When you read something, ask yourself how did the person writing the article evaluate, dissect and align their thoughts….For example, the following portion of the HomeGain’s Blog by Howard Sobel on March 20th, 2009
Howard gets to core of house value change… If you have job growth you have housing demand… Housing demand is a derivative of jobs… more people more demand to house those workers….So read this insightful blog. I have only capture a portion to illustrate his thought process.
“San Jose as a Leading Indicator San Jose is experiencing a very tough time. The San Jose unemployment rate is now 7.2%, compared to 4.9% a year ago and help wanted ads are down by 35%. If San Francisco has benefittedwith a healthier economy Its hard to believe this isn’t a leading indicator for softer rent rates. Remember… its well paying jobs that led the boom and it is jobs that will herald the decline. San Francisco is not experiencing the price declines that many homes have. However, if you consider that the major employers of the city are restaurants (hurting), the financial district (dead) and technology (weakening) then its time to adjust to new realities. Reading the Curve What Now Markets precede people’s perception of them. In other words, people are still trying for historic rent rates. Waiting is too expensive. Rather than continue to try for historic returns. Its time to lock in cash flow rather than hit a home run, to refocus on reasonable cash flow guaranteed for a least the length of the lease. It’s the best way to manage rental property today and to get safely through this downturn.”
Always ask how does “whatever” effect the demand for space…. All real estate values can be boiled down to the change in demand for space… Enjoy the weekend… Any thoughts….