Wednesday, June 8, 2011

Precession Of Military Spending

This past weekend I was at a friend's birthday having a conversation with someone who works for a commercial construction company in Fayetteville, NC.  He must travel 3.5 hours to work every week to his jobsite.

He has spent the last few weeks looking for work here in Charlotte but has had trouble landing a position.  The reason is not his experience or knowledge, he has a tremendous amount of both, but that Charlotte is like most areas in the country where very little real estate construction is taking place.

What is so special about Fayetteville? 

Government spending.  44,000 new military jobs are on the way to the small city creating a massive demand for all types of  new infrastructure.

Yesterday I took my 8 hours of mandatory continuing education to get keep my real estate license active in North Carolina.  While we spent the beginning of the class discussing how horrible the market conditions are today, the teacher stopped and asked if anyone knew what North Carolina city was just announced with tops in the country for greatest home price appreciation?

I raised my hand, "Fayetteville, NC?" 

"Correct," he answered.  "Right now they can't get enough new homes out of the ground."

Yesterday I discussed the importance of not only looking at the numbers of a real estate transaction, but the surrounding community the property will be located in.  My Apartment Case Study was a community located in Fayetteville, NC.  Does this information now change your view of asset?  It should.

American military spending will be a dominant force in the global economy until our government reaches our Greek moment and is forced to cut spending.  That moment may come next month, but it may not come for another 3 to 4 years.  Until then, you must continue to respect and plan investments according to this incredible force of spending.  The following graph shows where we rank against the rest of the world, combined.

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