William’s Site

I feel compelled to write something regarding a football club which I have supported, albeit mainly from a distance, since I was a boy. The last disgraceful episode in the history of Aston Villa Fc was the 3-0 defeat at Doncaster in the league cup. I can take nothing away from Doncaster, who played like lions on the night. They were full of running and pressurised us from the word go. However the point here is that a team of Aston Villa’s obvious size, standing and sometimes glorious past should have been far too much for even the bravest of lower division teams. This was not a one off; sadly it was indicative of the general malaise which seems to have set in at the club over the last two years.

Here is a good example. Our £9million pound club record signing, Juan Pablo Angel strolled round the park (when he did actually move) looking like he did not want to be there. For the most part he loped towards the opposition penalty area when we got forward and then stood around waiting for something to happen. I am no expert in the art of striking, but from many hours watching some of the best strikers in the world even I can tell that a good striker will make something happen, not wait for it to fall into his lap. The fact that he has only managed to score this season against lowly Wickham Wanderers, in an earlier round of the cup, I think says it all.

Liam Ridgewell had a nightmare against Doncaster, giving away a penalty and being lucky not to concede another only a few minutes earlier, however, the fact that he was so noticeably bad at least confirmed some effort on his part. Thomas Sorenson played well throughout and the 3-0 score line will look badly on his record, but was mainly down to shambolic defending. Gareth Barry also had a good game, frequently getting down the left on Doncaster’s wide pitch. However whenever he did so the moves were broken up by the fact that no one was making the runs into the centre for him and our static strikers were being easily marked by defenders they should have been running rings round.

Perhaps the only other player I cannot fault for effort was Milan Barros, who unfortunately looked like he did not relish the cold and his touch on the ball was often well short of what we know he is capable of. I think the game perhaps turned on the penalty claim which TV replays show was an abject penalty when Milan Barros was chopped down in the box. Villa seemed to give up after the penalty was turned down. That aside Doncaster should have had another one when Liam Ridgewell very deliberately shoulder barged one of their players off the ball.

Considering that the league cup was our only realistic chance of success this season, you would have thought that we could have expected a little bit more from the players. It seems to me that the hunger has gone from the side and we have accepted the mid-table mediocrity that is so often the result of a long hard season. And indeed, the league position suggests that they think that even that will be handed to them on a plate. Quite simply it is not good enough. These players are earning – a very loose definition of the word – thousands of pounds per week, and much of that comes out of the ordinary supporters pockets.

I know for a fact that Aston Villa have some of the most fiercely loyal supporters in the land, which perhaps explains why they continue to spend money on substandard products rather than shop elsewhere. However you cannot help thinking that in years to come, unless things change radically, this will not be the case. In today’s society where more and more people are moving away from their towns of birth for employment and social reasons, clubs cannot rely on regional association to maintain their fan base and success, however infrequent, is the only thing which will keep the fans returning.

Aston Villa has always been considered the bigger of the two Birmingham clubs and indeed Birmingham is the second largest city in England. To not have a football team in the top half of the table challenging for honours is unacceptable, or at the very least, surreal.

I have been reading recently that Doug Ellis has finally decided to relinquish control of the club. Doug has done very well for Aston Villa over the years (I am not one of those who blames him for our demise) and has managed to keep the business in a very strong position financially when so many other clubs are in deep financial trouble. Unfortunately the world of football has moved on from when Doug started and it is time for a fresh injection of cash and some new faces to try and revive the club. I sincerely believe it is time for a wholesale change in personnel at the club, players and manager alike.

Irish property developers the Comer Brothers and Michael Neville who are looking to purchase Villa for around £64million will certainly inject some cash to be spent on players, but my cynical side tells me giving it to a manager who fails to inspire his team will merely lead to a squandering of a golden opportunity. Don’t get me wrong, I have nothing against David O’Leary as a manager and I think in the right circumstances he is very capable. I am suggesting, however, that he has become associated with the failures of Villa over the past couple of years and retaining him for much longer will keep that link to the bad days, when the club needs much more positive input. Likewise Juan Pablo Angel. He is simply another in the long line of expensive strikers who have moved to Villa and failed to live up to their potential. He is a very talented individual and I think perhaps he would benefit from a change of clubs. It is time to cut our losses.

For the Villa fans, we can only hope that the new year brings a new attitude at the club and that things will improve – lets face it, they can’t get much worse after a 3-0 defeat at Doncaster!

I feel compelled to write something regarding a football club which I have supported, albeit mainly from a distance, since I was a boy. The last disgraceful episode in the history of Aston Villa Fc was the 3-0 defeat at Doncaster in the league cup. I can take nothing away from Doncaster, who played like lions on the night. They were full of running and pressurised us from the word go. However the point here is that a team of Aston Villa’s obvious size, standing and sometimes glorious past should have been far too much for even the bravest of lower division teams. This was not a one off; sadly it was indicative of the general malaise which seems to have set in at the club over the last two years.

Here is a good example. Our £9million pound club record signing, Juan Pablo Angel strolled round the park (when he did actually move) looking like he did not want to be there. For the most part he loped towards the opposition penalty area when we got forward and then stood around waiting for something to happen. I am no expert in the art of striking, but from many hours watching some of the best strikers in the world even I can tell that a good striker will make something happen, not wait for it to fall into his lap. The fact that he has only managed to score this season against lowly Wickham Wanderers, in an earlier round of the cup, I think says it all.

Liam Ridgewell had a nightmare against Doncaster, giving away a penalty and being lucky not to concede another only a few minutes earlier, however, the fact that he was so noticeably bad at least confirmed some effort on his part. Thomas Sorenson played well throughout and the 3-0 score line will look badly on his record, but was mainly down to shambolic defending. Gareth Barry also had a good game, frequently getting down the left on Doncaster’s wide pitch. However whenever he did so the moves were broken up by the fact that no one was making the runs into the centre for him and our static strikers were being easily marked by defenders they should have been running rings round.

Perhaps the only other player I cannot fault for effort was Milan Barros, who unfortunately looked like he did not relish the cold and his touch on the ball was often well short of what we know he is capable of. I think the game perhaps turned on the penalty claim which TV replays show was an abject penalty when Milan Barros was chopped down in the box. Villa seemed to give up after the penalty was turned down. That aside Doncaster should have had another one when Liam Ridgewell very deliberately shoulder barged one of their players off the ball.

Considering that the league cup was our only realistic chance of success this season, you would have thought that we could have expected a little bit more from the players. It seems to me that the hunger has gone from the side and we have accepted the mid-table mediocrity that is so often the result of a long hard season. And indeed, the league position suggests that they think that even that will be handed to them on a plate. Quite simply it is not good enough. These players are earning – a very loose definition of the word – thousands of pounds per week, and much of that comes out of the ordinary supporters pockets.

I know for a fact that Aston Villa have some of the most fiercely loyal supporters in the land, which perhaps explains why they continue to spend money on substandard products rather than shop elsewhere. However you cannot help thinking that in years to come, unless things change radically, this will not be the case. In today’s society where more and more people are moving away from their towns of birth for employment and social reasons, clubs cannot rely on regional association to maintain their fan base and success, however infrequent, is the only thing which will keep the fans returning.

Aston Villa has always been considered the bigger of the two Birmingham clubs and indeed Birmingham is the second largest city in England. To not have a football team in the top half of the table challenging for honours is unacceptable, or at the very least, surreal.

I have been reading recently that Doug Ellis has finally decided to relinquish control of the club. Doug has done very well for Aston Villa over the years (I am not one of those who blames him for our demise) and has managed to keep the business in a very strong position financially when so many other clubs are in deep financial trouble. Unfortunately the world of football has moved on from when Doug started and it is time for a fresh injection of cash and some new faces to try and revive the club. I sincerely believe it is time for a wholesale change in personnel at the club, players and manager alike.

Irish property developers the Comer Brothers and Michael Neville who are looking to purchase Villa for around £64million will certainly inject some cash to be spent on players, but my cynical side tells me giving it to a manager who fails to inspire his team will merely lead to a squandering of a golden opportunity. Don’t get me wrong, I have nothing against David O’Leary as a manager and I think in the right circumstances he is very capable. I am suggesting, however, that he has become associated with the failures of Villa over the past couple of years and retaining him for much longer will keep that link to the bad days, when the club needs much more positive input. Likewise Juan Pablo Angel. He is simply another in the long line of expensive strikers who have moved to Villa and failed to live up to their potential. He is a very talented individual and I think perhaps he would benefit from a change of clubs. It is time to cut our losses.

For the Villa fans, we can only hope that the new year brings a new attitude at the club and that things will improve – lets face it, they can’t get much worse after a 3-0 defeat at Doncaster!

The race for the vacant Portsmouth manager’s market has provided fascinating reading over the past week or so and over £13 million has been traded on Betfair. Frenchman Alain Perrin was sacked on 24 November after steering the club into the Premiership relegation zone without a home win all season.

Perrin had only been manager since April 2005 but had won just four matches out of 21. He replaced an equally unimpressive boss in Velimir Zajec, who mustered five wins in 21 matches and was himself only in charge at Fratton Park for five months.

Neil Warnock was the first manager in the frame and eager punters backed him into 1.20 (1/5). The former Notts County, Huddersfield and Bury manager had been in charge at Sheffield United since December 1999 but had made no secret his desire to manage in the Premiership. Warnock was set to hold talks with Portsmouth chairman Milan Mandaric until he decided to remain at Brammall Lane on 1 December. His Premiership dream may yet come true as The Blades are sitting pretty in one of the automatic promotion positions in the Championship.

The best was yet to come. Harry Redknapp, who left Portsmouth for bitter rivals Southampton, revealed in a crunch meeting with Saints chairman Rupert Lowe that he had always felt more comfortable at Portsmouth after he was refused permission to speak to his former employers about a possible return. Redknapp’s position became untenable and he walked away from the club he joined just 12 months ago.

Over £11 million was traded on Redknapp, with punters eager to “buy money” backed him at odds as low as 1.01 (1/100) although some shrewd players managed to get a few pounds on him at odds as large as 59/1 previously, creating a no-lose betting situation.

However, there was yet another twist in this tale. Mandaric refused to pay Southampton the £220,000 compensation they demanded – the remainder of Redknapp’s contract, since the former West Ham boss was still technically under contract, leaving him in limbo.

Mandaric has now expressed interest in other managers, with Northern Ireland boss Lawrie Sanchez, under-pressure Rangers manager Alex McLeish and former Hearts manager George Burley all in the frame.

Despite this and numerous claims in the press that Redknapp has no chance of a surprising return to Fratton Park, he is still trading as low as 1.30 (3/10).

The Compelling Facts…

What if… Just 5% of the Baby Boom Generation learned of a cost effectice way to own more than 1 home in retirement? 75 million boomers will retire over the next 15 years, 5% equals a demand of 250,000 condo hotel units per year, every year unitl 2020.

What if… you could buy a second home/condo, use it when you wanted, and a professional (hotel manager) optimized the rental income and minimized the expenses while you were not in residence? Would this be more desirable than the alternative of doing-it-yourself for at least 5% of the population?

What if… you could deduct several homes instead of just 1 or 2?

What if… you could say you have condos in Town & Country and on The Slopes & Shore? And all these condos cost you less than just one traditional second home?

What if… all these properties appreciated like your home has?

The Condo Hotel opportunity will be the choice of more than 5% of the Baby Boom Generation, and the trend is just beginning. The condo hotel industry will also breath new life and prosperity into the hotel industry, making quality and ‘the best located’ hotels more profitable than ever. Condo hotel will separate the real estate business from the hotel service business and create a win-win for condo hotel ownership and hotel guests. Lastly, retirees of the next decade will expect more and be able to afford a higher lifestyle through condo hotel. These are the premise of this paper.

THE POWER OF THE BOOMER GENERATION…

Why are Baby Boomers Important?

81 million US Baby Boomers* (born between 1946-64) began to reach retirement age (59 ½) in 2004. 28% of the US population is a Baby Boomer. 2016 is the peak year, with 4.3 million 59 year old birthdays. A Boomer turns 50 every 7.4 seconds this 2005!

*Many non-US Boomers will choose to retire in the USA to be closer to the world’s best health care system. per year:4,000,000per day (4.0 mil / 365): 10,958per hour (10.6 k / 24):456per minute (456 / 60):7.1

Boomers have just begun buying their second/retirement homes.

Michigan has 234,000 second homes, California has 237,000 and Florida has 483,000. 6.4 million people own a second home, up over 40% since 1995. By 2010, an estimated 10 million people are expected to own a second home, despite 9/11, this is a 56% increase in just 5 more years and could be considered a boom market by any measure. More people will buy in the next 5 years than have purchased in the last 10 years, competition for desirable retirement residences will only intensify, appreciate in values will follow suit. Low rates have helped fuel this real estate market, but they are a smaller part of the equation than is commonly believed. Currency exchange rates have a much more dramatic inflationary effect on resort area real estate.

The trend began in 2001, and intensified as interest rates fell in 2002-03, causing some boomers to “buy early”. Real estate further became the investment “du jour” as it became clear in 2001-02 that the stock market was ‘not returning the level of investment returns’ that many boomers had built retirement savings expectations around.

This lack of security and control in the stock market, and its positive effect on real estate investment, will be discussed further in this report. In addition, tax ramifications for second home ownership has helped encouraged second home ownership says the Wall Street Journal “In addition to low interest rates and demographics, the second-home market has been helped by the Taxpayer Relief Act of 1997, which established new rules for the treatment of a capital gain on a principal residence. Under the old law, taxes on gains were deferred if the seller bought a new home of equal or greater value up to two years before or after the sale of the primary home. In addition, sellers over age 55 could claim a one-time exclusion of $125,000.”

New rules repealed the mandatory gain-deferral and increased the exclusion to $500,000, as long as a taxpayer owned and used the principal residence for two of the five years preceding the sale date of the home. Plus, the exclusion now can be claimed every other year.

These tax changes “liberated” sellers from the pressure to trade up to avoid a tax hit. Instead, says an NAR spokesman, it has encouraged many sellers to trade down to more modest digs, while using the remaining proceeds to purchase second and third homes. Tax changes have created a whole new form of property ‘trading’, where there is a tax advantage to buy a new home every 24 months, allowing a capital gain profit with zero tax cost. For many savvy investors, this has created a true ‘cottage industry’ in home flipping.

“The second-home market can accommodate 100,000 to 150,000 new housing starts a year over the next 10 years”, estimates David Hehman, CEO of EscapeHomes.

But why second homes? As many professional people have discovered, as technology allows us to ‘work from anywhere’; why not work from someplace beautiful, someplace ‘vacation-like’, from the cottage? The evolution of the home office has turned to the cottage office. The typical vacation-home buyer is 55 years old and earned $71,000 in 2003, while investment-property buyers had a median age of 47 and earned $85,700.

For properties purchased between mid-2003 and mid-2004, the median price of a vacation home was $190,000 compared with $148,000 for investment homes. In contrast with the last available full-year price data in 2001, vacation homes have appreciated 12.8 percent from $168,500, and investment homes have risen 25.4 percent from $118,000.

Nearly one out of five second homes will become primary residences after retirement – 27 percent of vacation homes and 14 percent of investment property. “In addition, buyers were looking to diversify portfolio investments,” Mansell said. “This is now the most frequently cited motivation for purchasing a second home.” In listing the reasons why they bought second homes, respondents said there were some differences depending on the type of home. Overall, 30 percent of buyers wanted to diversify investments, 28 percent sought rental income (37 percent investment vs. 7 percent vacation homes), 14 percent wanted a personal or family retreat (29 percent vacation vs. 8 percent investment), 6 percent planned to use for vacations (16 percent vacation vs. 2 percent investment), and 5 percent had extra money to spend.

“Because the typical second-home buyer is a baby boomer, it’s likely over the next decade that second-home sales will remain historically high,” Lereah said. “The boomers are still in their peak earning years and have both the wherewithal and the desire to purchase vacation homes and investment properties.” Ninety-two percent of all second-home buyers see their property as a good investment. In addition, 38 percent said it was very likely they’d purchase another home within two years, breaking down to 47 percent of investment buyers and 16 percent of vacation-home buyers.The 9/11 effect, and family values is another unpredicted phenomenon that many experts sight when discussing the second home market. The theory says that as Americans were shocked by the events of 9/11, they wanted to create more ‘family together time’ and come together in vacation destinations where far-flung family members could rejoin as a whole unit. Drive-to destinations were first to experience the effects on family-tourism from 9/11, these resort locations within a 2-5 hour drive from metro areas actually saw increases in occupancy immediately following 9/11. The theory is still evolving, but through my own surveys of boomers, this effect has merit on cottage demand. Drive-to vacation cottages is still the fastest growing market.

Can the demand for second home, resort properties and retirement residences be truly measured or is it just another version of real estate investment hype? A new study by NAR, shows that 23 percent of all homes purchased in 2004 were for investment, while another 13 percent were vacation homes. In addition, there was a record of 2.82 million second home sales in 2004, up 16.3 percent from 2.42 million 2003. The investment-home component rose 14.4 percent to 1.80 million sales in 2004 from 1.57 million in 2003, while vacation-home sales rose 19.8 percent to 1.02 million in 2004 from 850,000 in 2003.

The figures have merit and factual measurement. Real estate values in nearly all ‘vacation, resort, and retirement’ areas have out paced the overall market by double digit (alarming) rates. The working communities of America are not only lagging, but in many cases falling in real value (when adjusted for CPI inflation).

(A note about inflation & currency: All too often we read reports about the increasing value of assets like real estate without any discussion of the cost of inflation in these increases or the exchange value of the currency being used to value the asset. If the dollar falls in purchasing value by 30% against other currencies, the value of real fixed assets should correspondingly rise by 30% (if they are desirable for purchase by foreigners). Real estate markets that have a high level of foreign investment will appreciate quickly as the dollar falls, and fall if the dollar strengthens (Hawaii circa 1990s). If the Consumer Price Index (CPI) rises by 3%, then the value of a home that rises by 5% has truly only increased by 2%. It is disturbing to this author that this is not more openly discussed by our mainstream press, who by profession are journalists with liberal arts degrees, not MBAs. Watch the true inflation-adjusted appreciation rate, no the media hype.)

Can these high rates of appreciation in second home markets really continue? Many experts believe, “Yes!”, it can sustain for a long run (not months, but years). The fundamentals of rapid appreciation equate to supply growing slower than demand. Supply in areas such as South Florida have been rapid (78,000 new or planned condo units entering the Broward/Dade county market by 2007), but material shortages and hurricanes have slowed the ramp-up and created a large amount of pent up demand chasing reduced supply. Also, the foreign buyer demand in the Miami area is extremely high, this means these buyers are using currency that is 20-30% strong than last year. A 30% rise in property values is easily absorbed in this environment.)

In areas such as Arizona and Las Vegas, water concerns and lack of infrastructure and skilled laborers have slowed the rapid pace, but the grow rate is still staggering. Other scenic second home destinations, like the mountain states, Pacific Northwest and Florida Keys have environmental hurdles which raise the barriers to entry for developers and restrict supply. A restricted supply in the face of demographically empowered demand is always a formula for rapid price appreciation (CA in 1970’s). What goes up must come down? Yes. But a 20% per annuim rise for 5 years, followed by 5 years of stagnation or a 10% loss, is still 5%+ annual growth rate (worse case). If leveraged at 90%, the return on initial investment is still 44% per year. The hard part is making sure the best years are in the beginning… even hard is selling at a peak. It is estimated that there are between 40-90,000 new condo hotel units coming to market by 2008.

The demand for these units will exceed 1 million buyers, so the price of condo hotel units could be much higher than presently expected.