The motto of the world ever since Adam Smith has been “grow or die”. Prosperity and standards of living and education levels have increased in most countries dramatically. Growth has come to mean producing huge quantities of goods that no one needs and convincing them to buy them anyway. Perhaps this is like the disease organism that grows and grows until it kills its host and then dies itself.
Many of the Developed countries have taken worker security and benefits to the point where their economies have become uncompetitive. Now there is clamor for increasing working hours and push back retirement age as an incentive for companies to expand or hire more workers. The short term benefits of this are pretty obvious. Long term, the goal is to reduce the expected deficits in entitlement programs.
Most of the countries considering these things are experiencing high un-employment. Is squeezing more out of workers the answer to this problem? This will eliminate the need for more workers. More jobs are needed. The solution to this is more consumers not more workers. A retired person or a person on vacation is a professional consumer. Perhaps, the whole structure of production, consumption and employment needs to be re-examined in the light of and organism that may be growing itself to death.
David Segrest, CCIM, CIPS, CEA, TRC, is a REALTOR in Charlotte NC. His web page is http://www.segrestrealty.com. His email address is david@segrestrealty.com.
Thursday, September 30, 2010
Wednesday, September 29, 2010
Linkages and Countries
In commercial real estate we talk about linkages rather than location. This used to mean proximity to airports, other transportation hubs, population centers and highways. Now the importance of linkages goes beyond the location and extends to the global community. An auto plant is more connected to the parts suppliers and raw materials producers and the dealerships that sell the cars, than to the community of its location.
Globalization has lead to greater productivity and lowered employment. While this seems to be a sudden phenomenon, it is not. The current economic crisis has merely accelerated the process. The jobs that are lost will not come back. The labor type of jobs that have been outsourced will continue moving for cheaper production. The new plants used to just move and take advantage of cheaper labor. Now they move and take advantage of new technologies as well.
This means that the 4000 jobs that moved to Mexico, were probably replaced with 3500 jobs when they went to China and 3000 jobs when they go to Viet Nam. Each time the factory moves, productivity and production increase. Employment decreases. A new strategy will be needed to keep the world working.
David Segrest, CCIM, CIPS, CEA, TRC, is a REALTOR in Charlotte NC. His web page is http://www.segrestrealty.com. His email address is david@segrestrealty.com.
Globalization has lead to greater productivity and lowered employment. While this seems to be a sudden phenomenon, it is not. The current economic crisis has merely accelerated the process. The jobs that are lost will not come back. The labor type of jobs that have been outsourced will continue moving for cheaper production. The new plants used to just move and take advantage of cheaper labor. Now they move and take advantage of new technologies as well.
This means that the 4000 jobs that moved to Mexico, were probably replaced with 3500 jobs when they went to China and 3000 jobs when they go to Viet Nam. Each time the factory moves, productivity and production increase. Employment decreases. A new strategy will be needed to keep the world working.
David Segrest, CCIM, CIPS, CEA, TRC, is a REALTOR in Charlotte NC. His web page is http://www.segrestrealty.com. His email address is david@segrestrealty.com.
Friday, August 27, 2010
Bubbles May not be all Bad
They certainly made Lawrence Welk famous. The economies of Central and Eastern Europe were the last to go into the tank. They had been buoyed some by membership in the European Union. Latvia’s real estate had been propped up by unrealistic lending criteria.
When the bubble did pop, it splattered hard. Most of these economies, except for a few little pockets, dropped like a rock. The thing to remember about emerging economies is that they move really fast. This has been the lesson learned in South America. The USA or western Europe may take years to recover. When these small economies take off, it will be rocket-ship style.
I’m not saying that it is time to buy. It is time to look for market landmarks. There will be some awesome opportunities and some terrific profits will be made. If it is not time to buy it is at least time for close observation of these markets. The examination must be of the general market; but pay close attention to micro markets. There will be pockets of greater opportunity. A rising tide supposedly raises all the boats. Some of these boats may have already sunk.
David Segrest is a REALTOR® in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com He is also a contributor on Argentina to: http://realestatebloginternational.com/
When the bubble did pop, it splattered hard. Most of these economies, except for a few little pockets, dropped like a rock. The thing to remember about emerging economies is that they move really fast. This has been the lesson learned in South America. The USA or western Europe may take years to recover. When these small economies take off, it will be rocket-ship style.
I’m not saying that it is time to buy. It is time to look for market landmarks. There will be some awesome opportunities and some terrific profits will be made. If it is not time to buy it is at least time for close observation of these markets. The examination must be of the general market; but pay close attention to micro markets. There will be pockets of greater opportunity. A rising tide supposedly raises all the boats. Some of these boats may have already sunk.
David Segrest is a REALTOR® in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com He is also a contributor on Argentina to: http://realestatebloginternational.com/
Thursday, July 1, 2010
Time for Dreams to Come True
For many people around the world dreams have turned into nightmares. For others the nightmares can make the dreams come true. Buying a property at foreclosure or short sale in the USA is tough. In many places the complications make it nearly impossible. These are not the only properties that can be bought at a discount.
Many developers are holding land and can no longer get the financing to build the property out. Many other developers have properties that are built out and just sitting in inventory. These are opportunities for people with cash or access to financing. The dollar for some strange reason is in an advantageous position in reference to many currencies. This is a situation that cannot last. The perception is now, that no matter how bad things are in the USA at least the government is stable.
As other countries stabilize more, their currencies will rise. The people who buy now with valuable dollars, will have stronger currencies in the future to convert back to dollars. This means the profit on their investments will be multiplied.
David Segrest is a REALTOR® in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com He is also a contributor on Argentina to: http://realestatebloginternational.com/
Many developers are holding land and can no longer get the financing to build the property out. Many other developers have properties that are built out and just sitting in inventory. These are opportunities for people with cash or access to financing. The dollar for some strange reason is in an advantageous position in reference to many currencies. This is a situation that cannot last. The perception is now, that no matter how bad things are in the USA at least the government is stable.
As other countries stabilize more, their currencies will rise. The people who buy now with valuable dollars, will have stronger currencies in the future to convert back to dollars. This means the profit on their investments will be multiplied.
David Segrest is a REALTOR® in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com He is also a contributor on Argentina to: http://realestatebloginternational.com/
Wednesday, June 30, 2010
Industrial Real Estate & the Global Supply Chain
The resort real estate industry has adapted to and taken advantage of globalization on a major scale. The industrial industry has adapted by opening offices around the world and trying to teach other countries how to “do real estate”. While we have to adapt to the laws of other places, we don’t always adapt well to the customs.
One problem is that the global supply chain demands standardization of procedures in warehouses and factories. Freight moves in standardized containers. Products come together from wherever the best source is for each module. The handling, shipping and stocking procedures have to conform to the standard systems. The buildings have to conform to the activity involved. Does this mean we can use a standard building?
In some cases it does. In other instances the building is the variable that makes the whole thing fit together. Plumbers would call it an adapter. The customs and processes come together in the building. In most cases, the loading doors need to fit the trucks and trains that deliver and remove the goods. The break rooms and offices need to fit the customs of the people who work there. Everything in the middle needs to bring the systems together.
David Segrest is a REALTOR® in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com He is also a contributor on Argentina to: http://realestatebloginternational.com/
One problem is that the global supply chain demands standardization of procedures in warehouses and factories. Freight moves in standardized containers. Products come together from wherever the best source is for each module. The handling, shipping and stocking procedures have to conform to the standard systems. The buildings have to conform to the activity involved. Does this mean we can use a standard building?
In some cases it does. In other instances the building is the variable that makes the whole thing fit together. Plumbers would call it an adapter. The customs and processes come together in the building. In most cases, the loading doors need to fit the trucks and trains that deliver and remove the goods. The break rooms and offices need to fit the customs of the people who work there. Everything in the middle needs to bring the systems together.
David Segrest is a REALTOR® in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com He is also a contributor on Argentina to: http://realestatebloginternational.com/
Tuesday, June 29, 2010
Governments Respond to Hard Times by Opening Markets
It seems that lowered demand in local markets is forcing many countries to revise their attitude on foreign ownership of real estate. Several countries have regulation changes in the works to make it possible or easier for foreigners to own real estate. Australia has actually passed new legislation
The requirement of a permanent visa for real estate ownership has been eliminated. The $300,000 (Australian) minimum for students has also been removed. For developers the requirement to build within one year of acquisition on new land has been increased to two years. The 50% limit on sales of new properties to foreigners has also been lifted provided the property is marketed locally as well as internationally.
Even Mexico is considering dropping the ban on foreign ownership of coastal properties. Many people wonder why Mexico had the restrictions on coastal and border properties; but one must consider that immigrants from the USA stole 1/3 of the country.
David Segrest is a REALTOR® in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com He is also a contributor on Argentina to: http://realestatebloginternational.com/
The requirement of a permanent visa for real estate ownership has been eliminated. The $300,000 (Australian) minimum for students has also been removed. For developers the requirement to build within one year of acquisition on new land has been increased to two years. The 50% limit on sales of new properties to foreigners has also been lifted provided the property is marketed locally as well as internationally.
Even Mexico is considering dropping the ban on foreign ownership of coastal properties. Many people wonder why Mexico had the restrictions on coastal and border properties; but one must consider that immigrants from the USA stole 1/3 of the country.
David Segrest is a REALTOR® in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com He is also a contributor on Argentina to: http://realestatebloginternational.com/
Tuesday, December 22, 2009
Finding a Message of Hope
This is a traditional time of year to talk about a message of hope. Some of us in the real estate business may have to look a little harder this year. It is there. I found a message of hope in a most unlikely place. My wife likes to go to these investment “seminars” where the speaker feeds you in order to get you to come.
The one we went to last week was especially bad. The woman used very bad English, she was long winded. The food did not come until after the speech. The message was one of gloom and doom. She talked about low yield, extremely high inflation, real estate in the toilet, stocks unpredictable, and herself as the savior. I was depressed just by having to go. It got worse as the night went on. That negative message spoiled my appetite and my attitude.
It wasn’t until yesterday morning that the good news hit me. The real estate industry is in pain right now because of too much inventory and too little money. People still like to sleep inside; so our market will not totally go away. The real estate assets, if we can just hang on, will have to increase in value some day. Hyper-inflation will help this some. Hyper-inflation will also reduce the relative value of debt. Hallelujah.
David Segrest is a REALTOR® in Charlotte NC. His website is http://www.segrestrealty.com/ His email is david@segrestrealty.com He is also a contributor on Argentina to: http://realestatebloginternational.com/
The one we went to last week was especially bad. The woman used very bad English, she was long winded. The food did not come until after the speech. The message was one of gloom and doom. She talked about low yield, extremely high inflation, real estate in the toilet, stocks unpredictable, and herself as the savior. I was depressed just by having to go. It got worse as the night went on. That negative message spoiled my appetite and my attitude.
It wasn’t until yesterday morning that the good news hit me. The real estate industry is in pain right now because of too much inventory and too little money. People still like to sleep inside; so our market will not totally go away. The real estate assets, if we can just hang on, will have to increase in value some day. Hyper-inflation will help this some. Hyper-inflation will also reduce the relative value of debt. Hallelujah.
David Segrest is a REALTOR® in Charlotte NC. His website is http://www.segrestrealty.com/ His email is david@segrestrealty.com He is also a contributor on Argentina to: http://realestatebloginternational.com/
Subscribe to:
Posts (Atom)
