Hot International Real Estate Trend


We are spotting trends! The collision of three huge economic distortions that create an earthquake of international property opportunity right now. This September 14, 2004 Gary Scott message looks at three specific and special real estate deals that will profit from these trends.

As I write, the collision of these trends is having a volcanic impact on your health and wealth, either up or down.

The first trend is really hot, or at least getting warm.

That’s the weather. National Geographic devoted a huge portion of its September 2004 issue to it…Global Warming. The 20th century has seen the greatest warming in at least 1,000 years. Sea levels rise with the temperatures, a result of sea ice decline. Higher waters initially drown low lying islands which is happening now from the Indian Ocean (the Maldives Islands continued existence is in doubt) to Western Alaska (Inupiat Islands are eroding). Peru’s ice caps are contracting more than 600 feet a year. The Larsen Ice Shelf is collapsing. Alaska’s forests are dryer and have more forest fires. Lake Chad in Africa has shrunk by 90%. The Western U.S. is in a five year drought. The Sierra Nevada Snowpack melts earlier and the Sacramento River gets 12 percent less spring and summer snowmelt. The list goes on…and on.

Warmer weather also creates increasing numbers of larger storms..hence a record number of hurricanes have hit Florida this last month and tropical storm Jeanne is already in the Caribbean.

The second trend is theboom on the beach.

In recent decades one of the largest migrations in mankind’s history has transformed the Atlantic and Gulf coast. Now one in 7 Americans live on the East and Gulf coasts. Beach economies have been growing faster than anywhere else.

This concentration of humanity has flocked to the coastline from rock-strewn coasts in Maine all the way around to sandy barrier islands hugging Texas.

New retirees and baby boomers are settling on the coast full-time or buying vacation homes for later retirement later.

A USA TODAY analysis found that an estimated 41 million people now live in a county that abuts the eastern or southern seaboard. There are also several million inland residents with second homes near the coast. Since 1993, 100 coastal counties have grown nearly 50% faster than the rate for the entire USA. About 1,000 new year- round residents arrive each day.

To a large extent, this migration is being fed by the booming metropolitan centers along the East Coast: Boston, New York, Baltimore-Washington, Charlotte, N.C., and Atlanta. Many urban residents start out buying or renting a weekend home along the coast and eventually move permanently. This is important as you will see in a moment!

This growth should continue with the aging of the USA's 78 million baby boomers. Millions of boomers should have the financial resources to move to the beach but….

The crowds also create problems. Traffic jams are everywhere. Quaint charming villages have turned into high rent suburbs and lost their charm. The quiet pace that originally attracted is gone. Along with the traffic jams comes overcrowded schools, higher crime, a shortage of affordable housing and higher taxes to deal with the growing mess.

Another bigger problem is water pollution and the surging costs of dealing with nature's risks.

Mother Nature grows nastier with the warming and this coincides with the crowds. We are seeing more and stronger hurricanes, record floods and lots of beach erosion. The danger to life and property is rising, and the cost of disaster relief is soaring. Insurance costs have risen dramatically and even so is available only with government support.

Finally we reach the third trend, a migration north as humanity seeks relief from stress. As the coastal crowds grow, the traditional strategy for hurricanes, to get out does not work. There are not enough roads to evacuate everyone ahead of a storm.

Yesterday’s USA Today headline read, “Anxiety, fatigue grind down hurricane-lashed Floridians ; 'Normal' comes to mean insomnia, power outages and evacuation orders”.

The stress from facing these ordeals is going to cause many people on the coast to leave. Manny will head north to Georgia and North and south Carolina. We can gain opportunity if we spot where they will go.

Here are three specific opportunities I see right now.

First, I have long been urging readers to consider investing in Ashe county N.C. Read

http://www.garyascott.com/archives/2001/01/07/203/index.html

http://www.garyascott.com/archives/2003/09/12/902/index.html

to understand why.

Now there is a specific real estate opportunity called Jefferson Station that I believe will be very hot. For the past five years the City of West Jefferson has been growing rapidly. Several years ago Thomasville Furniture shut down its 12.5 acre furniture plant in the very middle of this town. Now this site is being developed into a center of residential condominiums, offices, commercial spaces, art studios, restaurants, an open-air ‘square’ and an industrial space in the dry kiln area of the property.

The developer plans to have 50 retail spaces plus 30 loft condos available in the first phase. They are available in sizes from 1,000 feet to 3,000 with the high ceilings that range from 12 – 24 feet. An exercise room is also being constructed for the homeowners’ use. The condos can be purchased completed or in a shell.

My belief is that these condos are the final tipping point for West Jefferson and that those who buy early will see a dramatic rise in their value. This development is near the Charlotte, Greensborough, Winston Salem, Raleigh market.

We will have an Ashe county real estate review at our October course here at the farm. For details go to http://www.garyascott.com/catalog/iiez.html

If you have interest in this development, I plan to talk to the developer next week so send me a note at gary@garyascott.com and I will bring you up to date on what I learn.

I stumbled across the second opportunity by chance. There is a small mobile home development sitting on a compact, but beautiful lake minutes from the Bavarian town of Helen Georgia, near Cleveland Georgia, not far north of Atlanta. This lake is special, because it is dammed so it never rises or falls as so many Georgia lakes do. Two of our friends have places there and we have visited often. We love it, heavily wooded with lots of quiet, forest walks. For a variety of reasons there are 70 units for sale in this development. The high number of units on the block are caused by local distortions, aging of the original owners, previous water and sewage problems, wrangling in the condo association and a transition from smaller units to larger. There is opportunity when local conditions temporarily depress values created by larger fundamentals. There are many amenities, stables, indoor pool, sauna, jacuzzi and a club.

Because these homes and lots run from as low as $20,000 (the highest I have heard of is $169,000) this is a perfect lower entry place where many fed-up Floridians may move. This opportunity is also strengthened by the Charlotte NC and Atlanta market. For details send a note to Kathy at KSGOEBEL@yahoo.com

The third opportunity is property in Ecuador which I have written about in previous messages. Less than four hours from the U.S. you have an ocean and mountains where there are no hurricanes. Ecuador has volcanoes and earthquakes, but these are different, coming infrequently. The residents in Florida know that hurricanes will come each year.

We have specific properties in mind and I will send pictures and details in future messages. Until then, to learn more about Ecuador property go to http://www.garyascott.com/catalog/ecrealestatetours.html

Until next message, good investing!

Gary


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