Market Perspective

Twelve Reasons to Buy Land Now – Introduction

Posted by on May 1, 2012 in Ned Massie, Perspective | 0 comments

Grant Massie Land Company has identified 12 reasons why this is the right time to buy good tracts of land.  In the American economy, there is normally $2Trillion (Tn) worth of cash sitting on the sidelines of the financial markets in money market accounts, etc.  Today, there is approximately $9Tn sitting on the sidelines, an extra $7Tn sitting idle earning probably a half a percentage point per year in a money market account or something similar.  That is especially odd when inflation is at least 2% or more per year. Uncertainty about the business environment, government regulations, and fear as to the “change” we are experiencing are valid reasons but there are others.  However, the fact remains that in the $15Tn GDP USA economy, there is an extra $7Tn earning basically nothing. Over the next three months, we are going to be talking about the 12 reasons why now is the time to buy land.  We feel strongly that this is the case and we are seeing some investors begin to move their money into land tracts.  But we would be remiss if we did not share with you the 12 reasons why you want to purchase a good piece of land now. 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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Forces Impacting the American Economy – Part 7

Posted by on Mar 8, 2012 in Ned Massie, Perspective | 0 comments

Having now reviewed what we believe are the six strongest forces impacting the American economy, it seems to us that we owe you our economic forecast for 2012.  Obviously, it is worth every cent you are paying for it and since you are paying nothing for it, that may well mean my forecast is worthless. However, combining the forces we have discussed over the previous six installments, our economic forecast for 2012 is: Continue to ignore the Case Shiller Index unless you are concerned with California, Florida, Arizona, and Las Vegas…housing prices in central Virginia will increase in 2012; New housing construction will rebound in 2012 to one million units nationwide and since the new housing industry is 27% of the American economy our economy will improve…BUT THIS RECOVERY WILL BE TEPID because the banks are on the sideline; The Fed will continue to be an active player in our financial markets because they will need to buffer us against the ECB miscues, past and future, so interest rates will end 2012 close to where they are today; Inflation is coming but the downdrafts of Europe and possibly China will keep it at bay for another year; Both Europe and China will muddle through 2012; Because of the disincentives and confusion from the Obama administration issuing over 4,000 regulations that they cannot legislate, small companies will minimize hiring and the incentives are for global companies to hire overseas not here in the U.S., hence even with “on shoring” job growth will increase but not significantly enough to reduce unemployment… probably 8% at the end of 2012; The commercial real estate market recovery will lag the residential market; Some land market segments will do well and others will suffer as each of the market segments is in a different cycle. What does all of this mean to a land seller in 2012? The recovery of the land market gives you the opportunity to reposition your investments for the next decade.  Not all tracts will accelerate in value at the same pace and some may not increase in value at all. What does all of this mean to a land investor in 2012? The best investments are made at the bottom of an economic cycle…not at the cycle’s peak…so your window of opportunity to make the best buy is passing now. Therefore, buy one high quality tract of land as an investment now – in five years you will appear Brilliant. Since not all tracts of land are equal, we are happy to help you determine the best strategy for your land investments.  We enjoy helping our clients look Brilliant.  Call us...

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Forces Impacting the American Economy – Part 6

Posted by on Mar 2, 2012 in Ned Massie, Perspective | 0 comments

We have been reviewing the three strongest negative and three strongest positive forces impacting the American economy.  After looking at the three strongest negative forces, we have previously looked at two of the strongest positive forces.  Now we will examine the third positive force: The New Housing Market: Since 27% of the American economy is based upon the construction of new housing units, both multi-family and single family, the American economy will not heal until new housing construction increases. Last year we forecast that in 2011 the construction starts for new housing units would reach 1 million units.  While the increase in activity at the end of 2011 moved us in the correct direction, we did not hit the 1 million unit figure. In the fourth quarter of 2011, multi-family construction began to kick in.  Additionally, the construction of new single family housing began to increase.  We expect both trends to continue to increase and that new housing construction will hit the level of 1 million units in 2012. That is still substantially below the 1.5 million to 2 million units that should be produced annually in the USA.  However, it is a vast improvement over the number of units produced annually during 2009 – 2011. When 27% of the American economy begins to grow, it commences a virtuous cycle that is as strong as the negative cycle that began in the fall of 2005 when the new home market began to collapse.  But this segment is still fettered. Therefore, the improvement in the American economy will be more tepid than we have seen in previous economic recoveries.  Remember, the first negative force we reviewed was that the American banks are reducing their loan portfolios which contracts the capital available, leading to a slower economy. While the land market recovery continues, let us help you find the right opportunity to reposition your land investments.  Call us...

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Forces Impacting the American Economy – Part 5

Posted by on Feb 23, 2012 in Ned Massie, Perspective | 0 comments

We started this series reviewing the three strongest negative and three strongest positive forces impacting the American economy.  After looking at what we believe are the three most negative forces, we are now looking at the three most positive forces.  Of the positive, force number 2 is: Interest Rates – The Federal Reserve is going to keep interest rates stable and low during 2012 because they recognize that the American economy needs the accelerator to continue to be pressed down.  Although the American economy has been in recovery for two years, the European Central Bank (ECB) proved inept, resulting in a European Recession of 2012. The Fed is fighting two wars, a tepid American economic recovery partially caused by the American banking industry being under siege and the European Recession of 2012. Therefore, The Fed launched in the fall of 2011 what they call “Operation Twist” in order to reduce mortgage rates and it is succeeding.  The USA will go into the spring market of 2012 with mortgage rates in the 3’s for perhaps the first time in American history. How much of a positive influence low mortgage rates will have on the USA residential market in the spring of 2012 will be determined by whether or not the current administration in Washington gets out of the way.  Since the current administration is an advocate of Big Government as the solution to everything, look for the impact to be muted but mildly positive. We enjoy helping our clients determine the best strategies for their land investments.  Call us...

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Forces Impacting the American Economy – Part 4

Posted by on Feb 17, 2012 in Ned Massie, Perspective | 0 comments

In this series we are looking at the six strongest forces, three negative and three positive, which are impacting the American economy.  Having examined the three most negative forces, here is the first of the positive forces: On Shoring – Tsunamis in Japan and turmoil in China have helped American based companies realize that having products produced in the United States enjoys several positives in terms of controlling both costs and supplies.  Production based in the USA enjoys many benefits absent in China and other countries. As a result, there is enough movement of manufacturing jobs from overseas countries back to the United States that the term “On Shoring” has been created to describe this phenomenon.  This is a reversal of the “Off Shoring” that occurred over the last 20 years – watch this shift grow. However, understand that the new facilities will have a higher use of technology, including robots, than the manufacturing facilities that left America in the 1990’s.  Even with that significant change, the overall impact of On Shoring will be a net positive for the American economy. If we had real leaders in Washington, this trend would be maximized.  The 2012 elections will determine whether the leadership will be sent to Washington that will encourage this paradigm shift. But there are other important and positive forces at work in the American economy.  Keep tuned as we explore them. Call us today so that we can help you maximize the opportunities that the land market recovery is providing to land investors.  Remember, not all tracts of land are equal.  Let us help you determine the best strategy for your land investments....

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Forces Impacting the American Economy – Part 3

Posted by on Feb 9, 2012 in Ned Massie, Perspective | 0 comments

Continuing our series on the six strongest forces impacting the American Economy, we need to pay special attention to one major negative force… China. China – Like all command economies, China’s will ultimately fail.  Too many distortions will build up over time because of the lack of feedback in a command/communist economy. Without the market feedback of capitalism, capital is wasted on producing unwanted goods.  The excess produced goods ultimately drive down the value of those excess goods.  The result is called an economic dislocation but to us laymen it is recession or depression. The good news is that the Chinese Yuan is almost totally disconnected from the balance of the world.  This means that the turmoil that China is experiencing internally (one symptom being a reported 180,000 riots in 2011) will actually not transfer to the rest of the world, EXCEPT in the form of commodity prices. The Chinese Communist government continues to use construction to provide jobs to the masses so that there will be less turmoil.  Employed folks typically do not riot so stability requires the Chinese leaders to create jobs. Having built some cities that are unoccupied, China has now announced plans that they are going to build more apartments over the next five years than exist in any country in the world.  The construction should keep their economy percolating and global commodity prices stable.  Without it, the opposite on both of those would be true. However, it also means the Chinese Bubble will continue to expand.  The question is not if it will “Pop”, but when.  While the bursting of the Chinese Bubble will be severely negative to the world economy when it occurs, the short term negative is the continued false demand for commodities which will heighten the speculative fever in each of the relatively small commodity markets. Speculation means volatility and volatility means uncertainty…and business hates uncertainty.  Hence, heightened uncertainty is a negative force. Next time we will begin looking at the three positive forces impacting the American economy. While the land market recovers, you have the opportunity to reposition your land investments – we would be happy to help you determine the best strategy.  Call us...

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