Obama or Romney? Nah, electricity

By John McGory

This year’s presidential election will determine who our country’s leader will be.  Regardless of who wins, the real power in our world is electricity.

Electricity is the one leader we cannot do without.  We can change presidents and prime ministers but could you imagine the state of world affairs if we lost power for a substantial period of time? It would be very ugly.

The recent storms that ripped through the Midwest and Middle Atlantic states left millions without electricity for up to a week.  Ask any business or individual who didn’t have power for a week how important electricity is to them today.  They would kneel to the all powerful king.

The world’s economic and environmental future hinges on how we continue to provide a steady, reliable stream of electricity for a growing world.  The world-wide consumption of electricity doubled since 1980 and is expected to double again by 2030. 

China doubled its electric power system between 2006 and 2010.  India electric consumption will increase fivefold from 2010 to 2030. 

The United States electric needs sound modest in comparison to developing countries.  The U.S. electricity consumption will increase by 1.4 percent a year for the next two decades, according to Daniel Yergin in his book, “The Quest.”  But don’t be fooled, it will not be easy to produce.   Yergin says the U.S. will need to build about 300 new standard-sized coal-fired plants or 150 nuclear reactors to meet that increased consumption.

So how does the world get from here to there to meet it insatiable hunger for electricity?  Here are two questions that need to be answered:

1.   What types of fuel will countries use to produce their electricity needs? 
2.    How will the world pay for the estimated $14 trillion it will cost to accommodate this growth?        

Electricity’s great strength is its flexibility.  It is not a primary energy resource but one that is made from other resources.    Coal, natural gas and uranium are today’s big three with coal supplying 45 percent of the power for electricity, followed by natural gas at 23 percent and rising, and nuclear at 20 percent.  Hydropower supplies seven percent, wind approximately two percent and oil one percent. 

These primary resources are competing for a piece of the worldwide $14 trillion electric pie.  They all have their pluses and minuses.  Coal, natural gas and nuclear are the big boys who are elbowing their way into position.

They are trying to elbow out renewable energies.  The big three continue to say that renewable energies are decades away from having a significant impact on the world’s electricity needs.

This year’s presidential election will put Barack Obama and Mitt Romney in a tight spot.  Huge contributions are coming in from the big energy producers.  But 85 percent of the public wants renewable energies to play a bigger role in meeting our energy needs. 

The candidates are going to walk a tightrope in appeasing big energy contributors while assuring the public that renewables will play a part in our energy future.  Listen closely to the candidates and you should be able to tell who is paying for the words that are coming out of their mouths. 

Electricity is our sovereign ruler.  We need it to live in our modern world.  The need for more power is great so the stakes are high.  Our economic and environmental future hinges on how we produce and pay for electricity.  The king must be served.

John McGory is an Ohio Energy Soldier and a partner in Webface, an original content marketing company.              

Housing ready to bloom?

By John McGory   

Spring is in the air.  The warm weather and sunny skies improve everyone’s mood.  Spring is also the time when people consider their housing options.  The Real Estate Swami says that it may be the best time in five years to buy or sell a house.

“Housing may be ready to bloom,” says the Swami.  “The economic outlook is much improved as reflected in strong retail sales of automobiles.  New car sales are the best they’ve been in four years.”

Job creation is also on the mend.  In the first two months of 2012, the economy added approximately 500,000 new jobs.  Swami says new jobs are the seeds for a housing recovery.

“New job creation begins the domino effect in housing.  This brings new people into the housing market creating positive momentum at the rental and starter-home segments.  The housing surge then cascades through the higher-end housing market over time,” remarked the Swami.

The glut of bank-owned homes is still a drag on the housing economy but it may begin to subside.  The Swami has seen a noticeable uptick in central Ohio houses going into contract.

“In my efforts to find housing for several clients, it is clear that existing home sales are improving.  Superior products that are priced right are going into contract within days.  This is a positive sign and could bring about the first substantial appreciation in home values in six years,” predicts the Swami.

If you are considering buying or selling a home in the near future, then Swami suggests to keep an eye on local house sales.

“How close to the listing price a house sells for is a good barometer for the housing health of neighborhoods,” says the Swami.   The days of deep discounts and a housing market severely tilted in favor of buyers may be coming to an end.”  

John McGory is a licensed Realtor and partner in Webface, a content marketing company.  If the swami can help you in either buying or selling a home, then please feel free to call at 614-581-3610 or send an email to jrmcgory@gmail.com.   We will be honored to assist you.

Presidential Candidates Silent on Housing

By John McGory

The Real Estate Swami said in his last post that he would listen to the candidates regarding their positions on housing as they vie for Ohio primary voters.

Well the Swami sees he won't have to waste his time since the candidates are refusing to talk housing and real estate.

TC Brown is covering the 2012 presidential election media coverage for the Columbia Journalism Review's 2012 Election Swing State Project.  Here is what Brown writes regarding the Republican candidates' position on housing:

The Blade article, penned by Tony Cook, zeroed in not on what Romney and Santorum are talking about, but what they aren’t—the housing crisis. Cook starts by paying close attention to the candidates’ rhetoric:

Attend a speech by Mitt Romney or Rick Santorum and you’re likely to hear all kinds of claims about the economy — gas prices are too high, deficit spending is out of control, and government regulations are hindering free enterprise.

But as the two leading Republican candidates crisscross Ohio and Michigan, an odd omission has emerged in their speeches. Neither has mentioned the housing crisis.

…Mr. Santorum didn’t mention the foreclosure crisis during Ohio speeches in Columbus, Akron, and Georgetown, either.

Mr. Romney also has avoided the issue during recent appearances in Cincinnati, Cleveland, Monroe, and Shelby Township, Michigan.

That seems a noteworthy omission since Michigan, which holds its primary Tuesday, has the fifth highest foreclosure rate in the country, while Ohio ranks 12th.

The silence may result from the candidates’ taking their signals from GOP primary voters. Cook does a good job exploring the underlying reasoning, first with insight from Don Haurin, an Ohio State University economist.

In wooing their Republican base, the two front-runners are emphasizing their conservative credentials. That means an emphasis on fewer government regulations and less intervention in the free market. That message doesn’t do much to reassure those who have lost their homes or are facing foreclosure, Mr. Haurin said.

“You’re telling them there’s no help and that’s not going to win you any votes,” he said.

Cook follows that gem up with a quote from Eric Herzik, chairman of the political science department at the University of Nevada-Reno: “The easy answer to why Republican candidates don’t talk about this is they don’t have any type of solution. You can say it’s tough love, but it’s not the 30-second sound bite you want.”

The Swami thinks this avoidance of the issue is unfortunate.  Ohioans continue to hurt from the recession and not talking about the housing crisis is wrong.

"Housing and real estate are a drag on Ohio's economy.  We want answers from those wishing to lead us, not sound bites," says the Swami.

John McGory is a licensed realtor and a partner in Webface, a content marketing company.  He can be reached at jrmcgory@gmail.com.

Your Drop in the Bucket

By John McGory

The Real Estate Swami asks a favor of you.  Answer this simple question:  Are you environmentally friendly?  Most of you will answer yes, as did the swami.  But the swami knows he can be a better steward of the environment. 

The Swami found this list of ten tips to help him keep the environment in mind as he lives his modest life.  He would like to share it with you.

1.  Turn off lights when you are not in a room.  The mind sometimes forgets the little detail of flipping a switch.

2.  Don’t let the water run unnecessarily when brushing teeth and washing dishes.

3.  Upgrade insulation, especially in older homes.

4.  Check for air leaks around windows and doors.

5.  Buy earth friendly cleaning products including laundry detergent.

6.  Buy energy efficient light bulbs.

7.  Use cloth diapers.  A disposable diaper takes 500 years to biodegrade in a landfill.

8.  Unplug appliances when not in use.

9.  Look for Energy Star products.

10.  Recycle.

These are a few ideas that will allow us all to help the environment.   Many of you are already doing these and more.  The Swami begs a thousand pardons from you for not always doing his part for the environment.  He asks to keep the words of Mother Teresa in mind when considering if our small effort at helping the environment is worth it.

“We ourselves feel that what we are doing is just a drop in the bucket.  But the ocean would be less because of that missing drop.”

Everyone’s home is a nicer place if the environment is clean.  If you have questions regarding your home or you know someone who does, send us an email and we will help you find the answers.

John McGory is a central Ohio residential and commercial Realtor.  He is also a partner in Webface, a content marketing company (www.web-face-solutions.com) He can be reached at jrmcgory@gmail.com

Central Ohio Real Estate Is Not Normal

By John McGory

A national real estate expert came to Columbus this week to tell us that the real estate market is close to normal again.  The Real Estate Swami says statistics can be deceiving.

Ted Jones, chief economist for Stewart Title, came to town to present his real estate forecast to the Columbus Board of Realtors, Building Industry Association and Columbus Mortgage Bankers.

The Real Estate Swami was there to listen to the Houston, Texas native.  The main thrust of Jones’ speech was we are back to 2002 sales levels and that is as good as it is going to get.  The bubble years from 2003 to 2009 are but a fond memory.   

Swami believes that the evidence in the streets of central Ohio is that while we are improving we have a ways to go before we see a “normal” real estate market.

“There is evidence that the housing market is gaining strength.  But to say this is normal is either a sign of the apocalypse or someone with little faith in the central Ohio housing market,” says the swami.

The swami points to a robust 1990s market with strong residential and commercial building as more typical of a normal central Ohio real estate market.  Those days will return as the economy continues to strengthen and job creation increases.

The central Ohio job market is still down 35,000 jobs from its peak in February 2008.  We have picked up 5,000 jobs in the last 12 months, including a 3,700-job uptick in November 2011.

“Columbus and central Ohio have always been considered the poor stepchildren from real estate experts around the country,” remarks the swami.  “But our market can do much better and will do so in the coming years if we continue to get strong local leadership from business and government.”

The swami did agree with Jones that one group that needs to be encouraged that real estate is a good investment are young adults.

“Renting gives the young the illusion of freedom.  That all is possible if you are not tied down to a property,” he says.  “But we must remember that they have grown up in the worst of real estate times.  The young will soon see that ownership is true freedom.”  

John McGory is a partner at Webface (http://www.web-face-solutions.com/), a content marketing company in central Ohio, and is a licensed real estate agent.

A New Year's Home Resolution

 By
John McGory

Do you have a New Year’s resolution for your home this year? The Real Estate Swami says that January is the perfect time to reflect on where you live and what your plans are for your house or apartment.

“The cold, gray days of January are the time to meditate on where you live,” says the Swami.  “Once you become one with your thoughts then you can begin to plan.”

The Swami suggests looking back before looking ahead.  What activities and events did you enjoy in your home last year?  What would have made those times better?   What limitations or drawbacks in your living arrangements brought discomfort or disappointment?  Thinking about the recent past can give you a clearer vision of where you want to go. 

It may be improving your patio, deck or outdoor space.  A bigger kitchen may bring needed space.  Or it may be that the house or apartment has too many issues and that a new address is the right answer.

Maybe the changes are small but mighty ones.  A resolution need not mean spending a lot of money.   Sometime it is simple as painting or a thorough cleaning. 

Another idea is to practice the feng shui concept of moving 27 items in your house to change your life.   Many practice the Chinese art of feng shui to promote positive energy flowing through the home.  It provides balance and harmony to the home or office.  Here is a short video that explains feng shui

http://video.about.com/fengshui/Learn-Feng-Shui-Basics.htm

“Much can be done to improve the feeling of love and energy in the home.   It starts by uncluttering the mind and feeling the energy that is there.  Then you will begin to understand what needs to be done,” says the swami.

The Swami reminds all that peace starts in the heart and home.  He wishes each of you a joyous 2012.

John McGory is a partner in Webface, a content marketing company. He is also a licensed central Ohio real estate agent.  He can be reached at jrmcgory@gmail.com

Stagflation rears its ugly head!

By John McGory

Stagflation is back.  Stagnant wages and inflation due to increased food and oil prices are combining to create an economy where prices go up while wages remain static.  While 10 percent unemployment figures grab headlines, 90 percent of the workforce lives with the fact that their pay does not go as far as it did a year ago.

The Real Estate Swami says that until wages rise above the rate of inflation, the real estate market will languish. The Swami points to the 1970s and early 1980s as the last time our economy dealt with stagflation.

“Our standard of living continues to erode as the cost of goods and services increase, while wages stand still,” says the Swami.  “Oil price increases in the 1970s during an economic downturn caused a decade of turmoil.  It is unreasonable to think that real estate will flourish in this stagflation environment.”

The hourly earnings of workers in non-supervisory positions have risen by 2.3 percent from July 2010 to last July.  That is a full percentage point below the 20-year average in annual wage increases of 3.3 percent.

In the same time period, the consumer price index increased by 3.6 percent. This means Americans are losing ground in their standard of living. With sustained high unemployment, a growth spike in wages does not seem to be in the cards for the next several years.  The only hope for relief is a significant drop in oil prices, which could decrease consumer prices and stop the slide in the standard of living.

“It is a time of economic retrenchment for all.  While much can be learned from living with less, the huge real estate machine that creates many jobs will remain silent,” remarks the Swami.  “Wealth for the people must be created before sustained prosperity returns.”

The Swami points to the fact that 70 percent of the U.S. economy is derived from consumer spending. If consumers are losing ground to inflation and stagnant wages, fewer products will be consumed.

“Real estate is the biggest item anyone buys.  But we cannot buy if we do not have,” the Swami says.   
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Home Building: A Shaky Future?

By John McGory

With the demise of the home building industry, a fundamental change in how we house people is facing our country.  The Real Estate Swami says the economic meltdown may usher in a new era in how we build and pay for housing in the U.S.

Sales of newly built homes, which peaked at 1.3 million units in 2005, are running at an annual rate of just 298,000 units in 2011 and are on pace to post the lowest count since record keeping began in 1963.  

Home building starts in central Ohio’s seven-county region totaled 600 through July 2011.  In the late 1990s, it was not uncommon to see 600 permits per month in the City of Columbus. 

 This staggering drop in new housing is chasing builders, large and small, out of business.  The Swami says that home building as we know it today may never return

“Central Ohio’s impressive home building industry is but a shell of what it once was,” remarked the Swami.  “In what form it returns when housing is needed is a question not yet answered.”

The Swami says the real estate meltdown shows where home ownership and the new economy have diverged.

He predicts the speed of the new economy will challenge home ownership and 30- or 40-year mortgages.  These challenges include:

1.   Worker skills necessary today may be useless tomorrow.

2.   Middle class jobs are disappearing.

3.   Companies flourish for a short period of time, then wither away. 

4.   Governments struggle to pay their bills and maintain necessary services.

“These are signs of a troubled day-to-day economy,” remarks the Swami.  “How can a home owner sign a 30-year mortgage under such uncertain circumstances?  How can communities afford services for suburban-styled development with this short-term economic mentality?”

The Swami foresees changes such as hybrid ownership/leasing arrangements, larger multi-family housing projects and the halt to sprawling development in rural areas.

“Significant changes in society took place during the last Great Depression.  How we live amongst one another will be one of the major changes we face as this economic malaise slowly comes to an end,” says the Swami.

The Real Estate Swami is brought to you by Web Face, a Columbus communications and marketing company (www.web-face-solutions.com)

Don't get lost in the wilderness of opinions

By John McGory

The events of the past few weeks have shown that the American public is fractured and confused.   Contentious negotiations over the deficit, a credit rating reduction and the corresponding stock market roller coaster ride have made many nervous over the direction of our country.

The Real Estate Swami preaches patience for those who have real estate and are considering selling.  He says that getting caught up in the rhetoric of the day is to be lost in the wilderness of opinions.

The swami points to comments made by Fannie Mae Chief Economist Doug Duncan that the U.S. is probably a little more than halfway through a 10-year adjustment period following housing market peaks in 2005 and 2006.  The value of U.S. housing stock has dropped eight trillion dollars since 2006.

“The long–term structural problems with the real estate economy will take time to correct.  Getting distracted by the wrangling in Washington can cause a confused mind,” says the swami.

Central Ohio average sales prices are down 3.5 percent from a year ago.  That indicates that buyers will continue to have the upper hand, says the swami.  Foreclosures have slowed due to banks moving slowly, which means another wave of foreclosed homes will be coming.

The swami warns not to become too passionate when considering your next real estate move.  He points to the words of the Buddha:  “As rain penetrates an improperly shingled roof, so passion overwhelms a confused mind.”
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The Real Estate Swami is brought to you by Web Face, a Columbus communication and marketing firm, http://www.web-face-solutions.com/

Wal-Mart, Westerville and Mass-Produced Urban Life

The Real Estate Swami sees turbulent days ahead for communities as Wal-Mart and other big box retailers move into urban neighborhoods.  Swami’s crystal ball shows many small business owners closing their shop doors in the coming years as a result.

The City of Westerville, Ohio, recently approved the building of a Wal-Mart in an urban neighborhood populated by many small shops.  This is an example of Wal-Mart’s plan to target urban areas since they have saturated the rural landscape.

A 2009 study* by the Center for Urban Research and Learning at Loyola University-Chicago highlighted the impact that urban Wal-Marts have on surrounding businesses.  The study of a Chicago neighborhood showed 82 of 306 area businesses closed their doors within two years of Wal-Mart’s opening.

“The beauty of the recent moon will not hide the pain and suffering many small business and building owners will feel in the coming days.  The vision of jobs, neighborhood vitality and the sense of community will vanish as a new reality sets upon urban neighborhoods,” reveals the Swami.

The Loyola University study shows that the probability of stores closing due to a new urban Wal-Mart falls off 6 percent per mile in all directions.  The types of establishments in danger include electronics, toys, office supplies, hardware, home furnishings and drugs. The report also shows area sales, jobs and taxes as flat or declining.

“The balance of local community is a delicate one,” the Swami says.  “Many desires and needs swirl within our collective spirit to form one face.  Let us meditate on the knowledge that change is constant. The community’s eyes and heart must be open to where the road ahead is leading.”

The Real Estate Swami is a service provided by Web Face, a communications and marketing company.  To find out more about Web Face go to www.web-face-solutions.com

*Davis, J., Merriman, D., Samayoa, L., Flanagan, B., Baiman, R., & Persky, J. (2009). The Impact of an Urban Wal-Mart Store on Area Businesses: An Evaluation of One Chicago Neighborhood's Experience. Chicago: Center for Urban Research and Learning, Loyola University-Chicago.

A Bright Star in Columbus' Future

The Real Estate Swami sees that MSN Real Estate ranks Columbus the 9^th best city in the country to rebuild homeownership.  The Swami perceives this as a bright star in central Ohio’s future. 

The survey ranked mid-to-large-sized cities.  Columbus was the largest city in the top ten, with Scranton-Wilkes-Barre, Pa. at the top.

The Swami’s crystal ball shows this trend to bode well for central Ohio.  Many affordable houses were constructed here in the fifteen years prior to the real estate crash.  Swami sees this stockpile of homes as an eventual benefit to central Ohio as the economy starts to grow.

“The pain of overbuilding is real to many in our community.  But the suffering will end when the jobs begin to return,” reveals the Swami.  “Many communities do not have the available infrastructure in place to accommodate growth.  New housing is not being built.  Communities that have good housing stock in place will be attractive to those who produce jobs.”

Swami believes that man creates his own destiny.  He considers Columbus’ selection as a top place to rebuild homeownership as a blessing.  Our challenge will be to take care of all our brothers and sisters.

“Our region is blessed with gifts including an ample water supply, a strong logistics component and enlightened young workers.  Our strengths can help all of our people blossom.  The region needs to focus more on taking care of its own and then the fruits of our labor will multiply.”

The Real Estate Swami is a service provided by Web Face, a marketing and communications company helping companies and central Ohio grow in responsible ways.  Learn more at www.web-face-solutions.com.