Market Perspective

Twelve Reasons to Buy Land Now – Reason Number 12

Posted by on Jul 18, 2012 in Ned Massie, Perspective | 0 comments

Growth Management is an Oxymoron Growth management is synonymous with trying to squeeze a handful of Jello.  You can close your fist with the Jello in it, but it is going to ooze out someplace.  Similarly, the more the planners attempt to “manage growth”, the more their apparent success simply means that they are increasing sprawl. California, which in the early 1950’s was the origin of the concept of “Growth Management”, has failed miserably.  Not only does it have the worst traffic conditions and the greatest amount of sprawl, growth management has driven up the cost of housing to the point that the middle class is leaving California in droves.  By some reports I have read, California has had a net exodus of 1M residents over the last 5 to 10 years. As a result of losing its middle class, California perpetually has budget problems because the majority of their residents and voters are somehow on the public dole.  They keep their taxes low or non-existent and focus the taxes on the “wealthy”.  That has never been a good idea when tried before elsewhere. It is quite a contrast watching how Texas is attracting expatriates from California because Texas has a different philosophy.  Texas has enjoyed a fairly good economy during The Great Recession while California has had perpetual budget problems and the declines in services and infrastructure that result. Virginia needs to be paying attention to things such as cash proffers.  In some counties of Virginia, cash proffers are as high as $60,000 per residential unit.  As a result, apartment and starter home construction for Gen Y is non-existent and sprawl is returning as folks who cannot afford an extra $300,000 for a home hit the interstate and drive until they qualify. As a land investor, you can use this flawed concept of growth management to your benefit understanding that you can make a purchase which in the future will make you look brilliant. We believe that those investors who buy good tracts of land today will look exceptionally brilliant in five years.  Let us help you.  We enjoy making our clients look...

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Twelve Reasons to Buy Land Now – Reason Number 11

Posted by on Jul 18, 2012 in Ned Massie, Perspective | 0 comments

Restriction Drives Land Values In the political arena today, politicians are afraid to appear pro-growth and petrified of anything what would make them appear anti-environment.  Unfortunately, the self-styled environmentalists apparently believe that all growth is negative. In the late 1980’s, I had the privilege of traveling extensively in Texas during the Savings and Loan crisis.  From that experience, I learned the problems of growth are much nicer than the problems generated by no growth. Unfortunately, most planners and environmental regulators typically lack practical experiences in the real world.  That combination results in a constant increase in regulations negatively affecting those who might want a new home, to go to a new shopping center, or work in a new office building. Here’s the good news – fortunately, the American population is growing and the largest generation of Americans ever is just now entering child bearing age.  This is positive for the acquisition of land not burdened by negative land use policies and environmental regulations.  That combination means that good land investments today will show handsome returns over the next several decades. We believe that those investors who buy good tracts of land today will look exceptionally brilliant in five years.  Let us help you.  We enjoy making our clients look...

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Twelve Reasons to Buy Land Now – Reason Number 10

Posted by on Jul 11, 2012 in Ned Massie, Perspective | 0 comments

Conservation Easement Tax Credits Ten years ago under then Governor Mark Warner, this program was enacted.  Since that time, Virginia’s taxpayers have wasted $1 Billion (Bn) in their taxes on a program that is dubious at best in its outcome.  Worse, it is suspicious in its accuracy and terrifyingly poorly managed when one considers that $1 Bn of Virginia taxpayer’s money has been spent on this program. Simplified, this program pays land owners to permanently restrict their land from being developed.  To those opposed to growth that is seen as a positive.  We find it of concern why “in perpetuity” anyone would want to preserve any tract of land from being developed.  The fact is that “in perpetuity” is an exceptionally long time. When Captain John Smith first set his foot in Virginia in 1607, if he had claimed the property for the Crown and immediately put a Conservation Easement on it, none of us would have homes, there would be no shopping centers or office buildings or any other places of employment.  If he was not able to see ahead 343 years, what makes us think we can see ahead 100 years? The bottom line for a land investor is that by buying land unburdened by Conservation Easements, you are acquiring an asset that is diminishing in quantity every year to the tune of $100 Million.  There is a point in the future that land that can be developed will have exceptional value, because so much of Virginia’s land will not be able to be developed.  The unintended consequence of this flawed governmental process is to drive up the value of land that is available for development. We believe that those investors who buy good tracts of land today will look exceptionally brilliant in five years.  Let us help you.  We enjoy making our clients look...

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Twelve Reasons to Buy Land Now – Reason Number 9

Posted by on Jul 3, 2012 in Ned Massie, Perspective | 0 comments

The Land Market Cycle or the Economic Cycle The oldest advice for making money through investments is “buy low and sell high”.  Unfortunately, most investors do the reverse.  They buy in the excitement of the peak of the market and then get nervous and sell in the trough of the collapse that invariably follows: Therefore, the very best investments are made in the trough of an economic cycle, not at the peak.  We’re in the trough.  Our database indicates that we are in the bottom of the land market cycle and that this is the time to purchase. Purchasing today means the following benefits for an investor: There is a significant variety of properties from which to choose; The prices are lower than they have been for a period of years; There is less competition from other buyers. That combination means that you should be able to make an excellent purchase of an excellent piece of land today at a very reasonable price.  The critical part is understanding that not all tracts of land are the same, much less equal in terms of potential values. We believe that those investors who buy good tracts of land today will look exceptionally brilliant in five years.  Let us help you.  We enjoy making our clients look brilliant....

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Twelve Reasons to Buy Land Now – Reason Number 8

Posted by on Jun 26, 2012 in Ned Massie, Perspective | 0 comments

Commercial Land Use Trends In our last two segments, we have talked about the importance of demographics, otherwise known as population growth.  The impact of increased population is not just in the housing market via apartments, single family, etc. The impact is also in workplaces, shopping centers, industrial/distribution centers and related uses of land.  Undoubtedly, the impact of technology is changing the way America works and shops.  It is also having a radical influence on the use of land. Twenty-five years ago, a large distribution center was 150,000 square feet.  Today, the norm that we are hearing about is 600,000 square feet and a very high percentage of distribution centers are in the 1M square foot range.  For a frame of reference, 1M square feet of distribution center consumes approximately 80 acres of land, not including any of the environmentally sensitive areas that have to be acquired, but cannot be used. The evolution of our society, driven by technology and population growth, is having a huge impact on land.  The best land investments occur when land is acquired at an agricultural use, but sold for a use that society values higher than agricultural use of land. Many restrictions are occurring in the marketplace today impacting the use of land.  This means that land that can be used residentially or commercially will experience greater demand in the midst of less supply.  Typically that combination means higher prices.  Talk with us.  We would love to help you take advantage of this opportunity to buy good land ahead for what is coming. We believe that those investors who buy good tracts of land today will look exceptionally brilliant in five years.  Let us help you.  We enjoy making our clients look...

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Twelve Reasons to Buy Land Now – Reason Number 7

Posted by on Jun 20, 2012 in Ned Massie, Perspective | 0 comments

Providing Housing Humans, for the most part, gave up living permanently in caves or tents centuries ago.  Today new homes are a marvel of technology.  Generation Y, which is currently between the ages of 11 and 31, is the largest generation of Americans ever.  And they are the most high-tech generation of Americans ever. Those two facts describe what is about to occur in the new housing industry.  Gen Y wants to purchase a new high-tech home.  Most Gen Y’s cannot afford a $500,000 home.  They can afford a starter home.  They are also having a huge impact on demand for apartments. Every community should want Gen Y as residents because they are the high-tech knowledge workers that businesses want today.  Communities that push Gen Y away with high housing prices will suffer economically in the future because they won’t have the knowledge workers living within their boundaries and therefore they will not attract new businesses. But because of their size and because of their desires, the housing industry is just beginning to experience the impact of Gen Y.  Although the National Association of Homebuilders, NAHB, says that the housing industry is approximately 15% of the American economy, when I was in Grad school in ’93, my estimate was that the housing industry tentacles approach more in the range of 25% of the American economy. Probably Dr. Bernanke is focused on dropping mortgage interest rates to levels not seen before in our industry in order to make housing more affordable, thereby increasing the demand for housing and the absorption of housing units on the market.  Since you cannot build a new house or apartment on a left-handed sky hook, the net effect of his efforts will be an increase in demand for land. We believe that those investors who buy good tracts of land today will look exceptionally brilliant in five years.  Let us help you.  We enjoy making our clients look...

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