It certainly has been a rough recession (is there any other kind?). For us in the Carolina's, Georgia and Tennessee we felt the drop about a year after South Florida. South Florida officially started down in Real Estate in July of 2005; now going on 4 years. Now that the dates are known when will we book an official bottom and even more importantly, when will we see positive economic growth again in Real Estate and beyond?
This month (March 2009) many indices are pointing to better times ahead. First came the report of February existing home sales, multi-home sales nationwide and more recently new home sales and durable goods. Interestingly, these aforementioned items generally lead us into a recession, but do not necessarily lead us to a recovery. However, in this case, since our government has put such an emphasis on Real Estate it looks as though this will be the leader. Hard times are still ahead for automobiles as projections of new units are at a low 10 million cars a year in 2009, down from record highs around 16 million/year just 2 years ago.
As consultants it is our job to look where ever we can for reliable changes in the market. Reliable changes being the key phrase. While it appears good for February and March in the housing sector, what will April and May bring? Again, let's look at some trends in housing.
Mortgages are at their all time lows and mortgage brokers and banks are busy writing business again.
Nearly all of the original $700 billion stimulus has been spent, although we have no detailed reports as of yet where exactly the money went, it will soon show results.
Real Estate inventory around Florida is falling, so are prices but not as drastically. The minute foreclosures begin dropping as a large percentage of sales, prices will begin to rise...slowly. This is a buying opportunity.
In Atlanta last summer the MLS billboard along the interstate showed approximately 102,000 homes listed. Last week it was around 82,000.
AS WHEN ENTERING ANY RECESSION, IT IS NEVER JUST ONE ITEM THAT BRINGS DOWN THE ECONOMY TO NEGATIVE GROWTH LEVELS. IT IS A SERIES OF INTER-RELATED FACTORS THAT BEGIN THE ACTUAL AND PERCEIVED DOWNTURN AND THE ACCOMPANYING HUMAN PESSIMISM.
SO TO IS THE BEGINNING OF A RENEWED ECONOMIC TREND TO THE POSITIVE. TODAY'S WALL STREET JOURNAL IS REPORTING MUCH LESS PAIN AND AGONY AS THEY WERE FROM OCTOBER 2008 UNTIL MARCH 1ST 2009.
LOOK AROUND AND OBSERVE THE NEWS AND ITS TONE. FINALLY AMERICANS ARE STARTING TO GET TIRED OF SITTING AROUND COMPLAINING AND WE SEEM TO BE TOUCHING OUR TOE IN THE ECONOMIC WATERS THAT AWAIT.
AS CONSULTANTS, WE OBSERVE, WE ANALYSE, WE QUESTION AND WE ARRANGE FACTS IN A LOGICAL FASHION IN ORDER TO MAKE DECISIONS FAVORABLE TO OUR CLIENTS. SO WHAT ADVICE DO WE GIVE OUR CLIENTS TODAY....."IT IS TIME TO BE WATCHFUL AND PREPARED." REAL ESTATE GOES ON IN A SLOWER BUT CHANGING ENVIRONMENT. OUR CLIENTS ARE IN VARIOUS STAGES; SOME ARE MOVING INVENTORY, SOME ARE RETOOLING PRODUCT WITH NEW DESIGNS AND MARKETING CAMPAIGNS,SOME ARE BEGINNING TO LOOK AT ADDING LAND TO THEIR INVENTORIES FOR NEW COMMUNITIES AS OTHERS SELL OR JOINT VENTURE EXISTING LAND HOLDINGS. AS PART OF THESE OPERATIONS BUILDERS AND DEVELOPERS ARE REVISITING THEIR BANKS AND MODIFYING THEIR FINANCING TERMS OR PLACING NEW FINANCING. TIMING IN OUR BUSINESS IS EVERYTHING BECAUSE REAL ESTATE TAKES TIME TO SPOOL UP, AND TIME MEANS EXPOSURE TO MARKETS THAT CHANGE IN CYCLES. NO ONE SAID IT WAS EASY, BUT KEYS TO THE FUTURE ARE IN THE NEWS EVERY SINGLE DAY.......AND TO, THAT IS WHERE YOUR CONSULTANT SHOULD BE! GET THE EDGE.
SINCERELY,
THE EDGE TEAM
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