Why Asians & Europeans Should Buy in South America

Why Asians & Europeans Should buy in South America
The biggest reason is the currency differences. South American Currencies are like the dollar in that they have been steadily losing value against other world currencies. Some of the currencies are undervalued. The Argentine Peso is 3.16 to the US dollar, which is pretty good. Most of the property there is priced in dollars though so that doesn’t really help some of from the USA. The dollar is 1.47 to the Euro. A European can get a significant advantage. The yen is 112.32 to the dollar, which is not all that great. The Yuan or RNB from China is 7.31. The Chinese have been accused ot keeping their currency artificially low; but considering recent events, that may not be the case any longer. Europeans will be the big winner on currencies, at least in the short term.

The next big reason is the things that are happenning to many of the South American Economies right now. They are shifting from commodities based economies to industrial and service based economies. Investing in South America now, with the exception of Bolivia, Venezuela and Ecuador, is like investing in the USA 150 years ago. The big difference being that they will probably compress 150 years of development into about 20.

The third reason is the agricultural potential. The coffee business has been hijacked by the Africans and Vietnamese. Soybeans, exotic herbs and fruits, ethanol and vegetables are the new order. The big users of these things are in the Northern hemisphere. When winter stops production in the North, summer prevails in the South.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com

New Year, New Perspectives

New Year, New Perspectives
I always make New Years Goals rather than resolutions. Resolutions are made to be broken. Goals get reviewed and usually accomplished. I will share two of my 2008 goals with you for 2 reasons. #1 you can keep my feet to the fire and remind me if I don’t accomplish it. #2 Maybe you can help me.
The first goal that I will share is to go to South or Central America at least 4 times during 2008. If you know of great real estate congresses, let me know. With the currency situation like it is going south makes a lot more sense than going to Europe or Asia.
The second goal is to find some large tracts of land in South America and find some European or Asian buyers for them. Let me know if you know land or buyers for land. We can share. The next blog will talk about why Asians and Europeans should be buying South American land.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com

Infrastructure, Trade & International Real Estate(Pt. 2)

Infrastructure, Trade & International Real Estate (Part 2)
I once had a listing in a small country in the West Indies. I spent a night there to understand the listing and get a perspective on marketing it. Getting there required a flight to San Juan, Puerto Rico and an overnight stay. The next morning a prop jet carried me to the capitol of this island. A 3 ½ hour drive by jeep fording a small river twice got me to the property.
It was a wonderful home, built into the side of the mountain. Solar heat and electricity and spring water were not just adequate; but exceptional. By walking about 2/10 of a mile to the top of a hill I was able to use my cell phone.
Going back required the same drive. The overnight stay was in the capital of this country in a fairly primitive beachfront hotel instead of San Juan. The flight back to San Juan started with a hand search of my baggage in the public part of the airport and a repeat performance on the secure side of the airport. In San Juan the flight connected on the same day. It was a great trip and a wonderful experience. I never sold the property. What do you think was the problem?
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com

Infrastructure, Trade & International Real Estate (Pt. 1)

Infrastructure, Trade & International Real Estate (Part 1)
In an earlier blog, the relationship between container facilities and trade was discussed. What happens to the trade articles after they reach the (air)port? They have to go somewhere. Even if intermodal facilities are available there still must be a way for the trucks and trains to disburse the goods or bring in goods for shipment. Whereever highways and rail lines go the demand for real estate increases. The prices increase too.
Other infrastructure is necessary as well. Manufacturing facilities need electricity and water. Delivery systems need fuel. The lack of available generating power has slowed growth on the border of the USA and Mexico. Manufacturers have actually built facilities that they could not operate. The business parks advertize available power. Several parks may be advertizing the same power. Users who do not check with the utility producers and reserve capacity may find themselves unable to operate.
In Brazil much of the electricity comes from hydro-electric plants. When there is a drought power is short and many companies have to work at reduced output. Using a competent real estate professional can help avoid these problems. I can introduce you to someone.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com

Squandered Opportunities

Squandered Oportunities
Venezuela has benefitted from the high price of oil for several years now. None of that wealth has really gone to help the citizens or improve the countries ongoing economic situation. Money has been used to finance growth in Argentina. Nestor Kirchner has used that money to pay off the renegotiated external debt. This has caused a tremendous inflow of foreign direct investment. Other countries in South America are also experiencing tremendous inflows of money and growth in their economies.
Venezuela is not getting foreign direct investment; because business people are afraid of Hugo Chavez and because it is very difficult to repatriate funds from that country. The business people of Venezuela are unable to get hard currency to invest abroad. The entire economy is expected to stagnate during the coming year. Latin Trade Magazine http://www.latintrade.com/ predicts dire consequences for the Bolivar’s exchange rate and severe inflation. For Venezuelans local real estate should be the only safe haven for capital that cannot be moved outside the country. Real estate is cheap now; because people are leaving the country. The prices should reflect the inflation in other sectors.
An old investment adage says, “The time to buy is when the blood is in the streets”. There may not be blood in the streets; but it is hard to distinguish all the red ink from blood.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com

Rocket Economy and Real Estate

Rocket Economy and Real Estate

Brazil has the fastest growing economy in the world. Lula (elected on the socialist Workers Party ticket) has turned out to be great for capitalism. Lula’s fiscally conservative policies have strengthened the economy and the middle class. His social programs have boosted 36 million people from poverty to lower middle class.

What does this mean for real estate? It means demand. According to the National Real Estate Investor magazine http://www.nreionline.com , office rents jumped 25% from 2005 to 2006 and 28% from 2006 to 2007. Demand for retail space is still strong and demand for housing is really skyrocketing.

Brazil is an excellent example of what South America needs. For too long the wealthy people have had their status preserved by benefiting disproportionately when times are good and moving their money out of the countries when times are bad. Lula has used the national wealth to build the prosperity of everyone and expand the middle class (which is the backbone of any successful economy). Hugo Chavez is a perfect example of the old style South American caudillo. He is using the wealth generated by the surge in oil prices to bolster his own position and feed his own follies.





David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com

BRRRR!

BRRRR!

The weather reports from the northern and Midwestern US are scary. Ice, snow, floods, no power. People everywhere in the northern part of the northern hemisphere are experiencing similar weather right now. The perpetual darkness and overcast causes severe depression. How many of these people are saying, “How much longer can I take this?”

Many answer that question every year by heading south. Winter solstice is a popular time to head for balmier destinations. In much of the business world, December has been removed from the calendar. At the very time when the target buyers are most susceptible to desire for warmth and comfort, the target market is busy celebrating.

I always say I am tired of this cold weather the first day it comes; but nothing gives me a warm fuzzy feeling like a commission check. That is even better than chicken soup.


David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com

The Second Home Culture

The Second Home Culture

Almost every country with any 2nd home market at all seems to have developed cultural enclaves of people who are not from that country. In these enclaves the only “natives” one sees are the people who do service. Even the language(s) is(are) usually more foreign than domestic.

Practically everyone from the USA says, “these foreigners should at least learn English”. These same people may have a 2nd home in Mexico or Costa Rica and not speak a word of Spanish. I can understand how some people improve their comfort level with international travel and home-ownership by being around other people who are like them. There are many reasons for international travel and investment that have nothing to do with the culture.

The culture is what attracts me most. The prices are lower outside of the enclaves as well. The enclave offers a greater sense of security at the expense of the adventure of international travel.

David Segrest is a REALTOR in Charlotte NC. His website is http:www.segrestrealty.com .

Containerized Freight and International Trade

Containerized Freight and International Trade

It seems simple enough. Trade requires freight. Freight moves in containers. It has not always been that way. The standard 20’ or 40’ container is a relatively new development. Freight moved anyway so what is the big deal?

The big deal is cost and location. Before containerized freight each item of cargo had to be handled individually every time it changed mode. Manufacturing facilities needed to be as close to market as possible. Close was measured in how many modes of transportation were required. That was the reason for the growth of the big seaport cities. The ease and relative inexpensiveness of transferring containers has nullified this effect somewhat.

Anyplace a truck or train or airplane can go is a potential shipping node. Around these nodes manufacturing and distribution centers can develop. These are followed by service industries and the businesses that are necessary to support a growing population. Whenever and wherever a new container node arises is an opportunity for real estate people to cash in on the growth.


David Segrest is a REALTOR in Charlotte NC. His website is http:www.segrestrealty.com .

International Trade & Wealth (pt. 5)

International Trade & Wealth (Pt. 5)

What is really important to us is “how does international trade affect real estate?”

The most obvious things of course are probably all of the imported items in any buildings that are built. In the USA a large portion of our lumber comes from Canada. Many of our fine wood items come from South America and Asia. The furniture comes from China. The cost of these items is held down by international competition. Some items of course are just things we could not have unless they were imported.

International traders and companies that operate businesses outside of their own countries are major users of real estate. Wherever a country touches the rest of the world is a major development point. Look at the areas around ports and international airports. Huge distribution centers spring up everywhere. There will also be manufacturing facilities that take advantage of the proximity to the transportation hubs. These places create jobs. They also bring in foreign workers who buy or rent homes.

Banking has gotten to be a huge industry largely because of the need to move money across national borders but also because of differences in national tax laws. Banks occupy a lot of office space. Their employees make a lot of money and occupy nice homes.

The travel people engage in for business creates an awareness that the countries outside of their own are not fearful environments. They learn to enjoy other cultures and other places. As their experience level grows so does their comfort level. 2nd homes in other countries becomes more desirable.


David Segrest is a REALTOR in Charlotte NC. His website is http:www.segrestrealty.com .