Apartment building made of shipping containers being built

I have a favorite interest in new styles of real estate, housing, and American cities. I lived in Asia for six years and came back with some new ideas about cities fitting people, not people fitting cities.

First of all, it costs too much to build real estate. Cities need to constantly reshape themselves to fit changing populations, energy costs, and work opportunities. Adaptation is crucial.

Second, they're too big. It's crazy to require people to have a car to get around. Walking, biking, and public transportation fit a considerable segment of our people (the young, the old, the poor) and shouldn't be so hard to use.

Third, I'd like more opportunity to inter-act with others. If I live on a quarter acre ranch, I'm not inter-acting with my neighbors.

So I like this idea I noticed:

http://www.jetsongreen.com/2014/10/a-shipping-container-apartment-complex-soon-in-dc.html

Peri-urban sub-markets

Even though TV and media is dominated by Los Angeles and New York, most people live in small cities in the U.S. In fact, the average person lives in a average city of 20,000 inhabitants.

If it's in a rural area (which is most of the U.S.), it serves as a market center for the surrounding population and towns. So the city population might be a small proportion of the actual number of people who shop in its stores and use its streets.

One such market center is Yucca Valley, California. It's similar to two other cities in Southern California, Blythe and Barstow.

	Barstow	Blythe	Yucca Valley
2014 Population	23,292	19,832	21,053
2013 Median Household Income	$56,865	$54,556	$56,369
2013 Total Housing Units within 2 miles of city	9,382	4,707	5,721

However, the surrounding population shops in each town, and their make-up changes the economy.

Demographics within a Twenty Mile Radius (not including other metro areas)
2013 Total Housing Units within 20 miles of city	15,990	9,762	66,267
2013 Employed Population 16+	13,770	6,586	48,674
Retail Consumer Spending: Retail Goods	$252,395,420	$125,670,463	$955,504,508

So the retail economy of Yucca Valley is more than four times that of Barstow, in second place:

Uncertainty about Real Estate, and About Everything Else

I noticed an article about single family home prices moderating in major markets:


http://www.marketwatch.com/story/house-prices-see-widespread-slowdown-in-july-2014-09-30

The Recovery from the Great Recession has not been as robust as many hoped. Why is that?

The world is a much crazier place than it used to be. While the U.S. is stable, and creative, and productive, the international environment has produced not one hot spot at a time (like the Cuban Missile Crisis), but dozens. Where wars used to be fought with armies in uniform, now they are fought with populations, social media, weather, economics, and diseases.

So what does that mean to an investor in real estate? Two things.

Volatility. The ups and downs are more upper and downer.

Stable economies (the U.S.) are a far better bet for investing, and real estate is a good option. Commercial real estate presents properties for businesses to use, and business in the U.S. is not going away.  Hold on to your hats, though. The investing ride is not going to be any smoother.

Office Building for Sale -- Zoning allows Residential Use

My newest listing is a 14,106 SF office building in Yucca Valley, California.

Visiting the Planning Department of Yucca Valley, I discovered that the city permits residential use of the property, including mixed use, residential care, and condominiums.

Hmm, is it a better investment as residential than as office? Maybe.

• Class C office rents in Yucca Valley appear to be under a dollar a square foot, modified gross (the landlord pays for the expenses of the building). 
• Apartment rents appear to be over a dollar per square foot.

• Vacancy for office appears to be ten percent, maybe a little higher for Class C properties.
• Vacancy for apartments in the region appear to be two percent. There are no ads for rent concessions or move-in specials.

 Changing the layout of the building from office to residential is not rocket science, but it costs money and takes time.  The property is for sale for $54 PSF, with an acre of land, so it might actually pencil out....