2012 INTERNATIONAL REAL ESTATE FORECAST

January 26, 2012 9:33 am Published by admin

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Each year E360 likes to review expected areas of opportunity for international real estate related to our North American, Central American and Caribbean markets. In the US there is more market transparency than in Central America and Caribbean markets. Given the lack of mls transparency across much of the Central American and Caribbean markets we have characterized market demand through consumer segmentation profiling unless we are completing a full market analysis. Below is summary of our market sentiment for 2012.

The US real estate market
E360 is cautiously optimistic about the US real estate market. From the broadest economic perspective there have been a number of positive indications including national unemployment rate declining to 8.5% according to the Bureau of Labor Statistics and December consumer confidence index increasing 10% which exceeded market forecasts. The small business optimism index has increased consecutively for the last 4 months. Over the last 15 months consistent job growth has occurred. According to realtytrac foreclosures were down to 1 in 5 for 2011 compared to the market bottom of 1 and 3 foreclosures.

According to US Census data, it’s still a buyer’s market with 6.8 months supply and reports of an additional 5 months supply of shadow inventory are on the horizon (however this shadow inventory data quality is debatable). Florida has reported an 8% increase in total sales and 15% gains in condo sales. Miami was the fastest rebounding residential property market in US during 2011 as they enjoyed a new record-setting year in sales velocity, outperforming prior 2005 sales record set during the peak of the South Florida condo boom era. Additionally, certain areas of Atlanta, Georgia are reporting a buyers market with a 3.5 months supply – far less than the National average.

The Florida and Georgia markets are of particular interest to E360 in our business as there are direct flight access market potential Mexico, Central America and the Caribbean.

The Emergence of the Expat Entrepreneur
Many expat entrepreneurs are motivated by the emergence of more favorable policies, tax regimes, economic climate and infrastructures promoting entrepreneurial spirit. Many seek to be in emerging markets where start-ups naturally cluster. Startupweekend.org powered by the Kauffman foundation is hosting events supporting entrepreneurs globally throughout the world. Google has recognized the same opportunity with entrepreneurs and partnered with the Kauffman foundation. We covered this topic a year ago as it related to the diaspora market segment. Many of these diasporas already have multilingual skills and existing capital relationships for entrepreneurial activities. We believe there is strong market potential for emerging real estate markets with expat entrepreneurs.

Diversified Buyer Origin
The affluent, equity rich, target market segments are an international class unto themselves. They are not as subject to economic cycles as the middle class mass market. We believe, as does Knight Frank, that they have access to low interest rates and will take advantage of it in 2012. While these interest rates aren’t as accessible in some cases, we still believe this still supports strong broader international market potential.

Internet Marketing will Continue to Grow
There are current reports forecasting a 3% growth of internet usage across the United States. That will bring total internet usage up to 75% of the US population.
Tablet users are expected to increase 62% this year and we expect this is a very appropriate marketing medium to communicate real estate opportunities.
Mobile marketing is expected to increase 17% in 2012. E360 does not believe that mobile marketing is the most appropriate medium for promoting most peoples largest purchase decisions, a home.
Online video is expected to increase 7% this year. There are easy ways to optimize your video’s for SEO that we have written about in the past. The competition for online video related to the real estate industry is lower compared to other industries.

As previously posted, January was expected to be strong search and lead generation month. Some of our branding team and friends believe this may be due to people’s reflection over their dreams and aspirations during the holidays translating into dramatic search spikes during January. Our Mexico real estate internet marketing is already supporting our strong search expectations. The same can be said with the Panama real estate internet marketing we are performing. We are measuring strong performance by high click thru rates and lead generation. Additionally, we expect to see a strong Costa Rica real estate internet marketing potential in 2012.

Social Media for Brand Awareness and Conversion
As it relates to a product or service we expect the most effective use of social media to be utilized for discount promotions, SEO page ranking, brand awareness and converting existing relationships. The debate continues on the lead generation potential.

Stepping back, we are excited about the market opportunities that lay ahead. We are already getting units closed. As an E360 valued relationship please don’t hesitate to ever reach out to us for a conversation. Throughout the year you will also find us attending the top international real estate conferences across our markets if you want to try connecting there.