With recently reported U.S. housing starts markedly higher in September, above one million for the sixth month in a row and beating the estimates of 1.15 million by analysts at Reuters handedly, U.S. Economic Outlook data forecasting 16 percent growth through Q4 2016 appears well within reason. In the country’s biggest home construction markets down south, housing starts hit their highest level since late 2007, with groundbreakings in the west following suit. According to a recent Bloomberg Business interview with Stan Humphries, Chief Economist for online real estate database giant Zillow, we are seeing a consistent cyclical progression towards more lending to home buyers, with more lending occurring under the 640 mark, and some banks now even going well below the 20 percent down payment requirement, even on non-FHA mortgages.
This view of the housing market in the U.S. is roundly confirmed by the recent Mortgage Bankers Association study, which sees demand rising to over 1.6 million units a year within a decade, as household formation becomes driven by significant demographic changes linked to net international migration, which should account for nearly 14 million new households on its own. Baby Boomers will also continue to play a major role, accounting for nearly 13 million more households of age 60 and over in 2024 than there are today. Some of the strongest housing growth the country has ever seen is set to take place in the coming decade according to the MBA study, and that’s what makes a well-positioned real estate investment outfit like ROI Land Investments (OTC: ROII) really stand out, with its focus on acquiring greenfield acreage in choice regional markets. This is acreage that is unencumbered by zoning restrictions and is therefore wide open to being developed intelligently, and in a cost-effective manner.
ROII’s approach to the market is dynamic, yet simple – with infrastructural build outs of the high quality housing units being sourced to trusted local construction companies, and the company handling the acquisition, permitting, as well as sale of units. The company has posted a banner year so far in 2015 too, starting with early successes in Kitimat, British Columbia. The Kitimat project is a 93-unit, 170,000 square foot ROI infrastructure and land agreement near the site of LNG Canada’s liquefied natural gas project, which has an estimated potential peak workforce of 7,500 people. LNG Canada is a major JV operation comprised of Royal Dutch Shell’s (NYSE: RDS.A) Canadian affiliate, and affiliates of PetroChina (NYSE: PTR), Mitsubishi, and Korea Gas. This development shows signs of a very profitable future for the company in Canada and especially in...
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