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
Wednesday, November 26, 2008
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
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