Метка: economics

Is 2009 a good year for buying a house

Is 2009 a Good Year for Buying a House

While some improvement in the economy and real estate market has been seen in the past couple of months according to the National Association of Estate Agents, struggles continue. In the latter part of 2008, both buyers and sellers were moving a little more, which many experts believe is due to low interest rates. Additionally, movement was also seen in the number of new homes coming on the market and the number of interested buyers.

While the current situation has been devastating to some, for first-time homebuyers, it has created an opportunity not otherwise offered. For a long time home prices were simply too high for new buyers but we now see almost 11% of homes sold went to first-time buyers. The same reports from 2008 show that real estate agents made more sales. This news was positive since the increase in sales was in December, which is usually a slow month.

The National Association of Estate Agents also indicated home prices increased only slightly and the number of falling rates had slowed down in some geographical locations. Other statistics include prospective buyers increased to 200 from 186 in December 2008 and agents with actual sales increased to 100 from 87. This means sales per real estate agent remained on a steady pace of six.

Then moving into the early part of 2009, reports came from the Financial Times specific to 2009 being a good or bad year to purchase real estate. A study was comprised of 50 top economists and the outcome was quite interesting. Of the 50, 60% said the purchase of real estate in 2009 should be avoided but the remaining 40% believed the opposite.

The reasons for each of the responses varied. For instance, some felt that buying property in 2009 would help the slow economy. Then, considering that interest rates are expected to stay low throughout the year and even decline at the end of the year, some people believe the lending process is still going to be difficult. Even with additional money to loan, especially if the government continues to provide assistance, buying versus not buying remained controversial.

Of the 50 economists, some felt that at the end of the year the real estate market will reach its lowest point. With this, homebuyers would be encouraged to start looking at real estate and even buying. However, of the economists that think that people should wait to buy believe prices are still too high when compared to current income. Therefore, the anticipation is that in 2010, the real estate will be much better than 2009. In fact, prices according to Capital Economics will fall 20$ more while Global Insight says 15% and JP Morgan believes 10%.

One particular economist is not as optimistic, stating his concerns are that housing prices will not reach affordability until the year 2014. The continuing fall of the real estate market is in part due to restrictions on credit and lending, high debt ratios, high rates of unemployment, and the stagnant economy. All those negative factors predict a declining real estate market for some time, beyond 2009. Because of this, potential buyers are hesitant to make such large purchases.

The bottom line is that this is a buyer’s market; people should not be in too much of a hurry to make real estate purchases. In 2009, unemployment hit incredible lows and with lenders still following strict lending guidelines, there is some concern. Now, in the situation when a person is transferred for a job or has gone through a divorce and must move, then buying in 2009 offers many benefits.

While the number of sales is low, because of unique situations, sales will continue very slowly. Even people interested in buying property as an investment or buying to flip and rent is a slow market. Experts are optimistic that a boom in real estate will occur once the recession has passed. As the supply of homes decreases, prices become more affordable, and lending institutions lighten up on loans, things will improve.

Real estate sold at auctions in 2009, as well as homes needing to be repaired or renovated are expected to go for low prices so buyers have ample opportunity of finding property that fits within any budget. Therefore, anyone wanting to buy a home in 2009 should put out a low offer and maintain ownership of the property for as long as possible.

Joint ventures make sense

Joint Ventures Make Sense

As there are numerous good reasons both business wise and financial, to create a joint venture with a company that has a great complementary capabilities and resources, such as distribution channels, new technologies or finance, joint ventures are becoming an increasingly popular way for different companies to build strategic alliances.

In a Joint venture, two or more parent companies agrees to share capital, technology, human resources, risks and rewards in a formation of a new entity under shared managerial power.

But before going into a joint venture, you should consider something first. We have gathered some information on what are the most important things to think about before going into a joint venture, here is the list:

Before going into a joint venture, be sure to first screen prospective partners. Make sure that you are on the same level of the industry.

Also make a joint development of a detailed business plan and short listing a set of prospective partners based on their contribution to the development of the plans.

Check the credentials of the other party by doing interviews and research. Check their previous business and also the sales that they are getting. You may also want to check customer feedback regarding their services.

You should also develop an exit strategy and terms of dissolution of the joint venture in case things would go wrong.

You should also try to think of the most appropriate structure for you joint ventures, for example most joint ventures involving fast growing companies are structured as strategic corporate partnership.

You should also take notice of the availability of appreciated or depreciated property being contributed to the joint venture; by misunderstanding the significance of appreciated property, companies can weaken the economics of the deal for themselves and their parties

You should also point out the different special allocations of income, gain, loss or deduction to be made among the partners and so with the compensation to the members that provide services.

You should also take note of the role of your business architect, this is a person that initiates new business ventures or leads business innovations, designs a winning business model and builds sustainable balanced business system for a lasting success.

Business architects can be found in multitude of business settings, be it in corporate change leaders, initiator of joint venture, and managers of different and radical company settings.

Human resources also plays a special role in joint ventures, here are some thing that a human resource should look into to get good business ventures.

The business strategy should begin with a sound, well articulated strategy. Before going into the first step, determine first and explain why you wish to enter into a joint venture, why you have chosen such partner or partners, and what the goal of the company is. You should put into word the involvement of the parent companies and define how long will the joint ventures last.

You should also describe strategies to define the managerial, accountability, decision-making process and conflict resolution procedures.
Develop Human Resource strategies that align and support the goals of the JV. You should develop a distinct identity and culture for the newly form company. Communicate energetically to the employees and establish a distinct career goal, management, and a means of welcoming return to the employees transferred to the joint venture.

Create salary, bonuses and retention program that is inline with the success of the joint venture. Maintain open communication between the companies that have been tied up.

Define a process for leadership selection that is seen fair and credible and give credits to the top-tier leadership as soon as possible. Look for key indicators of leadership potentials such as behavior, past experience, and measurable outputs.

To engage and motivate your employees, communication should be frequent and used to create a common vision, establish a connection with leadership, explain the new rules, support the individual transition process, aid in retention, and ultimately, define the new organization in terms of «We» instead of an «It» or «They». Share as much information as you can, and never sugar-coat or make false promises.

Conduct employee research to help the new organization determine what matters to employees and can serve as the foundation for all programs and incentives.