The Real Estate and Mortgage Industries Can (and Will) Survive!

This is good news! Now how do we get there? All economists are a bit confused on what needs to happen. First, let's get to the acceptance piece of the puzzle. (1) We are not in an economic recovery. Change needs to happen in many areas of the system the average consumer is living in. Jobs need to be created and the only way to do this is to create new industry. Real Estate Taxes are not only too high but they are not in proportion to reality. Not even close. Think on this. Why are homes on one street, same square footage, same design and similar age taxed thousands of dollars apart from their counterparts? This needs to be addressed. Tax assessors are working within guidelines of a "boom" that went way out into la-la land. Yet, they are assessing at those sales figures. It is a chain reaction in a system that needs to be redesigned.

There is a much needed reality check. Regulators, consumers and banks need to wake up quickly, which brings us to (2) to begin assess honestly, how we can renew our systems to have them fit into the change that is occurring in our democratic way of life. I am a republican and proud of it, but reality is reality. By 2020, the world will have an estimated 9 billion people to cloth and feed. This is not a one sided problem. It is a chain of past economic predictions that were just plain wrong. We are living in a system that has been broken. The chain of real estate ownership was created years ago when people began to buy and sell, price and live it their own home. Leasing was not looked upon as the American Dream. Owning a home was. Now, renting is so much more attractive to our pocketbooks. Why? OK- Think on this. You see a $250,000 home in the paper. Should you pay out of pocket 20% down (if your credit is perfect and very few have perfect credit) so that is $50,000. Who has this in an account right now without parents? Then up to another $10,000 for closing costs. The principal and interest is about $1200 a month( about 6% rate ) then you have taxes which can be about $350 more a month plus insurance can be about $150 more. You are at around $1700 a month and if there are those homeowner association fees, oh no- please? Now, the facts of these troubled times, this home is not holding value. Not good news for the American Dream concept. Next year it will probably be worth less, yet are taxes going up? So (3) is finding a way to build value in real estate again. Now, just suppose you can pay $1100 a month to live in that same $250, 000 home? When something breaks, you don't have to pay for the fix. No taxes fees or owner concerns. Just renters insurance to protect your own "stuff."

This brings us to (4) curing the disconnect of communication breakdown with banks, consumers and those running the real estate and mortgage worlds. Examples are government tax offices, Realtors®, mortgage professionals, jobs depending on industries that thrive on real estate such as contracting and engineering companies, etc. Pricing and regulation needs to be cut drastically. How can one home in a neighborhood, going through a short sale dictate prices of the other homes? It is all so off balance. Have you been food shopping lately? Our food supply is beginning to offer us less and short us as packaging is less for us to pay more. Boxes are smaller. Loaves of bread are smaller. So what can change all of this?

(5) is plain and simple we need laws designed for the people, by the people. When the Declaration of Independence was signed, it called for government for us. So let's remember real estate and mortgage markets drive the economy and let's remember that these markets can help bring about change quicker than any other markets. Once these markets create ways to achieve drastically lower utility bills, and real estate taxes are forced onto a more uniform format, all can recover.

Our system as we know it, is broken- Done. We will not ever find jobs for all who have lost theirs unless we re-train, re-create and re-build in the new world energy sectors offer. Going green. Tired of hearing this yet? Don't be and wake up America. Retrain those in construction and sales ability to learn to sell and install water conservation products as cisterns, solar products, solar hot water heaters and wind products. Train sales people to sell and represent these systems in the workforce. Re-create the entrepreneurial spirit. It worked years ago and it will work again-

Is Money the Main Consideration in Greening the Real Estate Market?

I am always amazed when I read an article that states that people do not understand the greening of real estate concepts and the opportunity it offers both buyers and sellers. In fact, I remember when I first heard that indoor air quality in homes can be worse than outdoor air quality I was not happy. Here I was, in 2005, a practicing broker, managing agents, and agents always feel responsible to suggest to sellers ways to improve the future sale of the largest financial investment they make.

While managing 2 offices in Sarasota, Florida, I kept hearing about green building. Sarasota is a leader in the state of Florida in green issues and sustainability so I began learning through osmosis and found no one was training the real estate professions on these issues. When I contacted my trade association to ask why, they had "no interest. They didn't know what green building was and did not see the need for Realtors® to know about it. Oh boy, I knew something was not right. Going into a deep study mode for a year, I started to learn quite a bit and documented my newfound knowledge. I was discovering that certain types of insulation and building materials could contribute to lower utility bills and a healthier indoor environment. In my travels, I learned that a TV uses 25% if its energy when it was turned off ( called phantom energy) and TV's could give off 4,000+ chemical fumes daily and since I had 4 at the time. I began to think of all of the buyers I sold homes to, and my agents sold property to who may have had a type of respiratory problem in a family member or friend and I could see how important this was to initiate education for the industry. When it comes time for a consumer to invest in a property, they need to about the ins and outs of this type of financial investment.

Traveling the country, going to seminars and conventions, and just listening and taking notes, I realized green building concepts were important for how clients to know how to have a better ROI. Concepts of lower utility bills, healthier indoor air quality, sustainable systems installed all sound like facts those in the industry need to A common term in real estate is Return on Investment. in the current climate, in general, this is not a feature or benefit people are experiencing as they were in the past. Many people are beginning to accept the fact that first costs are not the only factor to consider when building green or renovating with energy efficient materials and systems. It is the life expectancy of the structure that is considered for green upgrade decisions. I see a dollar value in this. Don't you? Consumers are learning so much through the Internet and learning about energy efficiency and the long-term value of the renovations they invest in. In the long run, they will see a difference in the quality of life and their bottom line when selling the property in the future. Energy retrofitting current housing inventory is something that is just beginning to come to the attention of the public. This could be a huge job creator. People who desire bringing renewable energy driven systems as solar and water conservation measures into their lifestyle will create new awareness and new jobs for people to learn these technologies and installation techniques.

Job creation in the construction fields needs immediate attention in the current economic downturn o educating from the agent and their affiliate industries to guide clients in becoming more energy efficient holds such promise for the future. When buying a piece of real estate, if it isn't offering green attributes now, consider what it will need in terms of upgrades to be a healthier place for your family to live and to be more energy efficient. In addition to better health, lower operating costs and good selling points for the future, there are many reasons to promote the greening the real estate markets.

Why Commercial Real Estate Needs to Go Green

If you own or manage commercial real estate or are looking to get into real estate investment then you are probably becoming aware of the need for offering green real estate solutions. Unless your property is let to a single occupier who have the responsibility to manage their own energy use your tenants will be looking to the building management company to be implementing energy efficiency measures for common services.

There are several main drivers for promoting energy efficiency in commercial real estate, environmental concerns, legal implications and economic considerations. Taking these in turn it is possible to apply each to an individual building to assess what measures are required, and which will be beneficial.

Environmental concerns

Whether you or your management company subscribe to the theory of global warming and the greenhouse effect, it is likely that your tenants, or potential tenants, or their investors will do. In the UK, all large public properties need to have a Display Energy Certificate and may also require an Energy Performance Certificate if it is newly constructed or refurbished. If a Display Energy Certificate is required then an advisory report is also required showing how savings can be made.

Whilst this regime does not apply to private buildings, it is a clear indication in the way that legislation is heading and how public perception is manifest.

Legal Implications

The legal implications have the most practical implications on Real Estate by way of changes to the Building Regulations and these effect both new build and refurbishments to existing commercial properties with more stringent regulations taking effect from 1 October 2010. Where there is a legal imperative on owners and property managers to make changes these of course must be observed although there are certain regulations that also allow for economic considerations to be taken into account, so that alterations only need be made where reasonable economically viable so to do.

Economic Considerations

With the cost of utilities and particularly electricity rising steadily any changes that can be made to improve energy efficiency will have an increasing and direct reduction on ongoing energy expenditure. Items such as passive infrared switching and heating and ventilating equipment with lower energy requirements or low water use appliances will have an ongoing financial benefit to the running cost of a building. In addition there may be grants available towards the capital costs of changing to better performing equipment.

The decision on whether individual improvements should be made needs to take into account all of the above, however it can be seen that there is pressure from a number of directions that means more and more real estate related decisions will have to be green orientated.