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
Monday, July 28, 2008
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
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