Jessie Holshouser
was our first speaker of the class. He spoke in great depths about the
ever-changing world of capital markets. Some of the most interesting parts of
his lecture were just coming to realize the standard or average way the market
has truly acted over the years. Being new in the industry, learning historically cap rates at closer to eight percent, when some markets are seeing Cap Rates as low as three percent
currently.
Overall, looking
back on my notes from this lecture, there was one thing I had written down that
immediately caught my eye when I began to start writing a post on it. “Jewelry
& Toaster Ovens” is what I want to highlight in this blog post. When banks were regulated and it became more difficult to attract
people into your banks, they had to come up with “gimmicks”. These “gimmicks”
such as toaster ovens and jewelry were how they got people to come in to use their
services. This got me thinking about something that’s less Real Estate related
and more marketing related. They do similar things in new home developments.
Sometimes, the first five homes come with flat screen televisions, or even
partially furnished.
This is just one
example of how lending has changed over the years. No longer, are lenders
giving out toasters and jewelry, as regulations have changed so have trends. As
with the real estate industry as a whole; cap rates, regulations, and trends are
continuing to change. Its important as new students in the industry to understand
this. Its obvious even as new comers that Cap Rates cant drop much further,
however, without this lecture it may not have been as obvious where they
generally are overall.
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