2nd quarter 2009 - 0.7%
3rd quarter 2009 2.2%
4th quarter 2009 5.6%
1st quarter 2010 2.7%
2nd quarter 2010 1.7%
3rd quarter 2010 2.6%
4th quarter 2010 3.1%
1st quarter 2011 0.4%
2nd QT
Advance Estimate July 29 1.3%
Second Estimate Aug 26 1.0%
Third Estimate Sept 29 1.3%
The third estimate was a good surprise. However, the second quarter was not much of a change from the first quarter. Maybe the difference from 0.4% to 1.3% doesn’t really matter --- bad is still bad. I really expected the GDP to be less than the first quarter, only because of trends. IF the 1.3% holds up because it will be revised again, we will again bounce along the bottom.
Wake up America!
Friday, September 30, 2011
Wednesday, September 28, 2011
Projected National Debt
Source: The White House
It is beyond comprehension that Washington DC has not recognized the need to do SOMETHING! They continue to play politics with our future, our kid’s future and our children’s children future. In fact, it goes beyond reason that I suspect everything is done on purpose and for a reason. WE need to change things in 2012 and hope it is not too late!!
National Debt in TRILLIONS (ex. One Trillion dollars = $1,000,000,000,000)
2012 $11.7 trillion
2013 $12.7
2014 $13.3
2015 $14.0
2016 $14.7
2017 $15.3
2018 $15.9
2019 $16.5
2020 $17.1
2021 $17.8
In comparison with other countries based on the public debt as a percentage of their economy in 2010: (Source- The World Factbook)
Greece 143%
Italy 119%
Ireland 97%
Portugal 93%
USA 90% Projected to be over 100% in 2011
Spain 60%
Tomorrow, September 29, 2011, the third GDP Estimate for the 2nd quarter will be published. The trend has been down while our debt as a percentage of our GDP increases.
The political environment in Washington DC has paralyzed this country.
It is beyond comprehension that Washington DC has not recognized the need to do SOMETHING! They continue to play politics with our future, our kid’s future and our children’s children future. In fact, it goes beyond reason that I suspect everything is done on purpose and for a reason. WE need to change things in 2012 and hope it is not too late!!
National Debt in TRILLIONS (ex. One Trillion dollars = $1,000,000,000,000)
2012 $11.7 trillion
2013 $12.7
2014 $13.3
2015 $14.0
2016 $14.7
2017 $15.3
2018 $15.9
2019 $16.5
2020 $17.1
2021 $17.8
In comparison with other countries based on the public debt as a percentage of their economy in 2010: (Source- The World Factbook)
Greece 143%
Italy 119%
Ireland 97%
Portugal 93%
USA 90% Projected to be over 100% in 2011
Spain 60%
Tomorrow, September 29, 2011, the third GDP Estimate for the 2nd quarter will be published. The trend has been down while our debt as a percentage of our GDP increases.
The political environment in Washington DC has paralyzed this country.
Wake Up America!
Tuesday, September 27, 2011
Rental Vacancy Rates & Supply
It is clear that this recession or is it a double dip recession or is it a depression continues to play havoc with the real estate market. Displaced homeowners due to foreclosures are flooding to rental units. Their credit has been seriously damaged primarily due to job loss and the downward spiral of the economy.
The demand for rental units has increased and the supply has not changed.
I have talked about the slowdown in family formations which fuels the home buying sector. As an example, family formations:
2010 - 357,000
2007 - 1,600,000
A pent-up demand for rental housing is currently due to foreclosures and will continue to grow as young people either move back with their parents or seek roommates.
Also, local government zoning has always limited multifamily housing and new projects are sporadic. NAR expects the vacancy rate to be below 5% by the end of the year. Below a 5% vacancy rate is considered a landlord’s market. Not unlike the single family home market which will ultimately become a seller’s market. Landlords have and will continue to push rental rates up.
In my opinion, with monthly rents increasing and difficult to find “newer’ rentals, buying a new home may be the best option today. Builders are re-establishing their product line to lower prices and offering fantastic incentives to buy. With interest rates at another historic low, it is possible to buy a new home today, lock in the interest rate and once you move in, your mortgage payment will be well below the monthly rent in your area. AND the home is yours ---freedom!
The demand for rental units has increased and the supply has not changed.
I have talked about the slowdown in family formations which fuels the home buying sector. As an example, family formations:
2010 - 357,000
2007 - 1,600,000
A pent-up demand for rental housing is currently due to foreclosures and will continue to grow as young people either move back with their parents or seek roommates.
Also, local government zoning has always limited multifamily housing and new projects are sporadic. NAR expects the vacancy rate to be below 5% by the end of the year. Below a 5% vacancy rate is considered a landlord’s market. Not unlike the single family home market which will ultimately become a seller’s market. Landlords have and will continue to push rental rates up.
In my opinion, with monthly rents increasing and difficult to find “newer’ rentals, buying a new home may be the best option today. Builders are re-establishing their product line to lower prices and offering fantastic incentives to buy. With interest rates at another historic low, it is possible to buy a new home today, lock in the interest rate and once you move in, your mortgage payment will be well below the monthly rent in your area. AND the home is yours ---freedom!
Monday, September 26, 2011
Ever wonder why someone would want to be a Politician?
Most state politicians get re-elected and they have significant power over the way we live. Power, money, no accountability, and you don’t work too hard may all be very good reasons to run for office. If you have integrity and tell the truth, you would be a unique but well worth the following money!
I have selected several states for you to compare the states and how much your legislators earn for the time they work. Remember they also receive a pension. Most states calculate the pension on the highest salary they achieve and the length of time in the legislature. Source: USA Today
State Salary Length of ’10-’11 Salary per Month
Legislative Session Rounded (my calc)
Alaska $50,400 3.5 months $14,400
Maryland $43,500 3.0 months $14,500
Montana $4,212 4.0 months $ 1,100
Texas $7,200 6.0 months $ 1,200
West Virginia $26,000 2.0 months $13,000
North Carolina $14,000 4.0 months $ 7,100
The monthly salary for most state legislators is much higher than your typical salary. You also get a pension and power is your goal.
As an example, in Texas, legislators link their pensions to judges that make $125,000 per year and NOT based on their $7,200 salary. So politicians can say they have not raised their salaries but their pension may be much higher than what you expect.
In North Carolina, how can I work for 4 months as a legislator and retain a job for the balance of the year? So, is it safe to say that “Joe the Plumber” is not a legislator?
Are they economists?
Are they attorneys?
Are they school teachers?
What sets them apart from the rest of us? The thirst for power or the financial security to allow them to seek power or do they have high ideals to do right?
So………………what do you think? Oh by the way, the Congress takes more time OFF from work than most state legislators work in a session.
I have selected several states for you to compare the states and how much your legislators earn for the time they work. Remember they also receive a pension. Most states calculate the pension on the highest salary they achieve and the length of time in the legislature. Source: USA Today
State Salary Length of ’10-’11 Salary per Month
Legislative Session Rounded (my calc)
Alaska $50,400 3.5 months $14,400
Maryland $43,500 3.0 months $14,500
Montana $4,212 4.0 months $ 1,100
Texas $7,200 6.0 months $ 1,200
West Virginia $26,000 2.0 months $13,000
North Carolina $14,000 4.0 months $ 7,100
The monthly salary for most state legislators is much higher than your typical salary. You also get a pension and power is your goal.
As an example, in Texas, legislators link their pensions to judges that make $125,000 per year and NOT based on their $7,200 salary. So politicians can say they have not raised their salaries but their pension may be much higher than what you expect.
In North Carolina, how can I work for 4 months as a legislator and retain a job for the balance of the year? So, is it safe to say that “Joe the Plumber” is not a legislator?
Are they economists?
Are they attorneys?
Are they school teachers?
What sets them apart from the rest of us? The thirst for power or the financial security to allow them to seek power or do they have high ideals to do right?
So………………what do you think? Oh by the way, the Congress takes more time OFF from work than most state legislators work in a session.
Friday, September 23, 2011
4% Interest Rates & a Low Credit Score?
In today’s real estate market, historically low interest rates seem to be the norm rather than the exception. This monetary policy is not helping new home construction, refinancing, nor increasing existing home re-sales. What is the problem?
1. Many people that could qualify for refinancing at a lower interest rate can’t because their home will not appraise.
2. Many homeowners have equity in their home but do not have the income to support refinancing.
3. We have discussed the lack of family formations, high unemployment and fear in the marketplace. All which contribute to the spiraling down of the housing industry.
I believe that if the mortgage interest rate was lowered to 1%, you may see an uptick in refinancing but this will not create new jobs nor significantly help the housing industry out of its downward spiral.
4. We also have many people able and willing to buy a home but they can’t because the rules have changed and it has become more difficult to obtain a mortgage. If their credit score is low, they will not qualify for a loan --- even with stable employment.
If you have a low credit score, you can help yourself by using the following guide:
• If you don’t use credit, you can’t raise your credit score
• Reduce or limit your credit card balance to a MAXIMUM 20-30% of the credit
• Pay down any credit card that is over 30% of the maximum credit limit before others. This will increase your credit score
• Having big balances on your credit cards impacts your credit
• Stabilize your finances to fix your credit
• Do not pay credit card interest for a great credit score. NOT carrying a balance is helpful to your finances and your credit score
• Equifax, Experian and TransUnion are the three credit bureaus. You should check your credit report to make sure it is correctly reported. Your credit score will suffer if the information is incorrect.
• You can get your credit report once a year for FREE. Go to the government run site AnnualCreditReport.com
1. Many people that could qualify for refinancing at a lower interest rate can’t because their home will not appraise.
2. Many homeowners have equity in their home but do not have the income to support refinancing.
3. We have discussed the lack of family formations, high unemployment and fear in the marketplace. All which contribute to the spiraling down of the housing industry.
I believe that if the mortgage interest rate was lowered to 1%, you may see an uptick in refinancing but this will not create new jobs nor significantly help the housing industry out of its downward spiral.
4. We also have many people able and willing to buy a home but they can’t because the rules have changed and it has become more difficult to obtain a mortgage. If their credit score is low, they will not qualify for a loan --- even with stable employment.
If you have a low credit score, you can help yourself by using the following guide:
• If you don’t use credit, you can’t raise your credit score
• Reduce or limit your credit card balance to a MAXIMUM 20-30% of the credit
• Pay down any credit card that is over 30% of the maximum credit limit before others. This will increase your credit score
• Having big balances on your credit cards impacts your credit
• Stabilize your finances to fix your credit
• Do not pay credit card interest for a great credit score. NOT carrying a balance is helpful to your finances and your credit score
• Equifax, Experian and TransUnion are the three credit bureaus. You should check your credit report to make sure it is correctly reported. Your credit score will suffer if the information is incorrect.
• You can get your credit report once a year for FREE. Go to the government run site AnnualCreditReport.com
Thursday, September 22, 2011
Wednesday, September 21, 2011
Cities with the Best Value
Kiplinger’s Personal Finance ranked US cities according to the median household income, cost of living, unemployment rate and several other factors. The intent was to determine which Cities are of the best value to live in. The top five are:
#1 Omaha, Neb
Unemployment Rate 4.6%
Cost-of-Living Index 90.3
Median household Income $53,457
Cost-of-Living Index 90.7
Median household Income $51,352
#4 Colorado Springs, CO
Unemployment Rate 9.3%
Cost-of-Living Index 92
Median household Income $56,576
#5 Knoxville, TN
Unemployment Rate 7.8%
Cost-of-Living Index 89.1
Median household Income $48,158
#1 Omaha, Neb
Unemployment Rate 4.6%
Cost-of-Living Index 90.3
Median household Income $53,457#2 Charlotte, NC
Unemployment Rate 10.4%
Cost-of-Living Index 93
Median household Income $53,168
#3 Nashville, TN
Unemployment Rate 8.5%Cost-of-Living Index 90.7
Median household Income $51,352
#4 Colorado Springs, CO
Unemployment Rate 9.3%
Cost-of-Living Index 92
Median household Income $56,576
#5 Knoxville, TN
Unemployment Rate 7.8%
Cost-of-Living Index 89.1
Median household Income $48,158
Tuesday, September 20, 2011
Interest Rate Projections
The graph below illustrates what the “EXPERTS” think interest rates will move to during the balance of 2011 and beyond. Today, the interest rates are below the lowest rate of 4.5% on the graph; so much for leading experts in the field!
If we can’t project what interest rates will do over a short window ----- HOW can anyone anticipate what the economy will do??? They can’t! They take their best guess and because they are labeled an expert by the media, they are listened to by a few.
This graph should finalize our impression that our economic experts have been and continue to mislead us! No wonder we have lost confidence in government and don’t believe anything they say! Obviously free money is not jump starting the economy --- the interest rates have only been at historic lows for years now!
And, re-sales and new home construction remain at all time lows. Simply because family formations are below norm, fear of job loss and the pendulum of government.
The real estate industry is in a tailspin and the focus is on solar panels, green roofs and windmills ---- only for the selected and they fail --- just like in the early ‘80’s.
This graph should finalize our impression that our economic experts have been and continue to mislead us! No wonder we have lost confidence in government and don’t believe anything they say! Obviously free money is not jump starting the economy --- the interest rates have only been at historic lows for years now!
And, re-sales and new home construction remain at all time lows. Simply because family formations are below norm, fear of job loss and the pendulum of government.
The real estate industry is in a tailspin and the focus is on solar panels, green roofs and windmills ---- only for the selected and they fail --- just like in the early ‘80’s.
WAKE UP AMERICA!
“Is it right to be politically correct or just right?”
Monday, September 19, 2011
LinkedIn Groups
Most LinkedIn Groups have changed their membership to be open for all LinkedIn members. My group “Land Development” will not be open for general membership. The LinkedIn “Land Development” Group just passed 4,000 members and continues to grow with contacts from all over the world.
If you are interested in joining a professional real estate development group, please type in Land Development in the LinkedIn group search bar and join us today. You will be expanding your professional network and connecting with like-minded professionals.
If you are interested in joining a professional real estate development group, please type in Land Development in the LinkedIn group search bar and join us today. You will be expanding your professional network and connecting with like-minded professionals.
Friday, September 16, 2011
Thursday, September 15, 2011
“Green Stormwater Practices”
I recently received a continuing education brochure which included a session on Green Stormwater Practices for civil engineers. You will learn:
Benefits of green stormwater practices
Evaluating green practices
Impact of green stormwater practices on LEED and other green designations
The practices to be evaluated in the seminar were listed in the brochure:
Bioretention
Cisterns
Permeable pavers/pervious concrete
Disconnecting impervious area/vegetate swales
Soil amendments (a soil conditioner added to improve plant growth and health)
Rainwater harvesting
Bioretention cells
Runnels (a narrow channel or course for water to flow)
Sustainable landscaping
Green roofs
In some areas of Australia, cisterns are required for every home. I have a link to a cistern video in case you are in the market to buy one. http://youtu.be/besl1h6t6FA.
I want to caution you. You need to obtain the proper construction and zoning permits from your town. It most likely isn’t an approved accessory use. If you live in a community with an HOA; you must also obtain their approval. You may have to hold a neighborhood meeting to explain what you want to do and they may demand a special color to blend into the architectural theme of your community. I am sure there are other things to think about but I will leave that up to you i.e. having to maintain your green roof!
Do you think “green” is an overused word?
Benefits of green stormwater practices
Evaluating green practices
Impact of green stormwater practices on LEED and other green designations
The practices to be evaluated in the seminar were listed in the brochure:
Bioretention
Cisterns
Permeable pavers/pervious concrete
Disconnecting impervious area/vegetate swales
Soil amendments (a soil conditioner added to improve plant growth and health)
Rainwater harvesting
Bioretention cells
Runnels (a narrow channel or course for water to flow)
Sustainable landscaping
Green roofs
In some areas of Australia, cisterns are required for every home. I have a link to a cistern video in case you are in the market to buy one. http://youtu.be/besl1h6t6FA.
I want to caution you. You need to obtain the proper construction and zoning permits from your town. It most likely isn’t an approved accessory use. If you live in a community with an HOA; you must also obtain their approval. You may have to hold a neighborhood meeting to explain what you want to do and they may demand a special color to blend into the architectural theme of your community. I am sure there are other things to think about but I will leave that up to you i.e. having to maintain your green roof!
Do you think “green” is an overused word?
Wednesday, September 14, 2011
Pre-Qualified or Pre-Approved??
As you start your housing search you may hear phrases like:
“Make sure you are pre-qualified!” or “Get pre-approved!”
What do these mean, which one is best for you and how will they impact your search?
Pre-Qualification:
This is traditionally a review of your credit report and credit score.
This process may also include the completion of a loan application that your loan officer or mortgage consultant will review with you and run through an automated underwriting system. That automated system will let your loan officer/mortgage consultant know whether what you have told them in terms of income, assets and credit will fall within the general mortgage guidelines.
However, that is subject to you providing acceptable documentation to the lender. If you have clean credit, a strong job history, good assets and reserves, the prequalification letter is probably going to meet your needs as you look for a home.
Pre-Approval:
However, if you find you are borderline in any area, or if you just want to get the mortgage approval done prior to shopping for a home, a “true” preapproval is the way to go. Your loan officer/mortgage consultant will take a full loan application and collect all your documentation of income and assets. Your application will be submitted for processing and review by an underwriter.
While a prequalification will take around 30 minutes, the preapproval process will be more like three to five days (the underwriter typically needs this much time to review your file).
What you then get is a preapproval commitment letter that you can use with your agent as you shop for houses. The loan would then be subject to an acceptable appraisal on the property you choose.
Make sure when speaking to your lender that you get their definition of pre-qualification and pre-approval. Not everyone has the same definition. Find the best option for you as you start your home search. Once this moving piece is in place, your adventure can begin!
“Make sure you are pre-qualified!” or “Get pre-approved!”
What do these mean, which one is best for you and how will they impact your search?
Pre-Qualification:
This is traditionally a review of your credit report and credit score.
This process may also include the completion of a loan application that your loan officer or mortgage consultant will review with you and run through an automated underwriting system. That automated system will let your loan officer/mortgage consultant know whether what you have told them in terms of income, assets and credit will fall within the general mortgage guidelines.
However, that is subject to you providing acceptable documentation to the lender. If you have clean credit, a strong job history, good assets and reserves, the prequalification letter is probably going to meet your needs as you look for a home.
Pre-Approval:
However, if you find you are borderline in any area, or if you just want to get the mortgage approval done prior to shopping for a home, a “true” preapproval is the way to go. Your loan officer/mortgage consultant will take a full loan application and collect all your documentation of income and assets. Your application will be submitted for processing and review by an underwriter.
While a prequalification will take around 30 minutes, the preapproval process will be more like three to five days (the underwriter typically needs this much time to review your file).
What you then get is a preapproval commitment letter that you can use with your agent as you shop for houses. The loan would then be subject to an acceptable appraisal on the property you choose.
Make sure when speaking to your lender that you get their definition of pre-qualification and pre-approval. Not everyone has the same definition. Find the best option for you as you start your home search. Once this moving piece is in place, your adventure can begin!
Tuesday, September 13, 2011
Saturday, September 10, 2011
Friday, September 9, 2011
Will You Sleep Better Tonight?
Based on the speech last night, will you sleep better tonight knowing that everything is now under control?
I have to be honest. I am assisting over 35 individuals in their Charlotte job search and not one of them is on unemployment nor will they qualify to build a road. The jobs bill proposed last night will not help them. So I go back to my statement for years now ...... As Housing Goes......So Goes the Economy.
If you have a job, why would you not buy a home today? Because.....................of FEAR.
Fear of losing their job and/or the lack of job security
Fear of the buying process – not understanding how the system works
Fear of their ability to make monthly payments
Fear of being “house poor”
Fear of the daunting loan process
Fear of qualifying and credit scores
I have to be honest. I am assisting over 35 individuals in their Charlotte job search and not one of them is on unemployment nor will they qualify to build a road. The jobs bill proposed last night will not help them. So I go back to my statement for years now ...... As Housing Goes......So Goes the Economy.
If you have a job, why would you not buy a home today? Because.....................of FEAR.
Fear of losing their job and/or the lack of job security
Fear of the buying process – not understanding how the system works
Fear of their ability to make monthly payments
Fear of being “house poor”
Fear of the daunting loan process
Fear of qualifying and credit scores
But the survey results do not match what is actually happening in the housing market. Why? Fear! Until the consumer knows the country is heading in the right direction, they will not buy anything - including their home.
Thursday, September 8, 2011
The Over Reach of Government
Oh how things have changed ---the long arm of government has changed the way we live. Think about what has changed over the past 20-years and where it might be going from here!
What we eat
What you wear
Homes we live in
Transportation mode to get to work
Type of vehicle
Energy consumption
Type of light bulb
Recycling
Education and careers
What about employment decisions – government versus private
The way we communicate
Right versus wrong
Family formations
Pass legislation to know what is in the legislation
Airport security
Taxes, more taxes and more taxes And the list goes on ………………………….
After tonight’s Presidential speech on jobs, think about how your life has changed by government.
Are you better off today than you were 1-year ago?
On election day, 2012, will you be better off than you are now?
What we eat
What you wear
Homes we live in
Transportation mode to get to work
Type of vehicle
Energy consumption
Type of light bulb
Recycling
Education and careers
What about employment decisions – government versus private
The way we communicate
Right versus wrong
Family formations
Pass legislation to know what is in the legislation
Airport security
Taxes, more taxes and more taxes And the list goes on ………………………….
After tonight’s Presidential speech on jobs, think about how your life has changed by government.
Are you better off today than you were 1-year ago?
On election day, 2012, will you be better off than you are now?
Wednesday, September 7, 2011
Peak of the Week - House Designs
A look back and a peek forward in housing design trends.
In the early 80’s and after that recession, single family house designs changed to smaller square footage compact designs. We built many 900 square foot homes. Included in the change was the introduction of the great room. This is the combination of the several living spaces into one large room rather than formal living and dining areas.
How will housing design change after the “great recession”?
In my opinion, there will be three changes consistent with the changing families, jobs, and standard of living.
1. The size of the single family home will continue to shrink in size and be on a smaller and smaller lot.
2.. The formal dining room will be replaced with a well appointed office space that is telecommute ready. Instead of a dining room space converted to an office. The new design will take the corporate office home to include features: enhance privacy, ease of telecommuting, excellent lighting, an attached half bath, built-ins for office equipment, and ergonomic built-in work station.
3. Multi-generational homes. Perhaps you were thinking that this would include the working parents and their children entering their work careers. I think it is the other generational relationship. The home will be designed for the working parents but also for the baby boomer parents as they reach their 70’s and 80’s before assisted living or in lieu of assisted living. I believe families will have to combine their wealth, capabilities, and care giving to succeed. A dual split master bedroom suite design may be suited for a multi-generational home design.
What design changes do you anticipate in the future?
In the early 80’s and after that recession, single family house designs changed to smaller square footage compact designs. We built many 900 square foot homes. Included in the change was the introduction of the great room. This is the combination of the several living spaces into one large room rather than formal living and dining areas.
How will housing design change after the “great recession”?
In my opinion, there will be three changes consistent with the changing families, jobs, and standard of living.
1. The size of the single family home will continue to shrink in size and be on a smaller and smaller lot.
2.. The formal dining room will be replaced with a well appointed office space that is telecommute ready. Instead of a dining room space converted to an office. The new design will take the corporate office home to include features: enhance privacy, ease of telecommuting, excellent lighting, an attached half bath, built-ins for office equipment, and ergonomic built-in work station.
3. Multi-generational homes. Perhaps you were thinking that this would include the working parents and their children entering their work careers. I think it is the other generational relationship. The home will be designed for the working parents but also for the baby boomer parents as they reach their 70’s and 80’s before assisted living or in lieu of assisted living. I believe families will have to combine their wealth, capabilities, and care giving to succeed. A dual split master bedroom suite design may be suited for a multi-generational home design.
What design changes do you anticipate in the future?
Tuesday, September 6, 2011
Joint Session of Congress
Thursday night's speech by the President has the following backdrop:
14,000,000 million unemployed
9,000,000 million part-time workers seeking full time work. When the economy improves, these workers will most likely become full time workers but no new jobs will be created--- expansion without hiring.
3,000,000 million stopped looking for work (I actually think this is low. I think many people started their own businesses as sole propreitors. This number is much higher than they think!)
Total out of work ---16%
Asking for time before a joint session of congress to give a speech is tantamount to a "war" speech. I would agree that we are in a domestic economic war. We however have been in this economic malaise for two years since there has not been a recovery. Will the President play politics again? Or will he and congress get their acts together and lead us out of economic ruin? Talk to you Friday about your thoughts -- or will you just watch the NFL pre-game show?
14,000,000 million unemployed
9,000,000 million part-time workers seeking full time work. When the economy improves, these workers will most likely become full time workers but no new jobs will be created--- expansion without hiring.
3,000,000 million stopped looking for work (I actually think this is low. I think many people started their own businesses as sole propreitors. This number is much higher than they think!)
Total out of work ---16%
Asking for time before a joint session of congress to give a speech is tantamount to a "war" speech. I would agree that we are in a domestic economic war. We however have been in this economic malaise for two years since there has not been a recovery. Will the President play politics again? Or will he and congress get their acts together and lead us out of economic ruin? Talk to you Friday about your thoughts -- or will you just watch the NFL pre-game show?
Friday, September 2, 2011
Looking for Opportunities in Real Estate?
Guest Blog By Don O'Dell
There is little question that foreclosures are a major part of the real estate market today. One of the challenges that comes along with buying a foreclosure can be the condition of the property. If the property is damaged, neglected or just plain outdated, you may want to consider a renovation loan. Here are some simple steps when considering such a loan:
Get pre-qualified and consider a full pre-approval. This statement is true for any type of loan. If you are a well-qualified buyer, a pre-qualification is sufficient from the right loan officer. If you have a couple of issues that require review from an underwriter (loan decision maker), then get fully pre-approved. The difference is that with a pre-approval you supply your supporting documentation (W2’s, pay stubs, etc.) and sign an application disclosure package. The result is a loan commitment and much stronger negotiating power with sellers.- Get organized. Once you find the right house and negotiate the contract the real work begins. For most buyers, you’ll need to turn your pre-qualification into a loan approval/commitment and lock your rate. At the same time, you will need to begin working with your general contractor(s) to specify the scope of work and cost of renovations. These need to be nailed down prior to ordering the appraisal so we can determine the “after improvement” value.
- Give plenty of time. Try to negotiate a 60-day contract-to-close period to give you and us the time needed to coordinate the financing and renovation. We may be able to close faster but there are many variables at play and you don’t need the extra stress of a quick closing.
- Be decisive. If you have trouble picking the toppings to put on your pizza, this may not be the right loan program for you. Identify what you want to renovate and make it happen.
- Consider hiring a HUD consultant. Usually HUD consultants are used for larger renovations and ones that include structural items. However if you could use help identifying the scope of work and working with contractors, a HUD consultant may be right for you.
What steps would you add to this list?
Thursday, September 1, 2011
Competition for JOBS
It is time to consider refocusing on the demand for land in the near future. There has always been competition between states, counties, and local governments to attract companies for their jobs. In many cases, this is accomplished through economic development groups. These organizations are quasi-government entities having the support of their governing bodies. Their goals include encouraging companies to expand their operations or relocate new facilities in their community.
As we come out of this “great recession”, the competition will become more intense as companies expand. As you know, Texas added more jobs than the rest of the states combined due to a pro-business environment. In locations not structured the same way, governments will resort to making offers or incentives to companies to create jobs through expansion or relocation. These enticements will be difficult to refuse!
In some cases, municipalities will use eminent domain to amass properties for large business complexes. Some local governments will use tax incentives, etc. to make a deal.
In either case, LAND is the important component i.e. location, existing infrastructure, etc. In the case of Boeing and their plant in Charleston, SC, the Charleston County Aviation Authority LEASED 240 contiguous acres to the Boeing Company.
Not having to purchase land for development purposes is a significant. Think about not having to use cash or obtain financing to purchase the property.
The following illustration is from The Post and Courier (www.postand courier.com) and it clearly illustrates all of the “carrots’ used to bring Boeing and Charleston, SC together.
Post and Courier illustration by Gill Guerry
As we come out of this “great recession”, the competition will become more intense as companies expand. As you know, Texas added more jobs than the rest of the states combined due to a pro-business environment. In locations not structured the same way, governments will resort to making offers or incentives to companies to create jobs through expansion or relocation. These enticements will be difficult to refuse!
In some cases, municipalities will use eminent domain to amass properties for large business complexes. Some local governments will use tax incentives, etc. to make a deal.
In either case, LAND is the important component i.e. location, existing infrastructure, etc. In the case of Boeing and their plant in Charleston, SC, the Charleston County Aviation Authority LEASED 240 contiguous acres to the Boeing Company.
Not having to purchase land for development purposes is a significant. Think about not having to use cash or obtain financing to purchase the property.
The following illustration is from The Post and Courier (www.postand courier.com) and it clearly illustrates all of the “carrots’ used to bring Boeing and Charleston, SC together.
Post and Courier illustration by Gill Guerry
The national discussion or debate about Boeings new plant seems to be about unions. In my opinion, the story is in the incentives and the LAND made available to Boeing. This definitely improved Boeings cash flow and decreased their initial start-up costs which solidified the deal. What is your local government doing to attract companies and their jobs and taxes to your community?
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