SOME WILL BURN A HOLE IN YOUR POCKET!

Pocket-(Sized) Listings: Homes Under 550 Square Feet for Sale

Jun. 17 2011
FORBES MAGAZINE

Size is not everything, especially if you ask a small, but mighty movement of people who prefer 400 square feet of real estate over 4,000. People who choose to live in smaller-sized homes cut down on living costs and since the recession and housing bust, the trend is really catching on, says Kent Griswold author of TinyHouseBlog.com.

These small homes can encompass a range of sizes, all the way down to a 84-sq ft home in Olympia, WA that was featured in NPR’s “tiny house movement” video.

"People are trying to downsize their lives, get rid of debt,” Griswold said. “Your cost of living is lower, your utilities don’t cost nearly as much. It changes your whole attitude — you’re in a small space, you only have room for so many items, it’s a lifestyle change.”

While some people purchase land and build their own small homes through kits, like, Cusato Cottages, others just choose to buy or rent homes that are smaller in size. Interested in downsizing your life? We rounded up a few small homes for sale, each with dimensions around 550 square feet or below:

6559 Beach Dr. SW Seattle, WA
For Sale: $335,000
Square Footage: 460

This romantic and private bungalow is nestled on prime Seattle real estate along the Puget Sound in the West Seattle neighborhood of Seaview. Built in 1926, the log cabin has original leaded windows, a claw-foot tub, stone fireplace and darling nook-sized bedroom.

15 Napier Ln San Francisco, CA
For Sale: $1,230,000
Square Footage: 550

Own a piece of San Francisco history by purchasing this piece of Telegraph Hill real estate. Built around 1884, this home is one of the few Telegraph Hill homes that survived the 1906 earthquake and fire. The two-story cottage was remodeled in 2002 and 2003. The 2-bedroom, 2-bath home has partial views of the bay and an open floor plan that makes it feel more spacious than its 550 square feet.

741 Wilcox Ave Los Angeles, CA
For Sale: $549,000
Square Footage: 528

It’s no secret that Hollywood real estate is pricey and this 2-bedroom, 1-bath bungalow is one prime example. Despite the home’s small size, it boasts a variety of amenities that up its home value, including a large entertainment-sized deck with hot tub and pergola, as well as a gated courtyard at the entrance of the home and hardwood floors throughout. Built in 1921, this little house was last sold in 2009 for $265,000.

9 Lincoln Ave Hampton Bays NY
For Sale: $599,000
Square Footage: 488

This updated piece of Hampton Bays real estate is a tiny alternative to a vacation condo. Set on Tiana Bay, the cottage has 50 feet of private beach access. Built in 1991, the home has undergone a complete remodel with updates to the kitchen, bath, electric and plumbing systems. With an open floor plan and high ceilings, the 1-bedroom, 1-bath house is a perfect summer hideaway.

7 S Maine St Kennebunkport, ME
For Sale: $385,000
Square Footage: 280

With only 280 square feet of living space, this piece of Kennebunkport real estate makes some New York studios look spacious. A part of Cabot Cove, a cottage beach community, this cottage has been professionally landscaped and furnished. The cottage has views of the cove and river and can be used as a primary residence, or summer rental.

527 Berkley St Berkley, MA
For Sale: $67,600
Square Footage: 478

Built in 1921, this 1-bedroom home is listed on the Berkley real estate market as a “great condo alternative.” The 478-square-foot cottage sits on a wooded lot just over half an acre just four minutes from Berkley’s city center, and about an hour’s drive from Boston.

507 N 21st St Wilmington, NC
For Sale: $119,900
Square Footage: 500

Sitting at 500 square feet, this World War II-era bungalow is within minutes of downtown and a local beach. The “move-in ready” 2-bedroom, 1-bath home was previously listed for $127,000 on the Wilmington real estate market.

2702 N. Ardmore Ave Manhattan Beach, CA
For Sale: $685,000
Square Footage: 498

Listed on the prestigious Manhattan Beach real estate market, this 2-bedroom, 1-bath home has been completely updated since its construction in 1954. The 498-square-foot cottage has a slate fireplace and brand new kitchen and bath. The house includes a breakfast nook, extra room, and gated front yard.

REAL ESTATE ASSETS

Distressed Debt Investors Prefer Real Estate In 2011
Forbes
January 27, 2011

With risk-taking coming back to most markets, investors in the riskiest asset classes are being forced to channel their funds into different sectors and instruments in their attempts to get the most bang for their buck.

The North American Distressed Debt Market Outlook 2011, a survey of 100 experienced distressed debt investors released by Debtwire, Macquarie Capital and Bingham McCutchen, found that these investors will move their cash from energy to real estate assets and from first and second-lien loans to common equity and convertible bonds. Distressed debt investors will have to adapt to a surging equity market and a bubble in high-yield loan markets, finding themselves pushed down the capital structure in search for yield.

Distressed debt markets will provide opportunities for investors in 2011, as “lingering concerns about unemployment, housing, and the European sovereign debt crisis will cause investors to remain cautious and focus on the ability of companies to withstand additional economic shock,” according to David Miller of Macquarie Capital. Investors will therefore “continue to stress the downside when evaluating investment opportunities.”

This will force a change in strategy for those brave enough to invest in distressed assets. Real estate will be the sweet spot for investors in 2011, with 48% of those surveyed choosing it as their favorite sector, a 22% rise from a year ago.

Specifically, the sector will be commercial real estate, where 51% of respondents expect default rates will not peak before the second half of 2011. “[These findings] don’t necessarily bode well for the prospect of the housing and commercial real estate markets avoiding a double dip,” reads the report.

This represents a marked change from a year ago, when energy and automotive sectors were amongst the top picks, with 37% and 29% respectively. But, with energy prices back on the rise and “the automotive sector dodging a huge bullet,” opportunities will lay elsewhere, in the real estate and financial markets. For example, General Motors and Fords carry a Fitch corporate rating of BB-, which is below investment grade.

The change is not only in sector, but in preferred instrument too. Whereas first and second-lien loans topped the list of “most attractive opportunities” in 2010, common shares, convertible bonds, and preferred/mezzanine loans have taken the top three spots. “There is no longer a need to be at the top of the capital structure,” said Ronald Silverman of Bingham McCutchen, another of the firms that cooperated in the report. “Unlike last year where first- and second-lien loans were the place to be, fund managers are prepared to move away from secured debt and are ready to enter on the ground floor.

A bubble in the high-yield and leveraged loan markets, as well as the staggering rebound in the equity markets, is the catalyst behind change. “Many investors experienced significant gains as they exploited inefficiencies in the high-yield and leveraged loan markets in 2010. As investors continue to deploy capital to these markets, returns will diminish, causing investors to move even further down the capital structure in search of outsized yields,” wrote Raoul Nowitz of Macquarie. Thus, 55% of respondents see those markets in a bubble, with most expecting a burst in the second half of 2011 or the early 2012.

Allocation of assets to distressed debt will remain essentially unchanged from 2010, with distressed allocations exceeding 40% of assets under management for 27% of those surveyed. Expected returns are “largely in line with those of 2010,” with 27% of managers expecting returns under 5%, and 16% of them expecting returns greater than 20%.

“Given the run-up in asset prices in 2010, distressed debt investors will be forced to take more aggressive risk positions to chase higher yields, creating an environment in which achieving extraordinary returns will be increasingly challenging,” said Ford Phillips of Macquarie Capital.