Peak of the Week

The map illustrates the “underemployment” rate by state. Have you ever wondered how these statistics are complied? We are overloaded with statistics and none are positive. All I know is that the real estate industry is in a state of malaise. This economy reminds me of the Carter years except the interest rates are about 14% apart! Looking forward, the GDP trend is what to watch and not the unemployment or underemployment rates.

The peak of the week post is to look back and to peek forward. With the price of gas continuing to trend up, consumer spending will also suffer – choice may be bread or gas? Thus the spiral will continue. My motto during the Carter years was “nice but not necessary”. I think this approach is appropriate today and in the future.

Buyers Looking for Great Deals

The past several months have been a roller coaster ride for the real estate industry. There have been ups and downs — highs and lows — and everything in between. But regardless of the market conditions, most buyers are still looking for a great deal.

Luckily, for most there are a lot of great deals to be had. 47% of the homes sold in Charlotte in 2010 were in the $100,000 to $250,000 price range. It’s a matter of finding the house that fits all of your needs and qualifications at the right price. For some, purchasing a corporate or REO home has been a way to make this all come together.

Corporate Homes are generally executive homes where the seller has been transferred and has received a corporate buyout. REO (Real Estate Owned) properties are bank owned foreclosed properties.

In both cases the sellers are corporate entities which are often more realistic when it comes to pricing the property to sell it in a timely manner. Some things to consider if you decide to go down this road:

• Corporate homes have often been pre-inspected and neutralized.

• Because the corporate entities have never lived in the home, they are able to remove emotion from pricing decisions and price according to market demands.

• REO properties face enormous competition with the glut of foreclosures currently on the market and are usually priced to sell.

• And don’t be fooled into thinking that all these properties will be in questionable condition. Some are sold “as is”, but others have been refurbished and many of these corporate sellers will make reasonable repairs when needed.

So for many buyers, the way to getting that great deal is by checking out the corporate and REO homes in their area. Remember, a corporate home or REO is a commodity to the sellers and it is all business. Therefore, approach buying the home as a business decision when submitting your offer to purchase. Personally, I would offer at least 20% lower than the sales price as a start.

Case Shiller Home Prices

The graph shows only the top metro areas and may not be indicative of your specific market. However, the trend in home prices is worth noting. Case Shiller is predicting further declines in home price.

 
Let’s use this graph for the Charlotte market. Home prices in 2003 are lower than the prices is 2010. The graph seems to indicate this. I have been assisting homeowners with their appeal of the County real estate tax revaluation. This revaluation compares prices from 2003 to 2010. Real estate taxes in the Charlotte area, for the most part, will increase based solely on prices. If the politicians raise the tax rate, homeowners will be in serious trouble since this would further put a strain on their pocketbook.


The national news commentary discusses market generalities but each housing market must be analyzed on its own characteristics and community factors. For Charlotte, prices are certainly lower than the peak of the “bubble” but higher than 2003 – the last time real estate taxes were set by the county.

Social Networking – Marketing Fundamentals – Part II

This post is the second in a series on social media marketing from a non-professional social marketer. It seems to me that anyone posting a discussion item on “How To” should have experience in the area of discussion. I can certainly tell you how to buy and sell land for a profit, but I can’t really tell you the best way to use social media. In fact, I am not sure there is an expert out there – maybe someone that uses social media outlets 24/7. I did find a list of fundamentals of social networking that might help you in your efforts.

Linking – it is reasonable to assume that your efforts can be linked to all of your networking groups. I do promote some of my blog posts on LinkedIn. I should be sending out an enewsletter to my sphere of influence. I have started to seek guest bloggers and in return post certain posts on other blogs.

Relationship Building – social networking such as LinkedIn allows you to promote your connections and build on your relationships of mutual interest. Continue to connect with your contacts. I have started to ask “How can I help you?” You need to continue your social networking efforts on a consistent and continuous basis.

If you should wish to know more about my LinkedIn approach and successes in building contact relationships, please let me know. If anyone has an approach for Facebook, please include a comment.

Social Networking – Marketing Fundamentals

As you know, I do not have a marketing background but have been actively involved in LinkedIn. I have been asked about my approach to social networking and in essence, it is marketing, branding, and connecting. However, the core principles that guide me in my business pursuit include:

Have strong Beliefs – know where you are going – have goals
Be an Optimist – be a positive role model - appreciate life
Relentless Preparation – answer the unanticipated, sense of calm with practice
Invest in Others – be a mentor - assist others without expecting anything in return.
Live in a State of Gratitude – 86,400 seconds in a day – how will you use this time?
Act rather than react – take action
Reinvent – do what you do and always have done – differently

Let’s take the above statements and apply social networking marketing fundamental to each:

Focus – your social networking and marketing should be focused on your goals and business strengths. Try to avoid going off on tangents which is easy to do while on the internet. Use your expertise to focus your marketing campaign on your expertise. Although, my blog seems to have a wide range of topics, my approach to LinkedIn has become more focused on real estate issues.

Quality – without a question, your social networking content should be relevant to your clients and your goals. I am on Facebook but find LinkedIn to be a forum allowing more valuable professional interaction with potential clients.

Listen – if you watch, listen, and follow group discussions and networkers, your interaction will be based on their needs and not your own promotion. Learn what is important to those you would like to connect with. Read their profile and understand the groups they belong to.

Patience – on LinkedIn, I have had the patience to grow my contact list, strengthen my group participation and direct my group activities. My contact list is nearing 800 and my group “Land Development” is nearing 2,700 members. It has taken awhile to reach this level of interaction but it has already achieved results.

“Sustainable Land Development – Ensuring Growth in a Green Economy”

I have been giving a 2-day seminar on real estate development for the American Society of Civil Engineers since 1997. Over the past several years, this seminar has not seen the attendance but continues to be of interested for real estate professionals.

Join industry participants in a proactive forum outlining the future of the real estate development industry for residential and non-residential projects. Learn how the industry will change in the future and how best to manage this change.

Also learn sustainable project design and program elements which will alter development patterns in the future. Practical business and profit center concepts and ideas will be highlighted. The seminar schedule for 2011:

San Antonio, TX                     March 24 & 25
Seattle, WA                            July 28 & 29
Charleston, SC                       September 15 & 16
Washington DC                      November 3 & 4
Houston, TX                          December 1 & 2

Contact me if you should wish to learn more about this seminar.

GDP

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%

Release dates in 2011 Gross Domestic Product

4th quarter 2010
Advance Estimate      January 28       3.2%
Second Estimate        February 25     2.8%
Third Estimate           March 25

The GDP will be significantly impacted by the rise in oil prices and commodities. The first quarter GDP estimates will be published in late April, 2011. We will be into a new economic period for two months by then and we will not need these estimates to know how the economy is holding up