The United State Postal Service is raising prices again on stamps. In fact, sorry to say this, but they are planning on raising it TWICE a year! Effective last week, the price of a first-class stamp went from 60 cents to 63 cents. The Postal Regulatory Commission said the 4.2% increase was to offset the rise in inflation. International letters and postcards went from $1.40 to $1.45, and the price to send a domestic postcard increased from 45 to 48 cents. The Postal Service says to expect increases twice a year going forward, in January and in July. As of 2021, USPS is expected to be $160 billion in debt for the next 10 years…Arara. People holding Forever Stamps can still use them, but people buying new Forever Stamps will see prices go up to 63 cents.
Two weeks into the new year and things are really picking up for Annoura Realty Group. Unfortunately, the team lost Fayth Lovejoy who had some personal issues and decided to put her real estate career on hold for now. But fortunately, Susan and Koh’s eldest son Joe PASSED his real estate exam last week and is now a licensed realtor for Annoura Realty Group! Joe will predominantly focus on apartment locating in Austin, where he lives. But, this summer when he comes home, he will be put into our riorous training program and will start to learn the family business. In the past couple of weeks, we welcomed three new Mitsui expats. Mik Ebisu took the lead and is working on helping them find housing. We also are helping one new doctor find housing in the Med Center, one new Mitsubishi Corporation expat, a new Kuraray expat, and we were asked to put up two new listings in the near future. Another exciting bit of news is the possibility of a new Japanese company now considering to open a branch in Houston! This tech based company is a start up company in Japan backed by Itochu. They went from 4 employees to 60 employees last year and have great potential for their product in the fields of bio science, building management, and manufacturing (robotics). Susan met them while on her Trade Mission Trip to Tokyo back in October. Over the months, she kept in touch through this newsletter, and last week, the CEO and two project managers came to Houston to visit after being exhibitors at the Consumer Electronics Show in Las Vegas. Susan and Mariko brought them to the Greater Houston Partnership for meetings, then to City Hall to meet several of the Trade Mission entourage, then they toured all over Houston to give themselves an idea of what it would be like if they opened a branch of their company here. We have our fingers crossed that we will see them again soon. With Houston being the 4th largest city, having the world’s largest medical center, and having manufacturing giants like Daikin, we think this company would be a good fit!
It is always good to know about possible real estate investment opportunities abroad. In 2020, we actually almost bought a small property in Belize, but pulled out when COVID hit, afraid tourism would freeze. When I travel to conventions, I often hear from Mexican developers building lucrative turnkey properties in Playa Del Carmen or Tulum. I have actually been wanting to go to the Riviera Maya area to have a look myself. There is a place called Isla de Mujeres that I heard is really nice and could be a good place to have an investment property. Well, these past 4 days I was invited to go Roatan, Honduras to check out a real estate opportunity on that island. I have never been to Roatan nor Honduras and did not know what to expect. I invited one of my favorite investors to join me so that we could both listen to the special tax incentives of this project. Interestingly, the amenities have all been built already: a golf course, several swimming pools, a private beach, fitness center (now being remodeled, so my excuse for not working out during this trip…haha), even two restaurants overlooking the Carribean Sea. The area is called Pristine Bay and the place we stayed at was called Las Verandas Hotel & Villas, which is completed and very nice. The new project will be next to the hotel and will be individually owned condominiums. People can buy them and rent them or of course they can buy them and live in them. The special location of Pristine Bay allows investors to avoid capital gains tax when they sell, and it also only taxes them on the small fraction of the land they own (there is no property tax on the improvement above).
Apparently, Roatan is a scuba diver’s paradise and while we were there, we checked out the golf course, kayaking, and snorkeling. The water was beautiful and the people we met were all very friendly. Pristine Bay is a project that I will be watching over the next few months. Many thanks to Holly Fitzgerald for being our hostess while on the island and to my colleague Ed Eakin for the invitation to learn about this development.
Have you ever gone to Top Golf? It’s a kind of entertainment style driving range and has become quite popular for both kids and adults. Adults often go with friends or for company parties. The golf clubs are provided for you and there is a full menu with food, drinks, and alcohol. People make teams and aim at targets, hitting golf balls and socializing with friends. Well… there is a new golf related concept that has come to Katy! Already successful in 3 locations in Florida, Pop Stroke chose Katy as their first Texas location. Similar to Top Golf, adults can socialize over alcoholic beverages while PUTTING on a Tiger Woods inspired putting course. “PopStroke is a family entertaiment facility where we offer 36 holes of Tiger Woods-designed miniature golf,” said Greg Bartoli, who is the founder, co-owner and CEO of PopStroke. I had a chance to go check it out and it looked really fun. When I went, it was a beautiful Thursday afternoon, and there were many people there playing (did not go to work?!) and socializing. There was a full menu and a full bar, with a huge screen showing sports. The price board showed $25 for all day play. They do not take reservations; it is first come first serve. Could be a very fun outing for a group of friends! Click here for details: https://popstroke.com/houston-katy/
January is the most popular month for economic forecasts. Economists analyze the data from the previous year, crunch data, and create trends to guess the future of the economy. So far in the first two weeks of January, I have heard several different forecasts from various different people. All of them have very interesting perspectives and reasonings and I will share some of what I heard.
First of all, COVID stimulus package after package after package (there were 3) injected too much money into the economy. In addition, the extremely low interest rates (under 3% for mortgage rates at one point) encouraged heavy spending for everything including home buying. In all, the government injected $5.4 trillion of stimulus money into the economy, effectively over-stimulating the economy. This resulted in inflation. But overstimulating the economy was not the only thing that caused inflation. Labor shortages also caused prices to go up. Why did we have labor shortages? Because COVID made some people decide to retire early or to quit their salary jobs. The labor shortage also caused prices to go up. Other causes that affected our economy last year included: the war in Ukraine which disrupted supply chains, the spike in COVID cases in China, an extraordinary cold Europe using more than expected natural resources. So here we are with high inflation.
In an attempt to control inflation, last year, the government raised the interest rate 7 times in a row with sometimes quite aggressive increases (June 2022 they hiked it 0.75%!). The logic is that increased interest rates makes it more painful to borrow money, hopefully resulting in less spending, hopefully resulting in lower prices. The housing market has definitely seen a difference. Home sales are down 9 months in a row here in Houston.
What we need to be careful of is to not confuse this situation with a full blown recession. Once the general public believes we are in a recession, it affects their behavior and they become conservative and stop spending. Their thoughts and behaviors can create a kind of recession that actually is not there yet. The economist for the Greater Houston Partnership believes that even if we do have a recession, it will be short and shallow in Houston. He cites purchasing managers still ordering supplies, no significant uptick in claims for unemployment, no uptick in layoffs, and car sales are actually up. This means that companies are not slowing down, and people are not losing their jobs, and that people are optimistic about keeping their jobs. Hopefully interest rates will stabilize and that will stabilize inflation. Once inflation is under control, affordability will come back, not only for homes but also for simple things like a bag of potato chips (now as much as $6!). To see the extremely interesting Economic Forecast by Patrick Jankowski, Chief Economist for the Greater Houston Partnership, click here.
