Re: Current and future trends of California’s Orange County Real Estate Business
Following the survey conducted at Elizabeth Do, I have done a detailed research on the current trends in the real estate industry which might be of importance in shaping up the level of performance and productivity in Liz Do. This report gives insightful knowledge on the noteworthy issues such as competition, legislation, projected industry growth and much more activities in the real estate industry that might be helpful to enhancing efficiency at Liz Do. Subsequent to the major decline, which resulted from the subprime mortgage predicament and the recent economic recession, this led to a reduction in prices of property but fortunately now the real estate industry is on the recovery phase (California Real Estate and Demographic Information, 2012). The players in the industry should anticipate increase of revenue as the company and customer attitude gets better and both residential and commercial developments will be on the rise over the next five years. However, this will not be smooth sailing because of the unpredictable interest rates which might pose a risk to the capital markets and mortgage lenders who will be a determining factor in improving the real estate industry. The study disclosed that Orange County’s largest market lies in the rural locality; it would therefore be prudent to formulate strategies of tapping this large market into the real estate industry (California Real Estate and Demographic Information, 2012). Having an upper hand in such a market would be beneficial for Liz Do since it would result to acquisition of a dominant position than other firms (Morris, 2001).
The appraisal management firms have resulted into a very competitive market of real estate, for instance it is believed that in California, the appraisal course will put someone’s home value on the basis of the cost of other desirable homes (California Department of Real Estate, 2012). This means that realtors have to ensure that they maintain the value of their homes so as to maintain a higher appeal in the market. The appraisers can easily reduce the value of a home based on the strict rules enacted by the Uniform Standards of Professional Appraisal Practice (USUAP) which must be observed for appraisal (Harney, 2012). For this reason it would be better to maintain extremely high housing standards to ensure that you remain competitive in the industry. There are many realtors in Orange County who are all eyeing for the same clients, due to this competition there must be laid down strategies to bring uniqueness in the homes sold by Liz Do (Gustavo, 2008). The government has also endorsed tough legislations to regulate real estate developers, these laws range from the administrative procedures, land laws and also building codes which must be adhered to by all developers.
Therefore, this makes it difficult for the real estate developers since these legislations have imposed more costs through licensing and many other protocols that have to be observed. It is advisable to be compliant with any legislation provided for by the authorities because non-compliance may lead to grave consequences such as auctioning of property which would result to great losses for the developer (Bindi, 2012). It is also evident that there are many distressed properties on the market, that is homes which have been excluded or may be involved in short sales. This provides great value to buyers of such houses due to the fact that they buy them at very cheap rates than their normal price. This is otherwise a big loss to people losing the houses. However the distressed homes might tend to keep the prices of homes at a lower rate. This will imply that developers like Liz Do will have to formulate measures to know how to cope with this condition. This might mean taking advantage of these cheaper homes and refurbishing them to raise their values then reselling them later at a price margin (Heywood, 2010).
The government has also raised taxes in a way to finance its expenditures. These taxes have also been translated to the real estate industry, this indicates increase in the level of operational costs for developers. It would therefore be wise for developers to devise methods of leveraging their investments against such induced costs which can reduce the levels of profits (Basso, 2011). In conclusion, I would recommend Liz Do to make considerations on the issues raised about the prevailing market conditions such as; anticipated increase in the demand of homes following the stabilization of the economy, existence of untapped market in the rural region of Orange County, compliance with the relevant laws endorsed by the government so as to enhance smooth running of its operations and also to evaluate on the viability of using distressed houses as a way of reducing costs of initial development (Chris & Melicher, 2011). It is also prudent that Liz Do should maintain high quality of their homes to ensure they remain competitive in the market and to ensure they comply with the appraisers of homes who can reduce the property value. You can share this report with the managers at Liz Do to enlighten them on these observations.
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