Instructions
The student must then post two replies of at least 450 words. Each reply must
incorporate at least one scholarly citation in current APA format. Any sources cited must have
been published within the last five years. Cite the specific verse(s) for at least one Biblical
principle that you feel is relevant to the situation (explain how and why it applies). Acceptable
sources include peer-reviewed journals, the textbook, and the Bible.
Sources older than five years and non-scholarly sources such as trade publications and industry-
related websites may also be used in addition to the minimum number of scholarly sources.
1.) Respond to Breanna:
According to Numbers 14:8, “If the Lord delights in us, then He will bring us into this land and give it to us, ‘a land which flows with milk and honey” (King James Bible, 1769/2017). For real estate developers, recognizing opportunity within the land is not only the first milestone of a development process but also a constant activity with ever-changing requirements and demands that may pop up during a project. However, “capturing such an opportunity may have significant influence on the success of the project” (Dewberry, 2019). Being able to pinpoint an opportunity that God has guided you to, should end in a blessing-filled land overflowing with figurative milk and honey, as God has promised.
The land I chose for this assignment is located at West 73rd Street in Cleveland, Ohio (https://www.loopnet.com/Listing/W-73rd-St-Cleveland-OH/22555141/ ). It consists of 1.13 acres of land and is surrounded by multiple other residential properties, both single family and multifamily residential units. Therefore, it should be zoned as a residential property.
Some of the infrastructure for this land appears to need to be set up such as the water, electric, and gas infrastructures. However, there is already a good transportation infrastructure and even better social infrastructure since there are plenty of roads, streets, and walkways surrounding the immediate property and those roads are in proximity of a highway. There is also a major park within walking distance, the Cleveland Public Theater, and many retail units to support the foundation for the social infrastructure.
Real estate infrastructure in every discipline is significantly influenced by the economic environment and climate. With that said, according to U.S. Bureau of Economic Analysis (BEA) (2021), the gross domestic product in Cuyahoga County has increased -3.3% to 5.6% compared to the national average of -3.4%. The area is right on track when being compared to the rest of the country, which is neither bad nor good. The land also falls in an area that fell to -5.5% unemployment rate compared to the -4.5% national average (U.S. Bureau of Labor Statistics, 2021). While this is a little more, the population demographics show that the median income is higher than the national average and the specific area in this neighborhood might not have been affected by this high unemployment rate. This unemployment rate also had to do a lot with covid-19 and its effects on the economy. The evidence lies in the inflation rates. For example, the consumer price index increased by 7% in 2021, almost 6 times more than average increase. Although real estate is supposed to hedge against inflation, during the pandemic it also experienced a dramatic increase (Salisu et al, 2020). Due to this inflation, the real estate interest rates also decreased to encourage spending in this area. The interest rate for a 30-year mortgage declined to a 52-week low of 2.83% and is now steady at 3.73% (The Wall Street Journal, 2022). All in all, the land appears to be a good opportunity for residential investment and continued profits in the area for excess enrichment.
References:
King James Bible. (2017). King James Bible Online. https://www.kingjamesbibleonline.org/ (Links to an external site.) (Original work published 1769)
Dewberry (2019). Development of the Built Environment: From Site Acquisition to Project Completion. McGraw-Hill Professional.
U.S. Bureau of Economic Analysis (BEA). (December 08, 2021). GDP by County, Metro, and other areas. GDP by County, Metro, and Other Areas. Retrieved January 27, 2022, from https://www.bea.gov/data/gdp/gdp-county-metro-and-other-areas
Sun, Y., & Cui, Y. (2018). Analyzing urban infrastructure economic benefit using an integrated approach. Cities, 79, 124–133. https://doi.org/10.1016/j.cities.2018.03.001
U.S. Bureau of Labor Statistics. (2021, September 17). County employment and wages in Ohio – first quarter 2021 : Midwest Information Office. U.S. Bureau of Labor Statistics. Retrieved January 28, 2022, from https://stats.bls.gov/regions/midwest/news-release/countyemploymentandwages_ohio.htm
Hudson, M. (2021). Rent-seeking and asset-price inflation: A total-returns profile of economic polarization in America. Review of Keynesian Economics, 9(4), 435–460. https://doi.org/10.4337/roke.2021.04.01
Salisu, A. A., Raheem, I. D., & Ndako, U. B. (2020). The inflation hedging properties of gold, stocks and Real Estate: A Comparative Analysis. Resources Policy, 66, 101605. https://doi.org/10.1016/j.resourpol.2020.101605
The Wall Street Journal. (2022, January 27). Bonds & rates. The Wall Street Journal. Retrieved January 27, 2022, from https://www.wsj.com/market-data/bonds
U.S. Bureau of Labor Statistics. (2022, January 14). Consumer price index: 2021 in Review. U.S. Bureau of Labor Statistics. Retrieved January 27, 2022, from https://www.bls.gov/opub/ted/2022/consumer-price-index-2021-in-review.html
2.) Respond to John
Jan 27 at 11:30pm
Manage Discussion Entry
Land is a very rare and precious resource as it is where it all begins in real estate. Real estate developers utilize the evolution of high-speed IT technologies used for examining big data on the available land as businesses intelligence tools assist in the next stage of development (Cherishenko & Yu Yu, 2021). Big data collection can assist real estate developers on both micro and macro levels as location, the current economy, and real estate transactions can determine the risk factor prior to finalizing the acquisition of a parcel of land (Lee, Jae-Hwan, & Jun-Ho, 2021). Once the risk has been assessed the developers can identify the particular property type in which the land will be used for. In Huntsville, Alabama, there has been an exponential amount of growth where land has been utilized to develop new residential, retail, office, industrial, and mixed use properties.
South Huntsville has been budding with growth as their has been new restaurants added over the past year such as Tom Brown, Starbucks, Whataburger, Chic-fil-a, Marcos Pizza, and Zaxby’s along with other local dinning establishments. There has been numerous residential subdivisions that are actively being constructed along with a new High School that relocated from Bailey Cover Road to new all new Publix shopping center. Since 2002, the total GDP for Huntsville as climb steadily without any setbacks which reflected by the strong economy and the tremendous growth through the city (Federal Reserve Bank of St.Louis, 2021). Unemployment rates have decreased each month as the rates maintain between 2.3-2.9% over the past 6 months and the with average weekly wages for those employed in Huntsville at $1257 which is above the United States average. (Bureau of Labor Statistics, 2022).
A great opportunity to establish a new retail property would be at 11365 S. Memorial Parkway which is the heart of the growth in south Huntsville as there is a Walmart, restaurants, smaller shopping centers, and residential properties. The real estate developers and investors are only limited to the opportunities based on how much land they have access to along with proper infrastructures in place. Without the availability of infrastructures then there are limits to what can be placed on the land as well as how productive, effectively and efficiently these properties are generating a return on investment. This tract of land has transportation, water/sewage, electric, and social infrastructures in place as the surrounding establishments inside the built environment has created a city budding with growth. The immediate access to the roadways will enable access to construct teams and eliminate downtime due to transportation issues. The water pipe system and the electric grid are new as this growth within the community is less than 10 years old.
Interest rates have began to rise over since the beginning of the year and in order to bring down inflation the Fed will look raise rates again when it meets on March 15-16 (Timiraos, 2022). Closing on this property with a commercial loan prior to the presumed rate hike will keep the expenses down on the build on this site.
References
Cheryshenko, M. S., & Pomernyuk, Y. Y. (2021). Integration of big data in the decision-making process in the real estate sector. IOP Conference Series.Earth and Environmental Science, 751(1) http://dx.doi.org/10.1088/1755-1315/751/1/012096
Economy at a Glance Huntsville, AL. (2022). U.S. Bureau of Labor Statistics. Date accessed: 1/27/22. Retrieve from: https://www.bls.gov/eag/eag.al_huntsville_msa.htm#eag_al_huntsville_msa.f.p
Fed Interest-Rate Decision Tees Up March Increase. (2022). N. Timiraos. Wall Street Journal. Date accessed: 1/27/22. Retrieved from: https://www.wsj.com/articles/fed-tees-up-march-interest-rate-increase-11643223603
GDP and summary by county and metropolitan area.(2021). Bureau of Economic AnalysisDate accessed: 1/27/22. Retrieved from: https://apps.bea.gov/iTable/drilldown.cfm?reqid=70&stepnum=40&Major_Area=5&State=26620&Area=XX&TableId=533&statistic=3&Year=2020,2019,2018,2017&YearBegin=-1&Year_End=-1&Unit_Of_Measure=PercentChange&Rank=0&Drill=1
Lee, S., Jae-Hwan, K., & Jun-Ho, H. (2021). Land Price Forecasting Research by Macro and Micro Factors and Real Estate Market Utilization Plan Research by Landscape Factors: Big Data Analysis Approach. Symmetry, 13(4), 616. http://dx.doi.org/10.3390/sym13040616
