Recession Proof Investment
In the last article we searched for a recession proof industry. I don’t know if we found one. I do know of a recession proof investment. As much as I love real estate as an investment vehicle, that even seems a little scary right now. Government bonds are fine if you don’t consider currency risk. Precious metals seem to be overpriced to me. If the economy gets better (surely it will someday), they will lose value.
Perhaps the best investment right now is to invest time and money in education. If one is careful what type of education one gets this should be a truly lasting asset with continuing high returns. The biggest challenge today would be to find a field of study that will not become obsolete. Any knowledge gained enriches ones enjoyment of life. Most of us now are looking for something to enrich our financial conditions. For me that points to real estate education.
There are many great designation programs available. Many people don’t feel prosperous enough to travel and take an expensive class. Maybe buying a book will help. It only counts if you read it. Also, one can do research into a subject online. Many of us have time and no money right now. Choosing a subject and researching it online is an excellent way to invest what is plentiful (time) and preserve what is scarce (money).
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Tuesday, December 30, 2008
Monday, December 29, 2008
What is Recession Proof?
What is Recession Proof?
Before the current recession, there were quite a few industries that were considered recession proof. Food, energy, medical, even housing. “Everyone has to have food , clothing & shelter.”, right? The price of oil has dropped. Much of the recent spike in agriculture came for sugar and corn used in ethanol production. The prices in the grocery store don’t seem to have declined; but the farmers are hurting again.
Health care workers are doing ok. Health care providers are having a problem collecting bills. Laid off workers lose their health insurance; but they cannot be refused service for something life threatening. I will make no discussion on housing, even though that is how most of us make our living. Are we still making a living?
My wife is an architect. The architects have an expression for recession times. They consider themselves to be “self-unemployed”. Is that what some of the REALTORS are?
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Before the current recession, there were quite a few industries that were considered recession proof. Food, energy, medical, even housing. “Everyone has to have food , clothing & shelter.”, right? The price of oil has dropped. Much of the recent spike in agriculture came for sugar and corn used in ethanol production. The prices in the grocery store don’t seem to have declined; but the farmers are hurting again.
Health care workers are doing ok. Health care providers are having a problem collecting bills. Laid off workers lose their health insurance; but they cannot be refused service for something life threatening. I will make no discussion on housing, even though that is how most of us make our living. Are we still making a living?
My wife is an architect. The architects have an expression for recession times. They consider themselves to be “self-unemployed”. Is that what some of the REALTORS are?
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Friday, December 26, 2008
Negativism & Bad News
Negativism & Bad News
The news has been so gloomy lately, I’ve just been expecting the whole world to come down around my ears; so when I felt something hit my ankles, I thought: My God it is even worse than I thought. When I got the courage up and looked down I realized it was only my pants. What on earth is the government up to now? Or maybe it’s the banks?
It is time to go back to the old basics. Don’t sweat the small stuff. -It’s all small stuff. Don Juan’s “man of power” knows that nothing really matters. He behaves as if everything does. Reality check…vacancy rates in the properties I manage are lower than they were last year at this time. Delinquencies are no better; but they are no worse. Neither my immediate family nor myself are sick. The greenhouse is doing well.
These are small things. They affect my life more than GDP per Capita or unemployment. I can sell all of my stocks and have a loss for my taxes. I can buy better stocks and just wait. Life is good…or at least good enough.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
The news has been so gloomy lately, I’ve just been expecting the whole world to come down around my ears; so when I felt something hit my ankles, I thought: My God it is even worse than I thought. When I got the courage up and looked down I realized it was only my pants. What on earth is the government up to now? Or maybe it’s the banks?
It is time to go back to the old basics. Don’t sweat the small stuff. -It’s all small stuff. Don Juan’s “man of power” knows that nothing really matters. He behaves as if everything does. Reality check…vacancy rates in the properties I manage are lower than they were last year at this time. Delinquencies are no better; but they are no worse. Neither my immediate family nor myself are sick. The greenhouse is doing well.
These are small things. They affect my life more than GDP per Capita or unemployment. I can sell all of my stocks and have a loss for my taxes. I can buy better stocks and just wait. Life is good…or at least good enough.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Thursday, December 18, 2008
'Tis the Season
'Tis the Season
'Tis the season to not do business internationally. In the USA people are going to be working on the 25th. In many countries almost everything shuts down for the month of December. Most Latins celebrate 12 days of Christmas; but they have a getting ready and getting over period that extends until about January 6. Christmas is not the merchant’s bonanza elsewhere that it is here.
Outside of the USA, children and servants or employees receive a small gift from the parent or boss. The celebrations are the focus rather than the gifts. The celebrations are unbelievable. I had the wonderful experience of being in Brussels on St. Nicolas day. I just happened to be in the “Manikin Piss” square when the celebration started and the 4 societies of “Manikin Piss” competed to see who could do the most fantastic parade. This was like what I would imagine a medieval street carnival would be. I felt as if I had been transported to the middle ages.
Whatever religion or lack thereof you celebrate, I wish you much joy in this season and in the coming year.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
'Tis the season to not do business internationally. In the USA people are going to be working on the 25th. In many countries almost everything shuts down for the month of December. Most Latins celebrate 12 days of Christmas; but they have a getting ready and getting over period that extends until about January 6. Christmas is not the merchant’s bonanza elsewhere that it is here.
Outside of the USA, children and servants or employees receive a small gift from the parent or boss. The celebrations are the focus rather than the gifts. The celebrations are unbelievable. I had the wonderful experience of being in Brussels on St. Nicolas day. I just happened to be in the “Manikin Piss” square when the celebration started and the 4 societies of “Manikin Piss” competed to see who could do the most fantastic parade. This was like what I would imagine a medieval street carnival would be. I felt as if I had been transported to the middle ages.
Whatever religion or lack thereof you celebrate, I wish you much joy in this season and in the coming year.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Wednesday, December 17, 2008
Benefits from Hard Times
Benefits from Hard Times
Polyanna is bound to be having 2nd thoughts if she is much exposed to the news. There are bound to be some lasting benefits from the current economic conditions. There are probably some short term benefits as well. Teachers and other public servants who have had to suffer with inferior wages at least can compare their lot favorably with people who are unemployed. Somehow being better off because someone else is worse off is not really all that great.
The auto manufacturers are bound to be happy to smash the unions. Public sympathy does not seem to be with the UAW right now. Think of this though. If their wages are reduced, what does this do to the general economy. The industrial bailout where everyone has to suffer a little may have some short term benefits. Long term everyone still loses. Metaphorically, our country is going into deeper debt to cover daily expenses. We could use the money obtained through this debt to buy assets like bridges, roads and schools. The money would put people to work.
Long term, we would be better off because we would at least have an asset to show for the crippling debt incurred. The asset may even help generate revenue to pay off the debt. It is similar to the choice between borrowing money to pay rent or borrowing money to buy a house.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Polyanna is bound to be having 2nd thoughts if she is much exposed to the news. There are bound to be some lasting benefits from the current economic conditions. There are probably some short term benefits as well. Teachers and other public servants who have had to suffer with inferior wages at least can compare their lot favorably with people who are unemployed. Somehow being better off because someone else is worse off is not really all that great.
The auto manufacturers are bound to be happy to smash the unions. Public sympathy does not seem to be with the UAW right now. Think of this though. If their wages are reduced, what does this do to the general economy. The industrial bailout where everyone has to suffer a little may have some short term benefits. Long term everyone still loses. Metaphorically, our country is going into deeper debt to cover daily expenses. We could use the money obtained through this debt to buy assets like bridges, roads and schools. The money would put people to work.
Long term, we would be better off because we would at least have an asset to show for the crippling debt incurred. The asset may even help generate revenue to pay off the debt. It is similar to the choice between borrowing money to pay rent or borrowing money to buy a house.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Monday, December 15, 2008
Market Bottoms
Market Bottoms
How does one know when the market has hit bottom? Maybe there will be a small surge. Take care. This could be the “dead cat bounce”. I think most of the markets are at or near their bottom. Some activity is taking place. Neither buyers nor sellers are negotiating the way they were even a month ago. People are counting the days until January 21st.
Market “fundamentals” are important. Faith is more important. Most of us believe that when the new administration comes in things will change for the better. Our beliefs, more that the actions of the new administration is what will change the market direction. For investors who have a definite strategy, based on property performance there has never been a better time to meet goals. Commercial real estate prices are finally in line with yields. Competing investments are yielding less. Vacancies reduce NOI (net operating income). This reduces the value of the property. It increases upside potential however.
Buying properties with high vacancy rates may seem scary right now. People with courage will probably make a lot of money. Concentrate on location. Physical conditions and leasing strategies can be fixed. Location will be critical as the economy bounces back. Cautious users know they cannot afford a bad location.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
How does one know when the market has hit bottom? Maybe there will be a small surge. Take care. This could be the “dead cat bounce”. I think most of the markets are at or near their bottom. Some activity is taking place. Neither buyers nor sellers are negotiating the way they were even a month ago. People are counting the days until January 21st.
Market “fundamentals” are important. Faith is more important. Most of us believe that when the new administration comes in things will change for the better. Our beliefs, more that the actions of the new administration is what will change the market direction. For investors who have a definite strategy, based on property performance there has never been a better time to meet goals. Commercial real estate prices are finally in line with yields. Competing investments are yielding less. Vacancies reduce NOI (net operating income). This reduces the value of the property. It increases upside potential however.
Buying properties with high vacancy rates may seem scary right now. People with courage will probably make a lot of money. Concentrate on location. Physical conditions and leasing strategies can be fixed. Location will be critical as the economy bounces back. Cautious users know they cannot afford a bad location.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Sunday, December 14, 2008
How Do You Know What to Pay?
How Do You Know What to Pay?
Yesterday, I visited my friend and neighbor Rick Stikeleather. He is one of the most successful small real estate investors I know. He also does brokerage and management. He buys the properties for income mostly; but when and area where he was heavily invested went through the gentrification process a few years ago he did sell the properties in that area.
I asked Rick, “Are you still buying?” He indicated that he was. I asked “How do you know what to pay?” He said, “I buy on the rent.” This is a really simple answer to a really complicated question. It summarizes the reason for his great success. Rick does not concentrate on how much the property will be worth next year or in five years. He concentrates on the return on his investment today. I can’t help but believe that in an uncertain environment this is the only valid approach.
The answer could be restated for homeowners or 2nd home buyers. What are the benefits you expect to receive? Are they worth the price? What are they worth to you? The answer to this question is more important than the actual market value. Market values go up and down. While benefits sometimes change, this is a much slower and less volatile aspect of property.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Yesterday, I visited my friend and neighbor Rick Stikeleather. He is one of the most successful small real estate investors I know. He also does brokerage and management. He buys the properties for income mostly; but when and area where he was heavily invested went through the gentrification process a few years ago he did sell the properties in that area.
I asked Rick, “Are you still buying?” He indicated that he was. I asked “How do you know what to pay?” He said, “I buy on the rent.” This is a really simple answer to a really complicated question. It summarizes the reason for his great success. Rick does not concentrate on how much the property will be worth next year or in five years. He concentrates on the return on his investment today. I can’t help but believe that in an uncertain environment this is the only valid approach.
The answer could be restated for homeowners or 2nd home buyers. What are the benefits you expect to receive? Are they worth the price? What are they worth to you? The answer to this question is more important than the actual market value. Market values go up and down. While benefits sometimes change, this is a much slower and less volatile aspect of property.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Tuesday, December 9, 2008
Does Barack Obama Read This Blog?
Does Barack Obama Read This Blog?
In the last posting, I suggest good old fashioned public works projects to put people back to work. It seems as if Barack Obama had the same idea. These projects are a stimulus package that always works and leaves a lasting legacy of public assets. There are still stone walls around Charlotte that were built by the WPA.
The Bush administration has been pretty generous. They set up a big $700 billion grab and then said, we are only going distribute ½ of the money to our buddies. We will leave the other half for the new administration to give to their buddies. I just can’t believe that Congress fell for that top down junk. If anything the measures they took will make things worse. They will certainly lead to more stratification of our society, which we definitely don’t need.
Roads bridges and schools benefit our country. Wars only benefit a few industries at the expense of the entire society. The tremendous projects that were planned for Iraq, many of them paid for and never built, would be very helpful here.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
In the last posting, I suggest good old fashioned public works projects to put people back to work. It seems as if Barack Obama had the same idea. These projects are a stimulus package that always works and leaves a lasting legacy of public assets. There are still stone walls around Charlotte that were built by the WPA.
The Bush administration has been pretty generous. They set up a big $700 billion grab and then said, we are only going distribute ½ of the money to our buddies. We will leave the other half for the new administration to give to their buddies. I just can’t believe that Congress fell for that top down junk. If anything the measures they took will make things worse. They will certainly lead to more stratification of our society, which we definitely don’t need.
Roads bridges and schools benefit our country. Wars only benefit a few industries at the expense of the entire society. The tremendous projects that were planned for Iraq, many of them paid for and never built, would be very helpful here.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Friday, December 5, 2008
What Happened to the Old Home Remedy
What Happened to the Old Home Remedy
The only benefit most of us get from the trickle down economic stimulus plans of the current administration is a warm damp feeling on the back of our necks. What happened to the old fashioned stimulus packages that always worked? Are they too old fashioned and unsophisticated? My dad always said that it never helped him when the Rockefellers got extra money; because he wasn’t smart enough to get it from him. When The working men got money he was smart enough to get some of it.
The roads and bridges throughout our country are in horrible condition and overcrowded. Those projects put people to work and stimulate the local and national economies. Commercial REALTORS® know that progress follows roads. Progress puts more people to work. The construction workers spend money at Walmart and the local restaurants and watering holes. The engineers spend money at Target, Sachs and the cheaper restaurants. These people buy homes and make mortgage payments. Usually their payments are on time.
Making jobs raises wages and income. Bailing out the auto industry or financial institutions requires that they cut jobs and reduce wages and benefits. How does this help the economy? The effect of the current bailout plans is only a further stratification of our society. The effect of new roads, schools and jobs would be growth in the economy and in the lifestyle of the people.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
The only benefit most of us get from the trickle down economic stimulus plans of the current administration is a warm damp feeling on the back of our necks. What happened to the old fashioned stimulus packages that always worked? Are they too old fashioned and unsophisticated? My dad always said that it never helped him when the Rockefellers got extra money; because he wasn’t smart enough to get it from him. When The working men got money he was smart enough to get some of it.
The roads and bridges throughout our country are in horrible condition and overcrowded. Those projects put people to work and stimulate the local and national economies. Commercial REALTORS® know that progress follows roads. Progress puts more people to work. The construction workers spend money at Walmart and the local restaurants and watering holes. The engineers spend money at Target, Sachs and the cheaper restaurants. These people buy homes and make mortgage payments. Usually their payments are on time.
Making jobs raises wages and income. Bailing out the auto industry or financial institutions requires that they cut jobs and reduce wages and benefits. How does this help the economy? The effect of the current bailout plans is only a further stratification of our society. The effect of new roads, schools and jobs would be growth in the economy and in the lifestyle of the people.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Wednesday, December 3, 2008
The Time to Buy
The Time to Buy
Current events in Mumbai and Bangkok remind me of the old saying, “The time to buy is when the blood is in the streets.” I wonder how relevant that saying is today, when there is real blood in some streets and not just red ink. There are always people who have to sell right now for some reason or another. Unless there is a “seller’s market” these people will always present opportunities for bottom fishers. How many people in Bangkok or Mumbai will sell just because of the recent violence? How much lower price will they be willing to accept?
In areas where there is a prolonged conflict there are a lot of people who sell and leave regardless of the price they receive. In some of these markets the people just leave and abandon their property. We see this in Iraq and Sudan. Other people move into these homes and take them over, paying nothing. Sooner or later people come back and there is a big mess to straighten out. This is already happening in Baghdad.
What price will an investor pay in a case where the risk is so high. I used to go to seminars conducted by a man named Jimmy Napier. He taught us that if the yield is high enough, you can afford to lose your principal occasionally. How low does the price have to be for the yield to be that high?
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Current events in Mumbai and Bangkok remind me of the old saying, “The time to buy is when the blood is in the streets.” I wonder how relevant that saying is today, when there is real blood in some streets and not just red ink. There are always people who have to sell right now for some reason or another. Unless there is a “seller’s market” these people will always present opportunities for bottom fishers. How many people in Bangkok or Mumbai will sell just because of the recent violence? How much lower price will they be willing to accept?
In areas where there is a prolonged conflict there are a lot of people who sell and leave regardless of the price they receive. In some of these markets the people just leave and abandon their property. We see this in Iraq and Sudan. Other people move into these homes and take them over, paying nothing. Sooner or later people come back and there is a big mess to straighten out. This is already happening in Baghdad.
What price will an investor pay in a case where the risk is so high. I used to go to seminars conducted by a man named Jimmy Napier. He taught us that if the yield is high enough, you can afford to lose your principal occasionally. How low does the price have to be for the yield to be that high?
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Tuesday, December 2, 2008
Snow or No Snow
Snow or No Snow
Some Colorado ski resorts have between 14 and 17 inches of snow today. That is great for skiers and for the people who depend on that trade. I wonder how many people will spend the holiday season skiing. I wonder how many 2nd homes will be sold in these areas. This could be a really good time to get a great deal.
Of course for people who are not skiers this snow may just mean a hard time getting around. It is 42 degrees Fahrenheit in Charlotte this morning. That is not so bad; but it is wet and the cold goes straight to my bones. Do you think I am wishing for Mexico or Central America? You bet your sweet booty I am. What about people where it is snowing? Maybe some 2nd homes will be sold in warm places this season as well. This could be a really good time to get a great deal.
Every coin has 2 sides. Hopefully there will be a lot of sales. The retailers are getting a lot of traffic over the weekend. Perhaps the change of seasons, the holidays and the hopes for regime change in the USA will perk up the economy and get things rolling again. Do you think we have hit bottom yet?
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Some Colorado ski resorts have between 14 and 17 inches of snow today. That is great for skiers and for the people who depend on that trade. I wonder how many people will spend the holiday season skiing. I wonder how many 2nd homes will be sold in these areas. This could be a really good time to get a great deal.
Of course for people who are not skiers this snow may just mean a hard time getting around. It is 42 degrees Fahrenheit in Charlotte this morning. That is not so bad; but it is wet and the cold goes straight to my bones. Do you think I am wishing for Mexico or Central America? You bet your sweet booty I am. What about people where it is snowing? Maybe some 2nd homes will be sold in warm places this season as well. This could be a really good time to get a great deal.
Every coin has 2 sides. Hopefully there will be a lot of sales. The retailers are getting a lot of traffic over the weekend. Perhaps the change of seasons, the holidays and the hopes for regime change in the USA will perk up the economy and get things rolling again. Do you think we have hit bottom yet?
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Wednesday, November 26, 2008
Falling Commodity Prices and Emerging Markets
Falling Commodity Prices and Emerging Markets
It has seemed for a while as if the internal markets in the emerging world would sustain at least a modicum of growth there. Unfortunately, the economies of these countries are, in most cases, heavily dependent on commodities. The decrease in world demand is driving the price of these commodities down. This decreases the foreign exchange coming in to the country. In many cases it also decreases the costs of subsidies the governments pay for food and energy.
The manufacturing sectors in these countries, in large part, make the cheap goods that are sold in Walmart and places like that. These stores are still doing well because people are being forced to shop more consciously. We see in the Economist that Brazil is not as detached from the rest of the world as was previously thought. This is from a macroeconomic perspective. A large part of Brazil’s economy is un-official. This part of the economy is not measured in the official numbers and a misleading opinion can be gained from looking at official numbers.
Home construction is the engine that drives consumer based economies. A home takes 3 to 6 months to build. This sector can stop or slow down really fast. Commercial construction and large condominium projects as seen in cities like Sao Paulo take years. Works in progress do not normally just stop. By the time a slowdown is felt in that sector, the economy has had time to recover.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
It has seemed for a while as if the internal markets in the emerging world would sustain at least a modicum of growth there. Unfortunately, the economies of these countries are, in most cases, heavily dependent on commodities. The decrease in world demand is driving the price of these commodities down. This decreases the foreign exchange coming in to the country. In many cases it also decreases the costs of subsidies the governments pay for food and energy.
The manufacturing sectors in these countries, in large part, make the cheap goods that are sold in Walmart and places like that. These stores are still doing well because people are being forced to shop more consciously. We see in the Economist that Brazil is not as detached from the rest of the world as was previously thought. This is from a macroeconomic perspective. A large part of Brazil’s economy is un-official. This part of the economy is not measured in the official numbers and a misleading opinion can be gained from looking at official numbers.
Home construction is the engine that drives consumer based economies. A home takes 3 to 6 months to build. This sector can stop or slow down really fast. Commercial construction and large condominium projects as seen in cities like Sao Paulo take years. Works in progress do not normally just stop. By the time a slowdown is felt in that sector, the economy has had time to recover.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Tuesday, November 25, 2008
Politics and Property Values
Politics and Property Values
How quickly a little bit of turmoil can defeat years of good government and transparancy will be demonstrated by the current situation in Nicaragua. For 15 years democracy and transparency have made steady progress in improving the real estate environment. I erroneously saw hopeful signs in Ortega’s election. He won a free and fair election and he and his administration vowed to clean up a lot of the issues that had been plaguing the real estate industry there. They were especially going to concentrate on title issues.
Now the new election for mayors comes and we see that he intends to be a standard latin strongman. In 1979 the Sandanistas replaced a dictator by force. In 2008 Ortega is behaving like a dictator himself. When he was elected, he promised he had changed. I don’t think anyone expected his change to be becoming what he had fought against for most of his life. I am sorely disappointed.
The results of this situation are yet to be seen in the real estate market. Our present economic climate will possibly used as an excuse for falling prices and slumping markets. It is really sad that a country like Nicaragua that was showing so much hope is sliding back into caos.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
How quickly a little bit of turmoil can defeat years of good government and transparancy will be demonstrated by the current situation in Nicaragua. For 15 years democracy and transparency have made steady progress in improving the real estate environment. I erroneously saw hopeful signs in Ortega’s election. He won a free and fair election and he and his administration vowed to clean up a lot of the issues that had been plaguing the real estate industry there. They were especially going to concentrate on title issues.
Now the new election for mayors comes and we see that he intends to be a standard latin strongman. In 1979 the Sandanistas replaced a dictator by force. In 2008 Ortega is behaving like a dictator himself. When he was elected, he promised he had changed. I don’t think anyone expected his change to be becoming what he had fought against for most of his life. I am sorely disappointed.
The results of this situation are yet to be seen in the real estate market. Our present economic climate will possibly used as an excuse for falling prices and slumping markets. It is really sad that a country like Nicaragua that was showing so much hope is sliding back into caos.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Monday, November 24, 2008
Where is There Still a Live Market?
Where is there still a live market?
A lot of this depends on one’s definition of a live market. I think that would be a market where one could purchase with a reasonable assurance that the value of the property purchased will go up instead of down. This market would have to meet multiple criterions. The most important being little or no speculation in the market. Fast value increases lead to speculation and artificially high prices.
Other things that are important are market fundamentals. What is the supply and demand ratio? How do the prices being achieved in the market compare with the ability of the people who need the housing to pay? What do developers have to do to sell the properties and to obtain financing? When developers have to offer high incentives and high loan costs, this increases the “soft costs” of the property. These soft costs do not enhance the value and the greater they are, the longer it will take for a buyer to have equity.
The aforementioned items pertain to the real estate market. What about the underlying economy? Is this market dependent on local employment opportunities? If so, how stable is the current environment. Is the market dependent on foreign buyers? Where do they originate and how stable are conditions there? One example of a market that has all of these things in balance is Bucharest. This market has a shortage of housing and people who are able to buy. The biggest danger there is speculation.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
A lot of this depends on one’s definition of a live market. I think that would be a market where one could purchase with a reasonable assurance that the value of the property purchased will go up instead of down. This market would have to meet multiple criterions. The most important being little or no speculation in the market. Fast value increases lead to speculation and artificially high prices.
Other things that are important are market fundamentals. What is the supply and demand ratio? How do the prices being achieved in the market compare with the ability of the people who need the housing to pay? What do developers have to do to sell the properties and to obtain financing? When developers have to offer high incentives and high loan costs, this increases the “soft costs” of the property. These soft costs do not enhance the value and the greater they are, the longer it will take for a buyer to have equity.
The aforementioned items pertain to the real estate market. What about the underlying economy? Is this market dependent on local employment opportunities? If so, how stable is the current environment. Is the market dependent on foreign buyers? Where do they originate and how stable are conditions there? One example of a market that has all of these things in balance is Bucharest. This market has a shortage of housing and people who are able to buy. The biggest danger there is speculation.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Friday, November 21, 2008
Lest We Forget
Lest We Forget
The news this morning (11/20/08) on NPR was the gloomiest I have heard in a while. I am glad it is almost Thanksgiving; because that time forces thoughts of blessings. I am afraid to look at my stock portfolio; but I am still in business today. I don’t know about tomorrow. We do have a closing scheduled for this morning.
My wife and I and our extended family are in good health. We have a little garden and we don’t have expensive vices (except for real estate). There are so many people who have nothing. In so many countries the poor have no hope and no opportunity. One has to think of the people who would be so happy just to have breakfast. Our country has survived 8 years of the darkest administration ever. It is a tribute to the system and to the founding fathers that we had the ability to bring this chapter to a close without bloodshed.
In Zimbabwe change of administration doesn’t come even after an election. What if we could not remove George Bush after these years of misrule? The future does look dark. I feel that the world economy has not even hit the bottom yet. As long as we can hope there is hope. I really believe that a new era is coming. Like The Phoenix we will rise from the ashes. Perhaps today’s trials will yield positive change. It has been said that any adversity that doesn’t kill you makes you stronger. Think how powerful we will be.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
The news this morning (11/20/08) on NPR was the gloomiest I have heard in a while. I am glad it is almost Thanksgiving; because that time forces thoughts of blessings. I am afraid to look at my stock portfolio; but I am still in business today. I don’t know about tomorrow. We do have a closing scheduled for this morning.
My wife and I and our extended family are in good health. We have a little garden and we don’t have expensive vices (except for real estate). There are so many people who have nothing. In so many countries the poor have no hope and no opportunity. One has to think of the people who would be so happy just to have breakfast. Our country has survived 8 years of the darkest administration ever. It is a tribute to the system and to the founding fathers that we had the ability to bring this chapter to a close without bloodshed.
In Zimbabwe change of administration doesn’t come even after an election. What if we could not remove George Bush after these years of misrule? The future does look dark. I feel that the world economy has not even hit the bottom yet. As long as we can hope there is hope. I really believe that a new era is coming. Like The Phoenix we will rise from the ashes. Perhaps today’s trials will yield positive change. It has been said that any adversity that doesn’t kill you makes you stronger. Think how powerful we will be.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Wednesday, November 19, 2008
OH! OH! Mexico
OH! OH! Mexico
It is 20 degrees Fahrenheit in Charlotte NC this morning. It is 93 degrees in Cabo San Lucas. I know where I would rather be. Where would your clients rather be. A lot of people are going to be retiring early due to the financial crisis. If they have not met their financial goals yet, they may be interested in going someplace where their fixed income dollars will give them a nicer lifestyle.
Mexico, Central America, South America, Central and Eastern Europe are all really great retirement options. There are real estate agents and developers in those areas who will be more than happy to share commissions with other brokers. This is an easy way to make a few extra commission checks in a year when many of us are expecting our normal business to slow down. Anyone who has the CIPS (Certified International Property Specialist) designation knows how to take advantage of this situation.
Of course, we probably would not want to sell a property in a resort without visiting first to make sure the product is of the highest quality. These visits are often subsidized by the developers and the part that we do pay is tax deductible. That means Uncle Sam pays one third of your expenses and if you live in NC the state will pay 6% or 7%, depending on your tax situation. Want to meet brokers and developers in these countries? Check out NAR International or call me.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
It is 20 degrees Fahrenheit in Charlotte NC this morning. It is 93 degrees in Cabo San Lucas. I know where I would rather be. Where would your clients rather be. A lot of people are going to be retiring early due to the financial crisis. If they have not met their financial goals yet, they may be interested in going someplace where their fixed income dollars will give them a nicer lifestyle.
Mexico, Central America, South America, Central and Eastern Europe are all really great retirement options. There are real estate agents and developers in those areas who will be more than happy to share commissions with other brokers. This is an easy way to make a few extra commission checks in a year when many of us are expecting our normal business to slow down. Anyone who has the CIPS (Certified International Property Specialist) designation knows how to take advantage of this situation.
Of course, we probably would not want to sell a property in a resort without visiting first to make sure the product is of the highest quality. These visits are often subsidized by the developers and the part that we do pay is tax deductible. That means Uncle Sam pays one third of your expenses and if you live in NC the state will pay 6% or 7%, depending on your tax situation. Want to meet brokers and developers in these countries? Check out NAR International or call me.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Monday, November 17, 2008
Russia & Venezuela in the Caribbean
Russia & Venezuela in the Caribbean
A recent Economist article mentioned Russia and Venezuela holding joint military exercises in the Caribbean. Some people see this as an invasion of the USA sphere of influence. I see it as a real estate marketing opportunity. Venezuelans and Russians are both major customers in the Miami real estate market. Why not invite the Sailors to take liberty in Miami.
They could come into the cruise ship terminal. Developers could pick them up and have parties for them. They could show them their property inventory. Having been in the navy myself at one time, I am fairly certain the sailors don’t have the wherewithal to buy right now. Some of the officers probably do. At any rate they will be exposed to the wonderful climate and lifestyle of the USA. Some may wish to return. Some may wish to change things at home.
Excluding people for what ever reason usually promotes disharmony. The people of Venezuela and Russia are not our enemies. Their leaders are using us as a bogey-man to frighten their citizens into obedience or to incite national pride. Shine the light under the bed or in the closet and the monsters go away.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
A recent Economist article mentioned Russia and Venezuela holding joint military exercises in the Caribbean. Some people see this as an invasion of the USA sphere of influence. I see it as a real estate marketing opportunity. Venezuelans and Russians are both major customers in the Miami real estate market. Why not invite the Sailors to take liberty in Miami.
They could come into the cruise ship terminal. Developers could pick them up and have parties for them. They could show them their property inventory. Having been in the navy myself at one time, I am fairly certain the sailors don’t have the wherewithal to buy right now. Some of the officers probably do. At any rate they will be exposed to the wonderful climate and lifestyle of the USA. Some may wish to return. Some may wish to change things at home.
Excluding people for what ever reason usually promotes disharmony. The people of Venezuela and Russia are not our enemies. Their leaders are using us as a bogey-man to frighten their citizens into obedience or to incite national pride. Shine the light under the bed or in the closet and the monsters go away.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Thursday, November 13, 2008
No Convenience Store (for awhile)
No Convenience Store (for awhile)
I always learn new tricks and get new ideas at the NAR convention. This year was no exception. In addition to a lot of new contacts and some really great ideas, my wife and I had a really good time. I am still going to have to trim expenses and I am going to have to make some small investments in my office setup. I do have a new direction for my company.
Going way back to something I heard Jim Teat (one of the most successful land assemblers I have ever met) say. He said, “I don’t buy land, I sell dreams.” The trade show in Orlando had many beautiful 2nd home locations on display. I am going to turn my office into a dream center. I will set up a library of properties and a nice DVD player to show the properties that people have an interest in. I will advertise that “I can help make your dreams come true.” People will come to my dream center and talk about their dreams. We will select the properties around the world that fulfill the most of their desires and watch them on the screen. The dreamers will be introduced to the developers and a visit will be scheduled.
I also got certified to teach the “Doing Business in Mexico” class. The course is for brokers; but it can be adapted for the general public. That is one of the things I will do to get my “Dream Center” populated.s
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
I always learn new tricks and get new ideas at the NAR convention. This year was no exception. In addition to a lot of new contacts and some really great ideas, my wife and I had a really good time. I am still going to have to trim expenses and I am going to have to make some small investments in my office setup. I do have a new direction for my company.
Going way back to something I heard Jim Teat (one of the most successful land assemblers I have ever met) say. He said, “I don’t buy land, I sell dreams.” The trade show in Orlando had many beautiful 2nd home locations on display. I am going to turn my office into a dream center. I will set up a library of properties and a nice DVD player to show the properties that people have an interest in. I will advertise that “I can help make your dreams come true.” People will come to my dream center and talk about their dreams. We will select the properties around the world that fulfill the most of their desires and watch them on the screen. The dreamers will be introduced to the developers and a visit will be scheduled.
I also got certified to teach the “Doing Business in Mexico” class. The course is for brokers; but it can be adapted for the general public. That is one of the things I will do to get my “Dream Center” populated.s
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Friday, October 31, 2008
Networking and Educational Opportunities
Networking and Educational Opportunities
This will be my 3rd downturn experienced as a real estate agent. I survived the 1st 2. Frankly I am afraid this time. This downturn will probably outlast the 1st 2. There are 3 choices available. 1) I can get a job in a convenience store or a fast food restaurant. 2) I can hunker down, cut expenses, and be like a turtle in a shell until the storm blows over. 3) I can find a way to prosper because of the downturn.
Admitted, I am on the edge of option 2 right now. If I don’t cut expenses, I will not have the capital to attempt option 3. I don’t know what option 3 is. Next week I will spend Monday in Miami at a special pre-convention (NAR) conference with international practitioners from around the world. Picking the brains of the best real estate agents on the planet will be my priority.
Tuesday, I will go to Orlando for the NAR convention. With all of the opportunities offered there, if I don’t at least get a clue for option 3, it will be time for option 1. You can be there too. We can talk. Maybe we can help each other. Register at: http://www.realtor.org/meetings_and_expo . I would much rather see you there than at the convenience store.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
This will be my 3rd downturn experienced as a real estate agent. I survived the 1st 2. Frankly I am afraid this time. This downturn will probably outlast the 1st 2. There are 3 choices available. 1) I can get a job in a convenience store or a fast food restaurant. 2) I can hunker down, cut expenses, and be like a turtle in a shell until the storm blows over. 3) I can find a way to prosper because of the downturn.
Admitted, I am on the edge of option 2 right now. If I don’t cut expenses, I will not have the capital to attempt option 3. I don’t know what option 3 is. Next week I will spend Monday in Miami at a special pre-convention (NAR) conference with international practitioners from around the world. Picking the brains of the best real estate agents on the planet will be my priority.
Tuesday, I will go to Orlando for the NAR convention. With all of the opportunities offered there, if I don’t at least get a clue for option 3, it will be time for option 1. You can be there too. We can talk. Maybe we can help each other. Register at: http://www.realtor.org/meetings_and_expo . I would much rather see you there than at the convenience store.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Wednesday, October 29, 2008
The Global Financial Crisis and Real Estate (part 7)
The Global Financial Crisis and Real Estate (part 7)
In conclusion of this series, let me say no one really knows what is going to happen to the real estate markets as a result of this crisis. A lot of the results are manifesting now. The really big question is how much of what’s happening is a result of temporary fear and how much is long term and more or less permanent. There is no doubt that subdivisions with poorly constructed homes and many foreclosures have a potential to become new slums. There is no doubt that some markets were severely overpriced.
The positive factors are that the population is still increasing. People need a place to live. How many of them will settle for less than they had before? There is a lot of cash around. Sales of municipal bonds are doing very well. That cash will have to go somewhere when the fear portion of this debacle is over. Will it go into investments that benefit the general world economy or will it go into gold bars and similar static investments? What will happen when the money starts moving again?
Will there be a pent up demand, or will the austerity learned in the hard times prevail? My parents were raised during the great depression. My mother turns out the lights when she leaves a room. Even though the price of gasoline is dropping, usage is still going down. Is this the current economic situation; or are habits permanently changed? Only time will tell.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
In conclusion of this series, let me say no one really knows what is going to happen to the real estate markets as a result of this crisis. A lot of the results are manifesting now. The really big question is how much of what’s happening is a result of temporary fear and how much is long term and more or less permanent. There is no doubt that subdivisions with poorly constructed homes and many foreclosures have a potential to become new slums. There is no doubt that some markets were severely overpriced.
The positive factors are that the population is still increasing. People need a place to live. How many of them will settle for less than they had before? There is a lot of cash around. Sales of municipal bonds are doing very well. That cash will have to go somewhere when the fear portion of this debacle is over. Will it go into investments that benefit the general world economy or will it go into gold bars and similar static investments? What will happen when the money starts moving again?
Will there be a pent up demand, or will the austerity learned in the hard times prevail? My parents were raised during the great depression. My mother turns out the lights when she leaves a room. Even though the price of gasoline is dropping, usage is still going down. Is this the current economic situation; or are habits permanently changed? Only time will tell.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Monday, October 27, 2008
The Global Financial Crisis and Real Estate (part 6)
The Global Financial Crisis and Real Estate (part 6)
Now we will discuss the office sector. I confess to having less knowledge and less interest in this sector than any other. Traditionally the office sector leads downturns and lags in recoveries. This downturn has been exceptional in that the office sector has been almost the last to feel the effects. The effects are being felt now as expansion plans are cancelled or put on hold. Financial sector companies are going under or merging. Even manufacturing and other service industries are cutting back on office workers. When the beehive prepares for winter they drive out the drones. This is happening in the business beehives now.
I see some hope in the possibility of a new industry. The governments are announcing investment and guarantees in huge proportions. I see a whole new group or consultants coming in to the mix to teach companies how to get this money and to teach executives how to steal it. Who knows how much office space these people will need. They may just work out of luxury beach houses in offshore banking havens.
Whatever happens, many of the 1st tier cities are finding themselves with considerable oversupply of class A office space. By the time the recession turn around much of this property will have been foreclosed or sold cheaply.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Now we will discuss the office sector. I confess to having less knowledge and less interest in this sector than any other. Traditionally the office sector leads downturns and lags in recoveries. This downturn has been exceptional in that the office sector has been almost the last to feel the effects. The effects are being felt now as expansion plans are cancelled or put on hold. Financial sector companies are going under or merging. Even manufacturing and other service industries are cutting back on office workers. When the beehive prepares for winter they drive out the drones. This is happening in the business beehives now.
I see some hope in the possibility of a new industry. The governments are announcing investment and guarantees in huge proportions. I see a whole new group or consultants coming in to the mix to teach companies how to get this money and to teach executives how to steal it. Who knows how much office space these people will need. They may just work out of luxury beach houses in offshore banking havens.
Whatever happens, many of the 1st tier cities are finding themselves with considerable oversupply of class A office space. By the time the recession turn around much of this property will have been foreclosed or sold cheaply.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Friday, October 24, 2008
The Global Financial Crisis and Real Estate (part 5)
The Global Financial Crisis and Real Estate (part 5)
The worldwide outlook for industrial properties will be mixed. While there is some slow down in employment and demand for manufactured goods will inevitably decrease. This is a slower situation. Companies that stay in business can cut production easily enough by laying off workers. It is more difficult to reduce or eliminate facilities. By the time these reductions are accomplished the demand should have rebounded. Demand for large new facilities will probably decline somewhat.
The property sector that usually benefits from a turndown in the general economy is the smaller industrial and warehouse properties. Middle managers get laid off. They either look for another position, retire or start their own business. This third alternative should make demand for small buildings increase. The big question in this particular turnaround is the loss in asset value in the financial markets. These middle managers typically fund their new ventures from their retirement account or stock portfolios. They may not care to liquidate these funds under the present economic conditions.
In emerging markets there is still some fairly strong demand from internal consumers. Perhaps this will last until the general market improves and leave these markets relatively untouched. Even where they do have some slowdowns they may actually be helpful. In China’s case, for example, the economic growth is expected to slow from 11% to 9%. This could allow their infrastructure to catch up with their other growth.
Next we will examine the office sector
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
The worldwide outlook for industrial properties will be mixed. While there is some slow down in employment and demand for manufactured goods will inevitably decrease. This is a slower situation. Companies that stay in business can cut production easily enough by laying off workers. It is more difficult to reduce or eliminate facilities. By the time these reductions are accomplished the demand should have rebounded. Demand for large new facilities will probably decline somewhat.
The property sector that usually benefits from a turndown in the general economy is the smaller industrial and warehouse properties. Middle managers get laid off. They either look for another position, retire or start their own business. This third alternative should make demand for small buildings increase. The big question in this particular turnaround is the loss in asset value in the financial markets. These middle managers typically fund their new ventures from their retirement account or stock portfolios. They may not care to liquidate these funds under the present economic conditions.
In emerging markets there is still some fairly strong demand from internal consumers. Perhaps this will last until the general market improves and leave these markets relatively untouched. Even where they do have some slowdowns they may actually be helpful. In China’s case, for example, the economic growth is expected to slow from 11% to 9%. This could allow their infrastructure to catch up with their other growth.
Next we will examine the office sector
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Monday, October 20, 2008
The Global Financial Crisis and Real Estate (part 4)
The Global Financial Crisis and Real Estate (part 4)
Who knows how long it will take to sort out the financial part of sub-prime mortgage crisis and the real estate bubble. The bubble will take care of itself. There will be scars. There will also be some very good deals. The actual dollar losses to the failed mortgages have already been written down for the most part. When some money comes back on a lost cause, that will be positive for the financial industry. The real problem will be with us for many years to come.
The real problem is sub-prime properties and sub-prime borrowers. Many of the properties that were financed under sub-prime mortgages were really shoddy construction in really depressing settings. People who could not even rent a home from a diligent landlord were desperate enough to take these “blessings”. Much of the “cost” in these transactions went to pay off appraisers and mortgage brokers and give cash advances so the buyers could resolve old debts in order to qualify for the loans. Less than normal “cost” went into labor and building materials. This left a crummy house with no equity, which will remain long after the foreclosure is done.
Then there are the sub-prime buyers. There were many honest, quality type people who got sucked into this situation by crooked “professionals”. There were a lot of people who should have been left sleeping under the bridge. These people will need a lot of counseling and rehab before they are even qualified to rent a property much less own one.
Next edition will be on industrial property.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Who knows how long it will take to sort out the financial part of sub-prime mortgage crisis and the real estate bubble. The bubble will take care of itself. There will be scars. There will also be some very good deals. The actual dollar losses to the failed mortgages have already been written down for the most part. When some money comes back on a lost cause, that will be positive for the financial industry. The real problem will be with us for many years to come.
The real problem is sub-prime properties and sub-prime borrowers. Many of the properties that were financed under sub-prime mortgages were really shoddy construction in really depressing settings. People who could not even rent a home from a diligent landlord were desperate enough to take these “blessings”. Much of the “cost” in these transactions went to pay off appraisers and mortgage brokers and give cash advances so the buyers could resolve old debts in order to qualify for the loans. Less than normal “cost” went into labor and building materials. This left a crummy house with no equity, which will remain long after the foreclosure is done.
Then there are the sub-prime buyers. There were many honest, quality type people who got sucked into this situation by crooked “professionals”. There were a lot of people who should have been left sleeping under the bridge. These people will need a lot of counseling and rehab before they are even qualified to rent a property much less own one.
Next edition will be on industrial property.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Thursday, October 16, 2008
The Global Financial Crisis and Real Estate (part 3)
The Global Financial Crisis and Real Estate (part 3)
Residential property markets are much more complex that retail. In most of the emerging market countries, internal demand is keeping the markets moving if not robust. The buyers in these markets are used to paying cash or a very high percentage of the price in cash. The entrepreneurs in the countries are used to making something out of nothing. There local use markets should suffer very little disruption. The 2nd home market that has been helping the more exotic locations will probably suffer some. The bargain hunters will reap a harvest. The builders and developers will lose some profit and have higher sales costs. The good ones will survive.
To make predictions in the developed economies is harder. Dr. Lawrence Yun made a speech about the BRIC countries at the Brazil Summit last month. He said the 3 things that emerging (real estate) markets need to advance are 1) Access to financing, 2) Mobility of the populations 3) Reduction or measurement of risk. This last really means transparency, economic freedom and respect for property rights. Even though he was talking about emerging markets, I see the relevance in the developed markets. Right now no-one really wants to buy because of uncertainty (risk). People who are mobile are unable to sell the homes they already own; so they have to rent.
The rental home market is still good in Charlotte. I have a feeling that in markets where there are a lot of foreclosures, there may be a lot of houses available and many unqualified renters trying to rent them. How many landlords will make the same mistakes the banks did?
Next posting will be a continuation of residential.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Residential property markets are much more complex that retail. In most of the emerging market countries, internal demand is keeping the markets moving if not robust. The buyers in these markets are used to paying cash or a very high percentage of the price in cash. The entrepreneurs in the countries are used to making something out of nothing. There local use markets should suffer very little disruption. The 2nd home market that has been helping the more exotic locations will probably suffer some. The bargain hunters will reap a harvest. The builders and developers will lose some profit and have higher sales costs. The good ones will survive.
To make predictions in the developed economies is harder. Dr. Lawrence Yun made a speech about the BRIC countries at the Brazil Summit last month. He said the 3 things that emerging (real estate) markets need to advance are 1) Access to financing, 2) Mobility of the populations 3) Reduction or measurement of risk. This last really means transparency, economic freedom and respect for property rights. Even though he was talking about emerging markets, I see the relevance in the developed markets. Right now no-one really wants to buy because of uncertainty (risk). People who are mobile are unable to sell the homes they already own; so they have to rent.
The rental home market is still good in Charlotte. I have a feeling that in markets where there are a lot of foreclosures, there may be a lot of houses available and many unqualified renters trying to rent them. How many landlords will make the same mistakes the banks did?
Next posting will be a continuation of residential.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Monday, October 13, 2008
The Global Financial Crisis and Real Estate (part 2)
The Global Financial Crisis and Real Estate (part 2)
So…To define the crisis. The stock market is dropping like a rock. People think the banks aren’t lending. The banks aren’t lending to each other. Whether from fear or prudence companies are cutting back everywhere they can. Families and individuals are looking at retirement plans that have been diminished on paper. They are cutting all unnecessary spending right as we come into the Christmas season. This is the time when retail operators balance their books. The retail operators know their books will not balance this year.
What we have is a disastrous non flow of money. It is mostly, not all, due to fear. How does all of this trace back to the sub-prime crisis and the housing bubble? The housing bubble comes from greed and stupidity. The sub-prime crisis comes from greed and dishonesty. What will be the effect on the real estate business? Let us examine one sector at a time.
Retail…The grinch that stole Christmas is probably going to get away with it this time. A lot of retailers are going to go broke. A lot of shopping centers are going to have empty spaces. A lot of big boxes will be standing dark. How many of these properties, especially the big boxes, were built by developers and sold to investors at very low cap rates based on credit tenants? These properties, if they rent at all, will not command the same rents they did originally. Some will certainly go into foreclosure. Will they sit empty until the next boom? Will they become flea markets and truck driving schools or churches? The shopping centers will also lose income and therefore value. There will be buying opportunities for patient capital. That patient capital better have some reserves for renovation in the next boom. No-one wants a shopworn old property.
Part 3 will examine other market sectors.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
So…To define the crisis. The stock market is dropping like a rock. People think the banks aren’t lending. The banks aren’t lending to each other. Whether from fear or prudence companies are cutting back everywhere they can. Families and individuals are looking at retirement plans that have been diminished on paper. They are cutting all unnecessary spending right as we come into the Christmas season. This is the time when retail operators balance their books. The retail operators know their books will not balance this year.
What we have is a disastrous non flow of money. It is mostly, not all, due to fear. How does all of this trace back to the sub-prime crisis and the housing bubble? The housing bubble comes from greed and stupidity. The sub-prime crisis comes from greed and dishonesty. What will be the effect on the real estate business? Let us examine one sector at a time.
Retail…The grinch that stole Christmas is probably going to get away with it this time. A lot of retailers are going to go broke. A lot of shopping centers are going to have empty spaces. A lot of big boxes will be standing dark. How many of these properties, especially the big boxes, were built by developers and sold to investors at very low cap rates based on credit tenants? These properties, if they rent at all, will not command the same rents they did originally. Some will certainly go into foreclosure. Will they sit empty until the next boom? Will they become flea markets and truck driving schools or churches? The shopping centers will also lose income and therefore value. There will be buying opportunities for patient capital. That patient capital better have some reserves for renovation in the next boom. No-one wants a shopworn old property.
Part 3 will examine other market sectors.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Sunday, October 12, 2008
The Global Financial Crisis and Real Estate (part 1)
The Global Financial Crisis and Real Estate (part 1)
Disclaimer: I do not know what will happen. I am just making this up like the real pundits do.
I guess the real question is, “Who will be affected, how and why?” That question leads back to the question “What is the crisis?” and “Is this a financial crisis or a confidence crisis?” The answer to the last question comes first. This is a financial crisis that stems from a confidence crisis that comes from a financial mess. The foreclosures themselves should not cause a crisis of the magnitude we face. Nor should the “real estate bubble”. Even together these two crisis should not cause a problem this big. There are not enough losses from foreclosures to do this. The “real estate bubble” was caused by speculators and most of them took the hit on their balance sheets and went on with their lives.
These two situations should have actually caused a bonanza for real estate professionals. They did not. There should have been some really great buying opportunities. There are not. That goes back to the definition of the crisis. That will come in part 2.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Disclaimer: I do not know what will happen. I am just making this up like the real pundits do.
I guess the real question is, “Who will be affected, how and why?” That question leads back to the question “What is the crisis?” and “Is this a financial crisis or a confidence crisis?” The answer to the last question comes first. This is a financial crisis that stems from a confidence crisis that comes from a financial mess. The foreclosures themselves should not cause a crisis of the magnitude we face. Nor should the “real estate bubble”. Even together these two crisis should not cause a problem this big. There are not enough losses from foreclosures to do this. The “real estate bubble” was caused by speculators and most of them took the hit on their balance sheets and went on with their lives.
These two situations should have actually caused a bonanza for real estate professionals. They did not. There should have been some really great buying opportunities. There are not. That goes back to the definition of the crisis. That will come in part 2.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Friday, October 3, 2008
Communication in Brazil
Communication in Brazil
One of the greatest challenges in the “Flat World” is staying in the flat part. By this I mean maintaining communication. Communication and technology are two of the things that have really flattened the world. Unfortunately, it seems that every part of the world accesses technology differently.
The international cell phone that Verizon wireless requires has dual modes. CDMA and GSM. One has to know which to use and how to use it whenever crossing borders. In the USA most companies use CDMA. In Europe and parts of Asia GSM is the standard. China is the exception. Their phones are CDMA. Argentina requires a special Vodafone phone for Verizon. AT & T phones work with the standard international phone (when they work at all). Brazil works (more or less) with the Verizon phone; but setting it is different. One has to select a GSM service to make outgoing calls and the procedure for placing the call is different.
The service provide may have to be changed as one moves about. VOIP (voice over internet protocol) has become my favorite way to stay in touch when possible. It is almost free and very reliable if one has a good broadband connection. A slow or flaky connection means broken or static communication. My wife says that my telephone has the hiccups.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
One of the greatest challenges in the “Flat World” is staying in the flat part. By this I mean maintaining communication. Communication and technology are two of the things that have really flattened the world. Unfortunately, it seems that every part of the world accesses technology differently.
The international cell phone that Verizon wireless requires has dual modes. CDMA and GSM. One has to know which to use and how to use it whenever crossing borders. In the USA most companies use CDMA. In Europe and parts of Asia GSM is the standard. China is the exception. Their phones are CDMA. Argentina requires a special Vodafone phone for Verizon. AT & T phones work with the standard international phone (when they work at all). Brazil works (more or less) with the Verizon phone; but setting it is different. One has to select a GSM service to make outgoing calls and the procedure for placing the call is different.
The service provide may have to be changed as one moves about. VOIP (voice over internet protocol) has become my favorite way to stay in touch when possible. It is almost free and very reliable if one has a good broadband connection. A slow or flaky connection means broken or static communication. My wife says that my telephone has the hiccups.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Sunday, September 28, 2008
Terri Morrison Comes to Raleigh
Terri Morrison Comes to Raleigh
On the 24th of September the TICOR (Triad International Council of REALTORS) held their international day at the Raleigh Regional association of REALTORS. I was fortunate enough to be a menu item for the afternoon. Terri Morrison was the entre for the morning.
Her presentation was totally packed with cultural tidbits. As much as I would like to itemize the things I learned, they seem like trivia without their context. All I can do is recommend very highly the new edition of her book, “Kiss, Bow or Shake Hands”. I know you have probably already read the old version. You probably keep it as a reference in your home or office. As great as it is you need to get the new version not just for the changes in the book; but for the changes that have taken place in the different cultures.
Cultures are so dynamic. Think about the world where you grew up. Think about how your families’ and friend’s attitudes and behaviors have changed. Other cultures are morphing as well. This is especially noticeable in some of the emerging economies. Changes in these places take place overnight.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
On the 24th of September the TICOR (Triad International Council of REALTORS) held their international day at the Raleigh Regional association of REALTORS. I was fortunate enough to be a menu item for the afternoon. Terri Morrison was the entre for the morning.
Her presentation was totally packed with cultural tidbits. As much as I would like to itemize the things I learned, they seem like trivia without their context. All I can do is recommend very highly the new edition of her book, “Kiss, Bow or Shake Hands”. I know you have probably already read the old version. You probably keep it as a reference in your home or office. As great as it is you need to get the new version not just for the changes in the book; but for the changes that have taken place in the different cultures.
Cultures are so dynamic. Think about the world where you grew up. Think about how your families’ and friend’s attitudes and behaviors have changed. Other cultures are morphing as well. This is especially noticeable in some of the emerging economies. Changes in these places take place overnight.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Friday, September 26, 2008
Argentina
Argentina
I spent the 17th and 18th of September in a conference in Buenos Aires sponsored by the Camara Inmobiliaria Argentina. While there was a lot of great information, I will share some insights gained on the Economy here. The appearance of things on the street is very good. People are out spending money. The building cranes are hard at work. The city looks better every year. The official numbers tell a different story.
The price of Soy has been dropping. Soy is critical to Argentina. The US dollar has been dropping. Argentines do their big deals in dollars. The Argentines have been converting their money to dollars and taking the dollars out of circulation. This combined with the current tight lending situation is causing a liquidity crisis.
The government has tried to balance the entire economy on the back of the farmers. The farmers blocked all the roads and threatened to quit bringing food to the city. The government caved; but this hurts the liquidity situation even more. Add to this the ridiculous retirement regime and the bloated public sector and we have a recipe for another real economic crisis. Argentina has not been able to de-couple from the world economy. It seems as if we will all suffer together. At least they will suffer with the best steak and some of the best wine in the world. It’s hard to feel sorry for them.
Sorry to be so late in posting this. I have had a difficult schedule. I am in Brazil now and will do a series of items to post 1 per day.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
I spent the 17th and 18th of September in a conference in Buenos Aires sponsored by the Camara Inmobiliaria Argentina. While there was a lot of great information, I will share some insights gained on the Economy here. The appearance of things on the street is very good. People are out spending money. The building cranes are hard at work. The city looks better every year. The official numbers tell a different story.
The price of Soy has been dropping. Soy is critical to Argentina. The US dollar has been dropping. Argentines do their big deals in dollars. The Argentines have been converting their money to dollars and taking the dollars out of circulation. This combined with the current tight lending situation is causing a liquidity crisis.
The government has tried to balance the entire economy on the back of the farmers. The farmers blocked all the roads and threatened to quit bringing food to the city. The government caved; but this hurts the liquidity situation even more. Add to this the ridiculous retirement regime and the bloated public sector and we have a recipe for another real economic crisis. Argentina has not been able to de-couple from the world economy. It seems as if we will all suffer together. At least they will suffer with the best steak and some of the best wine in the world. It’s hard to feel sorry for them.
Sorry to be so late in posting this. I have had a difficult schedule. I am in Brazil now and will do a series of items to post 1 per day.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Tuesday, September 16, 2008
Argentina Bound
Argentina Bound
Tuesday I will head for Buenos Aires, Argentina for the CIA conference. That is not an evil USA export that is the real estate organization of Argentina (Camara Inmobiliaria Argentina). They have 2 days of excellent educational presentations lined up. The conference is in the Hilton in Madero. . Information can be accessed at http://www.mundoinmobiliario.com.ar You should probably not go. I think I will be the only gringo there. That is like being the only girl at the dance. I will get all of the referrals.
I am kidding about you not going. I would like for you to go and make the conference and your business a success. If you are new to international real estate going to a conference with the professionals in your target market is an excellent way to jump start your business. This trip will cost around $3000. That is about the same as a half page ad in one of the luxury international real estate magazines. I promise this trip will be a lot more fun.
Everyone knows about the wonderful steaks in Argentina. A lesser known joy is the Malbek wine. They claim that Argentina is the only place where this grape grows. I think there may be some other countries that dispute this. I know that it is some of the best wine I have ever had. Join me in Argentina.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Tuesday I will head for Buenos Aires, Argentina for the CIA conference. That is not an evil USA export that is the real estate organization of Argentina (Camara Inmobiliaria Argentina). They have 2 days of excellent educational presentations lined up. The conference is in the Hilton in Madero. . Information can be accessed at http://www.mundoinmobiliario.com.ar You should probably not go. I think I will be the only gringo there. That is like being the only girl at the dance. I will get all of the referrals.
I am kidding about you not going. I would like for you to go and make the conference and your business a success. If you are new to international real estate going to a conference with the professionals in your target market is an excellent way to jump start your business. This trip will cost around $3000. That is about the same as a half page ad in one of the luxury international real estate magazines. I promise this trip will be a lot more fun.
Everyone knows about the wonderful steaks in Argentina. A lesser known joy is the Malbek wine. They claim that Argentina is the only place where this grape grows. I think there may be some other countries that dispute this. I know that it is some of the best wine I have ever had. Join me in Argentina.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Thursday, September 11, 2008
Ebb & Flow in Europe
Ebb & Flow in Europe
The western European Countries seem to be catching the cold from the USA. Germany may even be heading for recession. Eastern countries are still rocking and rolling for the most part. They are growing based on internal demand. This is caused by rising wages. The rising wages are causing inflation. The inflation may kill the goose that laid the golden egg.
There is still a lot of unsatisfied demand for real estate by users in Romania and Bulgaria. The slump in western markets is driving investors and developers east. Investment and development are normally good things for a real estate market. Too much development leads to oversupply and eventually causes a “market correction”. Over enthusiastic investment becomes speculation and eventually causes a “bubble”.
Signs to watch: For oversupply compare absorption rates with permitted projects. Look at vacancy rates. Industrial space is the steadiest market. This brings core jobs and growth. The office market is usually the first to falter and the last to recover. Retail follows closely behind. Looking at a country as a whole will give an imperfect picture, look first at the smallest submarkets. The small submarkets around them will give an indication of market direction. For oversupply and speculation awareness one always should ask. Who will use this property and how rather than who will buy this property.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
The western European Countries seem to be catching the cold from the USA. Germany may even be heading for recession. Eastern countries are still rocking and rolling for the most part. They are growing based on internal demand. This is caused by rising wages. The rising wages are causing inflation. The inflation may kill the goose that laid the golden egg.
There is still a lot of unsatisfied demand for real estate by users in Romania and Bulgaria. The slump in western markets is driving investors and developers east. Investment and development are normally good things for a real estate market. Too much development leads to oversupply and eventually causes a “market correction”. Over enthusiastic investment becomes speculation and eventually causes a “bubble”.
Signs to watch: For oversupply compare absorption rates with permitted projects. Look at vacancy rates. Industrial space is the steadiest market. This brings core jobs and growth. The office market is usually the first to falter and the last to recover. Retail follows closely behind. Looking at a country as a whole will give an imperfect picture, look first at the smallest submarkets. The small submarkets around them will give an indication of market direction. For oversupply and speculation awareness one always should ask. Who will use this property and how rather than who will buy this property.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Wednesday, September 3, 2008
Wishes for Good Health to the Dalai Lama
Wishes for Good Health to the Dalai Lama
The Dalai Lama is leaving the hospital on Labor Day. http://www.cnn.com/2008/WORLD/asiapcf/08/31/india.dalai.lama.ap/index.html?iref=mpstoryview
I wish him good health and more. I must confess to mixed feelings about Tibet and Taiwan and some of the other situations in China. As a student of Buddhism, I resent the affronts to the truest seat of that religion. I support the Tibetan’s right to self determination. I hate to see the ancient culture destroyed and the damages to the environment the progress brings. There is of course another side to the story.
An event similar to this happened when the Romans invaded Britain and brought their Catholic priests. An ancient way of life was destroyed. The world lost a really great religion and a lot of wisdom. When progress comes there are winners and losers. Progress should learn to be more gentle. Is it right to deprive the various indiginous people around the world of the rights to the internet, good health care and telephones? How can we divide the situation?
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
The Dalai Lama is leaving the hospital on Labor Day. http://www.cnn.com/2008/WORLD/asiapcf/08/31/india.dalai.lama.ap/index.html?iref=mpstoryview
I wish him good health and more. I must confess to mixed feelings about Tibet and Taiwan and some of the other situations in China. As a student of Buddhism, I resent the affronts to the truest seat of that religion. I support the Tibetan’s right to self determination. I hate to see the ancient culture destroyed and the damages to the environment the progress brings. There is of course another side to the story.
An event similar to this happened when the Romans invaded Britain and brought their Catholic priests. An ancient way of life was destroyed. The world lost a really great religion and a lot of wisdom. When progress comes there are winners and losers. Progress should learn to be more gentle. Is it right to deprive the various indiginous people around the world of the rights to the internet, good health care and telephones? How can we divide the situation?
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Saturday, August 30, 2008
Language and Culture
Language and Culture
It is amazing how a language defines a society. I have been practicing Portuguese in preparation for the SECOVI conference in Brazil next month. I can taste the Feijawada when I say the words. In other languages it is just black beans and rice with a little pork. In Brazil it is a holy ritual. The “j”’s and “d”’s have extra “seasoning”. The intonation and accents are like the Brazilian music. It is all like the Brazilian people.
One can make a few mistakes speaking Portuguese and not go to hell for it. This is like the Brazilian people too. They are the most diverse people in the world and they accept each other and live together. They are not defined by their race or religion or job. They are “Brazilian” and damned proud of it. The worst mistake you can make with language is to speak Spanish. The Brazilian language and culture are different and distinct from the rest of South America and the rest of the world. Brazil should be treated as the unique culture that it is.
Another prime example of language defining a culture is British English and American English. H.L. Mencken wrote essays comparing the two. When one reads his essays, the differences are “literal”.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
It is amazing how a language defines a society. I have been practicing Portuguese in preparation for the SECOVI conference in Brazil next month. I can taste the Feijawada when I say the words. In other languages it is just black beans and rice with a little pork. In Brazil it is a holy ritual. The “j”’s and “d”’s have extra “seasoning”. The intonation and accents are like the Brazilian music. It is all like the Brazilian people.
One can make a few mistakes speaking Portuguese and not go to hell for it. This is like the Brazilian people too. They are the most diverse people in the world and they accept each other and live together. They are not defined by their race or religion or job. They are “Brazilian” and damned proud of it. The worst mistake you can make with language is to speak Spanish. The Brazilian language and culture are different and distinct from the rest of South America and the rest of the world. Brazil should be treated as the unique culture that it is.
Another prime example of language defining a culture is British English and American English. H.L. Mencken wrote essays comparing the two. When one reads his essays, the differences are “literal”.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Thursday, August 28, 2008
Conventional Wisdom
Conventional Wisdom
So far this convention season, we’ve heard mostly conventional rhetoric. The democratic convention has mostly addressed domestic issues. I consider these to be very important because the USA economy is extremely important to world economy. Barbara Boxer spoke about the environment. I believe the Democrats are more trustworthy stewards of the environment than the Republicans. I fear that either side will subordinate the ecology to the economy. Short term gain, long term pain.
John McCain spoke to the American Legion convention. He seems to have convinced them that being a veteran is a qualification for being president. I am a veteran. I am not qualified to be president. He accused Barack Obama of linking the problems in Georgia to Iraq. I don’t think Obama did that; but I do think they are linked. I also think the current republican administration’s belligerent attitude has set the tone for other administrations around the world.
Our second rule of international real estate is: “Capital flows to the highest yield with the lowest risk.” Peace and harmony reduce risk. Peace and harmony attract investment.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
So far this convention season, we’ve heard mostly conventional rhetoric. The democratic convention has mostly addressed domestic issues. I consider these to be very important because the USA economy is extremely important to world economy. Barbara Boxer spoke about the environment. I believe the Democrats are more trustworthy stewards of the environment than the Republicans. I fear that either side will subordinate the ecology to the economy. Short term gain, long term pain.
John McCain spoke to the American Legion convention. He seems to have convinced them that being a veteran is a qualification for being president. I am a veteran. I am not qualified to be president. He accused Barack Obama of linking the problems in Georgia to Iraq. I don’t think Obama did that; but I do think they are linked. I also think the current republican administration’s belligerent attitude has set the tone for other administrations around the world.
Our second rule of international real estate is: “Capital flows to the highest yield with the lowest risk.” Peace and harmony reduce risk. Peace and harmony attract investment.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Monday, August 25, 2008
Politics and Real Estate
Politics and Real Estate
I consider politics to be a sordid pastime. I prefer not to be involved. Discussions of politics virtually never makes friends only enemies. Unfortunately, the motto of RPAC has proved to be only too true in the last few years. “If real estate is your profession, politics is your business.” Just look at the way the economy of the United States has been ruined in the last 8 years by bad political and foreign policy decisions.
The second rule of international real estate is “Capital flows to the highest yield with the lowest risk.” Political risk is bad enough by itself. In some countries the ownership, transfer and tax rules can change overnight. Political risk also causes other risks such as danger from terrorism or military action. It is quite bad to lose your property or have it damaged in a way that is usually not covered by insurance. Losing one’s life is the ultimate risk.
I wonder what the effects of the last several weeks have done to property values in S. Ossetia and Georgia. Maybe this is time to buy. The blood is definitely in the streets. How long will it be before the economies of these areas will rebound? How long before these areas are once again fit for human habitation? I personally think that purchases in Tblisi and other Georgian cities could be a good investment. I am 61 years old. I don’t think I have enough time left for an investment in S. Ossetia or N. Ossetia.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
I consider politics to be a sordid pastime. I prefer not to be involved. Discussions of politics virtually never makes friends only enemies. Unfortunately, the motto of RPAC has proved to be only too true in the last few years. “If real estate is your profession, politics is your business.” Just look at the way the economy of the United States has been ruined in the last 8 years by bad political and foreign policy decisions.
The second rule of international real estate is “Capital flows to the highest yield with the lowest risk.” Political risk is bad enough by itself. In some countries the ownership, transfer and tax rules can change overnight. Political risk also causes other risks such as danger from terrorism or military action. It is quite bad to lose your property or have it damaged in a way that is usually not covered by insurance. Losing one’s life is the ultimate risk.
I wonder what the effects of the last several weeks have done to property values in S. Ossetia and Georgia. Maybe this is time to buy. The blood is definitely in the streets. How long will it be before the economies of these areas will rebound? How long before these areas are once again fit for human habitation? I personally think that purchases in Tblisi and other Georgian cities could be a good investment. I am 61 years old. I don’t think I have enough time left for an investment in S. Ossetia or N. Ossetia.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Friday, August 22, 2008
The New Cold War
The New Cold War
What will the “new cold war” mean for the “new world order”. The world’s hopes for peace were pretty much dashed when George Bush moved into the Whitehouse. Bill Clinton had spent 8 years making friends around the world, wiping out the budget deficit and spreading peace and good will. George Bush has spent his 8 years making enemies, blowing the budget and spreading war, jealousy and hatred.
There was no reason to be so insensitive to Russian national pride. Russia was trying to be a good or at least a better world citizen. The USA superior attitude destroyed all of that. There was and is no need for a missile defense system that does not work anyway. Until now there has been no need to expand NATO into the former Warsaw Pact. Now we need it in Georgia bad. The real competition is no longer missiles and warfare abilities. The new competition is energy. We are driving Russia from the Western camp to the Chinese camp. It may be a cold winter in Europe. If not this year, next year for sure.
I just hope the next “leader of the free world” will be less arrogant and more charismatic.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
What will the “new cold war” mean for the “new world order”. The world’s hopes for peace were pretty much dashed when George Bush moved into the Whitehouse. Bill Clinton had spent 8 years making friends around the world, wiping out the budget deficit and spreading peace and good will. George Bush has spent his 8 years making enemies, blowing the budget and spreading war, jealousy and hatred.
There was no reason to be so insensitive to Russian national pride. Russia was trying to be a good or at least a better world citizen. The USA superior attitude destroyed all of that. There was and is no need for a missile defense system that does not work anyway. Until now there has been no need to expand NATO into the former Warsaw Pact. Now we need it in Georgia bad. The real competition is no longer missiles and warfare abilities. The new competition is energy. We are driving Russia from the Western camp to the Chinese camp. It may be a cold winter in Europe. If not this year, next year for sure.
I just hope the next “leader of the free world” will be less arrogant and more charismatic.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Thursday, August 21, 2008
South American Spring
South American Spring
One of the things I really love about South America is the ability to enjoy Spring and Fall twice. CIA (Camara Inmobiliaria Argentina) and SECOVI (The Sao Paulo real estate professionals) are both having conferences in September. I will be enjoying Spring in both of them. Another Brazilian group Conaci is having a conference in Fortaleza. Fortaleza is pretty close to the equator. You can’t really call the season there Spring. All you can call it is hot.
SECOVI really knows how to put on a conference. The day before the conference begins they have the Premio Master Imobliaria, which the 1st stage for the FIABCI Prix de Exellence. This real estate award ceremony is held in the old railway station in Sao Paulo, which has been completely refurbished to a very high standard of excellence. The speakers at this conference are always fantastic. One year they had President Cardoso. They also have a Chef who could cook at any 5 star restaurant anywhere in the world. More info at http://www.convencaosecovi.com.br
The Argentines are having their conference at the Hilton in Puerto Madero, Buenos Aires. The conference is called Mundo Inmobiliario 2008. Information can be accessed at http://www.mundoinmobiliario.com.ar There is an all star, action packed two days of intense education. Plan to stay an extra day or two to really enjoy Buenos Aires.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
One of the things I really love about South America is the ability to enjoy Spring and Fall twice. CIA (Camara Inmobiliaria Argentina) and SECOVI (The Sao Paulo real estate professionals) are both having conferences in September. I will be enjoying Spring in both of them. Another Brazilian group Conaci is having a conference in Fortaleza. Fortaleza is pretty close to the equator. You can’t really call the season there Spring. All you can call it is hot.
SECOVI really knows how to put on a conference. The day before the conference begins they have the Premio Master Imobliaria, which the 1st stage for the FIABCI Prix de Exellence. This real estate award ceremony is held in the old railway station in Sao Paulo, which has been completely refurbished to a very high standard of excellence. The speakers at this conference are always fantastic. One year they had President Cardoso. They also have a Chef who could cook at any 5 star restaurant anywhere in the world. More info at http://www.convencaosecovi.com.br
The Argentines are having their conference at the Hilton in Puerto Madero, Buenos Aires. The conference is called Mundo Inmobiliario 2008. Information can be accessed at http://www.mundoinmobiliario.com.ar There is an all star, action packed two days of intense education. Plan to stay an extra day or two to really enjoy Buenos Aires.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Tuesday, August 19, 2008
Changes to Spanish Real Estate Law
Changes to Spanish Real Estate Law
In an attempt to slow down real estate speculation and to provide more affordable housing, Spain has changed their basic real estate law which is the Spanish Land Act. The changes to the law are in 3 main areas: valuation, protected status, and Infrastructure.
The valuation change is that property must now be appraised based on its current classification, rather than its potential use. The classifications are rural protected or non-protected or urban. Urban is classified in categories of : “supported by infrastructure” or “consolidated urban land”. Consolidated urban land has infrastructure that is legally integrated into the local system.
Protected housing must constitute 30% of all new development. This property Is what we would probably call “rent controlled” or “price controlled”. The right to develop infrastructure was formerly a private property right belonging to the owner. This right now will be subject to public administration and supervision.David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
In an attempt to slow down real estate speculation and to provide more affordable housing, Spain has changed their basic real estate law which is the Spanish Land Act. The changes to the law are in 3 main areas: valuation, protected status, and Infrastructure.
The valuation change is that property must now be appraised based on its current classification, rather than its potential use. The classifications are rural protected or non-protected or urban. Urban is classified in categories of : “supported by infrastructure” or “consolidated urban land”. Consolidated urban land has infrastructure that is legally integrated into the local system.
Protected housing must constitute 30% of all new development. This property Is what we would probably call “rent controlled” or “price controlled”. The right to develop infrastructure was formerly a private property right belonging to the owner. This right now will be subject to public administration and supervision.David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Monday, August 18, 2008
Let’s Go To Nicaragua
Let’s Go To Nicaragua
Beginning October 6th we will be doing a CIPS institute in Nicaragua. It is sponsored by Del Pacifica. It is going to be a lot of fun and a lot of good networking. Anyone who has any interest at all in the 2nd Home market or the Caribbean area and who does not yet have their CIPS designation should be there.
The prices will be at a slight discount. Taken individually the theatre classes will be $225 and Finance will be $295. The whole institute is only $800. The classes will be at an all-inclusive resort. We have one day to play at Del Pacifica, compliments of the developer. I can’t wait. I might even buy a green speedo just for the occasion. Don’t get too grossed out. If I buy a speedo it will be the goggles, not the bathing suit.
This may be a way to get your CIPS designation with a net cost of $0. You may get so excited about Del Pacifica that you tell a friend and sell a unit. Your commission will pay you for the class and your travel. Contact Lucia Sacasa luciasacasa@portonica.com to sign up today. We are filling up fast.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Beginning October 6th we will be doing a CIPS institute in Nicaragua. It is sponsored by Del Pacifica. It is going to be a lot of fun and a lot of good networking. Anyone who has any interest at all in the 2nd Home market or the Caribbean area and who does not yet have their CIPS designation should be there.
The prices will be at a slight discount. Taken individually the theatre classes will be $225 and Finance will be $295. The whole institute is only $800. The classes will be at an all-inclusive resort. We have one day to play at Del Pacifica, compliments of the developer. I can’t wait. I might even buy a green speedo just for the occasion. Don’t get too grossed out. If I buy a speedo it will be the goggles, not the bathing suit.
This may be a way to get your CIPS designation with a net cost of $0. You may get so excited about Del Pacifica that you tell a friend and sell a unit. Your commission will pay you for the class and your travel. Contact Lucia Sacasa luciasacasa@portonica.com to sign up today. We are filling up fast.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Friday, August 15, 2008
Knoxville, TN
Knoxville, TN.
It is really nice to find a spot where people are upbeat about their market and excited about the prospects of the real estate business there. A huge new research complex is being built near Oakridge. Oakridge is the most international city in the USA per capita, according to one of my students. I have not verified this; but I believe it.
A new Volkswagon plant is coming to the Chatanooga area. This will bring jobs and business that will affect not only Chatanooga; but all of East Tennessee and the mountains of NC, and Georgia. This plant does not bring just jobs. It brings a lot of increased demand for infrastructure that will benefit everyone. I am sure there are a lot of people in my home state of NC, who are bitter at not getting the plant. Perhaps they should go to Tennessee and see the roads and talk to the residents about their schools.
If Volkswagon or any other company just wants cheap labor, they will not be locating in the USA. They are looking for total quality of life and operating conditions. The roads in NC are so bad that the ideal target industry for us would be dentists. They can make a fortune replacing people’s fillings.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
It is really nice to find a spot where people are upbeat about their market and excited about the prospects of the real estate business there. A huge new research complex is being built near Oakridge. Oakridge is the most international city in the USA per capita, according to one of my students. I have not verified this; but I believe it.
A new Volkswagon plant is coming to the Chatanooga area. This will bring jobs and business that will affect not only Chatanooga; but all of East Tennessee and the mountains of NC, and Georgia. This plant does not bring just jobs. It brings a lot of increased demand for infrastructure that will benefit everyone. I am sure there are a lot of people in my home state of NC, who are bitter at not getting the plant. Perhaps they should go to Tennessee and see the roads and talk to the residents about their schools.
If Volkswagon or any other company just wants cheap labor, they will not be locating in the USA. They are looking for total quality of life and operating conditions. The roads in NC are so bad that the ideal target industry for us would be dentists. They can make a fortune replacing people’s fillings.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Wednesday, August 6, 2008
Emerging Markets Power the World
Emerging Markets Power the World
We talked about the world economy as a 747 with 4 engines. The European engine is sputtering. George Bush is choking the fuel to the USA engine. The commodities engine is going so fast it makes the plane lopsided. The emerging markets engine is really the only one operating well. For years the USA powered the plane with our internal economy (consumers). Our credit cards are all maxed out and our housing markets are drunk on Champagne music. (All those bursting bubbles)
The only thing keeping the world economy in the air is the internal growth in the emerging economies. These economies are growing because of consumer demand within their countries. In the USA, the war in Iraq is driving our economy. Driving it down that is. The soldiers are spending their money in Iraq. The military machine is sucking up fuel like moonshine. We will never cut demand for fossil fuels as long as we have over a million people driving around in Humvees and flying all over the world in airplanes with their only purpose being to drive around in Humvees.
Well, the economy is like the weather. We can complain about it. As individuals there is not much we can do to change it. We can take steps to make our own businesses better. What are you doing? Please share your good ideas.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
We talked about the world economy as a 747 with 4 engines. The European engine is sputtering. George Bush is choking the fuel to the USA engine. The commodities engine is going so fast it makes the plane lopsided. The emerging markets engine is really the only one operating well. For years the USA powered the plane with our internal economy (consumers). Our credit cards are all maxed out and our housing markets are drunk on Champagne music. (All those bursting bubbles)
The only thing keeping the world economy in the air is the internal growth in the emerging economies. These economies are growing because of consumer demand within their countries. In the USA, the war in Iraq is driving our economy. Driving it down that is. The soldiers are spending their money in Iraq. The military machine is sucking up fuel like moonshine. We will never cut demand for fossil fuels as long as we have over a million people driving around in Humvees and flying all over the world in airplanes with their only purpose being to drive around in Humvees.
Well, the economy is like the weather. We can complain about it. As individuals there is not much we can do to change it. We can take steps to make our own businesses better. What are you doing? Please share your good ideas.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Monday, August 4, 2008
Usufruct
Usufruct
We have referred to the situation before, mostly in communist or former communist countries, where the buyer of a property does not get title to the land. They merely get the right to develop or use the land. Normally this is done with state-owned or communally owned properties. There will normally be a lease on the land for an indefinite period or somewhere between 40 and 99 years. The process is called “Usufruct”. It means loosely “to use the fruit”.
While westerners seem to think this is unusual or a less than ideal situation, the same thing is done in capitalist countries. Almost all of the land in Israel is owned by the “Israeli Land Authority”. Many service stations, branch banks, fast food restaurants and shopping centers are built on long term leased land. Beach front land in Hawaii is rarely sold. The USA tax code recognizes only depreciation on the improvements on a property. If the land is leased, the lease has a definite life and the rent on the land is deductible as a business expense. There are advantages to this form of ownership for both the land owner and for the owner/developer of the improvements.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
We have referred to the situation before, mostly in communist or former communist countries, where the buyer of a property does not get title to the land. They merely get the right to develop or use the land. Normally this is done with state-owned or communally owned properties. There will normally be a lease on the land for an indefinite period or somewhere between 40 and 99 years. The process is called “Usufruct”. It means loosely “to use the fruit”.
While westerners seem to think this is unusual or a less than ideal situation, the same thing is done in capitalist countries. Almost all of the land in Israel is owned by the “Israeli Land Authority”. Many service stations, branch banks, fast food restaurants and shopping centers are built on long term leased land. Beach front land in Hawaii is rarely sold. The USA tax code recognizes only depreciation on the improvements on a property. If the land is leased, the lease has a definite life and the rent on the land is deductible as a business expense. There are advantages to this form of ownership for both the land owner and for the owner/developer of the improvements.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Sunday, August 3, 2008
How They Survived Hard Times in Brazil
How They Survived Hard Times in Brazil
My first trip to Sao Paulo was right after the devaluation of the Real. Everything I had read in the economist and elsewhere had prepared me to see and economic wasteland. Instead I saw building cranes everywhere. The demand was there the creative brokers and developers adapted to meet the demand.
What they did was this. As soon as the project was conceived a billboard and a trailer were erected on the site with pictures, models, sales agents and brochures. Every street corner for miles around was adorned with a beautiful Brazilian lady passing out brochures. The Brazilian ladies are all gorgeous. The Brazilian men are all macho. This is a perfect combination. The financing is what is really creative though.
The buyer picks out their unit and puts a sizeable deposit. They begin making monthly payments. Interest rates are high in Brazil; so the money accrues quickly. By the time the project is finished in about 3 years, the unit is paid for. The people move into a paid for home. The money deposit is guaranteed by a builder’s association. This solves another problem too. Many people were building without permits. The deposits are only insured for permitted projects.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
My first trip to Sao Paulo was right after the devaluation of the Real. Everything I had read in the economist and elsewhere had prepared me to see and economic wasteland. Instead I saw building cranes everywhere. The demand was there the creative brokers and developers adapted to meet the demand.
What they did was this. As soon as the project was conceived a billboard and a trailer were erected on the site with pictures, models, sales agents and brochures. Every street corner for miles around was adorned with a beautiful Brazilian lady passing out brochures. The Brazilian ladies are all gorgeous. The Brazilian men are all macho. This is a perfect combination. The financing is what is really creative though.
The buyer picks out their unit and puts a sizeable deposit. They begin making monthly payments. Interest rates are high in Brazil; so the money accrues quickly. By the time the project is finished in about 3 years, the unit is paid for. The people move into a paid for home. The money deposit is guaranteed by a builder’s association. This solves another problem too. Many people were building without permits. The deposits are only insured for permitted projects.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Monday, July 28, 2008
Down Market Opportunities
Down Market Opportunities
How can a real estate professional survive in a down market? A broker should always make money as long as there is activity. Unfortunately as prices drop activity usually declines as well. What about developers. Can they keep building when people stop buying? What happens to unsold product? How do they keep their people together if they don’t keep building?
We can look at the long term situation and study the actual market dynamics. The fact is in most of the world, demand for housing still exceeds supply. The problem being that the people who need the housing cannot buy it. For brokers and developers the most important question is, “What can they buy?” The second important question is “How can they buy?” The brokers and developers who answer these questions will not only survive in a down market they will thrive.
There are many who will say, “There are no answers to these questions in my market.” These are my favorite competition. They will go to work in a convenience store and leave the real estate business to me and my friends. There are always answers to these questions. Look at drug addicts. They always manage to get what they need. Are they smarter than we are? On a trip to Sao Paulo, Brazil after the devaluation of the Real, I expected to see financial disaster. Instead, I saw building cranes. Next blog will tell what they did to survive and thrive.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
How can a real estate professional survive in a down market? A broker should always make money as long as there is activity. Unfortunately as prices drop activity usually declines as well. What about developers. Can they keep building when people stop buying? What happens to unsold product? How do they keep their people together if they don’t keep building?
We can look at the long term situation and study the actual market dynamics. The fact is in most of the world, demand for housing still exceeds supply. The problem being that the people who need the housing cannot buy it. For brokers and developers the most important question is, “What can they buy?” The second important question is “How can they buy?” The brokers and developers who answer these questions will not only survive in a down market they will thrive.
There are many who will say, “There are no answers to these questions in my market.” These are my favorite competition. They will go to work in a convenience store and leave the real estate business to me and my friends. There are always answers to these questions. Look at drug addicts. They always manage to get what they need. Are they smarter than we are? On a trip to Sao Paulo, Brazil after the devaluation of the Real, I expected to see financial disaster. Instead, I saw building cranes. Next blog will tell what they did to survive and thrive.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Friday, July 25, 2008
5 Things the 2008 Shanghai CIPS Class Would Like For You to Know about Shanghai.
5 Things the 2008 Shanghai CIPS Class Would Like For You to Know about Shanghai.
Last nights homework for the Shanghai CIPS class was for each person to choose 1 thing they would like the world to know about Shanghai. We listed these things in class and voted for the top 5. I have left these things stated as closely as possible to the way the students said them. Please consider, the ideas were expressed in Chinese and translated. They may seem awkward in syntax; but I felt that it was important to leave them as close as possible to what I actually heard.
1) Forefront of Chinese Economy. Access to the Chinese economy.
2) The people are very talented.
3) Shanghai is an international City.
4) Shanghai enjoys a high standard of Government Service.
5) Shanghai is the center of 4 things in China.
a. Finance
b. Shipping
c. Trade
d. The economy.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Last nights homework for the Shanghai CIPS class was for each person to choose 1 thing they would like the world to know about Shanghai. We listed these things in class and voted for the top 5. I have left these things stated as closely as possible to the way the students said them. Please consider, the ideas were expressed in Chinese and translated. They may seem awkward in syntax; but I felt that it was important to leave them as close as possible to what I actually heard.
1) Forefront of Chinese Economy. Access to the Chinese economy.
2) The people are very talented.
3) Shanghai is an international City.
4) Shanghai enjoys a high standard of Government Service.
5) Shanghai is the center of 4 things in China.
a. Finance
b. Shipping
c. Trade
d. The economy.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Sunday, July 13, 2008
What I Have Learned from My Students in Shanghai (pt. 2)
What I Have Learned from My Students in Shanghai (pt. 2)
4 days of class are done now. Today’s class was on Europe. The students began the class expressing no interest much in doing business there. Going around the room each student was asked to choose a preferential country from Europe as a business target. This seemed to change things. One student is from France and he had to choose a country other than France. Despite the historical relationship only one student chose Russia.
The students did not realize before the class that The European Union is China’s largest trading partner. As we went through the Eastern European countries, similarities of situation were noticed. China and Viet Nam are the only countries that have retained communism and embraced capitalism at the same time. I think the real differences may be more semantic than political. What the west wants to export to the communist world is better defined as democracy than just capitalism. What the communist call communism is so totally different from what Karl Marx envisioned that all it really means is rule by one party. “The Party” itself seems more like a big lodge than a party.
The government people I have met here seem to be, for the most part, sincerely committed to having a society where everyone prospers. What I have seen of democracy in the last 8 years are systems where everyone pursues their own self interest. I can’t help that think that if we wish to “sell” democracy to the rest of the world, perhaps we should work on our “product quality” a little.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
4 days of class are done now. Today’s class was on Europe. The students began the class expressing no interest much in doing business there. Going around the room each student was asked to choose a preferential country from Europe as a business target. This seemed to change things. One student is from France and he had to choose a country other than France. Despite the historical relationship only one student chose Russia.
The students did not realize before the class that The European Union is China’s largest trading partner. As we went through the Eastern European countries, similarities of situation were noticed. China and Viet Nam are the only countries that have retained communism and embraced capitalism at the same time. I think the real differences may be more semantic than political. What the west wants to export to the communist world is better defined as democracy than just capitalism. What the communist call communism is so totally different from what Karl Marx envisioned that all it really means is rule by one party. “The Party” itself seems more like a big lodge than a party.
The government people I have met here seem to be, for the most part, sincerely committed to having a society where everyone prospers. What I have seen of democracy in the last 8 years are systems where everyone pursues their own self interest. I can’t help that think that if we wish to “sell” democracy to the rest of the world, perhaps we should work on our “product quality” a little.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Friday, July 11, 2008
What I Have Learned from My Students in Shanghai (pt. 1)
What I Have Learned from My Students in Shanghai (pt. 1)
Today will be the 3rd day of class in the Weston Institute in Shanghai. Some of the top developers in the city are sharing the experience. Almost every student has a laptop open as we go through the class. My overheads are in English. They have English and Chinese and use the overheads and the internet as we go through the material.
The first case in the Finance class is a Taiwanese buying a home in the USA. The book we are using is an old version and the case is outdated. We decided to use Shanghai as the destination for the buyer. A lot of the cultural issues are the same. Foreigners must live in Shanghai for a year before they can buy a home; so our example had to rent first for a year. Because our students are developers, we used an example based on a development one of the students is doing. This turned a dead old case into something dynamic.
Another difference is that the subject of our case will have to pay 9% tax on the total price of the property when he sells it. Even with this the profits will be tremendous after only a 3 year hold based on past performance of housing prices. That is the catch. Housing appreciation has slowed to (according to government figures) 0%. I will learn more today and share it with you.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Today will be the 3rd day of class in the Weston Institute in Shanghai. Some of the top developers in the city are sharing the experience. Almost every student has a laptop open as we go through the class. My overheads are in English. They have English and Chinese and use the overheads and the internet as we go through the material.
The first case in the Finance class is a Taiwanese buying a home in the USA. The book we are using is an old version and the case is outdated. We decided to use Shanghai as the destination for the buyer. A lot of the cultural issues are the same. Foreigners must live in Shanghai for a year before they can buy a home; so our example had to rent first for a year. Because our students are developers, we used an example based on a development one of the students is doing. This turned a dead old case into something dynamic.
Another difference is that the subject of our case will have to pay 9% tax on the total price of the property when he sells it. Even with this the profits will be tremendous after only a 3 year hold based on past performance of housing prices. That is the catch. Housing appreciation has slowed to (according to government figures) 0%. I will learn more today and share it with you.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Wednesday, July 9, 2008
Shanghai Re-visited
Shanghai Re-visited
I got back to Shanghai yesterday afternoon (7/8/08). I was last here in 2006. The airport has doubled in size. The real estate has doubled in price. Many of the empty spaces in Pudong have been filled in. Many of the full spaces in Puxi have been torn down and replaced with something bigger and better. The city just feels prosperous.
I needed to add some pages to my passport. On advice from Jeff Hornberg of NAR, instead of mailing the passport off, I just went to the US Consulate here. I got to the building at 8:05 AM. It was locked so I walked around the building until I found and open door. The elevators in the front banks do not go to the 8th floor where the consulate is. The security guard helped me find the right elevator. There were probably a hundred or more people already there. I won’t say the words I was thinking.
The guards seemed to know what I wanted. They ushered me to the front of the line and into the consulate. I went through security took a number filled out a paper gave up and got back my passport with 22 extra pages in about 30 minutes. Thank you Jeff for a great idea.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
I got back to Shanghai yesterday afternoon (7/8/08). I was last here in 2006. The airport has doubled in size. The real estate has doubled in price. Many of the empty spaces in Pudong have been filled in. Many of the full spaces in Puxi have been torn down and replaced with something bigger and better. The city just feels prosperous.
I needed to add some pages to my passport. On advice from Jeff Hornberg of NAR, instead of mailing the passport off, I just went to the US Consulate here. I got to the building at 8:05 AM. It was locked so I walked around the building until I found and open door. The elevators in the front banks do not go to the 8th floor where the consulate is. The security guard helped me find the right elevator. There were probably a hundred or more people already there. I won’t say the words I was thinking.
The guards seemed to know what I wanted. They ushered me to the front of the line and into the consulate. I went through security took a number filled out a paper gave up and got back my passport with 22 extra pages in about 30 minutes. Thank you Jeff for a great idea.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Thursday, July 3, 2008
Which Engine Runs the Plane Now?
Which Engine Runs the Plane Now?
A few years ago I attended a lecture at which the speaker compared the world economy to a 747 airplane. He mentioned 4 engines. 1 was the USA, 1 was Europe, 1 was Japan and 1 was the developing world. This was right after the Asian Crisis. He said the only engine keeping the plane up was the USA. So what keeps us in the air today? Are we still flying or are we getting ready to crash?
The USA is being crushed by high commodity prices and war spending and bad government economic policies. Europe is sputtering. Japan is beginning to start back up. China and India is the engine that is keeping us in the air. They were not even considered in the speech the economist delivered. They were just lumped in as the developing world. The countries in the developing world are doing ok because of high commodity prices and because the growth of the internal economies in these countries is like a runaway diesel.
Will this 1 engine on the 747 keep us in the air long enough to get the other engines re-started? This is the big question. What if it doesn’t? Is a worldwide recession even possible, or will the symptom of the recession be the cure? A tremendous economic slowdown like a world recession would have to push down the price of commodities. Would this restart the other engines or just blow out the one that still runs?
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
A few years ago I attended a lecture at which the speaker compared the world economy to a 747 airplane. He mentioned 4 engines. 1 was the USA, 1 was Europe, 1 was Japan and 1 was the developing world. This was right after the Asian Crisis. He said the only engine keeping the plane up was the USA. So what keeps us in the air today? Are we still flying or are we getting ready to crash?
The USA is being crushed by high commodity prices and war spending and bad government economic policies. Europe is sputtering. Japan is beginning to start back up. China and India is the engine that is keeping us in the air. They were not even considered in the speech the economist delivered. They were just lumped in as the developing world. The countries in the developing world are doing ok because of high commodity prices and because the growth of the internal economies in these countries is like a runaway diesel.
Will this 1 engine on the 747 keep us in the air long enough to get the other engines re-started? This is the big question. What if it doesn’t? Is a worldwide recession even possible, or will the symptom of the recession be the cure? A tremendous economic slowdown like a world recession would have to push down the price of commodities. Would this restart the other engines or just blow out the one that still runs?
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Saturday, June 28, 2008
Trying to Dodge Stupidity is Stupid
Trying to Dodge Stupidity is Stupid
I just received my Visa for next weeks trip to China. I had to send my passport (one of my most prized possessions) off to get the visa. I was afraid that embassy personnel ( being beurocrats) might lose my passport. I used “China Visa Service”. Their application includes two places for the shipping address. I put my post office as preferred.
I put my office as the second because they ship by FED-EX. My passport did not come Monday. I called Tuesday AM. They said it had been sent Friday and I should have it. They gave me the tracking #. I tracked it and found that there had been an attempted delivery at 10:00 and they would try again on Wednesday. I knew I was in my office all morning, I cursed FED-EX for stupidity and made signs for the doors saying to come on in and leaving my cell phone #.
When I got home, there was a door tag on my back door indicating the attempted delivery. They could not change delivery address without contacting the shipper. I managed to get them to deliver to a FED-EX office near my office. I could have saved about $40 and sent my passport to the Chinese Embassy. I will do that next time.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
I just received my Visa for next weeks trip to China. I had to send my passport (one of my most prized possessions) off to get the visa. I was afraid that embassy personnel ( being beurocrats) might lose my passport. I used “China Visa Service”. Their application includes two places for the shipping address. I put my post office as preferred.
I put my office as the second because they ship by FED-EX. My passport did not come Monday. I called Tuesday AM. They said it had been sent Friday and I should have it. They gave me the tracking #. I tracked it and found that there had been an attempted delivery at 10:00 and they would try again on Wednesday. I knew I was in my office all morning, I cursed FED-EX for stupidity and made signs for the doors saying to come on in and leaving my cell phone #.
When I got home, there was a door tag on my back door indicating the attempted delivery. They could not change delivery address without contacting the shipper. I managed to get them to deliver to a FED-EX office near my office. I could have saved about $40 and sent my passport to the Chinese Embassy. I will do that next time.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Wednesday, June 25, 2008
Xenophobia, Visas and International Real Estate
Xenophobia, Visas and International Real Estate
One of the preparations for a trip to China is getting a visa. The process is aggravating. The cost is high $205 and I have to send my passport away. The visa is for single entry and is only good for 90 days. Do you think I would like to buy a vacation home in China?
As the holder of a US passport, there are very few countries that require a visa. But what about the way the US treats visitors from most of the world? The visa requirements and the treatment people receive at our borders and airports is a major deterrent to investment and tourism here. With the US dollar at ridiculously low levels and real estate prices dropping we could be a desirable target for vacation home buyers. An improvement in this market would help our real estate industry and our general economy.
As a private citizen and a real estate agent, what can I do? I can apologize; but I am pretty powerless to change things. I can recommend properties in Central and South America. As a matter of fact that is what I am doing. I don’t mean to be unpatriotic about this being the greatest country in the world and all that. I just don’t want my clients and friends to have to start their trip with a dose of Homeland Insecurity.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
One of the preparations for a trip to China is getting a visa. The process is aggravating. The cost is high $205 and I have to send my passport away. The visa is for single entry and is only good for 90 days. Do you think I would like to buy a vacation home in China?
As the holder of a US passport, there are very few countries that require a visa. But what about the way the US treats visitors from most of the world? The visa requirements and the treatment people receive at our borders and airports is a major deterrent to investment and tourism here. With the US dollar at ridiculously low levels and real estate prices dropping we could be a desirable target for vacation home buyers. An improvement in this market would help our real estate industry and our general economy.
As a private citizen and a real estate agent, what can I do? I can apologize; but I am pretty powerless to change things. I can recommend properties in Central and South America. As a matter of fact that is what I am doing. I don’t mean to be unpatriotic about this being the greatest country in the world and all that. I just don’t want my clients and friends to have to start their trip with a dose of Homeland Insecurity.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Monday, June 23, 2008
Miami Congress (Dr. Yun) Pt. 4
Miami Congress (Dr. Yun) Pt. 4
On the economy:
1) The inflation rate is high and rising. Consumer sentiment is way down. The economy is expanding at a very slow rate.
2) Corporate profits are very high. The stock market is undervalued.
3) Vacation home sales are falling. The currency differential offers some opportunities. The US home prices are falling in Brazillian Real.
4) Freddie & Fannie have been in “declining market policy” mode. This calls for higher lending criteria. This policy is being removed during the month of June.
Sorry if this sounds disjointed. It is from my notes at the presentation. All of the statements are direct quotes or paraphrases from Dr. Yun’s talk.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
On the economy:
1) The inflation rate is high and rising. Consumer sentiment is way down. The economy is expanding at a very slow rate.
2) Corporate profits are very high. The stock market is undervalued.
3) Vacation home sales are falling. The currency differential offers some opportunities. The US home prices are falling in Brazillian Real.
4) Freddie & Fannie have been in “declining market policy” mode. This calls for higher lending criteria. This policy is being removed during the month of June.
Sorry if this sounds disjointed. It is from my notes at the presentation. All of the statements are direct quotes or paraphrases from Dr. Yun’s talk.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Friday, June 20, 2008
Miami Congress (Dr. Yun) Pt. 3
Miami Congress (Dr. Yun) Pt. 3
1) Housing market activity is at its lowest rate in 10 years
2) Projected price declines are causing pessimism in the market.
3) Prices seem to have stabilized. 80 % of the homes listed are listed because the owner wants to buy a new home.
4) The high vancancy in New (vacant) homes is declining do to cutbacks in construction.
5) Long term we need 1.6 million new homes per year. In 2006 there was and oversupply. Now the input is down to 1 million homes per year.
6) Price declines have been very speedy, over time there a potential for large price increases.
continued
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
1) Housing market activity is at its lowest rate in 10 years
2) Projected price declines are causing pessimism in the market.
3) Prices seem to have stabilized. 80 % of the homes listed are listed because the owner wants to buy a new home.
4) The high vancancy in New (vacant) homes is declining do to cutbacks in construction.
5) Long term we need 1.6 million new homes per year. In 2006 there was and oversupply. Now the input is down to 1 million homes per year.
6) Price declines have been very speedy, over time there a potential for large price increases.
continued
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Thursday, June 19, 2008
Miami Congress (Dr. Yun) Pt. 2
Miami Congress (Dr. Yun) Pt. 2
On home price trends:
1) Miami as a whole is down 15%. The areas with subprime property prices are down 35%.
2) In areas with no subprime foreclosures prices are unchanged.
3) Long time buyers are doing fine. Flippers are out of luck.
4) Location is more important than ever.
5) Wall street is facing and taking huge write-downs. The new CEOs are writing down losses that are higher than the real losses so they can be heroes and take credit for the major turnaround.
6) Mortgage rates are died to inflation, not to the Fed Funds Rate. Adjustable rates are tied to LIBOR.
Continued…..
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
On home price trends:
1) Miami as a whole is down 15%. The areas with subprime property prices are down 35%.
2) In areas with no subprime foreclosures prices are unchanged.
3) Long time buyers are doing fine. Flippers are out of luck.
4) Location is more important than ever.
5) Wall street is facing and taking huge write-downs. The new CEOs are writing down losses that are higher than the real losses so they can be heroes and take credit for the major turnaround.
6) Mortgage rates are died to inflation, not to the Fed Funds Rate. Adjustable rates are tied to LIBOR.
Continued…..
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Wednesday, June 18, 2008
Miami Congress (Dr. Yun) Pt. 1
Miami Congress (Dr. Yun) Pt. 1
A really great part of the Miami Congress is the presentation from the senior NAR economist. Dr. Lawrence Yun follows a couple of really great economist and he upholds the tradition well. I hope to have access to his overheads, which have a lot of numbers, soon. When I get that I will link you to them. Here we go from my presentation notes.
1) The current downturn follows an exceptional boom. There are several reasons for the downturn. They are primarily irrational exuberance and speculation.
2) The longterm market fundamentals are good.
3) “After the cleanup”. Subprime origination peaked in 2006. It had virtually disappeared by August of 2007.
4) Subprime defaults should rise through 1st Qtr of 2009.
5) Over half of defaults are from subprime. Only 9% of the loans are subprime.
6) Foreclosure has doubled from 1% to 2%. Detroit is 1st, Miami is 2nd. Areas with low subprime percentages are still seeing price growth.
Continued…..
A really great part of the Miami Congress is the presentation from the senior NAR economist. Dr. Lawrence Yun follows a couple of really great economist and he upholds the tradition well. I hope to have access to his overheads, which have a lot of numbers, soon. When I get that I will link you to them. Here we go from my presentation notes.
1) The current downturn follows an exceptional boom. There are several reasons for the downturn. They are primarily irrational exuberance and speculation.
2) The longterm market fundamentals are good.
3) “After the cleanup”. Subprime origination peaked in 2006. It had virtually disappeared by August of 2007.
4) Subprime defaults should rise through 1st Qtr of 2009.
5) Over half of defaults are from subprime. Only 9% of the loans are subprime.
6) Foreclosure has doubled from 1% to 2%. Detroit is 1st, Miami is 2nd. Areas with low subprime percentages are still seeing price growth.
Continued…..
Thursday, June 12, 2008
S. Florida and the Latin America Connection
S. Florida and the Latin Connection
My favorite part of the Miami Congress is the presentation that Mike Zellner of Latin Trade does each year. These are the points he made on the above subject:
1) Political instability in Latin America leads to Miami Immigration. It is always apparent which countries are having problems. They come to Miami. They don’t usually stay. When things get better they go home.
2) The weakening dollar is increasing shopping.
3) The economies of the developing countries are not slowing as much as those of the developed countries because of strong internal growth.
4) Bad service in the Port of Miami is forcing trade North.
5) The governments in most of Latin America are more competent than the governments in South Florida.
Mike showed a chart showing the number of International headquarters in different Latin cities. Sao Paulo was 1st with over 200. Mexico City was second and Miami was 3rd. I am requesting a copy of his presentation and I will share the numbers with you when I get them. Dr. Lawrence Yun, The NAR economist speaks next. I will give you a summary of his presentation in the next blog.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
My favorite part of the Miami Congress is the presentation that Mike Zellner of Latin Trade does each year. These are the points he made on the above subject:
1) Political instability in Latin America leads to Miami Immigration. It is always apparent which countries are having problems. They come to Miami. They don’t usually stay. When things get better they go home.
2) The weakening dollar is increasing shopping.
3) The economies of the developing countries are not slowing as much as those of the developed countries because of strong internal growth.
4) Bad service in the Port of Miami is forcing trade North.
5) The governments in most of Latin America are more competent than the governments in South Florida.
Mike showed a chart showing the number of International headquarters in different Latin cities. Sao Paulo was 1st with over 200. Mexico City was second and Miami was 3rd. I am requesting a copy of his presentation and I will share the numbers with you when I get them. Dr. Lawrence Yun, The NAR economist speaks next. I will give you a summary of his presentation in the next blog.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Wednesday, June 11, 2008
Miami and Costa Rica
Miami & Costa Rica
Last night we attended a Gala at a high rise resort. The property is almost sold out to people who purchased several years ago. These buyers are the losers at Miami’s musical chairs game. They are the speculators who put 20% down on the properties expecting them to go up 30% per year. Some of these may be the people who purchased originally. Some probably bought the contracts for a higher price. Some may have bought the contracts at a discount. I think it would be much more advantageous to buy from the builder now. The best deal of course will be to wait until the market finds its bottom. The views are unbelievable, the construction and floor plans and amenities are wonderful. The fundamentals are there. The market is not.
I have been talking to Mike Torino about his development in Costa Rica. It really sounds like a great project. The developer of the project kind of turned me off when he spoke about Costa Rica to the conference. He really didn’t say much about how great Costa Rica was. He mostly just dissed Panama, Nicaragua and Belize (the competition).
I still like the project. They have “You fly, we buy gathering weekends”. You buy the airline ticket. The developers pick you up at the airport and take you for a fun filled weekend with horseback riding, ziplining, fishing, dancing and parties. Mike says that there is no sales pressure at all. They let the good times and the wonderful place do the selling. If you need an invitation contact me.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Last night we attended a Gala at a high rise resort. The property is almost sold out to people who purchased several years ago. These buyers are the losers at Miami’s musical chairs game. They are the speculators who put 20% down on the properties expecting them to go up 30% per year. Some of these may be the people who purchased originally. Some probably bought the contracts for a higher price. Some may have bought the contracts at a discount. I think it would be much more advantageous to buy from the builder now. The best deal of course will be to wait until the market finds its bottom. The views are unbelievable, the construction and floor plans and amenities are wonderful. The fundamentals are there. The market is not.
I have been talking to Mike Torino about his development in Costa Rica. It really sounds like a great project. The developer of the project kind of turned me off when he spoke about Costa Rica to the conference. He really didn’t say much about how great Costa Rica was. He mostly just dissed Panama, Nicaragua and Belize (the competition).
I still like the project. They have “You fly, we buy gathering weekends”. You buy the airline ticket. The developers pick you up at the airport and take you for a fun filled weekend with horseback riding, ziplining, fishing, dancing and parties. Mike says that there is no sales pressure at all. They let the good times and the wonderful place do the selling. If you need an invitation contact me.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Tuesday, June 10, 2008
Miami Real Estate Congress
Miami Real Estate Congress
Here I am in the Charlotte airport again, headed for the Miami Congress. This is one of my favorite events of the year. To put a cherry on my ice cream, I am also flying out of concourse “C”. My gate is directly across from Phillips Seafood. It is too early for lunch; but I will eat it anyway.
The Miami congress is one of my favorite events of the year. The days are filled with really great educational events. My favorite is the update by Mike Zellner of Latin Trade Magazine. He and his magazine know more about Latin America than anyone. The evenings are filled with really great property tours. They are really parties; but we do look at the properties. Miami is one of the places where “the music has stopped” (not the salsa music, just the real estate music). I hope the developers will be generous this year.
The networking here is fantastic as well. People from all over Europe & South America will be at the conference. I have attended every conference except the 1st one. I have never failed to do at least one transaction as a direct or indirect result of the congress. The address for the congress is http://www.miamire.com
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Here I am in the Charlotte airport again, headed for the Miami Congress. This is one of my favorite events of the year. To put a cherry on my ice cream, I am also flying out of concourse “C”. My gate is directly across from Phillips Seafood. It is too early for lunch; but I will eat it anyway.
The Miami congress is one of my favorite events of the year. The days are filled with really great educational events. My favorite is the update by Mike Zellner of Latin Trade Magazine. He and his magazine know more about Latin America than anyone. The evenings are filled with really great property tours. They are really parties; but we do look at the properties. Miami is one of the places where “the music has stopped” (not the salsa music, just the real estate music). I hope the developers will be generous this year.
The networking here is fantastic as well. People from all over Europe & South America will be at the conference. I have attended every conference except the 1st one. I have never failed to do at least one transaction as a direct or indirect result of the congress. The address for the congress is http://www.miamire.com
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Sunday, June 8, 2008
California Dreamin'
California Dreamin’
I’m writing from the Red Carpet Club in San Francisco Airport. At the end of a Middle East and Africa course, I want to share some of what I learned from my students and a co-instructor. Only 1 student was from California; and he was not from the San Francisco area. He said the residential market was “a little slow”. The commercial market is doing fine. He is working with Israeli investors.
Two agents from Belize are doing more buying than selling. They say the Chinese are gobbling up all the good beachfront properties in Belize. Smart people. My co-instructor was a refugee from IBM who had worked in Namibia, and Zambia. I was really impressed with what he told us about these countries. I intend to let them be the subject of future research and another blog or two.
I got to meet with a former student from a Nicaragua class. He has a really interesting property of around 200 acres, waterfront in Panama on the Caribbean side. He does not have an exclusive listing; so I am afraid to talk about it. He is working on the listing. If he gets it, I will feature the property here.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
I’m writing from the Red Carpet Club in San Francisco Airport. At the end of a Middle East and Africa course, I want to share some of what I learned from my students and a co-instructor. Only 1 student was from California; and he was not from the San Francisco area. He said the residential market was “a little slow”. The commercial market is doing fine. He is working with Israeli investors.
Two agents from Belize are doing more buying than selling. They say the Chinese are gobbling up all the good beachfront properties in Belize. Smart people. My co-instructor was a refugee from IBM who had worked in Namibia, and Zambia. I was really impressed with what he told us about these countries. I intend to let them be the subject of future research and another blog or two.
I got to meet with a former student from a Nicaragua class. He has a really interesting property of around 200 acres, waterfront in Panama on the Caribbean side. He does not have an exclusive listing; so I am afraid to talk about it. He is working on the listing. If he gets it, I will feature the property here.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Saturday, June 7, 2008
Correction about Frankfurt
Correction About Frankfurt
In an earlier blog I said “The best thing about the Red Carpet Club in Frankfurt was that they didn’t have one.” We have to use the Lufthansa club. Well I’m wrong. This trip through I am going out of concourse “C”. They do have a Red Carpet Club. What a contrast.
Lufthansa had a full breakfast buffet. United has pretzels, crackers and liverwurst. Both clubs have lots of booze. In the states one buys the booze. How much booze do you want before getting on an airplane? In the states Red Carpet has free internet. Here they have T-Mobile. The whole airport has T-mobile. What is the benefit.
On another note. My last two flights have been on TAROM (the Romanian airline). I am so happy that my next leg will be on United. The airplanes and the food are ok. The real problem with TAROM is the company. They are severely understaffed so everything takes forever. Their people would not smile on a bet. I really do like to “fly the friendly skies”.
In an earlier blog I said “The best thing about the Red Carpet Club in Frankfurt was that they didn’t have one.” We have to use the Lufthansa club. Well I’m wrong. This trip through I am going out of concourse “C”. They do have a Red Carpet Club. What a contrast.
Lufthansa had a full breakfast buffet. United has pretzels, crackers and liverwurst. Both clubs have lots of booze. In the states one buys the booze. How much booze do you want before getting on an airplane? In the states Red Carpet has free internet. Here they have T-Mobile. The whole airport has T-mobile. What is the benefit.
On another note. My last two flights have been on TAROM (the Romanian airline). I am so happy that my next leg will be on United. The airplanes and the food are ok. The real problem with TAROM is the company. They are severely understaffed so everything takes forever. Their people would not smile on a bet. I really do like to “fly the friendly skies”.
Wednesday, June 4, 2008
Message from Romania
Message from Romania
My Romanian Students have a message for you:
Group 1 said: “Romania is a geographically and culturally beautiful country with a dynamic growing economical and financial business climate and special people with high capacity. You are more than welcome to invest together with us.”
Group 2 said: “Take the opportunity of a growing market in a colorful authentic environment. Based on the upward trend of the dynamic economy the real estate market is ready to begin its next upward surge. Invest in Romania.”
The class worked on these statements for 3 days. The goal was to tell you about Romania in as few words as possible. These are the exact words of the students in English. Everyone in the class spoke some English as a second language. I felt that it was important to use their exact words.
My Romanian Students have a message for you:
Group 1 said: “Romania is a geographically and culturally beautiful country with a dynamic growing economical and financial business climate and special people with high capacity. You are more than welcome to invest together with us.”
Group 2 said: “Take the opportunity of a growing market in a colorful authentic environment. Based on the upward trend of the dynamic economy the real estate market is ready to begin its next upward surge. Invest in Romania.”
The class worked on these statements for 3 days. The goal was to tell you about Romania in as few words as possible. These are the exact words of the students in English. Everyone in the class spoke some English as a second language. I felt that it was important to use their exact words.
Wednesday, May 28, 2008
Romanian Real Estate
Romanian Real Estate
It amazing how similar and how different Romanian real estate practices are from Bulgarian. The ownership laws are very close. There seems to be a lot of state owned property in both countries; but more of it is being privatized in Romania I think. The Romanians say they are about 5 years ahead of the Bulgarians. They believe that there is a bank “conspiracy” to ruin the real estate market. The market has slowed; but owners are unwilling to take lower prices so the market is stagnating.
Brokers complain that they can’t get sellers to give exclusive listings. They represent buyer and seller in the transaction. There is no MLS. Why would a seller give them an exclusive listing? They are really working for themselves. The brokers I have met are sincere. They are conscientious about developing their skills and building the industry. They are cursed by inertia.
Everyone is a real estate agent. This makes it really hard for the legitimate professionals. The most crippling aspect though is the belief that nothing can be changed. I have been coming here for 4 or 5 years now. Things have changed. It has been slow; but it is happening. The Romanians are near or at the end of a cycle. The Bulgarians are afraid that events in the USA will affect their market.
Prices in Bulgaria are so low (comparatively) that I cannot see a serious slowdown coming there for several years. As soon as the sellers get a little more motivated, there will be buying opportunities in Romania. Both countries have many really interesting old buildings that need to be renovated.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
It amazing how similar and how different Romanian real estate practices are from Bulgarian. The ownership laws are very close. There seems to be a lot of state owned property in both countries; but more of it is being privatized in Romania I think. The Romanians say they are about 5 years ahead of the Bulgarians. They believe that there is a bank “conspiracy” to ruin the real estate market. The market has slowed; but owners are unwilling to take lower prices so the market is stagnating.
Brokers complain that they can’t get sellers to give exclusive listings. They represent buyer and seller in the transaction. There is no MLS. Why would a seller give them an exclusive listing? They are really working for themselves. The brokers I have met are sincere. They are conscientious about developing their skills and building the industry. They are cursed by inertia.
Everyone is a real estate agent. This makes it really hard for the legitimate professionals. The most crippling aspect though is the belief that nothing can be changed. I have been coming here for 4 or 5 years now. Things have changed. It has been slow; but it is happening. The Romanians are near or at the end of a cycle. The Bulgarians are afraid that events in the USA will affect their market.
Prices in Bulgaria are so low (comparatively) that I cannot see a serious slowdown coming there for several years. As soon as the sellers get a little more motivated, there will be buying opportunities in Romania. Both countries have many really interesting old buildings that need to be renovated.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Monday, May 19, 2008
Bulgarian Real Estate Practices
Bulgarian Real Estate Procedures
There are quite a few fairly small differences in the way real estate is conducted in Bulgaria. I will just focus on a few things every foreign broker or buyer should know.
Agency: The brokers in Bulgaria normally charge the buyers the commission. They represent both parties in the transaction. Sometimes they have exclusive listings sometimes they don’t. Occasionally a broker will be hired just to advertise and market a property without being hired to list or sell the property.
The brokers do all of the title work and prepare all of the documents for the transaction. No lawyer is required; but many of the real estate offices have their own lawyers or are owned by lawyers.
I may be incorrect on this next point. If any Bulgarian practitioners are reading, I would really appreciate comments. Foreigners may own the land and the improvements in the name of an artificial entity. They may only own the improvements in their own name. A Bulgarian may own the land and the improvements in their own name. It is a common practice here to buy the right to build on a piece of land without buying the land.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
There are quite a few fairly small differences in the way real estate is conducted in Bulgaria. I will just focus on a few things every foreign broker or buyer should know.
Agency: The brokers in Bulgaria normally charge the buyers the commission. They represent both parties in the transaction. Sometimes they have exclusive listings sometimes they don’t. Occasionally a broker will be hired just to advertise and market a property without being hired to list or sell the property.
The brokers do all of the title work and prepare all of the documents for the transaction. No lawyer is required; but many of the real estate offices have their own lawyers or are owned by lawyers.
I may be incorrect on this next point. If any Bulgarian practitioners are reading, I would really appreciate comments. Foreigners may own the land and the improvements in the name of an artificial entity. They may only own the improvements in their own name. A Bulgarian may own the land and the improvements in their own name. It is a common practice here to buy the right to build on a piece of land without buying the land.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Saturday, May 17, 2008
What I learned from my Bulgarian Students
What I Learned from my Bulgarian Students
I asked the same thing in Bulgaria that I asked in Korea. “What are 5 things you want the world to know about your country.” The Korean class president was supposed to send me an email with the summary. He didn’t. This time I did the writing myself. This question elicited a response that lasted about an hour. We boiled it down into four statements.
An ancient history going back to the time of the Thracians has resulted in a rich culture featuring unique foods, wines, folk music and dancing. (More about Bulgarian food at http://davesdailygarden.blogspot.com/ )
The high educational level, friendliness and harmonious co-habitation of different ethnic and religious groups makes Bulgaria an attractive place to live.
From the mountains to the sea we enjoy a nice climate, hot mineral springs, 4 seasons and many recreational opportunities.
Steady 6% GDP growth, low unemployment , relatively low wages, the 2nd lowest real estate prices and the highest growth rate in real estate prices in the EU make Bulgaria an ideal investment target.
I hope to furnish links soon that will tie you to Bulgarian brokers and information sites.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
I asked the same thing in Bulgaria that I asked in Korea. “What are 5 things you want the world to know about your country.” The Korean class president was supposed to send me an email with the summary. He didn’t. This time I did the writing myself. This question elicited a response that lasted about an hour. We boiled it down into four statements.
An ancient history going back to the time of the Thracians has resulted in a rich culture featuring unique foods, wines, folk music and dancing. (More about Bulgarian food at http://davesdailygarden.blogspot.com/ )
The high educational level, friendliness and harmonious co-habitation of different ethnic and religious groups makes Bulgaria an attractive place to live.
From the mountains to the sea we enjoy a nice climate, hot mineral springs, 4 seasons and many recreational opportunities.
Steady 6% GDP growth, low unemployment , relatively low wages, the 2nd lowest real estate prices and the highest growth rate in real estate prices in the EU make Bulgaria an ideal investment target.
I hope to furnish links soon that will tie you to Bulgarian brokers and information sites.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Thursday, May 15, 2008
Airports & International Travel (Pt. 2)
Airports & International Travel (Pt. 2)
When I think of the horrible events of last year, I am really thankful for United Air Lines. I am not very thankful for Verizon Wireless. My “international phone” doesn’t work in Frankfurt. It hasn’t worked anywhere yet.
When I got to the gate in DC, the gate attendant told me that I wasn’t going to be able to get on the plane; because my luggage would be with Austrian Airlines and would not be with me. I told him, “I have to be in Varna, with or without my luggage. Can I get upgraded to 1st class with miles?” He sent me to the 1st class lounge to get a new ticket, while he held the plane. When I got back, he not only upgraded me to business class, he comp’d me because the video didn’t work. I admit to being worried about my luggage; but at least I know it won’t be there; so I won’t waste a lot of time looking for it. I can just go to lost luggage and start the search.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
When I think of the horrible events of last year, I am really thankful for United Air Lines. I am not very thankful for Verizon Wireless. My “international phone” doesn’t work in Frankfurt. It hasn’t worked anywhere yet.
When I got to the gate in DC, the gate attendant told me that I wasn’t going to be able to get on the plane; because my luggage would be with Austrian Airlines and would not be with me. I told him, “I have to be in Varna, with or without my luggage. Can I get upgraded to 1st class with miles?” He sent me to the 1st class lounge to get a new ticket, while he held the plane. When I got back, he not only upgraded me to business class, he comp’d me because the video didn’t work. I admit to being worried about my luggage; but at least I know it won’t be there; so I won’t waste a lot of time looking for it. I can just go to lost luggage and start the search.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Monday, May 12, 2008
Airports & International Travel (Pt. 1)
Another adventure begins as I head for Bulgaria & Romania. I am so excited about the opportunity to renew some old acquaintances that I will forgive the problems of travel and the missing of the NAR meetings in DC. One of my favorite events of the year. I always go the airport early for two reasons. 1) If things go wrong, I am ahead of the curve. 2) If I am lucky enough to fly out of concourse C, I can go to Phillips Seafood.
Nobody goes to the airport to eat; but Phillips Seafood in Charlotte is worth it. My original flight on United Mesa was so late that I would have missed my connection to Vienna. A transfer to USAir sent me to concourse C and Phillips Seafood. So…My battery got low as I was writing. I have had an adventure since it stopped. The USAir flight was delayed by an hour meaning I would still miss my connection. Almost the same as what happened last year; but with one big difference: This time I bought my ticket from United.
I got on the phone with United via the number on the back of my Gold Card. They re-routed me through Frankfurt and on to Vienna. Hopefully, I will still make my original flight to Varna. I am writing this from the Lufthansa lounge in Frankfurt. So far so good. At least I am on the right side of the ocean. There is not a wireless connection here other than T-Mobile; so I will not be able to post right now.
Another adventure begins as I head for Bulgaria & Romania. I am so excited about the opportunity to renew some old acquaintances that I will forgive the problems of travel and the missing of the NAR meetings in DC. One of my favorite events of the year. I always go the airport early for two reasons. 1) If things go wrong, I am ahead of the curve. 2) If I am lucky enough to fly out of concourse C, I can go to Phillips Seafood.
Nobody goes to the airport to eat; but Phillips Seafood in Charlotte is worth it. My original flight on United Mesa was so late that I would have missed my connection to Vienna. A transfer to USAir sent me to concourse C and Phillips Seafood. So…My battery got low as I was writing. I have had an adventure since it stopped. The USAir flight was delayed by an hour meaning I would still miss my connection. Almost the same as what happened last year; but with one big difference: This time I bought my ticket from United.
I got on the phone with United via the number on the back of my Gold Card. They re-routed me through Frankfurt and on to Vienna. Hopefully, I will still make my original flight to Varna. I am writing this from the Lufthansa lounge in Frankfurt. So far so good. At least I am on the right side of the ocean. There is not a wireless connection here other than T-Mobile; so I will not be able to post right now.
Friday, May 9, 2008
Patel on India (Pt. 2)
Patel on India (Pt. 2)
An Indian friend told me a few years ago how cheap things were in India. I asked him why he didn’t go home and live like a king. He said, “There’s nothing to buy there.”
From my conversation with Shashin, I learned that because of the tariffs and quotas being reduced, the stores are full of merchandise. One can buy anything available anywhere else. The cost of labor is very low. Someone does the laundry. Someone cleans the floors. Someone prepares the meals. The master and mistress live in a fairy tale world. To democratic western minds this may seem decadent. India has a billion people. Every one needs to make a living somehow. To do one’s own laundry is to deprive someone else of a meal.
I also learned that 50% of the population is under 25. Parents and the government are highly focused on making sure the children get a really great education. What does this mean for the future of India?
Shashin Patel’s web page is http://www.hospitalitygrp.com
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
An Indian friend told me a few years ago how cheap things were in India. I asked him why he didn’t go home and live like a king. He said, “There’s nothing to buy there.”
From my conversation with Shashin, I learned that because of the tariffs and quotas being reduced, the stores are full of merchandise. One can buy anything available anywhere else. The cost of labor is very low. Someone does the laundry. Someone cleans the floors. Someone prepares the meals. The master and mistress live in a fairy tale world. To democratic western minds this may seem decadent. India has a billion people. Every one needs to make a living somehow. To do one’s own laundry is to deprive someone else of a meal.
I also learned that 50% of the population is under 25. Parents and the government are highly focused on making sure the children get a really great education. What does this mean for the future of India?
Shashin Patel’s web page is http://www.hospitalitygrp.com
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Sunday, May 4, 2008
Patel on India (Pt. 1)
Patel on India ( Pt. 1)
My friend Shashin Patel recently returned for 7 weeks in India. I took the opportunity yesterday (5/30/08) to interview him for our benefit. He noticed some big changes.
One of the most noticeable changes was the availability of all types of merchandise in the stores. The current prime minister, who is an economist, has reduced the tariffs and other blocks to incoming merchandise. Corruption has been reduced because the people are totally fed up with it. There is fear of getting caught among government officials.
Foreign investors still have to have an Indian partner who owns more than 50% of the venture; but because of the tremendous growth in the economy and the improvement of the general prosperity, the investors are coming in. Investors are allowed to repatriate their profits. India’s attractive lifestyle is attracting people and helping to keep the people who are there. That will be the subject of the next blog.
Shashin Patel’s web page is http://www.hospitalitygrp.com
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
My friend Shashin Patel recently returned for 7 weeks in India. I took the opportunity yesterday (5/30/08) to interview him for our benefit. He noticed some big changes.
One of the most noticeable changes was the availability of all types of merchandise in the stores. The current prime minister, who is an economist, has reduced the tariffs and other blocks to incoming merchandise. Corruption has been reduced because the people are totally fed up with it. There is fear of getting caught among government officials.
Foreign investors still have to have an Indian partner who owns more than 50% of the venture; but because of the tremendous growth in the economy and the improvement of the general prosperity, the investors are coming in. Investors are allowed to repatriate their profits. India’s attractive lifestyle is attracting people and helping to keep the people who are there. That will be the subject of the next blog.
Shashin Patel’s web page is http://www.hospitalitygrp.com
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Tuesday, April 29, 2008
Oil, Agriculture and Real Estate
Oil, Agriculture and Real Estate
Land, like any other income producing property, is priced according to the income it produces. As the high cost of oil and available tax incentives induce normally reasonable people to do unreasonable things like burning up their food to power their SUVs, the price of agricultural commodities are skyrocketing. This increases farmer’s profits and thus increases the value of the land.
How long will it be before the governments in countries like Venezuela see foreigners taking away their “national heritage” in the form of corn, soybeans and sugar cane. In most of the civilized world, property rights are inviolable. Even in nominally communist countries like China, property rights are being strengthened as the economy grows. Look at the economies of the countries where property rights are protected. Look at Venezuela and Zimbabwe.
Lula, in Brazil, is a socialist; but he realized that in order to boost the well-being of the poorer parts of his society, he would have to boost the economy. He has done this by protecting and enhancing property rights and guarding the security of investments in the country.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Land, like any other income producing property, is priced according to the income it produces. As the high cost of oil and available tax incentives induce normally reasonable people to do unreasonable things like burning up their food to power their SUVs, the price of agricultural commodities are skyrocketing. This increases farmer’s profits and thus increases the value of the land.
How long will it be before the governments in countries like Venezuela see foreigners taking away their “national heritage” in the form of corn, soybeans and sugar cane. In most of the civilized world, property rights are inviolable. Even in nominally communist countries like China, property rights are being strengthened as the economy grows. Look at the economies of the countries where property rights are protected. Look at Venezuela and Zimbabwe.
Lula, in Brazil, is a socialist; but he realized that in order to boost the well-being of the poorer parts of his society, he would have to boost the economy. He has done this by protecting and enhancing property rights and guarding the security of investments in the country.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Monday, April 28, 2008
Pardon my Soapbox
Pardon my Soapbox
As I prepare for another trip to Romania and Bulgaria, last years nightmare caused by Orbitz and Lot Polish Airlines is still fresh in my mind. I can halfway forgive Lot Polish, my trip home was nice. The little Nazis at their ticket counter in Newark and the errors and inaccessibility of Orbitz still burn.
It cost me an extra $1800 to get to my destination. USAir was 15 minutes late. The Nazis would not let me on the plane, nor would they help me rebook. Try to call Orbitz sometime. They are a cyberspace illusion. After letters to both airlines, Orbitz and the FAA, Lot Polish agreed to give me back $442 for the segment I did not fly. That’s better than a swift kick between the legs. There’s a catch. They sent the money to Orbitz to refund to me.
This was in September, I am still begging them for the money. They acknowledge having it. They just don’t send it to me. Accept this as a fair warning. Any company dealing in millions of dollars of tickets every day that can’t afford to send out $442 may be on the verge of bankruptcy. What will your Orbitz tickets be worth if this happens?
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
As I prepare for another trip to Romania and Bulgaria, last years nightmare caused by Orbitz and Lot Polish Airlines is still fresh in my mind. I can halfway forgive Lot Polish, my trip home was nice. The little Nazis at their ticket counter in Newark and the errors and inaccessibility of Orbitz still burn.
It cost me an extra $1800 to get to my destination. USAir was 15 minutes late. The Nazis would not let me on the plane, nor would they help me rebook. Try to call Orbitz sometime. They are a cyberspace illusion. After letters to both airlines, Orbitz and the FAA, Lot Polish agreed to give me back $442 for the segment I did not fly. That’s better than a swift kick between the legs. There’s a catch. They sent the money to Orbitz to refund to me.
This was in September, I am still begging them for the money. They acknowledge having it. They just don’t send it to me. Accept this as a fair warning. Any company dealing in millions of dollars of tickets every day that can’t afford to send out $442 may be on the verge of bankruptcy. What will your Orbitz tickets be worth if this happens?
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Subscribe to:
Posts (Atom)
