While the wheels of justice turned at the normal speed of sludge moving uphill, the on-line brokers found their way into the mainstream real estate market (or at least a hole in the wall) rendering the DOJ/NAR settlement virtually irrelevant. Anticlimactic, then is how we shall describe the proposed settlement between the Department of Justice and the National Association of Realtors. Technology outpaced the DOJ's judgement.
Spin turns success for all parties. Some think Realtors have been pulverized – far from it. Some think it is a crowning victory for the buying public – no more so than the market yesterday. The NAR, of course, spinned it as a well-deserved victory, but what else would you expect.
There is no need for me to rehash the terms of the Department of Justice/National Association of Realtors settlement here since it would be reiterating what has already been competently discussed on so many real estate blogs. Click here to see NAR Wisdom’s or The Real Estate Bloggers’ recommended readings.
I simply wanted to point out an ironic turn of events behind the scenes while the DOJ was busting the NAR’s chops – supposedly.
Redfin has been the headlining poster child for on-line discount brokerage operations and has graciously taken innumerable bullets to the head from the traditional brokerage communities for ruining life as most Realtors knew it. CEO, Glenn Kelman, however has hung in there and made nice with just about everybody that gets to know him.
He must be really charming to have made nice with Greg Swann of Bloodhound Blog who nailed him mercilessly, over and over ad nauseam. Exhibit “A” blog entitled: “Could anything be sleazier than Redfin CEO Glenn Kelman? How about the Tennessee Association of Realtors?” which was admittedly for Greg’s own amusement. But the verbal battering recently turned into a love fest. I guess stranger things have happened.
Hey, things change. When Remax first came on the real estate scene offering its agents 100% of the commission, traditional brokerages were absolutely up in arms claiming the practice was unethical if not illegal. It wasn’t long before Remax was considered a traditional brokerage model.
So while the DOJ and NAR were slugging it out, Redfin was moving into their sweet digs in mainstream real estate circles, kind of. But not because Bloodhound kissed and made up.
Glenn Kelman recently spoke at Bloodhound’s version of Inman's Connect and surprise, is also now a contributing writer for Bloodhound.
Thank goodness life is endlessly ironic and entertaining.
May 29, 2008
While the wheels of justice turned at the normal speed of sludge moving uphill, the on-line brokers found their way into the mainstream real estate market (or at least a hole in the wall) rendering the DOJ/NAR settlement virtually irrelevant. Anticlimactic, then is how we shall describe the proposed settlement between the Department of Justice and the National Association of Realtors. Technology outpaced the DOJ's judgement.
May 25, 2008
This week's Worthy Nods in the news and on the blogs:
Wall Street Journal - Home Resales, Prices Decline While Inventories Increase - Article and video. The bad news just keeps coming.
Inman Blog - Your House, Please - And Your Badge, Too. Foreclosure could end your security clearance and your job.
Business Week's Hot Property Blog - Home Prices Down and Unsold Inventory Way Up
Geek Estate Blog - Are You A Rookie with Social Media? No Worries — Social Media U to the Rescue - Crash course on social networking.
Real Central VA - Policy Maps for Today's Real Estate Consumer - Where to go to get data layers for Real Estate Analysis, Neighborhood Conditions, Mortgage Originations, Education, Money & Income, Demographics, Owners and Renters, Jobs, Energy, and more.
International Herald Tribune's Raising the Roof Blog - RICS revises forecast, predicts 40 percent drop in U.K. home sales.
The Economist - The Winning Formula - World Bank's study, "The Growth Report" rates the top countries considered to be "economic miracles". You won't believe #1.
and finally...news from the Donald front...
IHT - Raising the Roof Blog - Trump project in Panama goes to court over talk it copied design of famous Dubai hotel - Don't you think that sail design for coastal towers is just a little over done? Trump gets 25% for licensing his name?
Real Concepts Green Series
The Architectural Oscars, Green Rooms and all....
Nowhere is eco-awareness more prominently displayed than in the new trophy towers around the world - the icons of world architecture that flaunt and celebrate everything green. In the race for ever more creative design and ultimate sustainability, these buildings have managed to support record prices.
If Don Quixote could find his way to modern Bahrain, he would feel at home beneath the wind turbines powering the Bahrain World Trade Center. The turbines generate about 15% of the total energy needs of the twin towers. The nautical design conjures images of a tall sailing ship.
Bahrain World Trade Center: The original plan was to utilize solar panels into the project, but the extreme heat conditions of Bahrain made it unfeasible. Back to the drawing board. Option #2 created a very striking building profile with three 100-foot wind turbines, each supported by a 30-meter bridge spanning between the two towers of BWTC, tying the two “sails” together.
BWTC's 100-foot diameter wind turbines:Another turbine-powered icon is the Castle House apartment tower under construction in London. It's turbine span is only about one-third of the BWTC, but nevertheless effective for energy generation.
Castle House, Castle & Elephant:
The 71-story Pearl River Tower in Guangzhou, China (completion slated for 2010) promises to be one of the most environmentally friendly buildings in the world – so far. Powered by wind turbines, once again. Does it seem ironic to you that the most forward thinking energy efficient building in the world is the new headquarters for a tobacco company? .
Pearl River Tower, China:
The proposed Wave Tower will be on the water in downtown Dubai. The tower will contain a water purification plant and will desalinate and purify the sea water and then filtered and allocated for drinking water, landscape maintenance and sewage.
Proposed Wave Tower:
The 92 stories, mixed-use proposed project was designed by a Spanish architectural firm, Studio A-cero, for a city where there are no rules. Not to worry about fitting in with existing architecture, just one-up the last design. This view looks more like an amusement park ride.
Proposed Wave Tower: The next nominee is Crystal Island. Is Crystal Island a city or a building? At 27 million square feet Moscow's newest conceptual wonder is a “city within a building” – the world’s largest building when completed. At a projected cost of $4 billion, it may also be the most expensive. Crystal Island was created by Fosters + Partners, an architectural firm known for iconoclastic designs. When completed the world's largest building will tower over the Kremlin.
The 1500 foot tall multi-use structure will house 900 apartments, 3,000 hotel rooms, an international school for 500 students, cinemas, a theater, a sports complex, and underground parking with 16,500 spaces.
As you would expect, superlatives will accompany the eco benefits of the world’s largest building. Solar panels and wind turbines will generate electricity. Natural ventilation via large atriums and special structural framing will allow daylight to penetrate deep into the heart of the structure. Energy management is at the heart of this project.
Perhaps the most celebrated new icon to come down the pike is another Foster + Partners creation, and yes it will be a crown jewel for Dubai. This time an entire city. Foster + Partners says the 1500-acre walled city of Masdar will be the world's first zero-carbon and zero-waste city in the world.
Conceptual Walled City of Masdar:
This is the first project resulting from the Masdar Initiative, an initiative driven by the Abu Dubai Future Energy Company which is a center for the development of new ideas for energy production.
At the helm of the project, Norman Foster predicts, "Masdar promises to set new benchmarks for the sustainable city of the future.” Foster explains further that the surrounding land will contain wind, photovoltaic farms, research fields and plantations, so that the city will be entirely self-sustaining. No cars will be allowed within the walls. Below is the rendering of city center and its futuristic transportation.
No Oscar nominations for U.S. towers? It's hard to compete with the likes of the winning projects and budgets. One thing that all these projects have in common is the harnessing of wind power. And the U.S. gets it too. The U.S. Department of Energy recently released a report supporting the ability to make wind power a major contributor to America's electricity supply predicting 20% wind energy by 2030. The report's further findings include:
- Reduce carbon dioxide emissions from electricity generation by 25 percent in 2030.
- Reduce natural gas use by 11%;
- Reduce water consumption associated with electricity generation by 4 trillion gallons by 2030;
- Increase annual revenues to local communities to more than $1.5 billion by 2030; and
- Support roughly 500,000 jobs in the U.S., with an average of more than 150,000 workers directly employed by the wind industry.
To download the full report, click here.
Real Concept's Green Series:
May 22, 2008
That someone else is EcoBroker International. Nods to Matt Carter at Inman Blog for bringing this to our attention.
This is the perfect example of a nation gone crazy for the hot, hot green brand. EcoBroker says this is a way for real estate agents to stand out in weak market. Increase your business.
“Through EcoBroker educational courses, real estate professionals acquire the knowledge and resources to become Certified EcoBrokers(R) and assist clients in their pursuit of properties with green features and marketing of properties with green features.”
The requirements to become a Certified EcoBroker is pretty darn simple:
- You must be a licensed real estate agent (there is also an affiliate program)
- Register and pay $395 ($129 annual renewal)
- Take three on-line courses.
Here is the curriculum:
EcoBroker Environmental Advantage™ - Learn how to constructively address environmental issues such as radon, asbestos, lead, water, mold, indoor air quality, and other issues that may arise during real estate transactions.Reduce liabilities and save deals by learning to work through environmental issues.
EcoBroker Energy Advantage™ - Learn about energy efficiency technologies, sustainable energy options, and mortgage options that award up to $15,000 worth of energy efficiency improvements for a home, at the closing table. Catch up with "green" home certification programs, such as Built Green® Colorado and Energy Star Qualified Homes, so the next time you encounter one, you can speak to its
features and attributes.
EcoBroker Green Market Advantage™ - Learn how your energy and environmental training can add value to all of your transactions, with consumers who consider themselves green-minded and those who don't! Identify new markets where your EcoBroker Designation will have appeal and impact.Generate more business from these new relationships and markets.
EcoBroker is based in environmentally friendly Denver. They’re old-timers when it comes to being green – as a matter of fact they invented the environment.
But look at the curriculum. One course deals with environmental issues like mold and radon. One course deals with how to market your EcoBroker designation to increase business. Only one of the three courses actually deals with energy efficiency and sustainable energy options and that is peppered with how to get rebates for energy efficiency improvements and various green home certification programs.
Call me crazy but this sounds a little thin on substance. But what do you expect for $395 and a few hours on the computer? I must admit however my opinion is based purely on EcoBroker’s web site. I did not feel compelled to pay $395 to test further for thin ice.
It seems that energy efficiency and sustainable building practices is a very complicated and confusing subject and one that I would be loath to suggest to a buyer that I had any degree of
But for those real estate professionals who collect designations, maybe this would be a nice addition…Certified EcoBroker. Has a nice green ring to it.
This green is marketing, pure and simple.
What does an EcoBroker drive I wonder?
Real Concept's Green Series:
May 20, 2008
I have been called a cynic when it comes to the Green Movement, but I must take exception. First and foremost I like to think of myself as a realist and a pragmatist. I don’t drive a hybrid because it doesn’t make economic sense – at least not today. I like using a metro system if I’m in a city that has one that works (Atlanta is not one of those cities.)
I don’t like to commute because it is a complete and utter waste of time. I shop at Whole Foods because I like the experience, I can graze while I’m shopping, and I eat a lot of sushi. But I don’t bring a canvas tote to carry my groceries home.
I don’t water illegally in the middle of the night – because I would probably get caught (even after paying the same cost for water as the local car wash for 10 years ((longggggg story))).
I live in a recycled house and could sell credits for carbon emissions for our property. I think carbon trading is coming to a city near you – why else would companies be preparing for that very certainty. Capitalism at its finest.
I think people love to think they’re being green: sophisticated enough to get it, chic enough to make the sacrifice.
The Green Movement has evolved 360 degrees from using plastic bags in order to save a tree. We have polluted the earth with billions of plastic water bottles trying to drink our way to a healthier life. Save the world. The rules will continue to change.
I would personally love to be the hero that saves this planet but I’m not really cut out for that line of work. It’s beyond my pay scale.
Green is probably THE hottest marketing brand out there today. It is the “Brand Du Jour.”
The preponderance of media coverage on being, becoming, buying, and living green is overwhelming and confusing. When it comes to green, the residential real estate industry is attaching itself to the green brand like a praying mantis to a succulent plant. After all, it is really one of the few real estate subjects that does not come with a panacea of negative chatter.
“Green will save the real estate market” – save the world – but I truly doubt it. Let’s talk before you climb onboard that train. I think the green brand for most of the housing industry, is extremely weak. But it is one of the few life preservers – of any description – to be seen on the current sea of trouble.
You may be glad to know that I’m writing on something other than infrastructure (which I will return to in June after a seminar on same) or China. I have quite a lot to pen on the subject of greening so I guess you could call this a Real Concept’s Green Series laced with some corresponding discussions on smart growth (the sound you hear is the practical air going out of that balloon.)
Since I don’t have to take a position – just because – I will approach the green issues with my motto emblazoned across my computer screen:
Which I promise to do.
Real Concept's Green Series:
Inconvenient Green Truths - Rethinking Everything
The Greening of Shareholders
"Vehicle Miles Traveled" Becoming a Zoning Issue as Governments Fight to Reduce Emissions
Builder's Facing Green Conundrum
Over The Top Eco-Iconic Architecture
Searching For The Green Realtor
The Greening of America - Keep It Real
May 17, 2008
These are aticles or blogs from this week's news and postings that I found interesting or worthy of acknowledgement:
** Business Week - The Reason For High Oil Prices - Most popular.
Big Builder On Line: Chain Link - The Meaning of Green - Report from the NHBA Green Conference
Wired: First Look at Hands-On Blackberry Bold
WSJ - The Eco-Kitchen Challenge
DOE Report: Wind Could Power 20 Percent of US Grid by 2030
The RE Bloggers - Realogy Down $132M for Q1
How to Geotag Your Photos
Raising the Roof - IHT - Dubai’s ambitious ‘Waterfront City’ starting to take shape
ULI - The Ultimate Green Building - Urban Farming
NYT - Taking Advantage of Previously Issued Credit Lines
NYT - Mortgage Holders Find It Hard to Walk Away From Houses
at 6:41 PM
May 16, 2008
Real Concepts China Blog Series - Revisited
I thought I was finished with the China Series but the horrible news of the earthquake in Sichuan, China made me reconsider a postscript. When in Beijing in a taxi we came to a traffic light and I noticed the buildings pictured here under construction.
On first look it seemed nondescript as we had seen hundreds of buildings in Beijing in various stages of development. But something didn't look right. Looking closer I almost gasped and told my husband to look at this construction and the concrete work. "Please not the concrete thing again." I had seen what I thought were some of the worst examples of concrete work in China that I had ever seen anywhere (even on the new Beijing airport runways). But this topped the list.
I wrote a blog about this when I got back but trashed it as uninteresting to most people, including my husband. But now, in retrospect with the obvious questions being raised in China after the earthquake as to the urban sea worthiness of their buildings, I reconsidered.
I am no construction expert and even less of a concrete know-it-all, but this building was very scary looking. In the picture below it looks like the concrete slab is overhanging creating a shadow. But look at the top photo - there is no sun to create a shadow and if you check the height of the blocks you'll see that it is a gap. I really wish I could have blown these photos to a size so that the questionable construction could be seen in all its glory.
I thought maybe the building had been condemned - it almost looked abandoned. Then I saw the man, shown below, and wanted to yell out a warning to get out of that building! The taxi sped on, but I managed to get a few shots. My husband asked if we could change the subject.
But first the rescue, recovery, and assistance. American Red Cross.
Real Concepts' China Series:
May 15, 2008
May 13, 2008
The only thing that can be agreed upon by various trade organizations is that more time is needed for dicussion of HUD's new RESPA proposal which was published in March with a 60-day public comment period.
Yesterday the Atlanta Board of Realtors published its May Newsletter which included an article entitled HUD's Recently Proposed Changes to RESPA , with the following tage line, "These measures could have a serious impact on how lenders, brokers, agents and attorneys all conduct business." All true but the beneficiaries of the revisions are intended to be buyers and borrowers.
The Atlanta law firm of Persily & Associates offers up their opinions in an overview of the proposed HUD changes.
"To begin with, the proposals are without question prohibitively lengthy and needlessly confusing for the average individual - to give you a small idea of what we are dealing with, the proposals span over 96 Federal Register pages (click here to find the PDF document), with an additional 500+ pages of economic analysis."
The biggest changes however affect the Good Faith Estimate and the HUD-1 Settlement Statement. HUD's vision was to gain transparency, clarity, and savings for the consumer.
Click here to see the proporsed Good Faith Estimate (GFE).
Click here for the proposed HUD-1 Settlement Statement.
The public comment period for the new RESPA proposal was set for today, May 13. However HUD took heed of the many requests (including the NAR, the Home Builders Association, ALTA and many members of Congress) to extend the time for public comment, so it was extended to June 12. If you want to put in your two cents better hurry. You may submit your comments or concerns directly to HUD.
Bernardi, acting HUD Secretary, "remains committed to improving the complicated, unclear and costly home-buying process."
May 12, 2008
The Urban Land Institute’s 2008 “Spring Council Forum” took place last week in Dallas and the clear cut message coming out of the numerous meetings and sessions was “the only certainty for the economy is uncertainty,” reports Trisha Riggs for The Ground Floor. In other words...no answers at this exit.
You might be expecting the usual brilliance from the gathering of some of the best minds in real estate, but the current market conundrum stilled the pundits from their usual exuberance of sage predictions and advice.
When most real estate professionals are fighting for survival the “best of show” are the companies whose doors remain open, whose banker relationships are not totally on the rocks, and whose developments are moving ahead no matter what the speed.
There were many “not so bright” and a few “could be worse” comments although “could be worse” is hard to imagine. The actual comments quoted from the panels you’ve already heard in every media position imaginable, so I won’t belabor the point.
But I found this interesting and very true:
“A view from Europe: The farther West one moves (as in closer to the U.S.), the worse the economy in each country seems. The farther East, the better it seems. Still, many overseas investors consider the U.S. economy to be resilient, all things considered, and the real estate industry ripe for investment (due to the weak dollar) .”
CASE IN POINT…Bubble indicators in London, recent property declines in Ireland, the real estate disaster in Spain. Opposite in East with China and India leading the real estate parade although anyone on this side of a huge bubble would advise an exercise in caution.
And what never changes...
Some advice for those looking to buy: Focus on quality assets. The yield for quality real estate is still better than that for other assets. "Quality wins," concluded one panelist.
Must have been a sobering Spring Forum. Just as well I missed it this year. I still have my fond memories of better years.
May 11, 2008
- Anticipated, personal and relevant advertising always does better than unsolicited junk.
- Making promises and keeping them is a great way to build a brand.
- Your best customers are worth far more than your average customers.
- Share of wallet is easier, more profitable and ultimately more effective a measure than share of market.
- Marketing begins before the product is created.
- Advertising is just a symptom, a tactic. Marketing is about far more than that.
- Low price is a great way to sell a commodity. That’s not marketing, though, that’s efficiency.
- Conversations among the members of your marketplace happen whether you like it or not.
- Good marketing encourages the right sort of conversations.
- Products that are remarkable get talked about.
- Marketing is the way your people answer the phone, the typesetting on your bills and your returns policy.
- You can’t fool all the people, not even most of the time. And people, once unfooled, talk about the experience.
- If you are marketing from a fairly static annual budget, you’re viewing marketing as an expense. Good marketers realize that it is an investment.
- People don’t buy what they need. They buy what they want.
You’re not in charge. And your prospects don’t care about you.
- What people want is the extra, the emotional bonus they get when they buy something they love.
- Business to business marketing is just marketing to consumers who happen to have a corporation to pay for what they buy.
- Traditional ways of interrupting consumers (TV ads, trade show booths, junk mail) are losing their cost-effectiveness. At the same time, new ways of spreading ideas (blogs, permission-based RSS information, consumer fan clubs) are quickly proving how well they work.
- People all over the world, and of every income level, respond to marketing that promises and delivers basic human wants.
- Good marketers tell a story.
- People are selfish, lazy, uninformed and impatient. Start with that and you’ll be pleasantly surprised by what you find.
- Marketing that works is marketing that people choose to notice.
- Effective stories match the worldview of the people you are telling the story to.
- Choose your customers. Fire the ones that hurt your ability to deliver the right story to the others.
- A product for everyone rarely reaches much of anyone.
- Living and breathing an authentic story is the best way to survive in an conversation-rich world.
- Marketers are responsible for the side effects their products cause.
- Reminding the consumer of a story they know and trust is a powerful shortcut.
- Good marketers measure.
- Marketing is not an emergency. It’s a planned, thoughtful exercise that started a long time ago and doesn’t end until you’re done.
- One disappointed customer is worth ten delighted ones.
- In the googleworld, the best in the world wins more often, and wins more.
- Most marketers create good enough and then quit. Greatest beats good enough every time.
- There are more rich people than ever before, and they demand to be treated differently.
- Organizations that manage to deal directly with their end users have an asset for the future.
- You can game the social media in the short run, but not for long.
- You market when you hire and when you fire. You market when you call tech support and you market every time you send a memo.
- Blogging makes you a better marketer because it teaches you humility in your writing.
Obviously, knowing what to do is very, very different than actually doing it.
Well said. Thanks Seth.
May 9, 2008
Yesterday the Economist weighed in on the state-of-the-real-estate-market debate. It wasn’t a pretty picture and definitely not a celebratory vision of a "crisis over" as reported earlier this week by the Wall Street Journal. Interesting week…Tuesday the WSJ said the real estate crisis was over. On Thursday the Economist said no way, we’re only halfway through the housing crisis. Also this week Greenspan issued his edict that the financial crisis was over and Bernanke was lining up new charts and grafts on his "Map of Misery" that say no, no, no it’s not over.
The next pundit to come forward this week was Lawrence Yun, Chief Economist for the National Association of Realtors. Mr. Yun hasn’t gotten a prediction right for the last six quarters but he’s sticking to his story and maybe just one of these days he will be proven right. He says said that “while the beginning of 2008 has been weak so far, the second half of the year should see an uptick that could lead to home value growth of more than 20 percent in the next five years.”
The Economist’s take on the NAR and Mr. Yun’s numbers is “widely quoted, but least useful” of three house price indices. My feelings exactly. NAR suggests a decline in house prices of 13% off the bubble peak.
Bernanke often uses the statistics from the Office of Federal Housing Enterprise Oversight (OFHEO) which suggest that average prices have fallen only 3% from a peak in April 2007 (everybody else considers the peak to have been 2005.) This is a weak indicator of our current malaise because the numbers do not include the subprime and jumbo loans leaving out the top and bottom of the market, where prices increased the fastest and where market stress is most apparent. (Greenspan must have used these numbers this week also.) The OFHEO's figures include only houses financed by mortgages backed by Fannie Mae and Freddie Mac. “Thus OFHEO's figures probably understate the scale of the housing mess, particularly in states such as California and Florida.”
The third measure, and indices of choice by investors, is the S&P/Case-Shiller indicator which shows house prices rising faster during the boom and falling faster now. As of the fourth quarter of 2007, the S&P/Case-Shiller national index was down 10% from its peak and an index of ten large cities had fallen by almost 16% by February. The Economist argues that the S&P/Case-Shiller is a better gauge of house prices in the large cities.
"By most measures, prices are still above the levels implied by the fundamentals. Using a model that ties house prices to disposable incomes and long-term interest rates, analysts at Goldman Sachs reckon that the correction in national house prices is only halfway through. They expect an 18-20% correction overall, or another 11-13% decline from today's levels. But their models suggest that six states—Arizona, Florida, Virginia, Maryland, California and New Jersey, could see further price declines of 25% or more."
Another argument on the still-in-crisis side of the ledger board is the homeowner-vacancy rate which is at a record level flooding the market with over a million “excess” houses for sale compared with the average between 1985 and 2005.
The NAR argues that monthly payments on a typical house with a 30-year mortgage with a 20% downpayment were 18.5% of the median family's income in February, down from almost 26% at the peak—and close to the historical average. “But this measure of affordability is misleading, not least because credit standards have tightened so much,” reports the Economist.
And finally Michael Feroli of JPMorgan “reckons house prices (as measured by the Case-Shiller index) need to fall by 10-15% over the next year and a half for the rent/price yield to return to its historical average.”
With fuel and food costs rising daily the news just isn’t getting better. The champagne is going back on the shelf.
May 7, 2008
Atlanta is a wonderful place to come home to. Driving through downtown Atlanta from the airport after a trip has thrilled me for over 30 years. It was particularly rewarding to get home after the "China Wars"; my overwrought sinuses needed to recuperate after breathing the polluted air of Beijing and Shanghai.
I thought Atlanta had good air. We have blue skies and lots of green stuff growing. So I was a little taken aback when an article in our local biz journal said that Atlanta was one of the top 10 cities in America for polluted air.
Number 6 to be exact, says the American Lung Association. How embarrassing.
The American Lung Association released its "State of the Air 2008" study last week that rated the worst offending cities for pollution by "year-round particle pollution." We received an "F" for our four core county area for the number of high ozone days. And our ozone pollution is on the rise.
I guess it's no wonder our pollution is bad....just look at all these freaking cars!
The next blow to Atlanta came from Forbes' infernal lists. Atlanta made the number uno slot for the absolute worst traffic in America. Congratulations to us.
Forbes' traffic study included the country's 75 largest metros and rankings were based on traffic delays, travel times and how efficiently commuters use existing infrastructure (the only infrastructure Atlantans use are the roads from the comfort of their own cars.)
Forbes says that "here in the fastest-growing city in America" commuters spend 60 hours a year stuck in traffic. I didn't know Atlanta was the fastest growing city in America (I din't think it is.)
Here comes the left hook Atlanta....
The Atlanta metro area ranked 16th in the nation for foreclosures in the first quarter of 2008 representing a 69 percent increase over the first quarter of 2007. One out of every 91 metro households got a foreclosure filing in the first quarter, 2008 .
I know what you're saying..."She sounds like she works for the Chamber of Commerce?" Probably not. So with all this stuff, why does anyone want to live in Atlanta?
There's all the Chamber of Commerce answers, and they're probably legitimate answers. Coke and Delta practically founded the city or at least flamed the embers as the Phoenix was rising. Home Depot started a mile from my house. UPS and Rubbermaid moved corporate headquarters here as have many other major corporations. Atlanta has the third largest concentration of Fortune 500 companies in the nation. But the really big hook is that Hooters headquarters is here in Atlanta (I honestly just learned that, I must have been under a rock.)
Fact of the matter is people just like living here. You're hard pressed to find anyone who doesn't like living here. They may not like the commute and traffic but life here is otherwise grand. Atlanta is chocked full of entrepreneurs. Land of opportunity? Feels like it. Atlanta may have taken it in the chin this week, but the folks keep coming. I don't blame them.
The entire top 10 places to breathe bad air: Los Angeles/Long Beach/Riverside, Calif., is the most polluted by year-round particles in the air, followed by Pittsburgh; Bakersfield, Calif.; Birmingham, Ala.; Visalia/Porterville, Calif.; Atlanta; Cincinnati; Fresno/Madera, Calif.; Hanford/Corcoran, Calif.; and Detroit.
Click here to see the state of your air.
The worst commutes behind Atlanta from second to 10th are: Detroit; Miami, Fla.; Orlando, Fla.; Dallas; Tampa, Fla.; Washington, D.C.; Los Angeles; Houston; and San Francisco.
May 6, 2008
Could we be any more ready for some good news?
I put a good deal of stock into the Wall Street Journal and I must say that Cyril Moulle-Berteaux makes some believable arguments in his article today entitled The Housing Crisis is Over, but I'm not so convinced that I'm ready to buy homebuilder stocks.
This piece is "OPINION" not hard news reporting although it contains facts that are used as the basis for editorial argument.
It is not necessarily a fact that the housing crisis is over. I am prepared however to be guardedly optomistic that we are looking at the bottom of the market. This is not the time to celebrate that the money will be once again clinking in our pockets, but it may mean a let up of the storm of the century.
Cyril makes the point that "affordability", the very thing that caused the bust, will now be the thing that stops the housing decline.
If he's right and we're staring at the bottom of the market, it will still be a long and arduous road to a healthy real estate recovery.
You read the article and decide for yourself. It's pretty interesting and provides hope where there once was little. The only thing that still troubles me about affordability is the rising cost of fuel and food which will whittle away at housing allocations.
And the thing that troubles me about an available pool of buyers is that that resource has been shrinking and every foreclosure means another buyer who is removed from the market for seven years, an entire generation in terms of housing turnover.
I just emailed a link to the editorial to a good friend who is CEO of a regional homebuilder. He's heading out tomorrow with his wife for few days at the beach. He emails back that they're going to splurge on some SPF-15 sunblock since the crisis is over. That's the way to celebrate.
But at the end of the day, I'm a sucker for good news. I'm in, but I haven't blown the cork yet!
May 5, 2008
Real Concepts China Series Shanghai faces the East China Sea (part of the Pacific) and is bisected by the Huangpu River which is alive with a constant stream of commercial vessels. There are lots and lots of people, cars, buses, and 45,000 taxis. Considering that Shanghai, larger than Beijing, is home to about 20 million people, it is surprising that the air quality is far superior to China's capital, but there is still no hiding the carbon footprint of such a large Chinese city. Shanghai is still struggling with environmental issues including pollution of its waterways. The markets in Old Town seem endless and include the almost valueless to the very rare. China does not allow the export of furniture over 100 years old but their value on old temple artifacts and antique household deities apparently does not carry the same importance as they freely exit the country. I'll know for sure when our shipment from China arrives. When I explained by pantomime to one old antique dealer that his particular item was too heavy to carry back, he promptly joined in the theatrics by pulling out a very dirty basin of water and placed a small block of wood in it and sailed it across the bowl, which of course meant we could ship it home. Hmmm. I could see this dealer was not going to make that happen. But it was an entertaining scene none-the-less. Here was another dealer in a smaller market what was entertaining himself and the passerbys on an ancient Chinese instrument. The following two photos were taken from the Bund promenade in two opposite directions. The first is across the Huangpu River towards Pudong, the new Financial District, with its iconoclastic architecture. Bicycles abound in Shanghai and are used as transportation by commuters and as work vehicles carrying large burdens. Some of the two and three-wheeled cycles appeared to be relics of the 30s. I don't remember seeing a new bicycle. Visiting a Buddhist temple in Shanghai , we noticed the golden Buddhas had a swastika on their chest which, according to our guide is a symbol of good will and a state of well being. It is a symbol that dates back to ancient times and originated in India. The reverse swastika that we associate with everything evil was misused by Hitler and forever scarred the scared meanings. Mein Kampf' , Hitler's view of politics and the world, is a banned book in China. Apparently it is not wise to investigate the subject of banned religions of China, some of which use the swastika as symbol. Reference the USA Today article of yesterday on China's Internet censorship. After reading the article, proceed at your own risk. The cacophony of sights, sounds, smells, and tastes (NO, do not eat from the street!) of traditional Shanghai neighborhoods is an assault and a delight to the senses. I can't think of a more fascinating engineering feat, as well as a "green" way to build, than the use of bamboo as scaffolding on high rise buildings. I don't know what the height limit is on bamboo's use but as the following photo illustrates, it's pretty darn high. Our guide and driver took us into the countryside about 1 hour outside Shanghai to the floating city of Zhouzhuango, known as the "Venice of the Orient". I don't think I would go that far, but it was interesting and lovely. It was discovered by Marco Polo who claimed the resemblance with his homeland. The drive to Zhouzhugano was as fascinating as the floating city. In fairly short order the city lights turn to agriculture and a completely different, slower, and poorer way of life. Here you can get a taste for the haves and have-nots that is often critized in China and defined by the urban experience and the less prosperous outlands. The excellent roadways well outside of Shanghai were shared by cars at seemingly unlimited speeds and impossibly show load-ladden cycles and even sometimes farm animals pulling their heavy burdens. It was shocking how quickly a powerful car at 80 mph comes upon a human-powerd tri-cart with a 12-foot high load. Somebody is going to get hurt. But it was not his, nor our day to die. I was to see the now familiar "Foreigners" Custom sign one last time before heading back to Atlanta. The next familiar sign that would welcome me home would read "U.S. Residents". Sounds oh so good. For all the excitement of China, it is not easy. Nor is it a country for sissies.
The opposite view is of the buildings facing the Bund, the waterfront street, and illustrates a slice of the colonial world of the 1920s and 30s. Again, its the 360 degree view of the old and the new China.
Apparently everyone is trying for a piece of China and the pie seems endless. On my Delta flight back, I overheard the Alabama Governor, Bob Riley, and his China contingent discussing the success of their visit to China to spur business relations. Georgia Governor, Sonny Perdue and his delegation were in China earlier this month as well. The universal refrain from China is "nearly limitless business opportunities."
Related Real Concepts Blogs on China:
Shanghai faces the East China Sea (part of the Pacific) and is bisected by the Huangpu River which is alive with a constant stream of commercial vessels.
There are lots and lots of people, cars, buses, and 45,000 taxis. Considering that Shanghai, larger than Beijing, is home to about 20 million people, it is surprising that the air quality is far superior to China's capital, but there is still no hiding the carbon footprint of such a large Chinese city. Shanghai is still struggling with environmental issues including pollution of its waterways.
The markets in Old Town seem endless and include the almost valueless to the very rare. China does not allow the export of furniture over 100 years old but their value on old temple artifacts and antique household deities apparently does not carry the same importance as they freely exit the country. I'll know for sure when our shipment from China arrives. When I explained by pantomime to one old antique dealer that his particular item was too heavy to carry back, he promptly joined in the theatrics by pulling out a very dirty basin of water and placed a small block of wood in it and sailed it across the bowl, which of course meant we could ship it home. Hmmm. I could see this dealer was not going to make that happen. But it was an entertaining scene none-the-less.
Here was another dealer in a smaller market what was entertaining himself and the passerbys on an ancient Chinese instrument.
The following two photos were taken from the Bund promenade in two opposite directions. The first is across the Huangpu River towards Pudong, the new Financial District, with its iconoclastic architecture.
Bicycles abound in Shanghai and are used as transportation by commuters and as work vehicles carrying large burdens. Some of the two and three-wheeled cycles appeared to be relics of the 30s. I don't remember seeing a new bicycle.
Visiting a Buddhist temple in Shanghai , we noticed the golden Buddhas had a swastika on their chest which, according to our guide is a symbol of good will and a state of well being. It is a symbol that dates back to ancient times and originated in India. The reverse swastika that we associate with everything evil was misused by Hitler and forever scarred the scared meanings. Mein Kampf' , Hitler's view of politics and the world, is a banned book in China. Apparently it is not wise to investigate the subject of banned religions of China, some of which use the swastika as symbol. Reference the USA Today article of yesterday on China's Internet censorship. After reading the article, proceed at your own risk.
The cacophony of sights, sounds, smells, and tastes (NO, do not eat from the street!) of traditional Shanghai neighborhoods is an assault and a delight to the senses.
I can't think of a more fascinating engineering feat, as well as a "green" way to build, than the use of bamboo as scaffolding on high rise buildings. I don't know what the height limit is on bamboo's use but as the following photo illustrates, it's pretty darn high.
Our guide and driver took us into the countryside about 1 hour outside Shanghai to the floating city of Zhouzhuango, known as the "Venice of the Orient". I don't think I would go that far, but it was interesting and lovely. It was discovered by Marco Polo who claimed the resemblance with his homeland.
The drive to Zhouzhugano was as fascinating as the floating city. In fairly short order the city lights turn to agriculture and a completely different, slower, and poorer way of life. Here you can get a taste for the haves and have-nots that is often critized in China and defined by the urban experience and the less prosperous outlands. The excellent roadways well outside of Shanghai were shared by cars at seemingly unlimited speeds and impossibly show load-ladden cycles and even sometimes farm animals pulling their heavy burdens. It was shocking how quickly a powerful car at 80 mph comes upon a human-powerd tri-cart with a 12-foot high load. Somebody is going to get hurt. But it was not his, nor our day to die.
I was to see the now familiar "Foreigners" Custom sign one last time before heading back to Atlanta. The next familiar sign that would welcome me home would read "U.S. Residents". Sounds oh so good.
For all the excitement of China, it is not easy. Nor is it a country for sissies.
May 4, 2008
Real Concepts China Series
“It’s easy to forget, amid the current building frenzy in China, that private residential property didn’t even exist in the People’s Republic a quarter century ago. From the time Chairman Mao Zedong took power in 1949 until the early 1980s, all property in China was owned, developed and allocated by the state ...Today, barely a generation later, China has the most dynamic housing market in the world. According to the research firm Euromonitor International, the country added 5.5 million new housing units in 2007, representing more than one-quarter of all new housing stock in the world.” From Building Wonderland, New York Times
"House lust" is not peculiar to the West. The sense of security that attaches to real property and the drive to protect that right of possession has taken root in China driving up home ownership rates in urban China at a breakneck pace. Beijing is trying to put the skids on property inflation, but the feeding frenzy continues.
Prices rose last year by 17.5% to 3,665 Yuan a square meter (or about $159 per sq.ft.) This is the strongest annual gain in four years. The jury is still out on the 2008 market but there are definite signs of weakness. "Property is the biggest wealth generator in China by far," says James McGregor, a Beijing-based business consultant the the author of One Billion Customers. "Nobody knows when the party will end and whether it will end badly."
What makes real estate in China so interesting are the property rights issues. What do you really have when you "own property" in China? As most things in China, there are not always clear answers. Property has been freely bought and sold in China for the last thirty years but many experts argue that it has been traded in a legal vacuum.
But let's back up to March of this year and set the propert rights stage in Beijing ...
The 3,000 delegates to China’s parliament, the National People’s Congress (NPC,) have a weighty job to do when they convene annually at Beijing’s Great Hall of the People. They eat, they drink, they snooze, but most importantly they push the “YES” button when prompted. “Prompted” is too mild a term to apply here. The Chinese Communist Party (CCP) actually dictates the laws the NPC will pass. Period. No laborious debates, no heated arguments, no tempers flaring out of control. But the NPC convention in March was slightly more contentious due to one law that was to receive the rubber stamp.
The NPC passed legislation giving individuals the same legal protection for their property as the state.
China’s property rights bill was first published in 2002 but remained embroiled in controversy through its evolution to the current legislation. The current version was set to be passed last year but delayed because of the “howls of protests” from the leftists who see this as part of the Great Wall of Communism crumbling as the principals of Marx, Lenin and Mao are set aside in favor of the Yuan. This year the Yuan won. It is an ideological irony that the Chinese Communist Party counts over 65percent of China’s GDP from pure unadulterated private capitalism. But they don’t look embarrassed at the dichotomy, they look rich.
This was the same National People’s Congress during which Prime Minister Wen Jiabao rededicated his government as a protector of the poor and powerless. And the same Congress that would not remove government restrictions on protest. China is, after all, a land of contradictions. You might call this a “new economic system of Socialism with Chinese characteristics.”
The law does not change the system of land tenure by which the state owns all land. Individuals trade only the right to use property for up to 70 years.The Chinese reality is that ownership of land is separated from the possession and use of it. The disposition of property after that term expires is one of many unsettled issues.
This legislation, not without its faults, omissions and vagaries, is a significant economic reform and a victory for the rule of law. It remains to be seen if the new law will have teeth. The greatest challenge facing the country is how to enforce the law so that private property rights are protected, especially since public ownership of the land is involved.
Many stories come out of China some reporting that rural farmers have done well by being relocated and paid when their land is taken for a higher capitalist use. Most cry foul, if they cry out at all. The protests are getting louder and fiercer as outraged farmers raise their voices to the offense of little or no compensation for their confiscated land.
Under existing law, local governments have the power to convert agricultural land to other uses if it is deemed to be in the public interest. Many local governments rely on these sales for the bulk of their income, but this has generated thousands of protests by farmers who have complained that they have been unfairly compensated.
But of more importance than the peasants to the CCP in getting this law passed was the growing middle class who have wealth tied up in real estate and want to be able to pass their property on to their only children. The growing wealth and power of the middle class has created an important political constituency.
This new law is not however a panacea for property rights issues and will not likely bring a full property-rights revolution China’s development demands. The new law will not give peasants marketable rights to the land they farm, nor can they use the land as security for a loan. The new law will not necessarily stop expropriation. The new law will however protect those who have obtained land from the farmers. Who has the land when the music stops will be the parties protected. Messy business.
In China, the passage of laws is not necessarily the rule of law. Here’s how this works…
- China’s Constitution is subordinate to the party and is often amended to reflect changes in official ideology. Kind of like Silly Putty. March’s Congress approved 13 changes to the Constitution.
- Constitutional changes are unlikely to have any influence on court cases, said Chinese legal experts, because the courts in China do not test laws and government decisions for adherence to the Constitution.
- The private property amendment was recognition of private business’s growing economic and political might, rather than an effective legal guarantee.
- Chinese law is centered on the needs of officialdom. China does not seem willing to let individuals have the power to create property rights that the state is then going to have to protect. The state seeks control.
- The greatest challenge facing the country, however, is how to enforce the law so that the private property rights would be effectively protected.
- The law does little to distinguish between private property gained legally through hard work and public property that falls into private hands through corruption.
- Some economists warn that the law’s passage would not significantly enhance the rights of property owners because government officials maintain control over the courts. In other words the key is enforcement of the law and China’s legislative branch lacks historical precedence in enforcing the laws the government applies to the ever-changing Constitution.
Despite all the issues the number one dream in China is home ownership.
When we were in Shanghai, we heard often that it was better to have a daughter than a son. After repeatedly questioning why we finally learned that the parents had to help pay for an apartment when the son got married. The New York Times clarifies that for us by explaining that "it is now a given in Shanghai, for example, that a man must own property if he hopes to attract a bride."
There is no lack of product in Shanghai to buy. After all Shanghai has more than 20,000 developers registered. That all land remains in the hands of the state explains why many developers came out of government entities — and why some of the country’s juiciest corruption scandals revolve around real estate.
Related Real Concepts Blogs on China:
May 1, 2008
Real Concepts China Series Interrupted
I'm in North Carolina digging out of my Mother's house of 60+ years. My brothers moved her into an assisted living place kicking and screaming while I was in China. Payback for missing that move is a week sorting, cleaning, and general hard labor at the old homestead. No Internet, no TV, no radio (unless I go sit in my car), no newspaper.
My daily brush with civilization was a couple of hours in the Kernersville sports bar where I could get a wi-fi connection. I intended on using Starbucks for my office, but what?...no wi-fi! I thought Starbucks automatically came with wi-fi, an inalienable right. But the barista steered me next door to the family-oriented sports bar.
My new friend, Mark, the owner of the sports bar, was really nice to let me annoy his beer-drinking sports fans by drinking wine and working on my computer. I managed to get some work done and it was at least nice to pull up emails. But all work came to a screeching halt the night I met the Clapp family. On that particular night, a race car satellite radio station invaded (took MY table) and was conducting live interviews with several race car drivers. After all, this is NASCAR country.
The Clapp family from Asheboro, North Carolina stopped all progress on my piece on China's Property Rights. There I was sitting next to the 70-year-old patriarch of three generations of race car drivers. Don Clapp himself, who was a dead ringer for Paul Newman - yes he hears that everywhere he goes, he says. Don Clapp was chasing whiskey shooters with beer (or vice-versa, I'm jot sure), smoking Winstons, and generally having a fine ole time. He gave me his very last business card which I include as Exhibit "A". The print is smeared as you can see, like he used the wrong gloss paper on an ink jet printer. But he didn't try to give me a driving lesson so I exchanged the favor and didn't give him a printing lesson.
One of the younger Clapps came over and I asked if he was the driver being interviewed. "No that's my son." Well he looked awfully young so I asked how old you had to be to drive a race car. Turns out the son was 16. There you go. Watch out for a very Young Clapp on the racing circuit!
But Exhibit "A" will give you some idea why China's Property Rights was delayed. I resigned myself to forgetting about property rights until I reached the comforts of my own office in Atlanta. Don Clapp was a force that could not be ignored...
I wish I had taken a Clapp family portrait for you, but at the time it truly never crossed my mind that I would share the story with anyone.
Everything in good time I suppose...China's Property Rights coming right up!
at 9:22 AM