Published by Ronald Gray on September 4, 2017

Understanding the ‘housing bubble’ and why it’s bad news for home buyers

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When house prices grow higher than its average value, the real estate market experiences a temporary yet critical period known as a “housing bubble.” Usually, compared with other asset markets, this particular sector shouldn’t be subject to pricing bubbles because of two fixed factors: the huge carrying cost of owning and maintaining a home, and the large transaction cost of purchasing a property.

While some aren’t really convinced that this market phenomenon exists, many experts agree that most periods of housing price bubbles are driven by an increase in demand. However, the most important question here is, what are actually the specific causes of such increase in demand?

The combination of a number of variables can easily cause a housing market bubble. Under the right circumstances and timely specific buyer behaviors, the resulting effects can create the perfect formula, encouraging risky decisions and speculative behaviors by several participants: investors, builders, buyers, lenders, and borrowers.

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Observe when the economy is at its best and people can usually turn to more disposable income to invest on an asset, particularly housing. A healthy economy means an optimistic credit growth, encouraging buyers to carelessly take on debt. Taking advantage of the currently positive market and economic standing, consumers can usually enjoy low interest rates and loose borrowing standards. These factors can overall promote offhand speculations and risky behaviors.

The increase in investors, that are most of the time, “unfit” homeowners is the byproduct of all these factors working together to produce one final result that could suddenly disrupt the market: a dramatic rise in home prices, effectively paralyzing homebuyers to afford what they previously could.

Published by Ronald Gray on August 15, 2017

REPOST: US tax change proposals anger builders, real estate agents, charities

Rewriting the tax code involves some serious research and hard work, and as for the recent proposed changes, many are not happy about it. Those in the real estate business, for example, argue that the proposed tax reform will hurt home sales and cut charitable contributions. The full story on CNBC:

With U.S. Congress members focused during their August recess on finding ways to lower the corporate tax rate, industry groups and other sectors of society are gearing up to fight proposed changes to the personal income tax.

While tax cuts for business have garnered the most headlines, lobbyists and lawmakers have conceded that rewriting the corporate tax code will be a long slog.

Tackling personal tax rates will be easier, many argue. Looking for an easier legislative win ahead of the 2018 midterm elections, most lawmakers in the Republican majority want to cut individual incomes taxes. President Donald Trump has been pushing hard for tax changes this year.

Still, proposed changes to the personal tax code have already stirred opposition from real estate agents, home builders, mortgage lenders and charities. These groups say proposed changes will hurt home sales and cut charitable contributions.

The National Association of Realtors issued an “August Recess Talking Points” circular imploring members to remind lawmakers that “Homeowners must be treated fairly in tax reform” to avoid “another housing crash.”

The group cited a report it commissioned from PwC that estimated home values could quickly dive more than 10 percent if the tax plan becomes law.

To simplify the tax code, Republicans have proposed eliminating nearly all tax write-offs including those for state and local taxes, then doubling the standard deduction. This would eliminate the incentive to itemize and should drastically reduce the number of taxpayers who do so.

Currently, many taxpayers use itemized deductions, claiming write-offs for things like charitable contributions, interest paid on a mortgage and state and local taxes. If the standard deduction becomes larger, fewer taxpayers will need to itemize, reducing the incentive to hold a mortgage or contribute to charity.

Currently, about 30 million taxpayers claim the mortgage interest deduction, with about $70 billion in total claims, according to Robert Dietz, an economist with the National Association of Homebuilders.

Estimates suggest more than half of taxpayers would stop itemizing under the proposed plan, Dietz said, warning that this would create a large ripple effect through the economy. He said people in early years of a mortgage would suffer most, along with prospective home buyers.

Home builders are also fighting the proposed tax code changes.

“I don’t think I would call that a cakewalk,” said Jerry Howard, the head of the National Home Builders Association, saying the proposal will face fierce resistance from his group, which represents 130,000 builders. He noted that members operate in every congressional district and employ more than 7 million people.

Charitable organizations are not arguing against increasing the standard deduction. But they are asking members of Congress to consider creating a “universal deduction,” so taxpayers taking the standard deduction can get additional credit for donations without itemizing.

Taxpayers claim an estimated $13 billion each year in charitable deductions. Charities fear giving would plummet if the standard deduction were doubled without creating a universal deduction.

Gail McGovern, president and CEO of the American Red Cross, said reducing charitable deductions would be “devastating.”

If lobbyists defeat the reform effort, Congress could try to cut rates without structural tax code changes, said Charles Boustany, a former Republican member of the tax-code writing House Ways and Means Committee who left Congress in January.

“The path of least resistance becomes an old-fashioned tax cut on the individual side,” said Boustany. “The pressure is just going to be relentless as we get later in the fall.”

Published by Ronald Gray on July 31, 2017

Ask these crucial questions before signing a commercial lease

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Many new business owners have encountered questions, decisions and responsibilities that come with building their own enterprise for the first time. One example of a critical task that one needs to undertake is choosing the right location—and one of the most common options available is signing a commercial lease.

However, signing a lease for your enterprise should not be a careless decision. In other words, as a new business owner, make sure that you’ve asked these fundamental questions before taking the first step:

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Have you actually read and understood the provisions that the agreement covers?

Many new owners get overwhelmed when it comes to signing a lease not only because it’s a multi-page document but also one needs enough time, especially if you’re a neophyte business owner, to fully understand the contract’s terminologies. This is why most commit the mistake of agreeing to terms and provisions that may not be even practical for a new establishment.

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Have you consulted the right people to help you get the best deal possible?

An experienced agent in commercial real estate can help you in finding not only the perfect location for your business but also the best deal possible. You have to know how to negotiate a lease and your best chance is to consult an expert.

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Have you considered talking to a lawyer before signing anything?

One of the most expensive mistakes that any new business owner makes is either renting the wrong property or striking a deal from the wrong landlord. Remember that you’re starting a new venture and you can’t afford to make one wrong step, especially when talking about legalities.

In other words, contracts are legally binding and before signing a property lease, talking to a trusted professional or attorney should make sure that you and your company are protected.

Published by Ronald Gray on July 11, 2017

REPOST: With autonomy, commercial real estate could go mobile

Online shopping has taken off impressively in the past few years, stimulating debates whether or not brick-and-mortar stores will eventually become obsolete. But with the rise of self-driving automobiles, are we seeing another industry disruption in the form of mobile malls? TechCruch has the full story:


The coming years could see the next great land rush across the U.S. and many other countries worldwide, but it might not even involve land. Instead, the next trend for savvy investors could be fleets of autonomous vehicles.

A previous article posited the idea that the retail industry may be about to experience its greatest disruption since the rise of online shopping. In a market that’s struggling to balance the pros and cons of selling sight-unseen products versus the high costs of maintaining a brick and mortar store, the answer could lie in mobile malls that bring stores direct to the consumer at the push of a button.

The continued progress in autonomous vehicles made by a host of companies, including Tesla, Google and Ford, makes the possibility of mobile retail stores even more feasible, allowing for tailored designs to better accommodate the shopping experience than previous attempts. And while the ramifications of such a prospect are vast for the retail industry, the effects could be felt elsewhere, too.



Problems for the real estate industry

The problems currently facing the commercial real estate industry are piling up. Startups are increasingly engaging with the sharing and collaborative economy, meaning that they’re opting for coworking spaces and shorter-term leases to accommodate their ever-changing business models. Likewise, the increasing reliance on remote freelance workers has seen companies requiring smaller office spaces. And as for the retail real estate space, they’ve taken a battering from the rise of online shopping — an industry that has been climbing steadily, with profits predicted to rise to $370 billion in 2017 from $231 billion in 2012. The last thing this industry needs is another headache.

However, if it does make a shift toward mobile stores, the demand on not just commercial real estate businesses but a wider reach of companies that sell and lease out physical space could drop significantly. Instead of choosing to purchase or lease shop fronts, startup businesses and already established companies could be attracted to the less expensive, more risk averse option of choosing a store on wheels.

Continue reading HERE.

Published by Ronald Gray on July 3, 2017

Luxury per square meter: World’s wealthiest neighborhoods

There’s no place like home, and even for the super-rich families of the world who can afford to live and be anywhere, there will always be a place that they can go back to every now and then. However, unlike those of ordinary people, these homes are located in the equally wealthy neighborhoods that not only offer the highest quality of life but also host the best posh living that money can buy. So where do the uber-rich families live and where can we find some of the world’s wealthiest neighborhoods? Here they are:


North of Montana, Santa Monica


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With a median sale price of $3.1 million for homes in this neighborhood, this place in greater Los Angeles, California, offers the finest living and an easy access to L.A.’s pristine beaches. The rich loves a warm climate and the suburbs of Los Angeles are home to many sun and beach-loving wealthy families in America.


Gangnam Area, Seoul


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Seoul is one of the richest cities in South Korea and according to a study, 31.9 percent of the wealthiest individuals live in Gangnam-gu and other rich districts in the city. Gangnam is Seoul’s most affluent district, with the most expensive real estate in the country. In fact, its rich owns a total cash assets of 19.1 percent—the biggest among six metropolitan cities (excluding Seoul) in the country.


Upper East Side, Manhattan in New York City


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NYC’s Manhattan area has been included in many of the lists where the uber-wealthy lives. The Upper East Side has the highest concentration of wealth in any NY neighborhood, thanks to its rich history and pricey real estate developments. The Big Apple’s Upper East Side is lined with glamourous mansions, posh apartments, and pent houses owned by big names in business and other industries.


Knightsbridge, London


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This English neighborhood is one of London’s most prestigious residential area. Imagine a 1,500-square meter penthouse costing for over $184 million, the highest recorded sale in the city in 2014. In the area, one can find a number of embassies, the Bulgari Hotel, and other extravagant establishments to cater to their equally wealthy customers.

Published by Ronald Gray on June 6, 2017

REPOST: African cities urged to take holistic approach to urban planning

With the human population growing exponentially, smarter ways to plan cities and urban agglomerations are extremely necessary to combat severe congestion, pollution, space shortages, and crime. In Africa for example, urban population is expected to double in just less than two decades. However, the continent seems to lack thoughtful urban planning. More insights from Citiscope:


Tangiers, Morocco, leveraged its close proximity to European markets to build a flourishing automotive industry centered in four free-trade zones. (Mikadun/

Tangiers, Morocco, leveraged its close proximity to European markets to build a flourishing automotive industry centered in four free-trade zones. (Mikadun/

Africa is the world’s second most rapidly urbanizing continent — topped only by Asia. In less than 20 years, Africa’s urban population will double. More than half of its population will reside in metropolitan areas.

This mass migration into cities already plagued by squalor and congestion requires thoughtful, comprehensive urban planning. Yet the region is falling dangerously short of that goal, a recent report warns.

Urbanization and Industrialization for Africa’s Transformation, published in March by the United Nations Economic Commission for Africa, characterizes planning efforts across Africa as largely disjointed.

In this post, Citiscope will look at what the report has to say about urban planning and policy prescriptions. Previously, we looked at the report’s overall conclusions and some of the case studies it highlights.

“Policies are often formulated and implemented in silos,” the report says. There’s “little analysis of the impact of urban trends and economic geography on industrialization in national development plan.”

The consequences for vulnerable populations are staggering. “Africa’s unguided urban expansion risks perpetuating non-inclusive and unsustainable growth,” the report warns.

The cycle of despair and inertia can be broken, however, through “strategic interventions” that can simultaneously lift both urban ecosystems and business opportunities.


Continue reading on this PAGE.

Published by Ronald Gray on May 16, 2017

Three social housing projects that defied design conventions

Several social housing programs have been established to provide affordable rental homes to low-income families around the world. In the US for instance, approximately 1.2 million families benefit from the thousands of government housing units peppered throughout the country.

Housing units may come in different shapes and sizes but most of the time, these buildings aren’t exactly that architecturally and aesthetically impressive. However, many developers around the globe agree that affordable housing design doesn’t have to be boring. In fact, high-quality design juxtaposed with affordability is very much possible.

Here are some of the world’s most impressive social housing projects that will leave you speechless:


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Honeycomb Apartments

This honeycomb-shaped social housing project is located in Slovenia. It’s composed of 60 apartment units and was completed in 2006. According to the design firm OFIS, the buildings were created to be flexible, with no structural elements inside them, providing more layout choices and instant reorganization.

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Mirador Housing Project

Located in Madrid, Spain, this social housing structure is composed of a mini-neighborhood arranged vertically around a semi-public sky-plaza. The designer, MVRDV, successfully used light, color and an innovative circulation to create dynamically beautiful yet affordable 165-unit building.

Thanks to the Empresa Municipal de la Viviedna y Suelo de Madrid, the project was funded and completed in 2005.

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Savonnerie Heymans

This housing project is located in Belgium and was a site of a former soap factory. Designed by MDW Architecture, the building is composed of sustainable accommodations ranging from studios to even several 6-bedroom apartments.

In addition, the design and structure of this project provide effective acoustical and thermal barrier in all its 42 units. You can also find public and outdoor spaces like the “mini forest” and a 3D landscaped park.


Low-cost housing developments are a rapidly growing segment of the real estate industry, both in developed countries and emerging markets. Especially with these types of design revolutions, which apparently do not compromise quality and budget, they are increasingly attractive to home buyers, investors, and even expatriates. The business is set boom in the next couple of years.

Published by Ronald Gray on May 12, 2017

REPOST: Japan’s Priests Turn to Property Development

Places of worship in Japan, such as temples and shrines, are located in some of the most lucrative spaces in the country’s congested cities. This is probably the reason why many developers have turned to priests to negotiate on constructing what they call ‘pilgrimage lodgings.’ The full report on Bloomberg:


Many shrines are in bustling city locations. Photographer: Shiho Fukada/Bloomberg

Many shrines are in bustling city locations. Photographer: Shiho Fukada/Bloomberg

Shinto elders at the centuries-old Unesco World Heritage Site of Shimogamo Shrine upset some neighbors when they bulldozed a swath of old Kyoto forest to build an apartment complex with units selling for more than $2 million apiece. “They should call it the Shimogamo Corporation,” says one angry parishioner, Akira Hitomi.


Skepticism of religion is common enough in Japan that there’s a saying, “If you want to get rich, become a priest.” In truth, many of Japan’s 180,000 temples and shrines are in deep financial trouble, says Yoshihide Sakurai, a professor of sociology of religion at Hokkaido University. “They need side businesses to make ends meet.” Many people in Japan visit Shinto shrines for weddings and New Year’s Day, and Buddhist temples for funerals, but fewer than 40 percent consider themselves religious, according to surveys by public broadcaster NHK. Fewer still are devoted enough to pay for the upkeep of places of worship, many of which are hundreds of years old and made of wood.


To make money, Japanese priests have hosted speed-dating events, rapping battles, and televised flower-arranging contests. They’ve also turned to real estate, a sign of the times as Japan experiences a property boom fueled by ultralow interest rates and a new inheritance tax that’s encouraged retirees to shelter money in rental properties. Real estate investment last year accounted for about a third of the country’s economic growth.


Location, location, location—it’s the big reason consultants and developers, including West Japan Railway Co. and homebuilding giant Sekisui House Ltd., are pitching projects to priests. Temples and shrines occupy some of the best buildable spaces in the country’s jampacked cities. In the central district of Osaka, wrecking balls are busy demolishing an old building Otani Shinshu Buddhists used for weddings and funerals. When construction is finished in 2019, a 17-floor business hotel operated by the Excel Tokyu Hotel group will stand beside the temple’s main hall. In Tokyo, Mitsui Fudosan Co. has so far developed an office tower and two condominiums on land leased from shrines. One is a short walk from the country’s busiest train station.


Continue reading HERE.


Published by Ronald Gray on April 19, 2017

A galaxy in the making: Star Wars theme parks

One of the world’s largest media franchises (second only to Pokemon and ahead of both Harry Potter and James Bond), Star Wars has transcended way beyond its cinematic origins. This US$42-billion (as of December 2015) entertainment empire has amassed plenty of tie-in projects, which include merchandise items, graphic novels, books, and even video games.  There is no limit as to which platforms the franchise can foray into, owing to its very special place in popular culture.



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Ever since the 1970s, the Star Wars movies have been bringing the world by storm. They are hailed as one of the most watched films of all time in almost all markets. That is because of the impeccable story line, the unforgettable acting, and of course the larger-than-life special effects. They have captivated the hearts of not only children but almost every other age group as well. It also makes people want to become Jedis. Let’s face it, there is nothing cooler than using lightsabers and the Force. Now, Disney is going to take the entire experience a step further by allowing fans to immerse themselves in the subculture.


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In the Star Wars Celebration 2017, Disney Imagineers and Lucasfilm employees has broken to the public their plans to open a Star Wars themed park named Star Wars Land in 2019. It will be one of the many irresistible attractions in Disney World California and Disney World Florida. As a matter of fact, at 14 acres, it will become the largest single-themed expansion in the entire history of Disney.



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There is even news that there will be a luxury starship resort. Once finished, the wall decorations and roof ornaments will certainly make visitors feel like they are in a whole new dimension. To ensure that they are on the right track, the company has sent out surveys to guests regarding their interest in the spaceship-inspired project. The whole park will become available to the public the same time as opening night for Star Wars Episode 9.

Published by Ronald Gray on March 24, 2017

REPOST: The Top 3 Hottest Real Estate Markets for 2017 Are in Florida

Beachfront houses are still among the most popular properties in the market, and Florida is definitely a top destination for such coastal dream homes. The full story on this Coastal Living post:


Where are the hottest real estate markets this year? Turns out the top ones are on the beach—meaning that this might be your year to make the leap and snatch up your dream house.

Trulia recently published its list of the 10 hottest real estate markets to watch in 2017, and—no surprise—several coastal markets made the list. Trulia based its ranking of the 100 largest metro areas across the country on five criteria: a high search interest, a decreasing rate of vacancy, high affordability, a high rate of job growth, and a high population of people happy with the outcome of the presidential election.

The “hottest” markets vary depending on who you talk to—Zillow’s ranking of the hottest markets of the year looked very different. But if you’re looking for coastal real estate in an affordable city that has few people moving out of it, this list of the hottest coastal markets of 2017 might offer some suggestions. If you’re looking to capitalize on the recovering housing market and purchase your dream coastal escape, consider these hot markets:

Number one overall and number one on the coastal list, Jacksonville has a high rate of job growth and high interest from out-of-towners looking to move there. Best of all, it’s more affordable than other, similar markets in the state.

Coming in at number two both overall and for coastal metro areas, the Cape Coral-Fort Myers area on Florida’s Gulf Coast has the fourth-highest rate of job growth in the country and a falling vacancy rate as people flock to its sunny shores.

Number three for coastal areas and number three overall on Trulia’s list, this area on Florida’s Atlantic side has a rate of job growth to match the Cape Coral-Fort Myers area and a great ratio of people looking to move there vs. people looking to move away—not to mention its long, sunny days and high temperatures year-round.

The Tampa-St. Petersburg-Clearwater metro area is on the Tampa Bay, on Florida’s Gulf side. It came in at five overall but is number four for coastal areas, with great job growth and affordability.

Charleston has been in the spotlight as a tourist hotspot so much lately that it’s not surprising that it’s also a great place to move. Ranked number seven overall and number five for coastal areas, this Lowcountry port city has a huge number of people looking to move there (while few are looking to move away), good affordability, and decent job growth—and an amazing culinary scene.

The next five coastal cities share the previous five’s high interest, good affordability, and job growth. Read on for the next best coastal areas to live:






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