Facebook Phone Faces An Uphill Battle In Emerging Markets
Parmy Olson, Forbes Staff
Tech 4/03/2013 @ 6:57PM
Facebook is gearing up to announce a big, new phone product tomorrow. We don’t know what it will look like, but this is already good news. Facebook needs a tighter integration with smartphones if it wants to grow. It has also reportedly paired up with Android and HTC, which suggests low-cost phones.
That’s more good news. Facebook needs momentum in emerging markets, where smartphone sales are advancing at breakneck speed. With expectations high, Facebook’s stock closed up 3.3% in New York today.
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Now comes the tough part.
Facebook has to establish stronger international partnerships with mobile operators and app developers if it truly wants to advance its mobile prospects in emerging markets.
Take India. The country has Facebook’s third largest user base with 62.6 million users in January 2013, still representing just 5.4% of the country’s population. Meanwhile smartphone shipments to India grew by 75% in the second half of 2012 from the first half, and the country is the second biggest market for the Android operating system.
Plenty of room to grow. Yet Facebook could struggle to shop a more deeply-embedded mobile service in emerging markets, where local apps born on mobile platforms dominate the landscape. These are apps like WhatsApp and Nimbuzz that are not popular, but already have all-important, complex relationships with local carriers and even mobile developers.
Nimbuzz is one of India’s most popular mobile messaging services, claiming 150 million global users, with more than 60% in Asia and the Middle East. Chief Executive Vikas Saxena says that Facebook’s Messenger service is “pretty basic” considering it doesn’t have the kind of educational apps, multimedia messaging, discounted calling and app marketplace that his platform has.
“We have apps that are relevant to local society,” says Saxena, citing dating apps, and Chatroulette-like apps that are popular in local culture and countries like Saudi Arabia where greater social restrictions exist for young people, particularly young women. By contrast, he says, “Facebook is known for known friends.”
Another advantage that Nimbuzz and other native mobile companies have in emerging markets is their relationships with mobile operators. With credit and debit card penetration low in India, smartphone users typically buy apps through their telco billing system.
For now if you buy an app on Facebook’s App Center through a smartphone, you’re sent to either Google Play or Apple’s App Store to make your purchase. It is unclear if Facebook’s new phone products will offer operator billing systems to make it easier for users in emerging markets to buy apps, and Facebook did not respond to a request for comment.
Nimbuzz, headquartered in India, has spent the last few years forming partnerships in India’s byzantine telecommunications industry, and has subscriber billing in place for the country’s eight big telco firms. India is divided into 22 geographic service areas, known as circles, and while some telco companies have centralized systems, others are decentralised so that each “circle” exists as a separate entity.
“You have to talk to each of them” says Saxena, who has at least 10 Nimbuzz staffers tasked full-time with maintaining telco partnerships. “Then you have Yemen, Pakistan, Nepal. It’s mind-boggling complexity.”
Nimbuzz is not the only messaging app busy forming partnerships with international mobile operators. Messaging giant WhatsApp, estimated to have between 200 and 300 million global users, has also partnered with more than 10 international operators in countries like Saudi Arabia, Hong Kong and Chile, to be packaged into data plans those operators sell. Partnerships between messaging services and the carriers whose business models they are disrupting might seem paradoxical, but they are growing according to Ovum, and happening most often in Asia Pacific.
Researchers at Analysys Mason say that Facebook needs to become more native on mobile if it wants user engagement to grow. They also say that engagement could increase six-fold for Facebook if the social network becomes the default communication platform for calling, messaging and email on smartphones.
But becoming “more native” means Facebook needs to establish clear billing systems in local markets, which means striking relationships with local carriers. It also needs to offer more compelling features than the messaging companies that are already dominating emerging markets, like WhatsApp, Nimbuzz and KakaoTalk.
According to Nielsen, WhatsApp Messenger is the most popular app in India, followed by Facebook,. Nimbuzz comes in fourth place, but Facebook Messenger, which seems key to Facebook’s mobile future with its real-time chat and forthcoming VoiP functionality, comes in at 6th.
Keeping up with the messaging companies alone is enough to explain why a Facebook phone has been rumoured to have been in the pipeline for so long – since at least 2011. The shift towards more permanency on mobile phones is crucial for Facebook, but it won’t be easy in emerging markets.
YouTube is filled with inspirational videos of all types, including those created by businesses or individuals looking to inspire others to succeed. Let’s look at 100 of the most inspiring business videos ever placed on this site.
Great Inspirational Tips for Business Success
Take a look at these cool business inspiration clips.
1. 9 Steps to Achieve Any Goal – Isn’t it great to know that you can make your business and personal dreams come true in nine steps?
2. ABCs of Success – A powerful strategy for personal and professional success.
3. Are You Going to Finish Strong? – Amazingly inspirational speech from an amazing man.
4. Biggest Business Mistake – Gain inspiration from this online marketer who wants you to learn from her biggest business mistake.
5. Business Ideas and Inspiration – Feel inspired by these business ideas and tips for ways to succeed.
6. How to Bring Inspiration into Your Business – Trusting your intuition to get the inspiration you need to make business decisions.
7. Life=Risk – This video highlights the risks some of the world’s greatest talents took to find amazing success.
8. Secret Formula for Business Success – A great video that explains a simple formula for business success that could motivate anyone to get up and moving.
9. The Power of Goal Setting – This video offers four great techniques on how to set goals for success in business.
10. Top 3 Lessons from Akio Morita – Check out tips from Evan Carmichael on how to find business success just like Sony founder Akio Morita.
11. Trusting the Path of Life – Explore why finding inspiration in business always requires trusting your life’s path.
12. Visualizing Riches – This quick clip from the DVD The Secret reminds us that we can achieve financial independence if we believe we can.
13. Wealth in Business – Great tips on how to become a wise business person while making a living following your passion.
14. When You Stop Dreaming You Stop Living – Great short motivational video on why it’s important to dream for what you want professionally and personally.
15. Why You Must Act on Business Inspirations – Video encourages you to act on those hunches you get in business that often turn into goldmines.
Home Business Inspiration
Starting a home business can be a scary prospect. Luckily these videos were created to provide you with the inspiration you need to get your start.
16. 3HourWorkDay.com – Awesome inspiration to create your own work-from-home business.
17. Business Money Inspiration – Money values from a young and successful home-based entrepreneur.
18. Exercise and Have More Success in Business – Online marketing entrepreneur inspires viewers to exercising, explaining why it can provide a successful business state of mind.
19. Finding New Business Ideas – Inspirational tips for prospective online home business entrepreneurs.
20. Finding Work from Home Inspiration – A man gives his inspiration for starting his home business. It may inspire you too!
21. Home Business Inspiration – This soothing video provides all of the inspirational quotes you need to start your home business.
22. How to Make Money Online – Feel inspired to make money online without being scammed after watching this informative video.
23. The Life of an Internet Marketer – Enjoy this uniquely-filmed video offering inspiration on starting a business as an Internet marketer.
24. Work at Home Business – If you’ve been thinking about starting your own work from home business, this video may just inspire you.
25. Secrets for Success – Finding inspiration in home business may require listening to these secrets.
26. Story of Inspiration for Online Businesses – If you’re looking for inspiration in starting your own home business check out this great video.
27. Young Entrepreneur – Get inspired by the success of 17-year-old young entrepreneur Christian Fioravanti who has had home business success for three years.
Humorous Business Inspiration
Sometimes a good laugh can be all the business inspiration you need, especially when that laugh is related to business!
28. Business Joke – If you’re in the middle of a business brain fart and need a break, this joke will perk you right up.
29. Conan O’Brien – This hilarious American Express commercial shows just how important the little details are in business.
30. Damn Funny Video Conference – Remember, when you’re primping for a business video conference, make sure no one can see you.
31. Drunk Business Meeting – Nothing like the drunk in the room to offer all the business insight you need. Pretty scary indeed.
32. FedEx Conference Call – Okay, this one is just funny–nothing more.
33. Finding Your Passion – Funny poem with quality inspirational advice for success.
34. Follow Your Dreams – Learn how to follow your dreams in business and beyond with this hilarious inspirational video.
35. Leadership Secrets from Santa Claus – This cute little video gives some great tips on how to become a business leader from Santa Claus.
36. Motivation? Do You Have Any? – Hilarious clip on ideas to consider if you’re lacking motivation.
37. No Excuses, No Regrets – A great video that focuses on leadership and success.
38. The Most Inspirational Thing Ever Said – If you’re about to make a business decision you might regret, just click on this video clip for what not to do.
Inspirational Business Quotes and Poems
Quick quotes, phrases, affirmations and poems that inspire success.
39. A Message for Big Dreamers – If you want to shoot for the stars in business and beyond, this video is a great watch!
40. Be Remarkable – This great video offers amazing inspirational quotes for business and beyond.
41. Create Your Best Year Ever – Steps to take to create your best year ever.
42. Don’t Quit – Great poem explaining why you should never give up on your dreams.
43. Dreams and Goals – Quotes to help you remember to always follow your dreams and push to achieve your goals.
44. Dreams are Whispers from the Soul – Great quotes and music giving tips on how to follow your dreams.
45. Inspiration for Success – Great affirmations to create the life and business you want.
46. Inspirational Quotes for Business People – Inspiring quotes for anyone looking to succeed in business.
47. Inspirational Words of Wisdom – Beautiful words of wisdom from legendary author Napoleon Hill to help you in business.
48. Life Success, Inspiration, Manifestation and Visualization – More great affirmations of success.
49. Keys to Great Success Affirmations – Reciting these affirmations could provide the inspiration you need to succeed.
50. Life is Life a Cup of Coffee – This is an amazing story for business owners who feel disconnected from their passion.
51. Success-Motivation-Inspiration – If you’re looking for success, motivation and inspiration in business, this is the video for you.
52. Very Inspirational! – Great business inspiration quotes.
Motivational Speakers and Keynote Addresses
Great speakers with the gift of motivating success in business and life.
53. Andrew Barden – Gain inspiration and learn specific small business marketing strategies from this business trainer.
54. Andrew Smith – Great business inspiration from this entrepreneur.
55. Andy Cohen – Funny motivational speech that discusses how magic in business creates success.
56. Art Williams – His “Just Do It” speech is inspiring enough to make anyone want to push for their business ambitions.
57. Dean Lindsay – Humorous keynote address at SPEAK! Conference from author Dean Lindsay on finding success in business.
58. Garrison Wynn – Funny, insightful keynote from business relationship expert Garrison Wynn.
59. Jack Canfield – Author of Chicken Soup for the Soul offers four amazing tips to inspire you toward wealth and success in business and life.
60. John Bell – Find great business inspiration from this impressive motivational speaker.
61. Mike Schlappi – Motivational speaker and top disabled athlete, Schlappi offers encouragement in business and life.
62. Oprah Winfrey – Talk about inspiration! Oprah Winfrey, the queen of business, offered a heartfelt keynote address to Stanford graduates.
63. President Barack Obama – Parts of President Barack Obama’s inspirational keynote address to students at Arizona State University.
64. Randy Pausch – Amazing inspirational final lecture from Carnegie Mellon University Professor Randy Pausch before he died in 2008.
65. Richard Branson – You can’t claim to have received real business inspiration until you get some from business guru Richard Branson.
66. Steve Jobs – This great speech by Steve Jobs encourages young graduates to stay hungry and foolish while they hone in on professional aspirations and follow their passions.
67. Tony Robbins – This speech title “What is an Extraordinary Life?” looks at how you define your personal and professional life.
68. Wally “Famous” Amos – Great speech by the founder of Famous Amos Cookies and father of the gourmet cookie industry.
Pop Culture Inspiration
Clips from pop culture that have done a great job of motivating entrepreneurs.
69. 40 Inspirational Speeches – 40 great inspirational speeches in movies that can motivate any prospective entrepreneur–and it’s all crammed into 2 minutes!
70. Amazing is Belief – Sports fanatics and business hopefuls could appreciate this high-energy inspirational ad for the 2010 NBA Playoffs.
71. Any Given Sunday Speech – While this speech isn’t specifically business-related, it inspires you to fight through your challenges inch-by-inch.
72. Evolve – This popular Gatorade commercial teaches us that we must constantly evolve in order to achieve greatness.
73. Failure – This Michael Jordan Nike ad reminds us that even though the best fail, it is these failures that push them to succeed.
74. Failure: The Secret to Success – This Honda commercial showcases a number of clips from individuals who used their failure to find success.
75. Money Making – Will Smith offers inspiration and tips on how to find success and make money in business and beyond.
76. Protect Your Dreams – Great inspirational talk given by Chris Gardner (played by Will Smith) to his son in the movie The Pursuit of Happyness.
77. Rocky Balboa Speech – Rocky gives his son a powerful speech about how to win and find success.
78. What Do You Get Up For? – Cool Nike ad that reminds you that following your passions should get you up in the morning.
Nothing like a success story to show you what others have accomplished–and just what you’re capable of.
79. 14-Year-Old Millionaire – At the age of 14, Farrah Gray, born and raised in a housing project in Chicago, became a self-made millionaire. Truly inspiring!
80. Bill and Dave – Recap of the remarkable success story of Bill Hewlett and Dave Packard.
81. Inspirational Business Stories – Brief video of business owners who have found success.
82. International Success Stories – The brief story of successful international health food product company, Innocent.
83. Most Inspirational and Motivational Video Ever – If this guy can find multi-million dollar success after bankruptcy, you can find success too!
84. My Bathroom Buddy – Great story from the founder of the successful eBay business, My Bathroom Buddy.
85. New Zealand Fresh Cuts – Sometimes inspiration requires hearing the story of someone who found great success before you.
86. Real Life Success Stories – A compilation of success stories from business owners who now earn six and seven figures.
87. Small Business Success Stories – These stories prove that starting your own succesful small business is possible.
88. Sweet Treats Entrepreneurial Success – Learn how a fun hobby turned into a successful business.
89. Teen Millionaires – If these teen millionaires can’t inspire you in business, no one can!
90. Third World Small Business Startups – You don’t have to be from a developed country to find success in business.
91. Young Millionaires Share Their Secrets – Another great inspiration video from young entrepreneurs who have successfully made millions.
Women in Business Inspiration
Women looking for business inspiration can visit these videos for the motivation the need.
92. Feminine Energy and Success in Business – Woman business owner talks about how collaboration and feminine energy create business success.
93. Inspiring Video for Women Entrepreneurs – Inspiring video clips and phrases from the Women Entrepreneurs Rock the World Event.
94. Million Dollar Mom – This mom started her own million-dollar business–an inspiration for any woman.
96. Welfare to Millionaire – She went from welfare to becoming a millionaire–maybe she will inspire you to do the same!
97. Why We Ladies Rock – This network marketing video shows just why ladies are dynamic and able to succeed in business. Very inspiring!
98. Woman, Thy Name is Entrepreneur – Amazingly inspiring video on the evolving perceptions of women in business.
100. Yoga Stress Relief – Learn to relieve stress with these women to energize and inspire your business efforts.
All these “100 of the Most Inspiring Business Videos on YouTube” taken from http://www.stumbleupon.com/su/1rA169
Each year provides a clean slate and a chance to grab market share from competitors. Here are three tasks to get you started.
The New Year represents a clean slate for your business. You have the potential to completely change your financial and strategic position in 2012, taking market share and growing the value of your business. Instead of unachievable New Year’s resolutions, commit to doing these three things to prepare your business for growth in the year ahead.
1. Determine the reasonable “run-off” of your business.
What would happen if you turned off your company’s growth engine? If your salespeople stayed home and you stopped all marketing, would you continue to bring in revenue in 2012? For some businesses, sales would dry up in a matter of months as the business worked through its backlog. In other businesses, sales to existing customers might continue for years.
It’s important to understand this projected “run-off” of your business so that you can set sales and marketing goals to drive sales above this level. How much of Starbucks’ sales are driven by caffeine junkies who religiously visit their stores? A lot. In this case, it’s important to measure marketing spend against the incremental sales it would generate, rather than total sales. This would explain why most of Starbucks’ marketing dollars are used for in-store campaigns rather than through expensive TV ads.
2. “Zero-base” your market(s).
Your competitors are also starting the year with $0 in revenues, with varying levels of run-off. It’s important to understand how much of your market is “fully baked”—committed to you or competitors based on your strategic assets and other strengths—vs. market share that is in play. You’ll probably find that more market share is up for grabs than you think.
Here’s a historical example to show what we mean: Before U.S. automakers collapsed in the great recession, each year they would tout their market share and state that their goal was to increase share. We all know that they reached these market share goals largely by reducing price and increasing customer incentives—which destroyed profits. Achieving a market share of 30 percent in one year didn’t ensure a market share of 30 percent in the next, because most car buyers don’t purchase a vehicle every year. Automakers essentially enter a completely new market each year in which anyone can capture share.
What steps can you take to grab share that your competitors owned in 2011?
3. Determine the strategic investments you need to make this year to create competitive advantage that will last into 2013 and beyond.
Even if you do grow your business in 2012, you’ll face the same challenge on Jan. 1, 2013. So it’s a good idea to do some thinking now about the investments that will make your life easier into next year and beyond.
For example, what investments can you make this year to increase your market share and reduce that of your competitors? Maybe it’s making a key acquisition, investing in R&D, or increasing brand awareness. Identify these investments now so they can make an impact in future years—so you don’t have to work as hard next year.
By Ron Pacchiano | Published on: 08-Dec-11
The ability to locate your data when you need it is an essential skill for anyone who uses a computer. Unfortunately, many people become very frustrated performing this relatively simple task. This is due to either a simple lack of understanding in how to navigate Windows or just years of bad file-management practices.
I’ve seen many smart, business-savvy people save Word documents to wherever the system defaults to, with no idea how to locate them outside of the application they were created in. They’d also swear their mother’s grave that they’d copied a file to their USB flash drive, and yet the file would never be on the disk. So, if you — or someone you know — could use a bit of file management help, these six tips will come in handy.
1. Get Comfortable using Windows Explorer
The primary culprit behind poor file-management skills seems to be a lack of understanding of how to navigate Windows. Therefore the single most important tip I can give is to learn to use Windows Explorer.
Windows Explorer displays the hierarchical structure of files, folders, and drives on your computer. It also shows any network drives that have been mapped to drive letters on your computer. Windows Explorer is your primary tool for copying, moving, renaming and searching for files and folders.
Once you can successfully navigate your computer’s drive and folder structure, you’ll be hard-pressed to misplace anything. To open Windows Explorer, you click Start > All Programs > Accessories, and then select Windows Explorer. To help get you started, check out How to Navigate Windows 7 with Windows Explorer from Dummies.com.
2. Store All of Your Data in a Single Location
Keeping your files and folders organized on the computer is no more difficult than keeping them organized in real life. For most of us, our files reside in one location; usually a file cabinet. Do the same on your computer and appoint one primary folder to store all of your data.
The easiest way to do this, especially if you’re not terribly proficient, is to take advantage of the default Documents folder built into Windows. Windows XP users know this as My Documents. Windows 7 refers to this folder as User’s Files, and it’s typically found on the Windows desktop and labeled with your username.
Within this default folder you’ll find multiple folders here with names like My Pictures, My Music and My Videos. This encourages you to group similar file types together. This structure not only makes it easier to locate your files quickly, it allows even inexperienced users to intuitively store their pictures in the My Pictures folder and their music in the My Music folder; thus reinforcing good file management skills. This approach also makes it very easy to archive or transfer their data to another system.
3. Use Shortcuts
One of the simplest ways to be productive, yet still keep your files properly organized is to use shortcuts. Instead of copying a word document to your desktop for quick and easy access, get in the habit of creating a shortcut to the file. This avoids unnecessary file duplication while at the same time keeping your files where they belong.
Plus, should you accidently delete the shortcut from your desktop, you won’t have to worry about recovering the file, since deleting the shortcut does not affect the original file. You can use shortcuts with any file type, and they’re easy to create. Just right-click on the file and choose Create shortcut. The shortcut appears within the same folder as the original file. You can identify the shortcut by a small arrow in the lower left of the icon. Now just cut and paste the shortcut to a location that’s most convenient for you.
4. Keep File Names Short
Although Windows is capable of using file names as long as 255 characters, keep your filenames as short as possible. While long filenames are harder to read, those 255 characters also have to account for the entire file path. For instance, if you had a file named “2011 business Projections” on your desktop, then the path for that file would be something like: C:\windows\users\username\desktop\2011 Business Projections, which more than doubles the number of characters.
This number increases dramatically when you have files stored in nested subfolders, and it could lead to problems down the road when you archive or transfer them. To keep your filenames to a reasonable length, use abbreviations such as Dept as opposed to Department. Or instead of using a full date like September 25th, 2011, use 9-25-11. Little things like that will significantly decrease the length of your filenames and still keep them easily identifiable.
5. Use Descriptive Folders to Identify Files
Folders can help you break the files down into smaller, more easily identifiable units. Let’s use books as an example. Instead of a filename like Harry_Potter _and _The_Deathly_Hallows_by_JK_Rowling.epub, you can shorten it considerably — and better organize it — by using folders. For instance, create a folder called JK_Rowling and then a sub-folder called Harry Potter. Now store the book in the Harry Potter folder with the name The_Deadly_Hallows.epub.
This folder method is much more concise; it lets you shorten the filename and storing the book by either series or author makes it easier to locate. This will not only work with books, but all of your data as well. Music can be stored in the My Music folder, broken down further by Artist and Album. Word documents and spreadsheets can be stored in either a Work or Personal folder, further sorted by Project or Event. Remember, the more detailed you can be in defining your folders the easier it will be to locate what you need when you need it.
6. Group Projects Components Together
You can also benefit by storing all components of a project under a single folder. I once provided IT support for an architecture company where this was a standard practice. Anyone working on a particular project, regardless of their role on the project, knew that whatever information they needed, whether it be CAD drawings, photos, status reports, invoices, presentations, etc., lived in that folder. Another benefit: if you store all the project components in one folder, it’s much easier to move or archive once the project is completed.
5 Mobile-friendly Website Tips
By Pam Baker
If your website contains a Content Management System (CMS), such as Drupal or WordPress, you’ll want to take a look at the plugins that are available for mobile editions. Plugins optimize your website for mobile viewing and are often the easiest options to use. Many are free, but some charge a premium.
“We have two go-to plugins for optimizing a WordPress website for mobile. Mobile from PluginBuddy, a premium plugin that starts at $45, is one. The support you receive for your $45 investment is stellar to say the least,” said Jarrod “Jay” Skeggs, partner at StudioD.tv. “WPtouch, a free plugin, is another. We have had good experience with it in the past.”
2. Consider DIY mobile website builders
“There are a number of sites that offer mobile website building services — often at no cost,” said Drew Barton, president and founder of Southern Web Group, a web design firm. “For example, Mobify has a free option. The service is widely used by some of the world’s leading publications.”
The dotMobi mobile website tool, Instant Mobilizer, is arguably the best known and is even incorporated on several leading website hosting services such as GoDaddy.com. However, dotmobi websites do not actually need third-party hosting.
“GoMobi websites are hosted ‘in the cloud’ by DotMobi, so SMBs don’t pay extra for hosting or have to worry about other technology aspects,” said Trey Harvin, CEO of DotMobi. “Since a GoMobi website works on all mobile handsets, it ensures a business is available on the complete range of mobiles available, not just iPhones and Androids.”
3. Avoid using Flash
“Get rid of Flash. Period, end of story,” said Kate McGinley, vice president of operations at McGinley Media Limited, a mobil app and website development firm. “It’s often not supported, and when it does, it takes too long to load, and you lose viewer interest.” Unfortunately, many regular websites do include Flash. Be extra careful to find it and eliminate it on the pages you want to be mobile friendly.
4. Keep the ‘Fat Finger’ in mind
Nothing detracts from a mobile experience more than a frustrated consumer unable to navigate a mobile site and click on hyperlinked text, warned Diane Buzzeo, CEO of Ability Commerce. Given the small size of a mobile screen, make text links larger for a mobile website. Similarly, make it easy for people browsing a phone to call you. “Phone numbers normally displayed in text can be enhanced with code to call upon touch,” she said. “Using TapToCall for customer service lines and other numbers is easy to integrate and a good alternative to advanced coding.”
5. Find good website models
Look at sites that have well-built mobile versions and how they contrast with their traditional desktop site. Amazon, Newegg and CNN are a few examples where you can draw inspiration and best practices. “You’ll find that they have removed animation and hover text, Web features that don’t transfer over to mobile devices well,” explained Buzzeo. “Take a cue from the leader in the industry and then test based on your own customer demographics.”
Testing is important in order to see your mobile website as your customers do. Testing on actual devices can be difficult, especially if you don’t already own all the devices you need to test. However, online testing sites are typically not as good as testing on the real device.
Try asking friends and customers to try your site on their device and offer feedback. This will dramatically reduce your testing cost, but it will also provide you with valuable insight into what your actual customers prefer to see on your new mobile-friendly website.
Pam Baker has written for numerous leading publications including, Institutional Investor magazine, CIO.com, NetworkWorld, ComputerWorld, IT World, Linux World, Internet News, E-Commerce Times, LinuxInsider, CIO Today Magazine, NPTech News (nonprofits), MedTech Journal, I Six Sigma magazine, Computer Sweden, the NY Times, and Knight-Ridder/McClatchy newspapers.
Mood of the Market
By Tara-Nicholle Nelson, Tuesday, December 27, 2011.
With 2012 nearly upon us, many of us will be spending this week reviewing the events of 2011 and setting resolutions, goals or visions for what we’d like to accomplish next year.
It will come as no surprise that the most common New Year’s resolutions fall into the categories of getting organized and getting fit — physically and financially.
Financial fitness includes getting your real estate business in order. But you can’t set up your real estate plans for the year in a vacuum. They must be done in context of what’s going on in the market. Here are four predictions about what that market context will look like in the coming year:
1. Even more foreclosures
While I’d like to claim crystal-ball credit for this one, it doesn’t take heightened powers of prediction to foresee an uptick in the rate of home repossessions in 2012. Last fall’s robo-signing debacle and the ongoing legal fallout from it created a massive backlog in the foreclosure pipeline, meaning that banks are taking many months, even years, to actually foreclose on mortgages in default.
Earlier this year, the New York Times reported that the additional hurdles New York state courts are requiring banks to leap in the wake of the robo-signing revelations, like additional settlement meetings with the homeowner to see if a modification can be brokered, have created a backlog of foreclosures that it would take 62 years to clear, at the current rate of foreclosure.
It’s pretty clear that in 2012 and beyond, the banks will work through those backlogs. The inevitable result will be an increase in foreclosures.
2. REOs and short sales will become the new normal
If you even know anyone who has house-hunted in the past couple of years, you’ve likely heard tales of the high-drama high jinks — super-long escrows, first-time buyers being bested by investors’ cash offers, banks resistant to negotiating for repairs — that take place in the course of a distressed property sale.
In the coming year, distressed home sales will continue to represent an increasing share of homes on the market. So, buyers will shift from considering whether to buy a short sale to understanding that they must be educated and prepared to do a deal with a seller, a bank (to buy an REO) or a hybrid of the two (to buy a short sale) to access the full selection of homes on the market.
This, in turn, will empower buyers to make smart decisions about what to offer and what to expect on any listing they like, as well as to set smart priorities and make realistic comparisons between listings based on their own personal priorities around timing, certainty and seller flexibility.
3. So-called ‘smart cities’ will do well
This year, a number of housing markets saw double- or even triple-dips in home values. In others, pricing stayed relatively flat. However, in areas where technology powers the economy, home values prospered along with the industry. Silicon Valley real estate, for instance, saw fierce competition among buyers as the young employees of companies that went public like used their newly stocked bank accounts to buy their first homes.
I recently talked with Jed Kolko, chief economist for real estate search site Trulia, and his 2012 forecast was that so-called “smart cities” will continue to have hot real estate markets next year. But Kolko defined smart cities much more broadly than the California tech hubs. Other tech centers like Austin, Texas, and the Massachusetts suburbs of Cambridge, Newton and Framingham all made Kolko’s list, as did Rochester, N.Y. (a town known for its highly educated, highly skilled work force).
4. Consumers will get ‘hopeless’
I mean hopeless in the best of all possible ways. For years, buyers and sellers have been waiting for that singular event to occur that would cause a quick market recovery. But 2012 will mark the fifth or sixth year of the real estate recession, depending on who you talk to. I predict that those consumers who have not already done so will drop unrealistic hopes for a fast return to the heady real estate fortunes of the subprime era. Instead, people will make their real estate plans based on:
- today’s low home prices, rather than the fantasy of what could happen if the market miraculously came back;
- assumptions of very low, or no, appreciation in home values for years to come; and
- very conservative estimates of their own finances and how they will grow.
As a result, buyers won’t break their necks to hurry and buy before prices uptick; rather, they’ll save and plan to buy when it makes the most sense for their finances. Homeowners will do the same; they will either refi, remodel and be content where they are for the long haul, or decide their homes no longer fit their lifestyles and their finances, divest of them and move on. But the good news is, people will make these decisions based on what is or is not sustainable for their lives and their finances, and not based on inflated hopes about what the market will or will not do.
Tara-Nicholle Nelson is author of “The Savvy Woman’s Homebuying Handbook” and “Trillion Dollar Women: Use Your Power to Make Buying and Remodeling Decisions.” Tara is also the Consumer Ambassador and Educator for real estate listings search site Trulia.com. Ask her a real estate question online or visit her website, www.rethinkrealestate.com.