Interpret the Media

http://www.nytimes.com/2009/09/27/business/economy/27jobs.html?_r=1

Link to the above NY Times article on unemployment. This article highlights how the number of job seekers clearly outnumbers the job openings by a record ratio. It seems to me that as we bounce along the bottom of the market, the creation of jobs is one of the most important elements of our economic recovery. http://www.nytimes.com/2009/09/30/business/economy/30econ.html?em

Link to this other NY Times article with the headline "US Home Prices continue to Improve, Index Shows"

Yesterday, the first goal for next 6 months is to interpret the media and figure out what it is they are really saying. Don't hesitate to post your comments.

2009-2010 Goals to Achieve

As per Gary Scott, Senior Vice President of the Allen Tate Company, he has defined five action items that we should all concentrate on now and carry into 2010. The commentary is my perspective on each goal.

1. Interpret the Media – every news story has a slant and the entire story must be read and interpreted to understand the emphasis of the story. The title of the article may not all reflect the point of the story. Housing starts, increase sales, consumer confidence, and the economy are subjects slanted by the media outlet for viewership and only one perspective. We owe it to ourselves to be fair and balanced!
2. Return on Investment - are we seeking new ways to do what we do? Technology is changing faster than we can keep up with but it does provide us with a new avenue in which to do our work. Find faster, easier and cheaper ways to do what you do!
3. Maximizing your Resources – are you overlooking any resources that may benefit you? How about a business mentor willing to help, answer questions and provide guidance?
4. Social Media – you must become active in the changing world of social networking sites. The opportunities are enormous and the connections are seemingly endless. Connect and make the world a closer network. I would be glad to provide tips on the use of LinkedIn.
5. Customer Service – we can’t diminish the importance of customer service – no matter what the industry. Communication, reputation, and professionalism will differentiate you from all of your peers!

All of these goals are achievable with a strong foundation of using the fundamentals of your expertise in new venues and in new ways. Using your knowledge, connections, and networking to make 2010 the best year yet will become “The New Normal”.

Sustainable Projects

A follower of my blog, Bill Futral forwarded an interesting development concept. Definitely a niche market but may be a trendsetter in future project planning. Please take a moment and click on the links. Bill and I would be interested in your opinions of this community/concept. http://www.terrain.org/unsprawl/24/
Bill believes when the market comes back that there will be a demand for this type rural setting with conveniences. Serenbe south of Atlanta is another community that has incorporated agriculture in their design. Please offer your opinions. In my opinion, this type of project is very much a sustainable community approach. Most municipalities would not know how to handle the land use designations or zoning classifications. I can easily see developers and designers using this approach in a variety of ways using agriculture as a component of a mixed use community.
Contact information: Bill Futral
bill@futral.net
www.futral.net
http://www.linkedin.com/in/bfutral

Social Sustainability

A community is composed of people as well as the places where they live; it is as much a social environment as a physical environment.
Communities must not only be environmentally sustainable, they must also be socially sustainable.
We should promote local area design plans that consider and reflect who will live in an area, both now and in the future.

Mixed use is seen as essential for social sustainability because:

• Different uses create a sense of place, community, life and vibrancy.
• Local people can make the most of the infrastructure by using it in different ways at different times of the day.
• Local people do not need to drive to their nearest facilities, providing health and environmental benefits to local residents
through walking and fewer exhaust emissions.
• Residents are not left out of opportunities that may need long-distance travel or that may not be in their local area.
• Local employment opportunities are available.

These communities balanced economic, environmental and social factors into successful examples of sustainable mixed use community projects.

Reston Virginia
Columbia Maryland
Irvine Ranch California
Celebration Florida
Seaside Florida

However, to consider sustainability as a main stream approach any policy change at the local level must be embraced by the citizens at the local level.
If a project is marketing “green”, this does not represent sustainability in real estate development.

Small scale vertical integrated mixed use provides in-fill
opportunities adhering to the principles of sustainable development.

Large scale planned horizontal mixed use community design provides the proper
balance between economic, environmental and social considerations.

Economic Sustainability

Economic sustainability in any community is difficult to achieve and measure.

Economic sustainability and development is influenced by market, physical, regulatory, financial, and political issues.

Economic sustainability is constantly changing because of growth pressures.

Therefore, whether it is at the federal, state, or local level, virtually all entities view economic sustainability and address economic development differently.

Economic sustainability can be achieved by:

1. Amending Land Use and Development Codes to require a fiscal impact analysis for major development projects
to determine if the development would benefit the community from a financial perspective.
2. Pursuing opportunities that diversify the basic industries and revenue streams within the community
3. Evaluating land use needs, availability and patterns for industrial and commercial uses.
4. Identifying, seeking, and recruiting target industries.
5. Understanding the local economy, economic development capacity, and supporting infrastructure.
6. Diversification – Mixed Use Developments

Environmental Sustainability

NOT SUSTAINABLE:
Consumption of renewable resources: More than nature’s ability to replenish
State of the environment: Environmental degradation

STEADY-STATE ECONOMY:

Consumption of renewable resources: Equal to nature’s ability to replenish

State of the environment: Environmental equilibrium

SUSTAINABLE DEVELOPMENT:
Consumption of renewable resources: Less than nature’s ability to replenish

State of the environment: Environmental renewal

Land development projects are being promoted by using the following design approaches. These programs may stand alone but are only not sustainable if social and economic factors are incorporated in the project design program.

LID Low Impact Development
“Low Impact Development is an approach to land development that uses various land planning, design practices, and technologies to simultaneously conserve and protect natural resource systems and reduce infrastructure costs.”
Low cost landscape feature located at the lot level --- “Integrated Management Practices”

The LID approach includes five basic tools:
• encourage conservation measures by increasing open space areas & saving natural vegetation
• promote impact minimization techniques such as impervious surface reduction by reducing street widths for residential applications
• provide for strategic runoff timing by slowing flow using the landscape by implementing cluster zoning provisions
• use an array of integrated management practices to reduce and cleanse runoff by using best management practices
• advocate pollution prevention measures to reduce the introduction of pollutants to the environment


LEED: Leadership in Energy and Environmental Design - What is LEED for Neighborhood Development?
LEED for Neighborhood Development is a rating system that integrates the principles of smart growth, new urbanism, and green building into the first national standard for neighborhood design. It is being developed by US Green Building Council (USGBC) in partnership with the Congress for the New Urbanism (CNU) and the Natural Resources Defense Council (NRDC). LEED was created to accomplish the following:
• Define “green building” by establishing a common standard of measurement
• Promote integrated, whole-building design practices
• Recognize environmental leadership in the building industry
• Stimulate green competition
• Raise consumer awareness of green building benefits
• Transform the building market

Sustainable Development Definition

Scheme of sustainable development: at the confluence of the three preoccupations
by the United Nations Division for Sustainable Developments

NAHB: Balancing the needs of people, planet, and profit

And as defined by the United Nations World Commission on Environment and Development

“Sustainable development meets the needs of the present without compromising
the ability of future generations to meet their own needs”

Let's Explore Sustainability

“A sustainable community effort consists of a long-term, integrated, systems approach
to developing and achieving a healthy community by jointly addressing environmental, economic and social issues.

Fostering a strong sense of community and building partnerships and consensus among key stakeholders are also important elements of such efforts”

Beth Lachman, Critical Technologies Institute, April 1977

This week, we will review the basics of a sustainable real estate development project.

Interesting Statistics as per BUILDER Magazine:

• By 2030, ½ of the buildings in the USA will be built after 2000

• 40% of the total new office space nationwide is located in the suburbs

• 12,400 avg vehicle miles traveled per household in 1969
• 21,200 avg vehicle miles traveled per household in 2001

• US Population:

in 2005 295 million
in 2035 378 million
in 2050 420 million

85 million metric tons of carbon dioxide that could be eliminated annually
between now and the year 2030 by shifting 60% of new land development to compact growth

$250 billion cumulative fuel cost savings that would be achieved with a 60% shift toward
compact growth patterns by 2030

The above statistics indicate the need for to use existing infrastructure for future land development projects.

Mixed use projects and higher density housing may become the norm for infill and re-development initiatives.

The only factor which regulators fail to consider as local communities guide growth patterns is the cost of land.

Land is the primary variable in the financial success of a project – including a sustainable project.
Let’s explore sustainability.

Think Outside of the Box

The news is good and bad. The economy is up and down. Business is on and off. Ideas stop and start. Companies hire and fire. This represents bouncing along the bottom of the recession. It is time to reassess our goals, re-brand our talents, and think out-side-of-the-box. What talents and experiences can you draw upon that can translate into future business.

From a real estate perspective, I am assisting over 15 individuals look for a new job in Charlotte, NC. I provide them a "second pair of eyes" and send them job opportunities which they may not have seen. There are multitude of job opening sources, including networking sites. Many of these individuals will find a new opportunity in Charlotte and most likely they will accomplish this on their own. From a Realtor perspective, I am creating a sphere of influence which didn't exist before. My effort helps people today and without a cost or a fee.

It is good to help others when it is difficult times for everyone. Work at expanding your network and connections so you are ready for a smooth transition into better economic times. Have a great weekend.

What is Your Business Plan for the Market Rebound?

The 3rd edition of this book was published last year by ASCE Press. If you want to diversify your business and investigate a proven process in which to evaluate residential properties, this book may be an important guide. In an earlier post, I suggested that buying finished lots under the market was a viable investment strategy. Obviously only after proper investigation. Also with the new initiatives at all levels of government and energy conservation efforts, you may still find below market land for residential purposes. In coming days, I will post items on a due diligence approach that will help you reduce the risk in buying land.

Land Tip: go to your local municipal sewer department and ask for a copy of their sewer line master plan. This should show you the existing locations of sewer trunk lines and the future sewer line extensions. Use this plan with the GIS plans online for your community and assess those properties in-line for sewer and that can be purchased below market. If you have specific questions, please contact me. I am willing to assist you in your efforts to diversify your business plan for the upcoming trend upward in the real estate market.

The End of the Recession - Current Predictions

http://cl.exct.net/?qs=1b2a144949b59802e025c1ef6691f86baa5a03835df70d69485ccec67561bd35

This is a current article about how the recession may end - whether it is a 'V' or 'U' shaped recovery. We seem to rely on experts and their opinions but how can they know? Especially when the experts never seem to be correct in their predictions! I am not an expert but I do have opinions. This is my fourth recession. The previous three recessions were isolated to several industries i.e. energy and housing. This recession seems to have impacted industries throughout the economy.

I hear the experts tell us that our economy is based on 70% consumer spending. If we have record unemployment rates which in shear numbers should cause us all to pause. The percentage rate of unemployment should not be the gauge. Since the population has significantly increased since the 1981 recession, the total number of people out of work is dramatic. And the totals do not include those out of work and not on unemployment. .

So, if we read or hear the experts predictions, keep in mind that the economy will improve. It is a matter of when. I do believe it will be a 'U' shaped recovery and we are bouncing along the bottom. We are heading into the holiday season and as unemployment numbers remain high, I would expect retail sales to be far off from the expert predictions. Thus, the 70% of our economy will still not be rebounding.

With all of this in mind, it is time to position yourself and your company for the rebound. What are you doing to be ready and ride the wave of an upward trend? What are you doing professionally to improve your position in your industry, company, and/or profession?

Don't remain idle and paralyzed by opinions from experts. Be ready, the economy will improve. And when it does improve, history tells us that we will not be able to keep up with demand. Don't be caught napping - it is time to plan for the recovery!

Share your opinions and post your comments to this discussion. Remember, the "experts" only have opinions and the only difference is that they have a larger audience.

Land Development Studio - Single Family Subdivision

The University of North Carolina Charlotte Land Development Studio class is underway. I have 13 civil engineering students - all seniors that will now have to combine their technical knowledge with their creative skills to plan a single family subdivision.

The intent of this segment of the class is to have the students learn the art of land planning, understand the non-technical aspects of arranging lots, and use their technical skills to manage infrastructure costs.

They will work in teams of two to prepare a subdivision layout plan and report in 3-weeks. Each team will present their plan to a mock Planning Board without the use of power point and field open questions from the "public". To determine if their project is viable, we will prepare a proforma based on the infrastructure cost to develop the project and the following criteria:

• The land is being purchased for $60,000 per acre
• We will build a 2,500 sq. ft. house
• We will sell the home for $290,000

Based on their land plan and infrastructure layout (roads, BMP/SWM, water, sewer, drainage, etc.), the students will determine if they will make a profit as a builder/developer. My intent is to instill in my students that their is a bigger picture in developing land and they will be on the cutting edge of the industry changes as we trend out of this recession.

Signs of Improvement in Housing - September 2009

The above chart shows the number homes on the market for sale. This comparison is from July 2008 to July 2009 and is representative of the US market. The supply for homes below $250,000 has decreased over the past year. As the inventory is reduced, the housing market starts to return back to an equilibrium market.

The lower priced homes under $250,000 will sell with the $8,000 first time home buyer federal credit and foreclosures fueling price reductions. Also, interest rates remain low. The higher price points will continue to see high inventories and the time on the market will lengthen due to the difficulty if not impossible to obtain a jumbo loan necessary to finance a high end home. Also, the number of buyers for homes over $500,000 is significantly less.

Tip for Today: Search for a home for sale below $100,000 and has more than 1.5 acres. For this property, make sure the property has significant lot frontage. Determine if the property can be re-subdivided - check the zoning. The intent is to subdivide, retain the house for rental purposes and achieve a vacant lot from subdividing the lot. Sell the lot at a price below the market. Look for the needle in the haystack!!! Don't waste your time on marginal properties. However, if you see the potential of creating additional lots from the original property - act. This approach is to hit a single rather than a homerun. Properly manage your risk.

Make Note of Commercial Real Estate Troubles

This shows the trend in commercial real estate values over a period of time. This recession is taking its toll on commercial real estate. The following link will take you to an in-depth analysis on this subject. It is important information to understand the entire real estate industry troubles because as you may know, commercial follows roof-tops. This is a land planning term but it may very well become a true statement for the economic problems in the commercial real estate sector.

http://www.zerohedge.com/article/guest-post-other-real-estate-issue-revisited

Some other quotes from articles over the past several days:

• Commercial real estate troubles may be more widespread than housing problems
• US banks are holding more than $1 trillion of mortgages backed by commercial real estate that is losing its value every day
• The Federal Reserve and Treasury are trying to prevent a meltdown in the commercial real estate sector causing more problems for the economy

Do your own marketing study in your local area. Have you noticed more commercial "For Lease" signs along the road?

Have you noticed more and more empty stores? This represents small business not surviving in today's economy.

Will this be our next major economic problem?

There is always an adjustment in housing and commercial properties and some markets will fare better than others. Once the re-adjustment occurs in commercial real estate, then it will follow the upward trend of housing. There are positive aspects: cheaper lease rates, better terms, and investment opportunities in commercial real estate. Monday will be a better day!

LinkedIn Professional Networking

Of all of the social networking sites available to us, in my opinion, LinkedIn provides an incredible professional networking opportunity. And at no expense to you! Take advantage of the many options which includes:

• Searching for companies which you can connect with in terms of marketing your product and/or services
• Search for individuals in and around your place of business - connect with those people and establish a working relationship
• Search for groups which address subjects of interest and join those groups. You should participate in the discussions. You should also review the group membership list and connect with those professionals that have similar interests or business goals
• You can also start you own group on an issue, topic or your profession. I started the Land Development group in mid-January 2009 and there are over 920 members. This group is growing at about 4-membership requests per day.
• You can submit discussions to each group that you have joined. My recommendation is to offer your advice and your willingness to assist others succeed. You will find your professional peers more receptive to you than if you asked them for something.
• Job openings and job postings can be found on the main page or within each group. This is also a great way to network by directing people you know to job opporunities.
• You can ask fellow professionals to be connected with you and for your close associates; ask them for a recommendation.

This is only the start of the power LinkedIn provides. I am selling land on LinkedIn by using several marketing approaches. I have posted a slide show on one property on my profile. This SlideShare presentation is fantastic and you can view it by logging onto LinkedIn; copy and paste the following link: http://www.tinyurl.com/mvu2fn

This will direct you to the SlideShare presentation which is also free. My entire marketing campaign will cost only time but no money! If you should wish to have more tips on how to use LinkedIn to your advantage, please let me know. I am more than willing to share ideas.

The Future of Land Development Part II

On LinkedIn, I have notified several groups that my white paper on The Future of Land Development Part II was now available upon request. I posted the discussion item yesterday and by evening, I have received 18 requests from 10 different states and one from Iraq (US Army). I will post statistics periodically to illustrate the power of social networking in making connections. If you want a copy of the paper sent to you, please send me your email address and I will send you a copy. I am looking forward to reactions and the debate that will follow.

You should read this article: http://www.dailyfinance.com/2009/09/08/deja-vu-all-over-again-fueling-the-next-housing-meltdown/

"The Future of Land Development Part II" a white paper is a must read!

Out-of-the-box thoughts on how government may regulate the real estate development industry in the very near future are outlined in the white paper “The Future of Land Development – Part II” ……. A must read!

As we recover from this severe recession, the real estate development industry will dramatically change and not necessarily for the best. The pendulum of government regulation always exceeds the need.

“The Future of Land Development Part II” is a controversial viewpoint on how government may micro-manage real estate development projects by exercising eminent domain and incorporating a new zoning bulk requirement into local ordinances. If you cherish property rights and free markets, ask for a copy of this “white paper” which presents a conceivable but unimaginable glimpse of the future.

Please respond by sending me your email address and I will email you a copy of Part II.

I ask that you post your comments for all to read. I am more than interested in reading your viewpoints on the changes to our real estate development industry.

Chicago ASCE Seminar - Survival for Land Development Professionals

My upcoming ASCE seminar “Residential Land Development Strategies” has been revamped to provide interactive sessions on ways to survive in this economic depression by thinking outside of the box. Included will be sessions on:

Project Workout Solutions – a new profit center
Social Networking for Land Development Engineers
Opportunities in Real Estate
Forging Alliances for Diversification
The Future of Land Development

These sessions are relevant to our business survival in this unprecedented downturn. As you know, interaction between participants has always been a plus for this seminar – now more important than ever. Hope to see you. This seminar is for all real estate development stakeholders seeking to earn a profit this year.

ASCE has agreed to a discounted registration fee for my contacts—even non-members!
Use Promo Code # CONTED15 for your registration and you will receive a 15% discount.

For Registration, GO TO:

https://secure.asce.org/ASCEWebsite/Webinar/ListSeminar.aspx?CatCode=CED-CON&catName=Construction/Development#925

Residential Land Development Strategies
Chicago, IL
September 24 & 25, 2009
Holiday Inn Hotel
506 West Harrison Street
Chicago, IL
312-957-9100

Charlotte, NC Market Update - Upward Trend!

The real estate data for the market area north of Charlotte has been issued. The comparison is for the activity from July 2008 to July 2009.

Overall the market seems to be showing some life but I am convinced that we will experience ups and downs rather than a define trend upward. Simply because of consumer confidence, unemployment, and unsettled economic indicators. Also the $8,000 federal tax credit will expire at the end of November which has resulted in more first time home buyers entering the market. We will probably experience an up tick in interest rates which has a tendency to cause fence sitters to actbut most will wait and see. Thus, our bottom of the market will bounce along the bottom into 2010. The analysis of the market trends however are positive and we can use this to reassure buyers and sellers that their is a viable real estate market and this is a great time to buy or sell real estate. This is a fantastic time to buy or sell land for develoment purposes ..but follow the guide posted previously on my blog. Now the market analysis:

1. Months of Supply of Housing Inventory - trend is down
Approx. 15-20% reduction in inventory due to solds and sellers pulling listings

2. Average Days on the Market - relatively constant at about 120 days
Above the $500,000 price point, the average days on the market at about 170 days

3. Homes Under Contract - trend is bumpy and not well defined
Seems that the bottom of the market was in February 2009

Charlotte typically trails the country on real estate trends so it will be interesting to obtain market analysis from other parts of the country. I will work on that.

4. Median Sold Price - trend is up for most price points

Trend is down for the $300,000 - $400,000 market segment

The bottom line: the market is improving but not stable enough to establish a consistent trend line.

Investment in Land is a viable Business Strategy

This illustration shows an oversupply of homes for sale in a market since the absorption rate is only 3 homes per month. We will also have an over supply of finished lots and investors will be assessing distressed subdivisions as an investment strategy. However, there will still be an excess of lots available for housing production in the near future - at least in most markets.

What about vacant land as an investment?

Land prices have come down but not to the level of home prices. Raw land remains an excellent investment with the proper analysis. Remember, the successful real estate developer or investor makes a majority of their profit on the land. If you are considering land to buy or sell, the potential of a positive transaction is enhanced by assessing land with the following criteria:

1. Location Location Location

2. Priced below the market and evaluate sold property prior to 2001

3. Adequate infrastructure immediate to the property

4. Public water and sewer availability

5. Mixed Use zoning with emphasis on a retail/office/residential vertical integrated use

6. Seller financing and become a partner in the project ("The Future of Land Development")

7. Contingent upon government approvals and permits

8. Smaller infill sites supported by a sustainable community poised for growth

9. Start the investigation now for a 4th quarter 2010 delivery

10. Use a detailed site analysis approach to determine land potential (ask for a detail copy)

Real estate is a risk reward industry. The above criteria does not remove the risk and a business decision matrix but it provides the framework in which compare property for investment purposes.

Social Media Revolution Prequel

This short video is provided by Jason Donn. http://bit.ly/AN2Fl

This is the prequel to the social media revolution video link included in my August 17th post. Interesting even with some duplication. This continues to reinforce the notion that social media will be our communitcation tool of the future. We must remain ahead of the curve to generate business, convey a message, and expand our connections with fellow professionals. I have included on my LinkedIn profile a link to my blog and I posted shareslides of a real estate listing. I will be driving business traffic to my profile and shareslides. Visit my profile and consider how you can best use the shareslide approach.