GLOBAL REAL ESTATE Local Markets

Course Overview How the Global Economy Shapes Your Market Your Hometown Global Market Cultural Literacy for Business Serving the Global Market Networking Power Planning>Action>Results Page 2

Try the self- assessment quiz on page 5 Are You Already Global? Try the self- assessment quiz on page 5 Page 5

1. How the Global Economy Shapes Your Market Page 8

In This Chapter Global economy, local real estate markets Global flow of capital and wealth Real estate as an investment Trends and indicators Use this information to monitor trends and indicators and synthesize the information into meaningful knowledge for business planning and decisions. Page 8

Global Economy Local Markets Global economic forces impact your business Real estate is a storehouse of wealth Which indicators and trends should you monitor? Design a personal data plan Page 9

Page 10-11

New wealth seeks opportunities and safety in real estate A Shrinking World? Spread of capitalism New wealth seeks opportunities and safety in real estate Page 12

Most Stable and Secure Page 13

Best Capital Appreciation Page 13

NAFTA MERCOSUR APEC ASAEN GAFTA COMESA E.U. Page 15

Connectivity Page 16

Round-the-clock financial world Instant access to market signals Nikkei Tokyo Dow, S&P500, NASDAQ New York CAC Paris Round-the-clock financial world Instant access to market signals DAX Frankfurt Hang Seng Hong Kong FTSE 100 London Page 17

Interdependence and Specialization Advantage: economic efficiencies and benefits Disadvantage: dependence on other countries Workers’ remittances = triple official government foreign aid Page 18

Ease of Travel Affordable airfares Convenient flights to hub cities & resorts Immigrants maintain homeland ties U.S. expatriate retirees Page 19

Capital—What Flows? Currency Credit Assets Information Capital goods Technology Debt Innovation Page 19

Capital Flees: Capital Seeks: Falling returns and values Acceptable risk/return Favorable ROI Quality properties Affordable and available credit Orderly, transparent markets Capital Flees: Falling returns and values Ownership restrictions Movement restrictions Tight, expensive credit Page 20

Capital Flow Theories Bargain Rate Theory Loss Avoidance Theory Capital flows to the point of relative weakness. Where prices are at bargain rates and other currencies have more buying power. Loss Avoidance Theory When values decline foreign investors avoid assets which may lose value and any advantage gained from exchange rates. Market Linkage Theory A single global system interlinks the world’s economies which rise and fall together. Page 21

How can you catch the right signals? Staying In the Know How can you catch the right signals? Select, monitor, compare key indicators The Economist, Financial Times, Wall Street Journal Government Web sites NAR Economists’ Outlook Page 22

Indicators GDP Flow of Funds Employment Mortgage Rates Consumer Price Index Imports, Exports and Trade Balance Labor Productivity Direct Investment Abroad Retail Sales Foreign Direct Investment Exchange Rates Interest Rates Page 23

Key Point Review Page 28