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As a professional engineer, I am involved in residential and commercial real estate development projects often early on, performing due diligence to see if a development project is feasible or not. This keeps me up to date on what is happening in land development.
It was evident from the end of 2007 and throughout 2008 that real estate development activity was drying up, just by following the number of projects I was evaluating for my clients. But I have to say that 2009 has been surprisingly different.
That’s not to say it’s been a banner year so far, but I do have to say that there have been more developers looking for land in the first quarter of 2009 than there have been for a good part of last year.
Perhaps the real estate recession is over.
Perhaps the fact that developers are starting to look at 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, I used a tool called Google Insights. Google Insights graphs Google searches to see trends in people’s interests over time. It is a very good tool to get an idea of what is happening in the world. Common logic would tell you that the more people search for terms like “Real Estate Development”, “Property Development”, and “Land Development”, the more people will be interested in starting development projects in the future.
This can serve as a leading house brush indicator for the development industry. Here is the link to what Google Insights shows for search trends on “real estate development” (Google Insights Real Estate Development Search)
The link results show that searches for these terms bottomed out in December 2008 and have recovered so far this year. Granted, the rally is small, but it is definitely a turnaround.
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 gloom right now. Only time will tell if the bullish trends on the Google Insights charts continue. Likewise, only time will tell if the increased activity I’m seeing with land developers in my office will continue, but I hope it does.