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“Why Maryland is About To See ‘The Perfect Storm’…”

By Sherman Ragland | June 2, 2008

I have it on good information that K-HOV Enterprises, one of the largest builders in the United States, just laid off over 50% of their staff in Maryland…. 50%!

This comes right after Lennar Enterprises closed their East Coast office in Bowie, MD several months ago. Poof, 300+ employees gone.

… and if you look at national home builder after national home builder, you will see that massive layoffs are occurring in this industry around the country, and Maryland is not immune.

So, why is this so shocking?

To many people outside of the Greater Washington, DC/Baltimore Corridor this will not come as any great surprise, given the “over hang” of unsold houses across the country.

… and to the “casual” real estate investing oberver this will seem like an appropriate thing to do in a market that has gone upside down.

However, to those of us who pay attention, this is a HUGE development.

“Why?”

Because Maryland is a Red Hot Growth Market, with respect to Job Creation.

In fact, from now until 2015, Maryland (specifically the area in-between 38 miles north of Baltimore, along I-95 and just South of

Washington, DC to the New National Harbor Project in Southern Prince George’s County) there are 60,000 new jobs coming into the region.

… Please let me repeat, 60,000 NEW JOBS in an area that currently has a population of approximately 3.0 million.

There is no question that the decision to essentially scuttle all new construction by the national builders has nothing to do with the realities of what is taking place in Maryland. In fact, it is safe to say that these decisions are probably being made at their respective corporate headquarters and heavily influenced by their Wall Street Investment bankers.

“Why?”

Because the time it takes to deliver a new housing development is about 18-36 months. In other words, at the very time that new projects should be started to be able to meet the demands being driven by the new employees coming to Maryland, is the precise moment in time when home builders are making deep, deep cuts in their payroll.

What makes this also significant is simply the amount of time it takes to get an employee up to speed within an organization like a home building enterprise. Most homebuilders will tell you that it takes a good 8-12 months to get a new employee up to speed on what the corporate culture and ways of doing business are really like within an organization.

I am absolutely confident that the decision to layoff so many people is both painful, and is being dictated outside of the actual conditions taking place in Maryland.

So what does all this mean?

#1 – In about 24-36 months we will begin to see the full impact of the demand for housing to fulfill the needs of the military and DOD operations being relocated to Maryland due to BRAC and the opening of the numerous health and bio-sciences buildings within the city of Baltimore.

#2 – With the shut down of construction activities by the major builders around town, expect thier to be a significant “GAP” between the demand for housing and the avialable supply in the next 24-36 months.

#3 – Now is the time to identify where the major employment centers will be within the state of Maryland from now until 2011-2015;

#4 – Overlay on top of this information the zip codes in which major foreclosure action is taking place right now, through 2009. Areas in which housing can be acquired “dirt cheap” through pre-foreclosure, short-sales and REO discounted bulk sales.

#5 – Contact the Housing and Community Development offices where you see significant concentrations of opportunity and inqure as to what the Section 8 office will pay in monthly rent. You now know what you can afford to pay in debt service either through your private investor program, or to your hard money lender.

#6 – You now have your own private “Road Map” to how you will become an instant Millionaire by acquiring properties in these areas over the next 12-24 months, holding for 24-36 months, and then cashing out when the market values spike.

#7 – Be at the Maryland Foreclsoure Summit on June 20th & 21st to be sure your acquisition strategies are in compliance with the new Maryland Foreclosure Laws, and to “Sharpen Your Saw” on the lastest tips and tricks for “buying right” to create instant wealth.

For more on the Maryland Foreclosure Summit, go to: http://www.MarylandForeclosureSummit.com

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