COMMERCIAL ARTICLE FOR December 5, 2010
Dec/100
Sales statistics for the traditional shopping day after Thanksgiving dubbed as “Black Friday” are rolling in ever so slowly. So far sales have indicated only a slight rise in consumer spending. To tell the truth, spending was only up 0.3% from “Black Friday”, 2009. However, in perspective, a little increase is better than no increase at all…right? This does mean that consumer confidence is on a positive upswing. And, for real estate to be steady, consumer confidence MUST be on the rise!
Commercial real estate??? How is it doing? Speaking at the 2011 Executive Economic outlook, hosted by Frost Band and Ernst & Young, Dr. Mark Doutzer, Real Estate Center Chief Economist claims, “The boat is moving from choppy waters to calmer seas.” He also mentioned that the country is slowly adding jobs, manufacturing is up and corporate profits are rising, which usually leads to hiring.
We join forces with Dr. Doutzer. While we do not know about other parts of the country (excluding what the media has to report), we certainly can say that lately our commercial team has seen a substantial amount of activity.
We have been working on ground leases for at least two businesses to relocate. Also, we have been meeting with a large international corporation regarding construction of a family sports complex to the area. Another oil company has expressed interest in purchasing land to construct an eighteen thousand square foot building which will house fifty employees.
Several meetings with builders and developers have taken place. Other meetings are scheduled before the first of the year. Builders have contacted us to say that sales are good and inventory is running low. What music to our ears! Developers in Montgomery County certainly have the dirt builders need to build their inventory! New home construction has without a doubt been at an all time low for the past three years. Production of new homes is like gulping ice cold lemonade on a hot, hot summer day! How refreshing! What a boost for the real estate industry!
A couple of established businesses are looking for either a permanent location (instead of leasing) or to build larger buildings. All of these calls have come to us in the last couple of weeks!
Convenience store developers have been expressing renewed interest in purchasing land to construct new stores. Actually, drive by League Line Road at Highway 75 North. Demolishing of the old Bob Wills night club has begun. A nice Shell convenience store will be built on this site.
Think about it! Businesses, developers, etc. do not choose an area unless they have confidence that it will grow and prosper!
Remember when we wrote: “In our opinion, commercial real estate is making a comeback, albeit a slow climb. We do not believe it will spike 50% per year, but, will remain steady.” Both of us stand firm on that belief!
Call us today!
Will Home Sales Take A Dip or Continue To Rise
Jul/100
With the end of the first time homebuyer credit on the horizon, the question is:
“Will homes sales take a dip or continue to rise?”
This Realtor® is “cautiously optimistic” that the trend will continue with an upward swing. As a matter of fact, I perceive an influx of re-sales in the near future. Why? Think about it! During the last few years there has been a huge drop in new home construction. That alone would indicate more previously owned homes will be on the market for sale.
According to the National Association of Realtors®, “During the boom years of 2003 to 2006, production (of new home) far exceeded the historical average, with builders producing a cumulative surplus of 1.3 million units.” Many investors with easy money “gobbled” up the excess property, and this “overproduction remained hidden”.
With so many homes currently on the market, it is hard to fathom a housing shortage! However, we may be taking the slow train in that direction. Lawrence Yun, chief economist of the National Association of Realtors®, says, “…the great underproduction in the past three years is an issue that will need to be reconciled, especially if the trend continues. Once we start seeing new household formation again, a housing shortage is something we won’t be able to dismiss too quickly.”
What’s happening in Montgomery County? Multiple Listing statistics indicates that there were 499 sales in May, 2009 as opposed to 558 sales in May, 2010. The number of sales in April, 2009 was 406, with 558 sales in April, 2010. Of those May, 2010 sales, 16.4% were new construction. May, 2009 new construction was 19.4%. April, 2009, new construction was 16% as opposed to 17.2% of April, 2010. Interesting that April and May of 2010 number of sales was exactly the same. This comparison is based on all areas in Montgomery County.
Did you know that ten percent of all foreign buyers who purchased property in the United States between May 2008 and May 2009 did so in Texas? According to the Texas Realtor magazine, “Texas is third behind Florida and California for international activity”. The 2009 NAR Profile of International Home Buying Activity indicates that “Texas is the top U.S. destination for buyers from Mexico and India. One of three buyers from Mexico and one in six from India choose the Lone Star State”. Another interesting statistic is: “46% of all international homebuyers paid cash; 29% of homebuyers from Mexico and 16%of buyers from India paid cash”. Montgomery County certainly has an international market including Mexico, India, Canada, Du Bai, Qatar, etc. Many of these buyers coming from these countries are American citizens moving back to their native land.
All in all, Montgomery County is doing well! As residents and property owners in this great county, we need to be ever thankful for our state of economy in the real estate market!
– Marion Franke
Contact the Franke Team, Kim Bowling, Realtor, for residential real estate. Website and blog: www.MyLakeConroe.com; phone: (936)-203-3351.