Business Insider recently published the 4th Quarter 2011 list of the cities with the most expensive real estate (follow the link to see the article). The chart is below. The list quickly underscores what an affordable environment in which we live and work in the United States.
Take a look at how the Korean's are putting previously unproductive space to use and combining internet sales with brick and mortar real estate. Good idea huh !
In order to replace aging public infrastructure assets you have to move the existing ones out of the way. See the video below on how a bridge across the Ohio River was removed to make way for a replacement. This one is for our readers who are in the demolition, road building and engineering industries. Enjoy !
2012 is likely to be similar to 2010 and 2011 in many segments of the real estate industry. However, the residential rental market is frequently mentioned as a bright spot. There is more demand than supply to meet the needs of the market place. Apartment communities and apartment buildings will surely meet most of the need with an already existing ready to go inventory.
The over building and easy credit of the pre-recession period put many homeowners into properties which are presently under water. The lenders are faced with the decision to either:
1. Foreclose and sell;
2. Amend and extend the loan; or
3. Allow the homeowners to short sell.
None of which are good options for anyone. Employment opportunities make increasing family incomes difficult to achieve; so even employed homeowners which are not in default can not keep up as their homes lost market value as a result of foreclosures and over supply. The best thing for the home owner is to remain in their home, keep it up and seek to stabilize the neighborhood.
We can wait for the government to legislate a solution, or we can consider what is best for our lending institutions, communities and neighbors. Richard Florida in his book The Great Reset identifies the problem, cause and some solutions such as:
1. Reduce interest rates to reset the home financing to a level in which the homeowner can afford to remain in the home. Surely, this would cost less than foreclosing and selling a home at a loss.
2. Agree with the homeowner to take a deed in lieu of foreclosure, transfer ownership of the home to either the lender or a rental company; rent the home to the former homeowner at a market rental rate; and give the homeowner or renter the option to buy the home back (with appropriate credits for previously paid equity etc.).
Keep the home occupied by the people who will take care of it the best and give them an opportunity to once again become a home owner. Everyone wins when the property values in a neighborhood stabilize.
Lenders and developers can create opportunity where everyone benefits and the capital cost is low.
Ohio and Kentucky statutes require residential builders to provide certain notice to home buyers. While there is no new law on this, the construction attorneys of Ulmer & Berne LLP have seen this issue come to light many times this past year; thus, prompting this refresher alert on Ohio and Kentucky notice statutes.
Both Ohio and Kentucky have notice statutes, which require that builders, upon entering into a contract for the construction of a residence (whether single-family or multi-family), provide notice of the builder's right to offer to cure construction defects before a homeowner may commence litigation against the builder for any alleged construction defects within the residence. Per Kentucky Revised Statute 411.260, such notice shall be substantially similar to the following form:
Sections 411.250 to 411.260 of the Kentucky Revised Statutes contain important requirements you must follow before you may file a lawsuit for defective construction against the builder of your home. You must deliver to the builder a written notice of any construction conditions you allege are defective and provide your builder the opportunity to make an offer to repair or pay for the defects. You are not obligated to accept any offer made by the builder. These are strict deadlines and procedures under state law, and failure to follow them may affect your abililty to file a lawsuit.
Per Ohio Revised Statute 1312.03, such notice must be conspicuous and in substantially the following form:
Ohio law contains important requirements you must follow before you may file a lawsuit or commence arbitration proceedings for defective construction against the residential contractor who constructed your home. At least sixty days before you file a lawsuit or commence arbitration proceedings, you must provide the contractor with a written notice of the conditions you allege are defective under Chapter 1312. [sic] of the Ohio Revised Code, [sic] the contractor has the opportunity to offer to repair or pay for the defects. You are not obligated to accept any offer the contractor makes. There are strict deadlines and procedures under state law, and failure to follow them may affect your ability to file a lawsuit or commence arbitration proceedings.
Although the aforementioned statutes do not contain any apparent language regarding repercussions to builders for not following these requirements, providing such notice is a good way to educate the buyer and provide the builder the opportunity to address the buyer's complaints before a suit is filed and attorney's fees start to mount.
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New rules promulgated under Ohio’s Public Construction Reform (the “Reform”) have been released by the Joint Committee on Agency Rule Review. The new rules include: (1) Rules for Prequalification of Prospective Bidders on Subcontracts; (2) Rules for Best Value Selection of Construction Manager and Design-Build firms; and (3) Rules for the Form of Subcontracts. The Rules for Prequalification and Best Value become effective 2/02/12, and the Rules for the Form of Subcontracts became effective 12/26/11. The Joint Committee also released a new form of subcontract for public jobs in Ohio.
Among other requirements, the new Prequalification Rules: (1) place significant emphasis on a bidding subcontractors' goals and history related to diversity and economic inclusion; and (2) permit a public authority to require a construction manager or design-build firm to employ additional criteria, in order to suit the unique needs of a project, including "knowledge of the local area and working relationships with local suppliers." As such, local subcontractors with strong supplier relationships, firm diversity goals and proven track records for economic inclusion should have an advantage when bidding public works in Ohio.
The new Prequalification Rules and other important information concerning the Reform may be found at http://ocr.ohio.gov/
Architect Ross Chapin, who has spent his career championing the "pocket neighborhood" concept has proven that "walkability" and "new urbanism" concepts which are successful in the Northwestcan be successful in the Midwest. TheInglenook community development in Carmel, Indiana is proof that "pocket neighborhoods" can be successful anywhere. We particularly like the concept for in-fill parcels and in first and second ring suburbs. To learn more about the concept see the links above and the video below.
As 2011 winds down and 2012 ramps up, I wanted to share with our readers the following thoughts from Seth Godin which he wrote on his blog recently:
Is there really any other kind?
If we see turbulence coming, we tend to avoid it. The art is in knowing that turbulence might come and looking forward to it, bracing for it and embracing it at the same time.
If your plan will only succeed if there is no turbulence at any time, it's probably not a very good plan (either that or you're not going anywhere interesting.)
See you soon !
It is the time of the year to reflect on what happened this past year. What is trending? What did we do right? What did we do wrong? What can we expect next year?
Tweeting is in. Now the challenge is to figure out a way to monetize it as opposed to just joking with my kids. In fact, the whole social media thing is trendy. But to what end? Notwithstanding this Blog, until someone way smarter than I can figure out some new way to utilize it, I am writing it out of my business plan. (It may stay in my social plan for a while because there is funny interesting stuff out there. You can follow me on Twitter and decide for yourself though whether anything I say is interesting or funny. My kids would probably say NOT.)
Apple – computers, tablets, phones – is in. All the way in. Even law firms who as an industry are ultra-concerned about security have made the switch. I resisted as long as I could in fear of my fingers being too fat to work the touch screen. People told me I’d get used to it – they were right. Not sure how I ever lived without my Apple phone, I-Pod, I-Pad and PC.
Urban life is in. In Cincinnati, it’s Over The Rhine. Washington Park being completely upgraded, several new restaurants, bars, shops and apartments, really cool old world architectural features, and Findlay Market. Gives local business owners a real chance. New Urbanism and Walkability are in.
3-D is in. New movies, remakes of old movies – all 3-D. I like the 3-D effect, but do I really need to see Beauty and the Beast all over again just to see a candle stick hover over my head?
Electric cars? Why isn’t that a done deal yet. I mean a real car you would actually like to own and drive. Why aren’t they everywhere?
Is it me or is the list of impressive politicians shrinking? We need to fix the system so that we are attracting the best and brightest to help govern.
Another thing broken is college sports. Division 1 football needs a playoff. The whole conference alignment makes no sense (San Diego State is in the Big East?). Title 9 does not work anymore. It has led to the elimination of whole sports programs at some schools, the reduction of baseball scholarships at all schools and other inequitable consequences. We need to support gender equity – I just don’t think Title 9 is the way to do that anymore. And the NCAA has lost its way. The purpose of the NCAA should be to protect the student athlete. It seems instead that it exists solely to protect the income streams of the largest universities.
Real estate lending has changed. Lenders are much more involved in the entire deal structure – not just the terms of the loan but the terms of the underlying deal. Much less willing to take risks. Leases, acquisitions, redevelopment – all tougher to do. Lenders may be right to take this approach. But it places increased level of importance on the experience, intellect and service attitude of the lender and its attorneys.
I am concerned about business prospects for 2012. But I was concerned going into 2011, and 2011 ended up pretty good. Wishing everyone a happy, healthy, prosperous 2012.
Take an old technology which has not seen any real updates in decades, make it internet connected and add a few semiconductors (to make it smart) and radically change the way offices and homes consume energy ! That is what the Nest Learning Thermostat promises to do. See the video below.
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