the lender and the lender assumes ownership.

Banks or lenders typically don’t want to own real estate, so even though they may take a loss on a short sale, it’s often less costly in the long run, considering the amount a bank would pay for title fees, to maintain a home, cover its taxes and pay real estate commissions when it sells, Zwicker-Grant said.

Zwicker-Grant said banks can be choosy when it comes to approving short sales and accepting bids. Like other sellers, they often hold out for the best possible deal.

“Just because the first offer came in, (the lender) looks at what’s going to close the quickest and get them the most money,” Zwicker-Grant said. “The bank is really in the driver’s seat.”

As of Wednesday, there were 131 short-sale homes listed in Bend and 68 in Redmond, representing roughly 9 percent and 7 percent of the listings in those markets, respectively, Greene said. Since Jan. 1, 17 short sales have closed in Bend and 34 in Redmond, according to Greene.

Valerie Hunter, principal broker at H & H Preferred Real Estate in Redmond, said she has helped close nearly 40 short sales in Central Oregon in recent months, the most she’s seen in the eight years she’s specialized in them. But as banks back up with short-sale applications, Hunter said the process is getting harder.

“Seventy-five percent don’t get successfully negotiated,” Hunter said.

“It’s a lot of work to do a short sale, and I try not to do them anymore because they are becoming more of a headache.”

If a short sale is approved, and a buyer purchases the seller’s home, the seller is not completely out of the woods. In past years, the amount of the loan forgiven by the lender — the difference between the outstanding loan amount and the sale price — was considered taxable income by the IRS.

That changed in December when President Bush signed the Mortgage Forgiveness Debt Relief Act of 2007. The act excludes income derived from debt forgiveness on a principal residence from taxation, but only for debt forgiven in 2007, 2008 or 2009.

For that reason and because of market conditions, Zwicker-Grant is seeing more homeowners take advantage of the process.

“Short sales have always been around, but we’ve never seen it so prevalent,” Zwicker-Grant said.

“Rapid Response System” for their Internet inquiries

Everyone is talking about response rates, and how that improves conversion from Internet inquiry to closed home sale. However, it seems that only a few large brokers have embraced a “Rapid Response System” for their Internet inquiries, and those that have done so are reaping the benefits.

If you’re a large broker and your response time is greater than 30 minutes (or worse yet, you don’t know what your response time is), here are three reasons large brokers should make sure each and every Internet inquiries are responded to immediately:

Higher Lead Conversion: Brokers who are responding to each and every lead within 10 minutes have a 250% greater lead to close conversion rate than those who are not responding quickly. Conversion rate increases translate directly into more revenue on the same amount of leads, so this has a much larger impact on large brokers’ margins.

Here is some interesting math. Let’s say that for $6 per inquiry, you can have a Rapid Response program implemented. Let’s also assume that broker revenue per closed transaction is $2,000. By dividing $6 by $2,000, you get 0.3%, the conversion improvement you need to completely cost justify a Rapid Response System.

This means that if you can get three additional closed transactions for each 1,000 Internet leads, your investment in the system costs you nothing. This is a no-brainer, as you’ll likely improve your conversion by 1% - 2%, which means 10 - 20 additional closings per 1,000 Internet leads.

More Satisfied Agents: Agents who get pre-qualified leads, rather than being fed raw Internet inquiries are much more satisfied with higher quality leads, and are more productive, since their time is spent working with qualified prospects, than dialing leads with a high propensity to be bogus, or looky-loos.

Improved Brand Reinforcement: Imagine you went into the local Bank of America branch, to make an inquiry of some sort, and then you were ignored (as 48% of your Internet inquires probably are, right not). How would that make you feel about the Bank of America brand? When prospective buyers come onto your website, they are experiencing your brand, and when your agents ignore their requests, or respond days later, it is tarnishing your brand.

In this market, where buyers have more choice, it’s especially important to show the value of your services and respond quickly to your Internet inquiries. It’s especially important for large brokers, as it can not only improve your revenue and margins, but benefits large brokers with increased agent satisfaction and brand reinforcement.

“The worst is behind us, Things are picking up.”

Western New York Realtors saw renewed life in the local home selling market in April, despite a fourth consecutive monthly drop in the total number of residential deals.

The Buffalo Niagara Association of Realtors on Monday reported a total of 808 single- family homes were sold last month, five fewer than in April 2007. However, it was a solid bounce back from March, when 733 homes sold, an 11 percent slump from the prior year.

While the market showed signs of improvement, Buffalo Niagara residential sales over the January-through-April period were off eight percent for the same period of 2007.

“The worst is behind us,” said Realty- USA Chief Executive Merle Whitehead. “We’re seeing strong foot traffic at open houses and getting more calls for listings. Things are picking up.”

The median residential sale price, which indicates half of homes sold for more and half for less, climbed 5 percent to $101,000. That beats the March median price of $97,000, and April 2007’s $95,000.

The average sale price in April came in at $121,849, just slightly below last April’s $121,927, and well ahead of the March average of $117,332.

New and active listing totals showed month-to-month and year-over-year gains. A total of 1,845 new listings were recorded in April, up from 1,448 in March and 1,728 in April 2007. Active listings totaled 5,382 last month, besting the March total of 5,134, and the prior April’s 5,055.

BNAR President James Knight said local home buyers and sellers are shaking off the traditional winter doldrums, along with fears based on national housing trends. Knight said he recently attempted a national real estate conference in Washington, D. C., where the prevailing message was a reminder that real estate markets are local, not national.

“We’re micro, not macro, and the real story is what happening neighborhood-to-neighborhood, not state-to-state, or coast-to-coast,” Knight said. “And what we’re seeing in our neighborhoods is pretty darn good.”

Whitehead agreed, saying local residents should ignore the national housing slump data.

“We’re rock stars here compared to most other markets,” Whitehead said. “Basing home buying and selling decisions on what you see on CNN or network news is like checking a national weather forecast to get the local conditions.”

Both Whitehead and Knight predicted May will see positive sales totals, setting the stage for a strong 2008.

“Our biggest problem is consumer confidence. In reality this is a well-balanced market with a great selection of inventory and great interest rates and we’ll see that in the numbers over the next few months, ” Whitehead said.

Harley Davidson Biker Rally final numbers

The Harley Davidson Biker Rally ended officially Sunday.

Here's a look at the final numbers compiled by Horry County's Emergency Operations Center.

There were a total of 135 accidents during the rally.

Three of them were fatal. In all 163 people were injured.

Experts say preliminary numbers show about 250,000 people were here over the ten days, including bikers, golfers and other tourists. That's down at least 10% from last year.

"As far as Myrtle Beach Harley Davidson goes, we had a good week," said Mike Shank with Harley Davidson.

"At Jamin' Leather we were very busy," said Jamin' Jamie Keats of Jamin Leather.

"We were very fortunate," said Shawn Croley of Surfside Live. "We did have a few record breaking nights this past week."

But the bikers weren't spending money everywhere.

"It was a lot slower than what we thought it would be," said Rachel Bailey of Tequila Mockingbird.

Certain bars didn't welcome as many bikers as they would have liked. Vendors also complained about a lack of business.

This year, fewer bikers made their way to the Grand Strand for the Harley Davidson Spring Rally, and with a new vendor location at Hard Rock Park on Highway 501, the bikers that were here were more spread out.

"I do think it moved traffic around a little more, away from Highway 17, and maybe some of the congested areas so that may have thinned things out in different areas around town," said Shank.

Still, traffic managed to mount as bikers left town Sunday.

As the rally wraps up, businesses look ahead to next year, when they expect more bikers and more money.

"I expect 2009 to be a better year, and 2010 I think it will blow up again," said Keats. "Once the election year is over and once gas prices start leveling out and people get used to it, things will change."

Gas prices and the economy are likely reasons the bike rally numbers were down.

3 people died in Harley-Davidson spring motorcycle rally.

The Horry County coroner says a 42-year-old Myrtle Beach man died from injuries he suffered in motorcycle accident during the annual Harley-Davidson spring motorcycle rally.

Coroner Robert Edge says Hilton L. Brown died from head injuries Saturday afternoon in the emergency room of Grand Strand Regional Medical Center.

Horry County Police Captain David Knipes says Brown was driving his motorcycle fast when he missed a curve near the Marriott Resort entrance.

No other vehicles were involved.

It was the third fatality in the 10-day rally that wrapped up Sunday.

The spring rally typically draws about 200,000 people to the 60-mile stretch of beaches from Georgetown to the North Carolina state line.

Three people died in accidents last year.

Lou Dobbs said stronger economy by the year’s end.

Speaking to thousands of real estate professionals on May 18, CNN Anchor and Managing Editor Lou Dobbs said the U.S. economic situation can be summed up with three words: normal business cycle.

Tens of thousands of real estate professionals worldwide packed into the Las Vegas Hilton Hotel to hear Dobbs’ keynote address at the 2008 International Council of Shopping Center’s Real Estate Convention. The annual convention is the world’s largest professional real estate event.

Beginning May 17, the event’s trade expo, leasing mall and general sessions sees more than 50,000 of the real estate industry’s top representatives.

“[The U.S. economy] is in a business cycle,” Dobbs said. “It’s been our experience for the past 200 years in the country and yet we have economists acting as if the slowdown is the same thing as Armageddon. It’s just a business cycle.”

Dobbs said his advice to real estate professionals is to hold tight for a stronger economy by the year’s end.

“This economy, through its natural strength and resilience, will recover and will be recovering demonstratively by this fall,” he said.

The real estate market, which has been beleaguered by financing troubles, rising interest rates and a halting housing market, has seen a downturn in recent months.

The 2007-2008 International Council of Shopping Centers Worldwide Chairman Rene Tremblay said the economic situation presents real estate professionals with an opportunity and the convention is a time for the nation's real estate developers to decide if, as an industry, “we are going to be paralyzed by fear or be emboldened by opportunity,” he said.

Despite real estate industry woes, International Council of Shopping Centers President and CEO Michael Kercheval said the organization and the convention’s numbers continue to grow.

The conference, he said, has seen a 13 percent increase in participation in its leasing and trade malls and 321 new companies have reserved booth space at the event.

Kercheval also reported that the convention has delegates from 60 nations in attendance and a record-breaking 2,638 public sector officials filing the Las Vegas Convention Center halls. ICSC membership is up 8 percent from its 2007 tally to more than 76,000.

“[Membership from] the capital market has dipped, but that decline has been dwarfed by a surge in members from the public sector, developers and retailers,” Kercheval said.

Dobbs shared Kercheval’s bright outlook. Citing the past decade’s Internet, technology and housing bubbles and their subsequent collapses, Dobbs said the United States has seen a roller coaster economy. But, he said, he does not “believe the country will see a classic recession.”

Home sales and prices poised for improvement

Home sales and prices throughout most of the country are poised for improvement in the second half of 2008, and the recovery will vary by market, Lawrence Yun, chief economist for the National Association of Realtors® said during NAR’s Midyear Legislative Meetings & Trade Expo. More than 9,000 Realtors and guests attended the conference that ran through Saturday.

Middle-America cities that performed evenly over the past few years - like Cincinnati, Milwaukee and the Kansas City, Mo., area - are likely to experience home price gains in the 20 to 30% range over the next five years, while markets like Miami, Las Vegas and Phoenix could see prices go up as much as 50% during that time period, Yun said.

Yun blamed most of the softening of the housing market over the last year on the “subprime mess,” where consumers with blemished credit records got loans they couldn’t afford when the interest rates reset to higher levels.

“In fact, if you look at where home prices fell the most, it’s the markets were subprime loans were prevalent,” Yun said. Cape Coral, Fla.; Detroit; Las Vegas; Miami; Orlando, Fla.; Phoenix and Riverside, Calif. were among the cities with a high percentage of subprime lending and where the markets suffered the biggest downturns, he explained.

“It’s important to keep things in context,” he said. “While much of the media is focusing on the fact that the rate of foreclosures doubled this year from historic averages, the foreclosure rate has gone from 1 percent of all homeowners with mortgages to 2 percent. Foreclosures are being driven principally by subprime loans.”

He further explained that more than half of today’s foreclosures are concentrated in the subprime market. The great majority of homeowners are making their mortgage payments on time.

Now that the subprime market has dried up, and loans insured by the Federal Housing Administration and those purchased by Fannie Mae and Freddie Mac are making a comeback, the housing markets will strengthen and prices are likely to begin a steady uptick in the coming months, Yun said.

Yun urged the Congress and White House to enact NAR-supported legislation to modernize FHA programs, reform regulation of the government-sponsored enterprises (Fannie Mae and Freddie Mac), establish a first-time home buyer tax credit, and make the temporary increases to the conforming loan limits established by the Economic Stimulus Act of 2008 permanent.

“These measures would quickly stabilize the housing markets and get fence-sitters into the market to buy homes,” Yun said.

“There are many reasons for people to get into the housing market today, and very few reasons not to. With the plentiful supply of homes for sale at affordable prices, interest rates approaching 40-year lows, and the strong track record of housing as a good long-term investment, conditions are ripe for buyers,” he added. “Those are the facts, plain and simple.”

As for a recession, it’s not happening, Yun said. “A slowdown, yes, but the definition of a recession is two consecutive quarters of negative GDP growth. It’s not in the cards - no matter how you look at it.”

The new real estate boom. Really.

The housing market is still a mess but funds that invest in real estate stocks are on fire this year. Here's why the comeback may be for real.


Oil hit another record high on Friday. So it's no surprise that natural resources mutual funds, funds that invest in energy companies and other plays on surging commodities, are the best performing domestic stock funds this year.

At the same time, real estate news just gets worse and worse, and on Friday, construction of single-family homes fell to a new 17-year low. But guess what the second-best performing fund category is so far this year?

That's right - real estate funds.

TalkBack: Is now a good time to invest in real estate?
Those funds that primarily invest in companies known as real estate investment trusts (REITs) are up more than 7%, according to Morningstar, trailing only the 13% gain in natural resources funds.

What's behind this real estate "boom"?

For starters, it's worth pointing out that real estate funds probably had nowhere to go but up. Many leading REIT indexes were down more than 15% last year.

But now, there are signs that the capital markets are stabilizing, which would continue to help REITs.

"I'd be a fool to say I'm not concerned about the economy and what it means for real estate fundamentals but the group took a big hit last year. If you look at how far it fell, it was probably overdone," said Robert Gadsden, manager of the Alpine Realty Income and Growth fund.

Gadsden said that another reason to like REITs right now is because the Fed's rate cuts have led to lower bond yields and relatively low rates on savings accounts. REITs, however, are required to pay a large chunk of their earnings back to investors as dividends.

"REIT stocks are a good yield play," Gadsden said.

The average dividend yield for the stocks in Gadsden's portfolio is 5.2%, compared to an average of just 2% for the S&P 500 and about 3.9% for a U.S. 10-Year Treasury.

Still, it may be premature to declare that the real estate market, especially for housing, has bottomed.

"The move in REIT stocks is not really about fundamentals. It's a psychological shift. The market wants to call the turn in real estate," said Kevin Means, managing partner with Alpha Equity Management, which subadvises the RidgeWorth Real Estate 130/30 fund.

Means said he's now concerned that there may be "frothiness" in some real estate stocks. However, he seeks to take advantage of that by short-selling some stocks (i.e. borrowing shares and selling them with the hopes of profiting by buying them later at a lower price).

The 130/30 in the fund's name means that he takes 30% of the proceeds he gets from short-selling stocks and uses them to buy more real-estate related stocks. (He is not limited to just buying REITs.) That allows him to have a 130% long position in the sector.