As a professional engineer, I am involved with residential and commercial real estate development projects often from the start – conducting due diligence to see if a development project is feasible or not. This keeps my finger on the pulse of what is happening in land development.
It was obvious from late 2007 and throughout 2008 that real estate development activity was drying up, simply by following the number of projects I was evaluating for my clients. But I have to say 2009 has been surprisingly different.
Now that isn’t to say it has been a banner year so far, but I must say there have been more real estate developers looking at land in the first quarter of 2009 than there were for a good bit of last year.
Maybe the recession for property development is over.
Maybe the fact that developers are starting to look for development projects again is a good sign and the trend will continue throughout 2009 and beyond.
I don’t know the answer to that, but to get another perspective on it, I used a tool called Google Insights. Google Insights graphs the searches in Google to see trends in people’s interests over time. It is a really neat tool for getting a feel of what is happening in the world. Common logic would tell you that the more people are searching on terms like, “Real Estate Development”, “Property Development”, and “Land Development”, the more people are interested in starting development projects in the future.
This can serve as a broad brush, leading indicator for the development industry. Here is the link for what Google Insights shows for search trends on “real estate development” ( Google Insights Real Estate Development Search )
The results on the link show that searches for these terms bottomed out in December of 2008 and have rallied off those bottoms so far this year. Granted the rally is meager, but it is definitely a change in trend.
Does this mean the recession is over for real estate development?
Well, I wouldn’t bet the farm based on people’s search trends, but the charts at least provide some positive news in a climate of doom and gloom right now. Only time will tell if the uptrends in the Google Insights charts continue. Likewise only time will tell if the increased activity I am seeing with land developers in my office will continue, but I for one hope it does.