Contributed by Aaron Fairchild:
Buckle up, there will be turbulence
“Plunge in Home Sales Stokes Economy Fears” WSJ article said the following about the national real-estate market on Wednesday, August 25, 2010:
Is there really a “National Real-Estate Market”?
According to the Bureau of Labor and Statistics the Seattle area unemployment rate in June was 8.6% and holding steady. Employment in our region is anchored by desirable jobs in growing sectors of the economy. We live in a beautiful part of the world with plenty of water, mountains and forests. People continue to move here as the map published by Forbes (June, 2010) illustrates below. Red lines indicate a net migration away from the city, black indicates net movement into the city.
The last time we saw more people leaving than coming to our state was in 1982 and demographers expect growth in this region to continue as unemployment, poor economies, water shortages, and desertification continue to push people out of other regions of the country. Additionally, homes in Seattle are more affordable today than they were during the period of our local depression, where 1 in 8 people were unemployed, from 1969 to 1973.
How does all this affect G2B?
Less Competition at Acquisition
G2B continues to believe that in the near to mid-term, property values will remain flat or rise only with the rate of inflation. This will shrink margins for investors who look to buy and hold. The uncertainty in our real estate market will continue to drive nervous investors and speculators to the sideline leaving less competition for acquisitions of fixer properties in neighborhoods where G2B thrives.
More Competition at Sale
This situation continues to play to G2B’s strength. G2B differentiates its homes in the direction the market is trending. G2B designs comfort, quality, energy efficiency, and green into existing homes in neighborhoods with a strong sense of community. G2B’s differentiating design appeals to the values that homebuyers are demanding. The current market conditions only enhance G2B’s edge when competing for precious homebuyers.
Knowing the Market with Deep Experience
G2B knows how to accurately value homes at acquisition and sale. Having compared and evaluated over 15,000 homes in Seattle’s good and bad times gives G2B the strategic edge needed to exploit opportunity in uncertain markets and create additional value.
We are certainly living in interesting economic times. Turbulence and uncertainty provides opportunity for smart moves and strong profits. We are excited about this market and extremely well positioned to thrive!
Contributed by Aaron Fairchild:
Last year there were 3 home remodels marketed for sale on the NW Multiple Listing Service as a BuiltGreen certified home. Our West Seattle home, the Sequoia House, was one of the three. If this seems shocking to you, imagine how we felt! Yet the trend is clear; we know that homebuyers are looking for and demanding energy efficient and green homes.
But don’t take it from us; a 2010 national AVID Builder survey indicates that green features are the most important “must have” for a future home purchase. AVID surveyed 20,000 existing homeowners and asked which features were “must haves” in their next home. Just over 60% of surveyed homeowners pointed to green features. In 2009, 40% of all residential new-construction in the City of Seattle was certified BuiltGreen.
Yet only 3 out of roughly 5,000 existing home sales were marketed and sold BuiltGreen certified!? According to a report published by Equilibrium Capital out of Portland in April 2010, “…the biggest long-term impact economically and environmentally is retrofitting existing buildings.”
Right now G2B is out raising equity in our company. We have calculated how much carbon is offset with one $25,000 investment in our company and the results are compelling. The amount of carbon emissions mitigated, calculated over the lifetime of efficiency measures retrofitted in one of our homes, is equal to removing 23 cars from the road for one year. Breaking that out per one $25,000 investment in our company is equal to roughly 6 cars over year one and 50 cars over 5 years! As one interested investor just said, “So for the cost of a Prius I can take 54 cars off the road (in five years) and get a return on my investment (as opposed to losing money on a car). Nice.”
Retrofitting and redeveloping existing buildings is done using today’s technologies and the deep efficiency measures can function optimally for 30 to 40 years! In 40 years we will still be dealing with our transportation problems and trying to create new renewable fuel sources. Meanwhile, our efficient homes will continue to roll along the road to sustainability.
The Green Canopy blog is written by our CEO and Culture Curator, Aaron Fairchild, as well as our staff and a few very special guests.