Welcome to the official blog of Block Real Estate Services, LLC (BRES). BRES seeks to offer insight and news concerning commercial real estate, financial investments, construction and development of the 212 communities we serve locally and nationally.

Thursday, January 24, 2013

Factors Contributing to the Real Estate Market in 2013

Block Real Estate recently had the pleasure of hearing Andrew Busch, top financial analyst, speak at the Kansas City at the Integra Realty Resources 11th Annual Real Estate Trends Conference. Busch highlighted the big factors contributing to the state of the economy and what you need to know for business in 2013.

According to Busch, it's all about growth for:

  • Europe 
  • China 
  • And The Federal Government
In this post, we examine these three factors and Bush's key takeaway on what affect this will have in 2013:

1. Europe
  • European Central Bank President Mario Draghi pledged to do whatever was necessary to protect the euro zone from collapse, sending markets and the euro higher. 
  • Spain must submit to close scrutiny of its financial sector by European institutions and the International Monetary Fund as a condition for any bailout. 

So, what's next for Europe? Busch said it looks like more of the same. There's no premium for taking risk when Europe bounces from crisis to crisis. Without risk, there's no start-ups and no start-ups equals no growth.

2. China

  • China is ebbing into an export slowdown. However, the country's ravenous appetite for copper, oil and iron continues, poses a threat to commodity prices. CNBC Asia reports show that iron ore imports hit a record high in December and for all of 2012, rising 8.4%.
  • China has also seen significant leadership, growth and economic shifts in 2012 that will come to play in 2013. 

Will China sustain? Busch says that this looks to be the year of transition for China. China maintains lower growth, but consumer spending and urbanization drive value.

3. The Federal Government

  • The U.S. spending and entitlement problem poses a long-term problem. 
  • The U.S. housing market is starting to stabilize. National Association of Home Builders (NAHB) Chief Economist David Crowe said in this article, "Nearly every measure of housing market strength – sales, starts, prices, permits and builder confidence – has been trending upward in recent months and we expect to see gradual but steady growth along these lines in 2013."

So, which way is it turned? The FED is actually doing something and Busch says it could tip in U.S. favor...or not. The alarming debt ceiling, budget and entitlements cause worry. However, a stabilizing housing market and rising energy trade lends reason for U.S. optimism. 

    Content compiled from Andrew Busch, Chief and Editor of the The Busch Update
    Read more on Andrew: http://www.andrewbusch.com/


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