A short missive here at the end of the year. I intend to have an excellent Christmas and prepare for an even better New Year, so to clear the way this is it for 2010 but be ready for next year – there are a lot of interesting and challenging things to come.
• The architectural business, especially for housing, will continue to founder. There will be an increase in mergers (of failing firms joining other failing firms) like two stars that collide; they may be brighter but only for a moment. Star designers of firms will, out of necessity, join other firms to try and continue on.
• Interest rates on housing will continue to rise. This will, for those that can, start a brief but explosive push to refinance before rates go too high. Then demand will flatten, rates will continue to rise, new housing will continue to suffer.
• Solar power needs markets to grow, and for the time being housing will not be the place. After all the government buildings, Walmarts, shopping centers, and office buildings are covered, where will this market turn? Traditional housing designs are not suited to panel installation. There will be a change in the designs of residential and multi-family roofs – less hip and more flat designs. This will dramatically affect the look of residential housing; also look for solar leasing deals with the big builders.
• Master planned communities will still sit on the sidelines, waiting, waiting, and waiting.
• There will be a five year breather on high-speed rail. When too many public service union jobs are lost due to budget cutting, there will be a quiet revolution to put off increasing our bond debt for this frivolous venture. Especially when it is found the only people who will profit are Chinese companies – to the tune of billions of tax dollars leaving the US.
• There will continue to be a movement of Boomers to the healthier and sunnier urban areas (Austin, Houston, San Diego for example), but there will also be a strong and financially important segment of this group that will stay in place and seek local options. Look for high quality and well serviced condominiums and apartment complexes in these markets. As they leave their big homes they want to stay local, live well, and have access to amenities, family and friends. They are not going too far afield unless it’s on a cruise ship.
• Speaking of cruise ships, with all the trouble in European cities (I know it’s isolated – but the traveler thinks not), look for cruising to continue to be supported – it is perceived as a safe way to see the world, if only its edges.
• Urban retail (much overbuilt everywhere) will look to be repurposed (lovely phrase), like overbuilt office space that was converted to housing; look for retail to face some of these same opportunities. Infill housing in parking areas at urban malls comes to mind in many markets.
• The continued growth of urban senior and active adult housing; the potential to repurpose failed condos into high-rise active adult complexes may save some vertical properties.
• The growth of apartment complexes – especially high end. These offer a mortgage free lifestyle that will verge on the resort and hotel level. Big impact in high-salary areas (Silicon Valley, Chicago’s Streeterville, San Francisco, and other high-value urban markets) where housing costs are too high for a transient worker climbing the ladder.
• More and more shopping on-line – driven by less and less product in the stores and the difficulty in accessing stores with the products. Amazon will blow the doors off most retailers.
• The urban scene will embrace the electric car in its many forms. But it still consumes energy, will clog the expressway the same as a nasty gas guzzler, and will still hurt if you are hit by one. Very few, like a friend of mine, will be self-sufficient with a private solar power system recharging their Volt. (Still trying to figure out how that works when he’s home only at night).
• Look for some reality in the draconian and silly environmental laws pushed during the last five years - more tempering than elimination. Cities will be desperate to attract builders and residents, the approval process must be streamlined; it will have to with the smaller and smaller staffs in most cities.
• And yes, there will still be a suburbia (its death, while wished for by some, is a long way, if ever, off), still an urban complex, still places in the country, and still commuters. Get over it; it is not as bad as you hope.
By the way a friend and political blogger, Rich Galen has an excellent post today, go to: http://www.mullings.com
And a wonderful video I suggest is: http://www.youtube.com/watch_popup?v=Iwa-lSVqA1M&vq=medium
And one last one on Quantitative Easing is: http://www.youtube.com/watch?v=PTUY16CkS-k
Have a wonderful Christmas, hug your friends and children, and spend the time preparing for an exciting New Year.
Stay tuned . . . .