As you read this today I hope to be dragging my tired body across the finish line at the Great Barrier Reef Marathon in Australia. This will be Continent #3 on my quest to run a marathon on all 7 continents.
As part of my vacation reading, I will be absorbing the recently published “2016 Emerging Trends in Real Estate” report published by PWC and the Urban Land Institute. If you would like to get a jump on me you can download it here. One highlight I noted was that secondary markets and 18 hour cities and tertiary markets (like San Diego County) are the compelling investment story for 2016. These are markets that people love to live, work and play in.
Speaking of places to live, after the carnage of the “Great Recession”, who would have thought the home-building industry would recover from forecasts that there was a 20-year oversupply of housing? Well it seems that the forecasters were wrong again, as the housing market index climbed to a 10-year high in October, a sign of full recovery and momentum for one of the most important indicators for the health of the economy.
Unemployment in San Diego continues to work its way down to 4.6% (down from 6.1% last year at this time). Amongst this optimism , a few words of caution. Economic growth dipped due to a strong dollar that caused a drop in exports. In San Diego, the Chamber of Commerce measure of business optimism fell for the third consecutive month. Small business owner concerns were around the $10 minimum wage going into effect in January and upcoming ACA deadlines requiring business to insure full-time workers (95% of worker now up from 70%).
If you follow my rule of buying real estate where more people are moving in than moving out then you should sleep well owning in San Diego. SANDAG just released its 2050 plan and in it, they project the region will add ONE MILLION more people, half a million jobs and 300,000 more homes. The new plan dedicated 15% of its resources to add 160 miles of managed lanes to our existing freeways – read van pool, car pool, and fast passes. They are planning 275 miles of bike ways. I have to say it was pretty cool to run the bike lane all the way from my house to Solana Beach for a training run before my marathon.
For those of you selling a property and considering doing a 1031 exchange, it is important to remember that you have 180 days OR the filing of your tax return to complete the exchange. So if your exchange is not completed by the due date of your tax return – file an extension.
As we head into the Holidays, I thought I would put out this need for Interfaith and their Veterans Assistance program (this program keeps Vets from being homeless and gets them back into society). We have just dedicated a facility that will house 20 homeless Vets and they need a car of SUV or van that the program can use to shuttle Vets to the stores, doctor appointments and job interviews. So if you have a running vehicle and need a year-end tax write off, please contact the Program Director Dean Dauphinais at email@example.com or (760) 489-6380.
I recently saw this quote in the SIOR real estate magazine, “The value added a good broker brings to a deal includes, among other things, the ability to understand the market beyond the published statistics, the ability to deeply understand a client’s position relative to the competition, and the ability to know when to be (and when not to be) aggressive during a negotiation…this value added is greatest when the deal is large and complex, and technology cannot easily replicate these features because they are human in nature”. Sounds like a good consultant to me…
I hope you enjoy the story…
A shepherd was herding his flock in a remote pasture of Australia when suddenly a brand-new BMW advanced out of the dust cloud towards him. The driver, a young man in an Armani suit, Gucci shoes, Ray Ban sunglasses and YSL tie, leaned out the window and asked the shepherd … “If I tell you exactly how many sheep you have in your flock, will you give me one?”
The shepherd looked at the man, obviously a millennial, then looked at his peacefully grazing flock and calmly answered “sure”. The millennial parked his car, whipped out his Apple Mac Pro connected it to a cell phone, then he surfed to Google Earth where he called up a GPS satellite navigation system, scanned the area, and then opened up a database and an Excel spreadsheet with complex formulas. He sent an email on his iphone and, after a few minutes, received a response. Finally, he prints out a 130-page report on his miniaturized printer then turns to the shepherd and says, “You have exactly 1586 sheep. “That is correct; take one of the sheep.” said the shepherd. He watches the young man select one of the animals and bundle it into his car.
Then the shepherd says: “If I can tell you exactly what your business is, will you give me back my animal?”, “OK, why not.” answered the young man. “Clearly, you are a consultant.” said the shepherd. “That’s correct.” says the millennial,”but how did you guess that?” “No guessing required.” Answers the shepherd. “You turned up here although nobody called you. You want to
get paid for an answer I already knew, to a question I never asked, and you don’t know didly about my business …… Now give me back my dog.”