1. Demographics
Demographics are the data that describes the composition of a population, such as age, race, gender, income, migration patterns and population growth. These statistics are an often overlooked but significant factor that affects how real estate is priced and what types of properties are in demand. Major shifts in the demographics of a nation can have a large impact on real estate trends for several decades.
For example, the baby boomers who were born between 1945 and 1964 are an example of a demographic trend with the potential to significantly influence the real estate market. The transition of these baby boomers to retirement is one of the more interesting generational trends in the last century, and the retirement of these baby boomers, which began back in 2010, is bound to be noticed in the market for decades to come. (For more on the baby-boomer trend, see Boomers: Twisting The Retirement Mindset.)
There are numerous ways this type of demographic shift can affect the real estate market, but for an investor, some key questions to ask might be: i) How would this affect the demand for second homes in popular vacation areas as more people start to retire? Or ii) How would this affect the demand for larger homes if incomes are smaller and the children have all moved out? These and other questions can help investors narrow down the type and location of potentially desirable real estate investments long before the trend has started.
2. Interest Rates
Interest rates also have a major impact on the real estate markets. Changes in interest rates can greatly influence a person's ability to purchase a residential property. That is because as the interest rates fall, the cost to obtain a mortgage to buy a home decreases, which creates a higher demand for real estate, which pushes prices up. Conversely, as interest rates rise, the cost to obtain a mortgage increases, thus lowering demand and prices of real estate.
However, when looking at the impact of interest rates on an equity investment such as a real estate investment trust (REIT), rather than on residential real estate, the relationship can be thought of as similar to a bond's relationship with interest rates. When interest rates decline, the value of a bond goes up because its coupon rate becomes more desirable, and when interest rates increase, the value of bonds decrease. Similarly, when the interest rate decreases in the market, REITs' high yields become more attractive and their value goes up. When interest rates increase, the yield on an REIT becomes less attractive and it pushes their value down. (To learn more about these effects, see How Interest Rates Affect Property Values.)
3. The Economy
Another key factor that affects the value of real estate is the overall health of the economy. This is generally measured by economic indicators such as the GDP, employment data, manufacturing activity, the prices of goods, etc. Broadly speaking, when the economy is sluggish, so is real estate.
However, the cyclicality of the economy can have varying effects on different types of real estate. For example, if an REIT has a larger percentage of its investments in hotels, they would typically be more affected by an economic downturn than an REIT that had invested in office buildings. Hotels are a form of property that is very sensitive to economic activity due to the type of lease structure inherent in the business. Renting a hotel room can be thought of as a form of short-term lease that can be easily avoided by hotel customers should the economy be doing poorly. On the other hand, office tenants generally have longer-term leases that can't be changed in the middle of an economic downturn. Thus, although you should be aware of the part of the cycle the economy is in, you should also be cognizant of the real estate property's sensitivity to the economic cycle.
4. Government Policies/Subsidies
Legislation is also another factor that can have a sizable impact on property demand and prices. Tax credits, deductions and subsidies are some of the ways the government can temporarily boost demand for real estate for as long as they are in place. Being aware of current government incentives can help you determine changes in supply and demand and identify potentially false trends. For example, in 2009, the U.S. government introduced a first-time homebuyer's tax credit to homeowners in an attempt to jump-start home sales in a sluggish economy. According to the National Association of Realtors (NAR), this tax incentive alone led to 900,000 homebuyers to buy homes in the U.S. This was quite a sizable increase, although temporary, and without knowing the increase was a result of the tax incentive, you may have ended up concluding that the demand for housing was going up based on other factors.
Thursday, February 24, 2011
Wednesday, February 2, 2011
how to fire someone
TwitterLinkedInDiggBuzzEmail.Howard Levitt, Financial Post · Wednesday, Feb. 2, 2011
I've been in this game a long time. When an employer wished to fire an employee for cause, I used to say "Check their expense accounts and their job applications. Many employees gild the lily-1. To cover with or as if with a thin layer of gold.
2. To give an often deceptively attractive or improved appearance to.)
on their expenses and most lie on their resumes. Both are cause for discharge. But now, there is an even easier method -- check their Facebook postings and Google their names.
Two union supporters at West Coast Mazda in Pitt Meadows, B.C., foolishly posted status updates to their hundreds of "friends," many of them co-workers.
For a few weeks, one of them posted increasingly belligerent and threatening messages. He accused two of his male supervisors of sexual acts in the washroom, referred to one of them as "A COMPLETE JACK-ASS," and attacked his employer's products. One of his post's was threatening: "If somebody mentally attacks you, and you stab him in the [face] 14 or 16 times ... that constitutes self defence, doesn't it???," he wrote.
The other employee's misconduct was more isolated. Posting on only one day, his musings, sprinkled with obscene language, included an attack on his employer's ability to service the customers. Realizing he had crossed the line, he apologized, deleted the postings and closed his Facebook account the next day. It was too late. The employer had been monitoring Facebook and had made copies after their "friends" reported the abuse.
When confronted, they both denied making the postings, claiming someone else had gone on their account.
Since the union had just been certified and no collective agreement had yet been negotiated, they applied to the B.C. Labour Relations Board for reinstatement. Allison Matacheskie, vice-chair woman of the board, found their behaviour to be just cause for discharge. Given their audience of co-workers and former employees, she said, they "could have no reasonable expectation of privacy." In her view, the comments were "akin to statements made on the shop floor" in full view of everyone. However, she noted, if the second employee had admitted the postings and been honest during the investigation and hearing, she might have decided otherwise respecting him.
The Internet is a dangerous workplace tool. Downloading pornography invites criminal repercussions. Carelessly sent emails can inadvertently disclose confidential information. The ease and spontaneity created by smartphones invite casual, careless, breaches of civility codes, even defamation. From an employer's standpoint, permissive use of smartphones as workplace tools often comes back to haunt them--employees who work on them after hours have electronic evidence to support overtime claims.
Employees should be under no misapprehension. They should not post web-based comments or send emails they would not want to be printed in the pages of this newspaper. If they do, and it impacts on their employer's reputation or undermines its authority, it can be cause for their discharge.
- Howard Levitt practises employment law in eight provinces and is author of The Law of Dismissal for Human Resources Professionals. He can be reached at hlevitt@langmichener.ca.
.
Read more: http://www.financialpost.com/news/features/Facebook+lead+cause+firing/4207432/story.html#ixzz1Cs8EAE36
I've been in this game a long time. When an employer wished to fire an employee for cause, I used to say "Check their expense accounts and their job applications. Many employees gild the lily-1. To cover with or as if with a thin layer of gold.
2. To give an often deceptively attractive or improved appearance to.)
on their expenses and most lie on their resumes. Both are cause for discharge. But now, there is an even easier method -- check their Facebook postings and Google their names.
Two union supporters at West Coast Mazda in Pitt Meadows, B.C., foolishly posted status updates to their hundreds of "friends," many of them co-workers.
For a few weeks, one of them posted increasingly belligerent and threatening messages. He accused two of his male supervisors of sexual acts in the washroom, referred to one of them as "A COMPLETE JACK-ASS," and attacked his employer's products. One of his post's was threatening: "If somebody mentally attacks you, and you stab him in the [face] 14 or 16 times ... that constitutes self defence, doesn't it???," he wrote.
The other employee's misconduct was more isolated. Posting on only one day, his musings, sprinkled with obscene language, included an attack on his employer's ability to service the customers. Realizing he had crossed the line, he apologized, deleted the postings and closed his Facebook account the next day. It was too late. The employer had been monitoring Facebook and had made copies after their "friends" reported the abuse.
When confronted, they both denied making the postings, claiming someone else had gone on their account.
Since the union had just been certified and no collective agreement had yet been negotiated, they applied to the B.C. Labour Relations Board for reinstatement. Allison Matacheskie, vice-chair woman of the board, found their behaviour to be just cause for discharge. Given their audience of co-workers and former employees, she said, they "could have no reasonable expectation of privacy." In her view, the comments were "akin to statements made on the shop floor" in full view of everyone. However, she noted, if the second employee had admitted the postings and been honest during the investigation and hearing, she might have decided otherwise respecting him.
The Internet is a dangerous workplace tool. Downloading pornography invites criminal repercussions. Carelessly sent emails can inadvertently disclose confidential information. The ease and spontaneity created by smartphones invite casual, careless, breaches of civility codes, even defamation. From an employer's standpoint, permissive use of smartphones as workplace tools often comes back to haunt them--employees who work on them after hours have electronic evidence to support overtime claims.
Employees should be under no misapprehension. They should not post web-based comments or send emails they would not want to be printed in the pages of this newspaper. If they do, and it impacts on their employer's reputation or undermines its authority, it can be cause for their discharge.
- Howard Levitt practises employment law in eight provinces and is author of The Law of Dismissal for Human Resources Professionals. He can be reached at hlevitt@langmichener.ca.
.
Read more: http://www.financialpost.com/news/features/Facebook+lead+cause+firing/4207432/story.html#ixzz1Cs8EAE36
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