Wishing everyone a safe and healthy rest of their holiday season. I for one am looking forward to an exciting new year with lots of exciting projects and changes. See you in 2012!
Wednesday, December 28, 2011
Wednesday, October 19, 2011
Monday, October 17, 2011
If You Are Afraid of the Market, You Just Might Miss The Market!
Can you believe how fast the year has gone by? Now that’s a haunting thought. The real scary thought is how many buyers and sellers are just sitting on the sidelines, too afraid to make a move. Waiting and waiting for some apparition or a sign from the great beyond, telling them it’s safe to buy a home or that their house value is going to go up in value in the next six months. Hoo-hoo-haa haa!!! Maybe I can shed some light where the dark monster of real estate fear may be lurking.
History has always been the best champion through murky and unstable times, guiding us through and out of the darkest of real estate slump markets and back into the light of day. This has been the roughest and scariest real estate market down turn since 1978 thru 1982 or maybe 1990 thru 1994.
Looking back to 1982, home loan interest rates were 18% & 19%. That was Scary! Creative Financing was born! President Reagan regained control of the economy by lowering taxes and we enjoyed stable real estate growth until late 1989. Then came the S & L financial collapse, whereas many huge companies such as Ford, GM, Anheuser Busch, Toyota, Robert Shaw, etc., left California. Unemployment was terrible! Money was tight and banks weren’t lending. In 1990, interest rates were floating around 11.9% to 13%. Hoo-hoo-haa -haa!!!!”” The Adjustable Rate Mortgage (ARM) became the light to save the day!
Even in the darkest of nights, the scariest of storms, eventually, the sun starts to shine and the storm passes. Both of these down markets lasted approximately 5 1/2 Years. What happened after the storm “Katrina” had passed? They began to rebuild and New Orleans was back, with the huge success of Mardi Gras in 2010 and 2011.
In 1995 & 1996 the R.E. Market was flat. Interest rates were around 8%. Property values were not going up nor were they going down. The monthly entry level mortgage payment was about the same as monthly rent in a good neighborhood. The bottom of the market had finally hit. However, buyers and seller’s were to afraid to move. Boooo!
Flat sales & low R.E. inventory left buyers and sellers sitting on the sidelines! Overall a pretty frighten public opinion of the housing market! History “SHOWS US” that was the time to make some moves! Hind sight is 20/20!
Now, I don’t want you to think that the “Mean Old Real Estate Boogeyman” does not exist, because he does exist. He exists in good markets as well as tough markets. Getting good and solid advice from an experienced Realtor, is the best decision one can make. With good information one can make good decisions, taking the fear away.
We all know people who purchased homes at the bottom of the market. They had the same fears that many buyers and sellers have today. “Is this the right time to buy? Is this the right time to sell? Will the home I buy go down in value after I buy it? If I wait to sell will the price go down further or should I wait and watch what happens next year or the year after?”
How have the buyers and sellers of 1996, 97, 98 through 2004 faired? Pretty darn good. I believe that in today's R.E. market, there are real opportunities to do well.
Whether you are planning to move up or you’re empty nesters looking to down-size, there are opportunities on both sides of the transaction.
Today's interest rates are absolutely fabulous! With conforming rates around 4% and Jumbo rates around 5.25% there is no cheaper money. Entry level mortgage payments are the same or cheaper than renting. Home prices have or are stabilizing, in the markets below $450,000, especially in Orange Co. The higher end markets are still selling; Maybe not as high as in the past, but they are still selling. Sellers with equity are finding some real bargains with their purchasing power today.
Fear and sitting on the sidelines has driven many real estate agents out of the business, as well. The less experienced, or the agents who did not embrace real estate as a career or were in the business just for the quick buck, have left or will be leaving soon.
According to Robert Kleinhenz, Deputy Chief Economist for the California Association of Realtors (CAR), there are approximately 162,000 licensed real estate agents state wide. At the recent Broker/Manager meeting in Orange, CA, he said he expects that number to drop again by the end of next year, to 152,000.
Do you want to hear something really scary? In 1980 – 1983 the realtor population decreased from 148,350 to 102,600 (-31% of Realtors), and decreased again in 1990 to 1997 from 146,000 to 90,500 (-38% of Realtors). From the beginning of this real estate decline in 2006, there were 211,300 Realtors to date. There has been a 26% decline in realtors to 162,000(Sourced CAR data). I also believe that many realtors will not renew their local & CAR dues next year and that we should hit a 30% decline in Realtors by the end of summer next year! Only the dedicated professionals will survive. My opinion only.
(Here is the fun scary stuff!) Do you think history will repeat itself once more! 1982 President Reagan won election over Pres. Jimmy Carter therein 1984 through 1990 there was a 6 year upswing in the RE market and prices went up. Pres. Bush Sr. left a surplus for Pres. Bill Clinton who began spending & implemented the ease of loan requirements. In 1998 George Bush Jr. takes office and that upswing ride lasted 8 years. The top of the market was 2005. We’ve been in decline for 6 years and next year is election year. I think the year will be flat, prices won’t go up or down. However, check out the buying power with today's interest rates; between 3.5% and 4.5% 30 Year Fixed Rate. I’m banking on a history repeating itself this coming election. Now that’s a scary thought. Boo!
History has always been the best champion through murky and unstable times, guiding us through and out of the darkest of real estate slump markets and back into the light of day. This has been the roughest and scariest real estate market down turn since 1978 thru 1982 or maybe 1990 thru 1994.
Looking back to 1982, home loan interest rates were 18% & 19%. That was Scary! Creative Financing was born! President Reagan regained control of the economy by lowering taxes and we enjoyed stable real estate growth until late 1989. Then came the S & L financial collapse, whereas many huge companies such as Ford, GM, Anheuser Busch, Toyota, Robert Shaw, etc., left California. Unemployment was terrible! Money was tight and banks weren’t lending. In 1990, interest rates were floating around 11.9% to 13%. Hoo-hoo-haa -haa!!!!”” The Adjustable Rate Mortgage (ARM) became the light to save the day!
Even in the darkest of nights, the scariest of storms, eventually, the sun starts to shine and the storm passes. Both of these down markets lasted approximately 5 1/2 Years. What happened after the storm “Katrina” had passed? They began to rebuild and New Orleans was back, with the huge success of Mardi Gras in 2010 and 2011.
In 1995 & 1996 the R.E. Market was flat. Interest rates were around 8%. Property values were not going up nor were they going down. The monthly entry level mortgage payment was about the same as monthly rent in a good neighborhood. The bottom of the market had finally hit. However, buyers and seller’s were to afraid to move. Boooo!
Flat sales & low R.E. inventory left buyers and sellers sitting on the sidelines! Overall a pretty frighten public opinion of the housing market! History “SHOWS US” that was the time to make some moves! Hind sight is 20/20!
Now, I don’t want you to think that the “Mean Old Real Estate Boogeyman” does not exist, because he does exist. He exists in good markets as well as tough markets. Getting good and solid advice from an experienced Realtor, is the best decision one can make. With good information one can make good decisions, taking the fear away.
We all know people who purchased homes at the bottom of the market. They had the same fears that many buyers and sellers have today. “Is this the right time to buy? Is this the right time to sell? Will the home I buy go down in value after I buy it? If I wait to sell will the price go down further or should I wait and watch what happens next year or the year after?”
How have the buyers and sellers of 1996, 97, 98 through 2004 faired? Pretty darn good. I believe that in today's R.E. market, there are real opportunities to do well.
Whether you are planning to move up or you’re empty nesters looking to down-size, there are opportunities on both sides of the transaction.
Today's interest rates are absolutely fabulous! With conforming rates around 4% and Jumbo rates around 5.25% there is no cheaper money. Entry level mortgage payments are the same or cheaper than renting. Home prices have or are stabilizing, in the markets below $450,000, especially in Orange Co. The higher end markets are still selling; Maybe not as high as in the past, but they are still selling. Sellers with equity are finding some real bargains with their purchasing power today.
Fear and sitting on the sidelines has driven many real estate agents out of the business, as well. The less experienced, or the agents who did not embrace real estate as a career or were in the business just for the quick buck, have left or will be leaving soon.
According to Robert Kleinhenz, Deputy Chief Economist for the California Association of Realtors (CAR), there are approximately 162,000 licensed real estate agents state wide. At the recent Broker/Manager meeting in Orange, CA, he said he expects that number to drop again by the end of next year, to 152,000.
Do you want to hear something really scary? In 1980 – 1983 the realtor population decreased from 148,350 to 102,600 (-31% of Realtors), and decreased again in 1990 to 1997 from 146,000 to 90,500 (-38% of Realtors). From the beginning of this real estate decline in 2006, there were 211,300 Realtors to date. There has been a 26% decline in realtors to 162,000(Sourced CAR data). I also believe that many realtors will not renew their local & CAR dues next year and that we should hit a 30% decline in Realtors by the end of summer next year! Only the dedicated professionals will survive. My opinion only.
(Here is the fun scary stuff!) Do you think history will repeat itself once more! 1982 President Reagan won election over Pres. Jimmy Carter therein 1984 through 1990 there was a 6 year upswing in the RE market and prices went up. Pres. Bush Sr. left a surplus for Pres. Bill Clinton who began spending & implemented the ease of loan requirements. In 1998 George Bush Jr. takes office and that upswing ride lasted 8 years. The top of the market was 2005. We’ve been in decline for 6 years and next year is election year. I think the year will be flat, prices won’t go up or down. However, check out the buying power with today's interest rates; between 3.5% and 4.5% 30 Year Fixed Rate. I’m banking on a history repeating itself this coming election. Now that’s a scary thought. Boo!
Wednesday, September 14, 2011
Putting the Puzzle Together
It has been a while since my last blog, must mean we've been busy over here! Well, we are now moving into the last quarter of the year and can you believe how fast this year has gone by?The kids will be banging on the door soon for their "trick or treats!" They always look so cute in their Halloween costumes with their looks of expectation as they arrive at the front door.
The holidays will be here before you know it. Once again, we all can give thanks for being here, safe in America. It is great getting together with family and friends. I can smell the turkey and pies as I write! I just love this time of year. The trees changing colors, the chill in the evening air, the smell of wood burning in a fireplace.
I find that during this last quarter, I start to think about what's going to happen next. The economy is in the tank and the Real Estate market is right there in the middle of it all.
With so many other industries that are connected to the real estate industry it is a real puzzle trying to figure out what I can do to help them to stay afloat during this market swing. My company, The Shire, has been hanging on during these tough times as well.
My clients that are depending on their home to be sold, so they can move on, ask what they can do to help sell their home.
My buyer clients, want to buy a home, but are afraid they will be making a bad decision. They are asking what happens if the market goes down further..then what?
This is the part of the economic puzzle tyhat we've all been talking about. This discussion has been going on for some time now. How long can this go on? How far will real estate prices fall? What is going to get the American economy started again? Where's our manufacturing? How much more will they be taxing us?
We have all had to tighten our belts and watch our pennies, as did our parents when they went through this type of downturn in their lives. This includes our government.
The depression of the 1920s and 1930s was no picnic. The 1950s, after the Korean war, was tough; 1970s after Vietnam when Nixon changed from the gold standard; 1980s with interest rates at 17% and above for a home loan. Let us not forget about 1990 through 1995 when all the S&L's went out of business and also the manufacturing that left California for other parts of the country or left the country completely. Yes, these were some tough times as well, and we did not fall into the ocean.
Guess what? America go through those times and came out even stronger. As we adjusted, the jobs came back, pricess of homes rose and we went through one of the longest economic upswings ever recorded.
I believe this November will be the start of finding that missing piece of the puzzle. I also think the part of the puzzle that's missing is "CONFICENCE. And from confidence, we will see the slow turning around of the American economic machine.
I don't have all the answers, if I did I would be a real bore to be around! However, in America, we are all entitled to our opinions and may speak them freely.
Here is one of my favorite quotes from Benjamin Franklin. "In America, a man may rise as high and as far as his wits will permit."
After November, you will still find me here...selling real estate, helping people achieve the American Dream and answering questions. THIS AMERICA IS NOT GOING OUT OF BUSINESS ANYTIME SOON!
The holidays will be here before you know it. Once again, we all can give thanks for being here, safe in America. It is great getting together with family and friends. I can smell the turkey and pies as I write! I just love this time of year. The trees changing colors, the chill in the evening air, the smell of wood burning in a fireplace.
I find that during this last quarter, I start to think about what's going to happen next. The economy is in the tank and the Real Estate market is right there in the middle of it all.
With so many other industries that are connected to the real estate industry it is a real puzzle trying to figure out what I can do to help them to stay afloat during this market swing. My company, The Shire, has been hanging on during these tough times as well.
My clients that are depending on their home to be sold, so they can move on, ask what they can do to help sell their home.
My buyer clients, want to buy a home, but are afraid they will be making a bad decision. They are asking what happens if the market goes down further..then what?
This is the part of the economic puzzle tyhat we've all been talking about. This discussion has been going on for some time now. How long can this go on? How far will real estate prices fall? What is going to get the American economy started again? Where's our manufacturing? How much more will they be taxing us?
We have all had to tighten our belts and watch our pennies, as did our parents when they went through this type of downturn in their lives. This includes our government.
The depression of the 1920s and 1930s was no picnic. The 1950s, after the Korean war, was tough; 1970s after Vietnam when Nixon changed from the gold standard; 1980s with interest rates at 17% and above for a home loan. Let us not forget about 1990 through 1995 when all the S&L's went out of business and also the manufacturing that left California for other parts of the country or left the country completely. Yes, these were some tough times as well, and we did not fall into the ocean.
Guess what? America go through those times and came out even stronger. As we adjusted, the jobs came back, pricess of homes rose and we went through one of the longest economic upswings ever recorded.
I believe this November will be the start of finding that missing piece of the puzzle. I also think the part of the puzzle that's missing is "CONFICENCE. And from confidence, we will see the slow turning around of the American economic machine.
I don't have all the answers, if I did I would be a real bore to be around! However, in America, we are all entitled to our opinions and may speak them freely.
Here is one of my favorite quotes from Benjamin Franklin. "In America, a man may rise as high and as far as his wits will permit."
After November, you will still find me here...selling real estate, helping people achieve the American Dream and answering questions. THIS AMERICA IS NOT GOING OUT OF BUSINESS ANYTIME SOON!
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