Weekly Summary of Posts

There are four sides to the economic story as: expressed by all forms of the media, published by government, presented by politicians, and interpreted by us. I am trying to understand our economic status and anticipate the future. If you are involved in the real estate industry, the economy significantly impacts our industry and we must plan for the worst and expect the best to happen. There are many industries and professions not as affected by the downturn as housing. Thus, as per the government and by definition, the economy is recovering. However, the real estate industry is not responding even with record low interest rates.

 

The administration has concluded that we are in a “jobless recovery”. The recovery is great news for some industries. However, this is not the best of news for the unemployed or the real estate industry. Let’s look at the government’s published projections:

 

OMB Mid-Session Review of the US Government Budget - FY 2011

 

Year (GDP)                 2010 (3.1)         2011 (4.0)         2012 (4.3)

Unemployment Rate          9.7                     9.2                     8.2

 

Deficit % of GDP              9.6                     8.0                     6.0

 

I am not confident of the above projections. However, the real estate climate will have improved by then. Simply, the presidential election will cause positive action over the next two years but the results will not be as positive as the OMB forecasts. However, we should NOW start to focus on the recovery in the real estate industry and plan your business to take advantage of the new norm!

My bold assumptions and projections:
1. Interest rates will rise – to what level by 2013? – let’s go out on a limb – 7%
2. Pent-up demand for housing will occur by 2013
3. Many of those that currently make a living in real estate may leave the industry causing a manpower problem by 2013
4. Housing prices, labor rates, and material pricing will gradually increase over the next two years

 

If you are in the real estate industry, what is your business plan for the next 2½ years? Consider the following points:

 

1. Concentrate on location, location, location

 

2. Target market industries

 

3. Expand your market

 

4. Increase your share of the market

 

5. Become an expert

 

6. Use technological change to your benefit

 

7. Explore new partnering opportunities

 

OK – so the economic picture is not so good now but it is now time to position ourselves for the future real estate recovery.

 

• Remember, we have to do what we do – differently
• There is and will be a new norm
• We need to adjust to the new norm by using our know-how, expertise, and desire to succeed
• Appreciate Life
• Live in a State of Gratitude
• Take Action

The bottom line is for you to define the new norm in your real estate market for 2013 business. Until then keep working at your business to adjust to the ever changing marketplace and position yourself to take advantage of the new norm business.