Good morning, in the US, starter homes - areas up to 1400 sq. ft., ideal for first homes - accounted for just 7% of construction in 2019, compared to 40% in 1980.
As a result, unaffordable housing is taking a toll on people's sentiments.
Per a recent survey by Fannie Mae, more than 80% of Americans ages 18–34 said now was a bad time to buy a house.
Their gloomy outlook is shared by the broader population: A record-low proportion of Americans—just 25%—said it was a good time to buy a house right now.
We've got enough problems to sort out already in our limited life spans, and housing certainly shouldn't be one of them.
🏋️♀️🍏✅
Chai's Giveaways
💝 Love is in the air and because we love our readers to the moon, this Valentine's Day, we are giving one lucky Ginger Chai reader a pair of cool boAt 441 Airdopes.
What Do You Have To Do?
Nothing out of the ordinary. Simply reading this newsletter on Monday, 14th February, makes you eligible for a boost in your music time, with up to 35 hours of charge-free playback.
💌 Want a friend or colleague to become eligible for our giveaway too? Ask them to subscribe to Ginger Chai before midnight, 13th February. You never know.
*Winner will be announced on 15th Feb. For Indian Residents Only.
The Quad-Core Real Estate Negotiation Strategy
Purchasing a property consists of many working parts but determining the strategy you use in a negotiation, can have a big bearing on the outcome.
And when it comes to critical, game changing information, we ensure a zero-wait time.
1️⃣ The Knowing-Before-Dealing Strategy: Having a few cups of chai with a seller can go a long way towards getting the buyer where she wants to go. Sellers enjoy dealing with someone they genuinely like.
Some buyers may get to know the other party and take note of what excites them about their property; or what they see as the greatest potential that exists to add value to the property.
When a known buyer comes to the negotiation table stating a couple of reasons why their lower offer is justifiable, property sellers are far more likely to take the lower price, happily.
2️⃣ The Let-Me-Show-You-The-Mirror Strategy: Many successful real estate negotiators believe that by focusing on each and every flaw that may exist within an asset, they can convince a seller that their property is worth far less than they are asking.
Going down this road can sometimes justify an offer which is considerably less than the asking price for the property. Sometimes it may work. Other times, it may blow the deal to smithereens.
3️⃣ The Let-It-Stew Strategy: Often times in a buyers' market, a property seller loses confidence in her ability to sell at her price because the property has been on the market for a while.
In such a scenario, when an initial offer is made by the buyer and the seller either chooses not to counter, or counters with a much higher asking price, the buyer can choose to let it die and come back again with the same offer at some point in the future. It works.
4️⃣ The Just-Below-The-Black-Strategy: This works only when the buyer knows what the seller’s bottom line is and believes that number is a fair price, while making an offer to seller.
To make this work, the price offered should only be a few percentage points below the seller’s bottom line. Typically, most sellers consider such an offer very seriously.
💡 Bonus Strategy: A good real estate negotiator is one who deploys a combination of these 4 core strategies to get the best deal when buying a property.
Things We Are Watching
🔖 Colombian real estate has reached a new milestone when it comes to cryptocurrency usage, after registering its first purchase with Bitcoin. The property was bought by a buyer who was not in Colombia, so the transaction was completed using the Lightning Network through Opennode, a payment processor.
🔖 A recent report revealed that many senior citizens have started looking for retirement homes in the range of INR 1-2 crore. Notably, southern cities like Bengaluru, Chennai, Kochi, and Coimbatore comprise a 70% share of the overall senior living real estate projects in India.
Our Glaciers Contain Lesser Water Than Believed
Uh oh. Turns out, we've had a poor understanding of how much ice is actually stored in our planet's glaciers.
Among other reasons, past analyses double-counted glaciers along the peripheries of the Greenland and Antarctic ice sheets, overestimating ice volume, Reuters reported.
Advanced satellite tech enabled estimates have reduced global sea level rise by 3 inches if all glaciers were to melt. However, communities that rely on seasonal melt from glaciers to feed rivers and irrigate crops are sweating.
🥶 If glaciers contain less ice, water will run out sooner than expected.
Is The Metaverse Bad News For Retail Real Estate?
Walmart has recently applied for metaverse trademarks, while mega retail brands like Nike, The Gap and Gucci are already there, meaning retailers are darn serious about setting up shop in the metaverse.
Not A Game Anymore
As the notion of the metaverse being a game balks, the metaverse is being increasingly viewed by investors as a serious real estate investing opportunity.
Naturally, more and more retailers have been gradually making their way into the parallel universe.
And that's leading to predictions - as more and more people hang out with friends, work in offices, attend concerts, and go to school in the metaverse, they'll do most of their shopping virtually as well.
But We've Seen That Film Before
Remember the early internet predictions that e-commerce would rapidly bring about the retail apocalypse? Turns out, a couple of decades or so later, e-commerce still makes up only about 20% of all core retail purchases.
📎 Retail brand Macy's CEO, while reporting the company's Q3 earnings said, that the retailer does more sales online in regions where the company has a physical presence.
Other examples also suggest that e-commerce has actually served to complement physical retail in many ways.
The Takeaway?
More likely than a metaverse retail takeover is a scenario where like e-commerce, the metaverse will ultimately serve to augment physical retail.
From outfitting our digital avatars and online spaces in branded products, to occasionally shopping at brand stores in their metaverse for in-store pickup or home delivery, the possible 'metaverse effects' on retail are constantly expanding.
And most of them still work well for retail real estate.
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Melting glaciers, increasing emissions, freak weather incidents etc. should all be treated as ample warnings, instead of being looked at as subtle signs.
Let's keep our environment in mind as we trudge through this mid-week.
See you tomorrow. 💚
☕ The Crew@Ginger Chai