By Terry Mock
Follow Terry on Twitter: @SustainLandDev
Despite headlines that indicated a stagnant +0.6% U.S. growth in GDP during the first quarter, many experts consider the reality to be still uglier. Whether the entire U.S. economy is in a recession or not, there is little doubt that our industry is…and it appears to be getting worse in Q2. Most land developers I’ve talked with agree that lenders are underestimating what lies ahead because their loan-loss reserves are nowhere near sufficient.
The Federal Reserve released its quarterly Senior Loan Officer Opinion Survey on Bank Lending Practices on May 5 and, as expected, historically soft demand and further tightening of lending standards were reported near or above historical highs for nearly all loan categories. Further pricing pressure on real estate through the year, with a trough in 2009, is expected by many.
It is against this backdrop of fear and uncertainty that leaders emerge. On May 2, Envision Central Texas Presented Community Stewardship Awards to people, projects and initiatives advancing the region’s vision to preserve and enhance natural resources, economic vitality, social equity, and overall quality of living for generations to come. On the same day, at the Sustainable Land Development Leadership Conference under the auspices of the newly formed Sustainable Land Development International (SLDI), it was announced that, from a field of five outstanding finalists, Carma Colorado’s Tallyn’s Reach had won the 2008 Visionary Project Award for creativity, vision, and the implementation of best practices in land development.
It is this ability to advance in the face of adversity that separates the winners from the losers during times such as these. Past business cycles have shown that fortunes are to be made by those who can stick it out. While every situation is unique, the best advice remains “Hope for the best, but plan for the worst”. As described by SLDI Board Director Skip Preble in The Last Word article entitled “Hang In ‘Til 2010“, history indicates that builders and developers who react quickly and effectively to changes in market conditions will survive, while those who postpone dealing with the crisis do not. Be proactive. Differentiate yourself. Be a leader!
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