Supply & Demand but No Transactions
I just read an article in the Economist on the Spanish housing market. It seems there is tremendous demand. The supply is huge. The builders are still building and people are not buying because the price is going down so fast. The credit crunch in Spain is not from foreclosures. The rules on home lending in that country have prevented that. The problem loans in Spain are with the builders who have too much inventory and whose inventory is too expensive.
Another major problem there is unemployment. The article did not discuss immigration and the problems developing there. Spain has one of the easiest immigration policies in the world. It has long been a haven for people from Latin America and North Africa. I know that in Latin countries remittances are really an important part of the economy. Who loses the job first the native Spaniard or the Immigrant? Considering that building will probably come to a screeching halt very soon, I can’t help but think the immigrants will be the first to go.
Spanish builders and developers have been working in Latin America and Eastern Europe for several years now. What will they do as these markets dry up?
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Wednesday, January 28, 2009
Tuesday, January 27, 2009
The Incredible Shrinking Economy
The Incredible Shrinking Economy
No one has to wait for the other shoe to drop. So many shoes have fallen that even Imelda Marcos has to be running short by now. When companies like Microsoft and Intel lay off people, things are getting tight. What will the economy look like when (and if) it does come back? Worldwide demand for goods and services seems to be declining. Many of the things people were buying were really unnecessary and it may be that those purchases will never be made.
We do need a lot of energy related technology. As energy gets cheaper due to lower demand, the immediate economic need for this technology diminishes. It is kind of like a roof repair. You can’t fix it when it’s raining. You don’t need to when it’s not. Energy and the environment could offer some really good long term high paying employment opportunities. Education is another field that could stand some expansion and improvement.
I do not think that the real estate business will ever go back to our old familiar business. We will probably wind up with something like the European model…fewer transactions, lower commissions, more competition.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
No one has to wait for the other shoe to drop. So many shoes have fallen that even Imelda Marcos has to be running short by now. When companies like Microsoft and Intel lay off people, things are getting tight. What will the economy look like when (and if) it does come back? Worldwide demand for goods and services seems to be declining. Many of the things people were buying were really unnecessary and it may be that those purchases will never be made.
We do need a lot of energy related technology. As energy gets cheaper due to lower demand, the immediate economic need for this technology diminishes. It is kind of like a roof repair. You can’t fix it when it’s raining. You don’t need to when it’s not. Energy and the environment could offer some really good long term high paying employment opportunities. Education is another field that could stand some expansion and improvement.
I do not think that the real estate business will ever go back to our old familiar business. We will probably wind up with something like the European model…fewer transactions, lower commissions, more competition.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Monday, January 26, 2009
Post Inauguration
Post Inauguration
It is probably too early to tell if any of Mr. Obama’s programs will actually work. I am greatly encouraged by the closing of Guantanamo prison. I am also excited about the cease fire in Gaza. This was scheduled for the time of the inauguration. It was engineered by European negotiators, with Condoleeza Rice sitting in the corner. Soon she will not even be sitting in the corner. She has not been a bad secretary of state, nor a good one. Her great accomplishment is being able to bounce a quarter off of her butt.
The talk on the radio this morning is about nationalizing banks. I doubt that will happen; but it is not without precedent. Remember the RTC. That was a government bank. That project gave REALTORS something to do and allowed us to survive until the market revived. Another entity of that nature like the “bad banks” could serve the same purpose.
The sheer size of the inaugural turnout is a hopeful sign. The most important task President Obama has is to change our attitudes and banish fear. This is a really great start.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
It is probably too early to tell if any of Mr. Obama’s programs will actually work. I am greatly encouraged by the closing of Guantanamo prison. I am also excited about the cease fire in Gaza. This was scheduled for the time of the inauguration. It was engineered by European negotiators, with Condoleeza Rice sitting in the corner. Soon she will not even be sitting in the corner. She has not been a bad secretary of state, nor a good one. Her great accomplishment is being able to bounce a quarter off of her butt.
The talk on the radio this morning is about nationalizing banks. I doubt that will happen; but it is not without precedent. Remember the RTC. That was a government bank. That project gave REALTORS something to do and allowed us to survive until the market revived. Another entity of that nature like the “bad banks” could serve the same purpose.
The sheer size of the inaugural turnout is a hopeful sign. The most important task President Obama has is to change our attitudes and banish fear. This is a really great start.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Thursday, January 22, 2009
Inauguration Day
Inauguration Day
Every inauguration has some historical significance. Perhaps today is one of the most important. We have heard a lot about the 1st black president…blah…blah…blah. I think there is so much more to this inauguration than that. Our new president is replacing what will probably go down in history as the worst president ever. Even before the inauguration he has begun a healing process between the liberal and conservative elements of the country.
I was not born in the great depression. I believe these are the worst economic times of my life. I truly believe that the situation is more a matter of trust than money. Mr. Obama is the type of man who can restore trust. Every challenge Mr. Bush faced was one more opportunity for him to enrich his friends and supporters. His every response was met with disbelief and cynicism because he was so obvious. Mr. Obama comes to office with no debts other than to the American people. His ideas are more pragmatic than ideological. No one knows if they will work; but they appear workable.
The USA’s standing in the world is at its lowest point. Mr. Bush has been a lone cowboy, riding roughshod over everyone. Mr. Obama at least has a chance to mend these relationships. He is as popular abroad as he is at home, if not more so.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Every inauguration has some historical significance. Perhaps today is one of the most important. We have heard a lot about the 1st black president…blah…blah…blah. I think there is so much more to this inauguration than that. Our new president is replacing what will probably go down in history as the worst president ever. Even before the inauguration he has begun a healing process between the liberal and conservative elements of the country.
I was not born in the great depression. I believe these are the worst economic times of my life. I truly believe that the situation is more a matter of trust than money. Mr. Obama is the type of man who can restore trust. Every challenge Mr. Bush faced was one more opportunity for him to enrich his friends and supporters. His every response was met with disbelief and cynicism because he was so obvious. Mr. Obama comes to office with no debts other than to the American people. His ideas are more pragmatic than ideological. No one knows if they will work; but they appear workable.
The USA’s standing in the world is at its lowest point. Mr. Bush has been a lone cowboy, riding roughshod over everyone. Mr. Obama at least has a chance to mend these relationships. He is as popular abroad as he is at home, if not more so.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Friday, January 16, 2009
Real Estate Bubbles
Real Estate Bubbles
I am currently reading a book on valuation of real estate in Argentina. The book is two years old; but it talks about real estate cycles and bubbles. In the USA it has been so long since our last fractured bubble that we forget about them. The book discusses the bubbles as a regular business occurrence in Argentina. It has charts about the exchange rate, the price of properties and the behavior of the stock market that draws relationships between these things and bubbles.
The book discusses the price of the house compared to the rent of the house and draws conclusions about how the ratio can deter or encourage purchases. It also shows that those relationships and their effect will be different in different localities. It also shows how this relationship can predict a bubble.
Sometimes USA REALTORS think that our market has the best ways and the best knowledge. The more I travel and the more I study the real estate materials in other countries, the more I think we have to learn from them. Even some of the newer markets have a lot of novel approaches to the industry to offer.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
I am currently reading a book on valuation of real estate in Argentina. The book is two years old; but it talks about real estate cycles and bubbles. In the USA it has been so long since our last fractured bubble that we forget about them. The book discusses the bubbles as a regular business occurrence in Argentina. It has charts about the exchange rate, the price of properties and the behavior of the stock market that draws relationships between these things and bubbles.
The book discusses the price of the house compared to the rent of the house and draws conclusions about how the ratio can deter or encourage purchases. It also shows that those relationships and their effect will be different in different localities. It also shows how this relationship can predict a bubble.
Sometimes USA REALTORS think that our market has the best ways and the best knowledge. The more I travel and the more I study the real estate materials in other countries, the more I think we have to learn from them. Even some of the newer markets have a lot of novel approaches to the industry to offer.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Thursday, January 15, 2009
Time For a New Model (Part 4)
Time For a New Model (Part 4)
The links between transportation and energy are pretty obvious. The links between housing and energy likewise. What about the links between entertainment and housing and transportation and energy? 2nd homes could become less attractive as transportation costs go up. Those homes that are close to dense population centers may be more attractive. The beaches and mountains of the southeastern USA are close to very large and growing population centers. Guess what? Their markets are competing well with more exotic destinations now.
Despite the economic downturn, sporting events and video games are still doing well. Macau and Las Vegas are suffering. Is there a connection here? I don’t know how to draw that connection; but if one looks at Las Vegas, one has to see a city that should not be there. The energy consumption is huge. The water comes from far away. Having been there in the summer, I can’t imagine what would happen if the power went out for a whole day. Surely these issues will be taken into account as environmentally conscious people make their home purchasing and vacation decisions.
As we move into an extremely cold winter, many people are beginning to doubt global warming. It is real. Will the ocean front condo (lot) become a ocean floor lot? You can still go hiking on a snowless ski slope; but who wants to do that when there are so many great hiking and climbing locales.David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
The links between transportation and energy are pretty obvious. The links between housing and energy likewise. What about the links between entertainment and housing and transportation and energy? 2nd homes could become less attractive as transportation costs go up. Those homes that are close to dense population centers may be more attractive. The beaches and mountains of the southeastern USA are close to very large and growing population centers. Guess what? Their markets are competing well with more exotic destinations now.
Despite the economic downturn, sporting events and video games are still doing well. Macau and Las Vegas are suffering. Is there a connection here? I don’t know how to draw that connection; but if one looks at Las Vegas, one has to see a city that should not be there. The energy consumption is huge. The water comes from far away. Having been there in the summer, I can’t imagine what would happen if the power went out for a whole day. Surely these issues will be taken into account as environmentally conscious people make their home purchasing and vacation decisions.
As we move into an extremely cold winter, many people are beginning to doubt global warming. It is real. Will the ocean front condo (lot) become a ocean floor lot? You can still go hiking on a snowless ski slope; but who wants to do that when there are so many great hiking and climbing locales.David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Wednesday, January 14, 2009
Time For a New Model (Part 3)
Time For a New Model (Part 3)
Not to say the old basics are no longer relevant. There seem to be new basics added, at least in the developed and developing world. The new basics are energy, transportation and entertainment. Energy and transportation are tightly interwoven and also affect the original basics to a high degree. This is what brings us back to the real estate.
Energy, transportation and food production all have a very high impact on the environment. Environmental issues are the monster under the bed that turned out to be real. There is already a green designation for real estate professionals. That is just a small precursor of what the new real estate markets will be like. How many luxury resort areas have neglected their environment to the point that soon no one will want to go there? What kind of changes will global warming make on 2nd home choices? What will be the new “hot” destinations? Will some of the coastal properties just go away?
Answer these questions and you have the beginnings of an outline for the new economic and real estate model. The hardest part of this will be choosing between what should be and what will be. How serious will the people of this world be about protecting our “mother”?
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Not to say the old basics are no longer relevant. There seem to be new basics added, at least in the developed and developing world. The new basics are energy, transportation and entertainment. Energy and transportation are tightly interwoven and also affect the original basics to a high degree. This is what brings us back to the real estate.
Energy, transportation and food production all have a very high impact on the environment. Environmental issues are the monster under the bed that turned out to be real. There is already a green designation for real estate professionals. That is just a small precursor of what the new real estate markets will be like. How many luxury resort areas have neglected their environment to the point that soon no one will want to go there? What kind of changes will global warming make on 2nd home choices? What will be the new “hot” destinations? Will some of the coastal properties just go away?
Answer these questions and you have the beginnings of an outline for the new economic and real estate model. The hardest part of this will be choosing between what should be and what will be. How serious will the people of this world be about protecting our “mother”?
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Sunday, January 11, 2009
Time For a New Model (Part 2)
Time For a New Model (Part 2)
People always have to have food, shelter and clothing, right? Invest in these areas, work in these areas, you will always be ok. In the 60’s a television set officially became a necessity. Entertainment and being connected to the world became so important that the need for this seemed to eclipse the basic needs of food, clothing and shelter. Witness the huge salaries made by entertainers and athletes. See the huge popularity of games.
What about the old basics? They are still basic necessities. Food has moved to the commodities level. 6% of the people in the USA feed the whole country and produce enough for export. Sometimes they prosper. Sometimes they don’t. Our current agricultural system is totally destroying the world we live in. The food we eat is killing us. The economic model of our agricultural system is wiping out 3rd world agriculture.
Shelter for a large portion of the world is a sheet of plastic or a cardboard box. For much of the rest of the world, the homes we have go so far beyond the needs of shelter that they reach the realm of conspicuous consumption or entertainment. Clothing, likewise. Protecting ourselves from the elements or covering our nakedness is such a small part of what clothing means as to be irrelevant. Clothing is art or conspicuous consumption. Once again we are in the realm of entertainment. Next article will talk about energy and transportation. Believe me, this will get back to real estate.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
People always have to have food, shelter and clothing, right? Invest in these areas, work in these areas, you will always be ok. In the 60’s a television set officially became a necessity. Entertainment and being connected to the world became so important that the need for this seemed to eclipse the basic needs of food, clothing and shelter. Witness the huge salaries made by entertainers and athletes. See the huge popularity of games.
What about the old basics? They are still basic necessities. Food has moved to the commodities level. 6% of the people in the USA feed the whole country and produce enough for export. Sometimes they prosper. Sometimes they don’t. Our current agricultural system is totally destroying the world we live in. The food we eat is killing us. The economic model of our agricultural system is wiping out 3rd world agriculture.
Shelter for a large portion of the world is a sheet of plastic or a cardboard box. For much of the rest of the world, the homes we have go so far beyond the needs of shelter that they reach the realm of conspicuous consumption or entertainment. Clothing, likewise. Protecting ourselves from the elements or covering our nakedness is such a small part of what clothing means as to be irrelevant. Clothing is art or conspicuous consumption. Once again we are in the realm of entertainment. Next article will talk about energy and transportation. Believe me, this will get back to real estate.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Wednesday, January 7, 2009
Time for a New Model
Time for a New Model (part 1)
The uncertain economic times may have as much to do with changes in the way the world works as an actual downturn in the world economy. Retailers had a rotten Christmas except for the ones selling technology and video games. My wife waited until the last minute to buy a “flip” for me. She had to go to 4 stores to find it. Can you believe the price of oil is dropping because of oversupply? Recycling wholesalers are having a problem with their markets diminishing.
These three things seem to be totally disconnected from one another; but they have a common connection. Our world is changing. Our economic model for the last century and a half has been consumerism. Now the credit crunch comes and people find they can live without some of the “stuff” that was previously essential. Our economy will rebound. What will the basis for the rebound be?
I really believe Obama’s economic plan will work. Building infrastructure always builds the economy. The boom that we have experienced since the 90’s has been based on half the world coming into the consumer age. That half of the world can still consume some more stuff. The developing nations have not sated their hunger for stuff because many of the people there still do not have the wherewithal to purchase it. Consumerism is not dead; but it is reaching old age and will have to yield to new forces.
What are the new forces? That will be the subject of the next article. I would love for this to be a discussion instead of a monologue. What do you think the new forces will be?
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
The uncertain economic times may have as much to do with changes in the way the world works as an actual downturn in the world economy. Retailers had a rotten Christmas except for the ones selling technology and video games. My wife waited until the last minute to buy a “flip” for me. She had to go to 4 stores to find it. Can you believe the price of oil is dropping because of oversupply? Recycling wholesalers are having a problem with their markets diminishing.
These three things seem to be totally disconnected from one another; but they have a common connection. Our world is changing. Our economic model for the last century and a half has been consumerism. Now the credit crunch comes and people find they can live without some of the “stuff” that was previously essential. Our economy will rebound. What will the basis for the rebound be?
I really believe Obama’s economic plan will work. Building infrastructure always builds the economy. The boom that we have experienced since the 90’s has been based on half the world coming into the consumer age. That half of the world can still consume some more stuff. The developing nations have not sated their hunger for stuff because many of the people there still do not have the wherewithal to purchase it. Consumerism is not dead; but it is reaching old age and will have to yield to new forces.
What are the new forces? That will be the subject of the next article. I would love for this to be a discussion instead of a monologue. What do you think the new forces will be?
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Sunday, January 4, 2009
New Years Resolutions
Written 12/30/08
New Years Resolutions
Each year at this time I begin working on some goals and action plans for the coming year. I review last year’s goals and resolutions and see how well I did. I have to admit, since I began this process 25 years ago, this is the worst I have ever done. The problem is not that I did not accomplish my goals. I did not even really work on them much. That is my major resolution for this year: To be more conscientious about my resolutions (and goals).
So, what did I do wrong? My goals for 2008 were definitely bold enough. Maybe they were too bold. I am thinking about something Charles DuBois said. I can’t remember it exactly; but paraphrased it is: You may have to be willing to give up who you are in order to become what you might be. I can see now that I was not making this commitment. I am not even sure I know how to do it. That will be my first step in this year’s goals.
What does this have to do with international real estate? If you are experiencing what I am, I am sure it will mean something for you. If you are not, those of us who are can use your help.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
New Years Resolutions
Each year at this time I begin working on some goals and action plans for the coming year. I review last year’s goals and resolutions and see how well I did. I have to admit, since I began this process 25 years ago, this is the worst I have ever done. The problem is not that I did not accomplish my goals. I did not even really work on them much. That is my major resolution for this year: To be more conscientious about my resolutions (and goals).
So, what did I do wrong? My goals for 2008 were definitely bold enough. Maybe they were too bold. I am thinking about something Charles DuBois said. I can’t remember it exactly; but paraphrased it is: You may have to be willing to give up who you are in order to become what you might be. I can see now that I was not making this commitment. I am not even sure I know how to do it. That will be my first step in this year’s goals.
What does this have to do with international real estate? If you are experiencing what I am, I am sure it will mean something for you. If you are not, those of us who are can use your help.
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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