Monthly Archives: December 2009

Channeling the Future of Real Estate

There I was driving home from the office on Highway 1, the other night ruminating about the future of real estate, when I came to a grinding halt in bumper to bumper traffic. As I sat unmoving and frustrated, I realized  I was sitting right in front of the electronic Caltans billboard near 41st Avenue. Glancing up. I noticed strange flashing lights and what appeared to be a string of random words running across the electronic screen.

Suddenly my cell phone rang and an eerie mechanical voice on the other end said: “Pay attention and write.” I was so shocked I grabbed my laptop and for the next three hours a series of messages channeled through the traffic board as I feverishly tried to keep up with my meager typing skills.

What follows is only a small part of all I was shown and told. Predictions for the future? Real estate for the coming year – courtesy of some Century 23 Agent traveling back in time? Who knows? Fact or fantasy….you be the judge. I’m just the instrument of some higher power with a heck of a cell phone bill .

–  An exhaustive study  tracking homes sold in 2005 with subprime loans and resold 5 years later as bank-owned properties will be published under the title of Garbage In Garbage Out.

– “Housing Bubble” Gum will become the new “Pet Rock” of 2010.

– A local Real Estate Agent will rise to the top of the fashion world with his Armani Hazmat Suit – high couture that protects against daily exposure to the standard household threats of formaldehyde, radon gas & lead-based paint.

– Mass demonstrations of seemingly random St. Vitus  dancing will  be traced to the hallucinogenic effects of a new strain of toxic mold found growing in the glut of vacant foreclosures across the country.

– Organic Sellers will attempt to secede from the market by forming a separate MLS where bank-owned properties are prevented from being listed for sale.

–  Disenchanted Appraisers unhappy with new HVCC legislation will quit the business and flock to an evangelical end of days cult called Appraise the Lord and Pass the Ammunition.

– New legislation attempting to slow the mounting tide of foreclosures will require troubled properties to first be labeled Afault, Befault and Cefault before being allowed to go to Default.

– In November a local real estate agent will give birth to a 14 pound escrow file and be prominently pictured on the cover of the National Enquirer.

– A local psychiatrist turned real estate agent will lose both of his licenses after he is discovered marketing pre-pre-pre-foreclosure properties on Craigslist using confidential client information.

– As the shadow inventory of homes held off market by the nation’s largest banks grows to record numbers Foreclosures will be re-named Noclosures.

– Scientists studying Real Estate Buyers and Sellers will identify a new psychological syndrome called Intention Deficit Disorder (IDD)

– In June, a radical cult of new age economists will flock to Sedona, Arizona to celebrate the advent of  the Un-harmonic Convergence, otherwise known as deflation.

–  New Fair Housing laws will require Short Sales to be called Chronologically-Challenged Sales in all real estate advertising

– Local Real Estate experts will issue a forecast guaranteeing that the market will be much better in 2010.  When pressed for specifics a terse one page explanation will be issued explaining that better really means “less bad.”

In a related story,  a record number of homeowners will burn their mortgages and declare their freedom in a series of  celebrations reminiscent of the “tea party” phenomenon of 2009.  Freedom will be identified as “just another word for nothing left to lose.

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The Clan of the Cave Bear

All is quiet on the Western Front. Or in the eye of the storm. Or in the clan of all those cave bears, lulling themselves into self-imposed states of hibernation for the winter.

Like lemmings of lore, Sellers often feel a biological imperative to hang it up when the holidays hit the fan. The approach of Thanksgiving triggers an implacable urge to jump off the market. Migrate away from any serious effort that might result in the sale of a home.

All the cultural bunting we deck our brains with, this time of year, offers plenty of excuse to sound the retreat. Too many parties. Too few shopping days. Too much family. And the all-too-easy assumption that buyers are too engaged with everything else to think about buying a home for the holidays.

Meanwhile, stage right, lots of wanna-be Sellers are also lying in wait. They are making mental lists of all the reasons why they shouldn’t list their homes for Christmas. And why they should hold off until that mythical “better” time in the future called Spring – for lack of a “better” idea of exactly when “better” is really going to be.

The supply of homes on the market grows smaller. Locally, it is approaching 800 – down 30% from last year. The inventory of desirable places to buy is waning like the rays of the sun in the days leading up to the Winter Solstice – the point in time when planet earth reaches its greatest degree of tilt.

Here’s my thought: If we are truly about to hit full-tilt boogie in this crazy pinball game we’ve been bouncing, spinning and wobbling around in for the last year, then, as soon as we get done with the longest night of our lives, let’s just push the reset button!

Go ahead. Take a moment. Do some soul searching into the darker realms of your unconscious and the hidden nooks and crannies of your conscious mind as well. Now quick. What do you really want ?

If the answer is: I really want to change my life and move on, then the rest is simple. Forget Christmas. Forget New Years. Beginning Tuesday, the hourglass of the days of our lives starts getting fuller. Not emptier. Adjust your attitude along with your latitude. Throw away everything you think you know about real estate. Do a complete core dump-ectomy on all that baggage you’ve been lugging around on automatic pilot. Time to clean house and sell house.

Let’s rethink this whole winter/spring gestalt thing-y we’ve grown so chummy with. It is an indulgence, we can’t afford anymore. Just another mind-game that obscures realty.

Yeah, I know the traditional party line: Tons of buyers sprouting up like flowers in the spring. And houses don’t show well during the cold, rainy months, when days are gray and dreary.

But let’s shine some of that soon-to-be-waxing light on a different perspective. There are already tons of buyers ready and waiting to buy. What are they waiting for? For you to put your house on the market! If you wait for them, they are going to continue waiting for you. Someone has to get the ball rolling. It’s literally and figuratively your move.

Assuming supply and demand still has something to do with real estate ….what kind of market would you rather have your home listed in? A market where there is good demand versus really low supply? Or a market where there is better demand but also a huge new influx of supply?

My contention is this: What is most important at any time of the year, in any kind of market, is the actual, real relationship between the total number of homes for sale and the total number of buyers out there.

Do more homes sell in the summer according to statistics? You bet. But, here’s a little secret… Summer is also the same time of the year when there are more homes that don’t sell. Why? Because there are way more homes on the market and never enough demand to buy them all.

Do less homes sell in the first quarter of the year, when it is cold and rainy and homes don’t necessarily show in perfect, pristine fashion? Yep. But guess what. There are also fewer homes that don’t sell too. Why? Because there are less homes on the market!

A greater percentage of the total number of homes listed in January, February and March will sell than the percentage of homes that will sell in the summer time, whether the catfish are jumpin’ and the livin’ seems easy or not. Shouldn’t yours be one of them? Spring is often the time for April Fool’s. The smarter money is going to get carpe diem-ing sooner rather than later this year.


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CHRISTMAS PRESENCE

I wanted to give you all something for Christmas….maybe not exactly what you were hoping for, but perhaps more than ever, it is the thought that counts.

So, it’s not a shiny new stated income loan. Or a stay of execution from foreclosure proceedings. Or a chauffeured ride in Mr Peabody’s Way-Back Machine, to Christmas Past  when all our homes were worth more. In fact it’s not any of those great big dreams we were busy betting on the come not so long ago. No high rise condos in Las Vegas. Or shopping centers in Chowchilla.  No second homes in the mountains. Forget about those last two rentals in Fresno we could have leveraged into with the equity lines on our tiny Santa Cruz  bungalows.

There have been many occasions over the years in real estate, when I would wake with sudden clarity, from what felt like a somnambulist trance. In those moments I found myself wishing that the world would simply stop moving like a blur around me.  I just wanted to freeze everything in place. Give my fingers,  gripping the facade so tightly, a chance to relax. Forget about the strange surreal fluttering in my stomach that was mysteriously following me around from house to house like a dark shadow. Stop worrying about  all those people making huge life decisions on the fly with barely a second thought or glance behind at the houses they were buying.

For a long time, I’ve needed a breathing space and an opportunity to reflect.  A chance to search the landscape littered with careless chards of affluence in hopes of recovering a few small pieces of my own soul – ejected when the G forces on Mr. Toad’s Wild Real Estate Ride got so powerful it was impossible to hold it all together as a real person.

So some might say….  Be careful what you wish for…. You just might get it.   Well, that’s the both the bad news and the good news for this year’s Christmas Presence.

Now that we’ve had time to reflect – by choice or just by the default of the marketplace, how many of us would willingly plunge headlong back into those craziest of times? Sure we’d like to be a bit busier. But would we really want go back to that place where 18 offers in the first two days was considered normal?  Where overbids regularly stretched people’s boundaries past any recognizable human form? If this is your wish for Christmas future,  then you really haven’t gotten the message or spent enough time in mindful meditation about the miraculous gift  that has been put on our plates.

In case you haven’t noticed, the fundamental reality of our economic system has changed forever.  On some deeper level, we all knew this was coming. We all knew we were living beyond our means even in this, the wealthiest nation on earth where 5% of the world’s population uses 25% of the world’s resources. All of us have felt the existential pangs and emptiness of materialism and what  it feels like to invest our identity and sense of self-worth in the ubiquitous, consumer-driven world of “stuff”.

And now, that the frenzy has abated, we’ve been given another chance to summon the collective courage to live beyond this moment differently with a new sense of responsibility to ourselves and to others.

Maybe this will be the economic downturn where crime rates and divorce rates don’t increase and instead,  more random acts of kindness and senseless acts of beauty are spontaneously reported.  Maybe people will  pay it forward this time instead of letting it all pile up on their revolving/spiraling 18% credit cards.  Maybe this will be the economic down turn where  the goal isn’t to return to a bigger and flashier version of business as usual but rather to create a new spiritual and enlightened moral vision of what business as usual really ought to be.

Anyone who still gets a tear in their eyes while watching It’s A Wonderful Life t and A Christmas Carol  is still capable of accessing that deeper desire for a different value system –  one where self-interest and idealism and social change all intersect.

So here is your Christmas Presence. I compiled a small list of favorites to watch, read and reflect on.   Google the Following or Go Straight to my Blog Site www.real-estate-of-mind.com

George Carlin – A Wonderful Message

Jill Bolte Taylor – Powerful Stroke of Insight

Bill Moyers Interviews Andrew J. Bacevich

Michael Lewis – The End

Repossessing Virtue – Parker Palmer on Economic Crisis, Morality and Meaning/Podcast

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WAITING FOR GOOD DOUGH

Tis the season. But specially this year. Specially this market. Specially now. A lot of you Sellers are either pulling it off or holding it back – aren’t you? You are waiting for good dough. Better dough. In fact a lot better dough than the measly bucks you’ve seen getting tossed around the marketplace lately. ( Can you believe what they actually sold that bank-owned property down the street for!!!!??)

The question is: When exactly are you waiting for? And how long are you prepared to wait?

The traditional answer this time of year is almost always: “We’re going to wait until next spring.” And that phrase “next spring” usually assumes the vague persona of some mythical place in time and space. Somewhere far away. Over the next hill. Beyond the current valley of the shadow. Where the flowers are blooming. Where the grass is a lot greener and so is the money.

There are only nineteen shopping days left until Christmas but I suspect that means a whole lot more when it comes to the fast-selling inventory of flat screen TV’s and some of those new techie little apps for your I Phone than it does for local Sellers who have slightly higher ticket items known as homes for sale. We are reminded constantly by the the hyped up stats that more homes are selling this year than last year, when we honestly feared the economy was going to collapse like a house of cards. But that’s not much consolation if your house isn’t one of the ones that has sold.

The pressure to buy that arises around those Dionysian revels designed for shop-aholics -like Black Friday and Cyber Monday – doesn’t translate well to erstwhile home buyers who we suspect must be out there somewhere hovering on the radar but who don’t seem to feel any kind of biological imperative to show up any time soon and own a new home by the end of the year.

If there was a sense of urgency, the extension of the first time buyers tax credit through next June, has lessened it. Ditto for the extension of the conforming jumbo loan limit. The time horizon got moved back. Not forward like the ubiquitous Cash for Clunkers. Plenty of people may be over at Kohls right now looking for a new set of dish towels but they simply aren’t going to be getting up at 4 o’clock in the morning to wait in line for tomorrow’s open house on the average $900,000 listing.

So a number of you who have been on the market for a little while, or even a longer while than a little while, are temporarily raising the white flag, calling a cease flyer and deciding to take a vacation from what seems like the full time vocation of trying to show and sell your home. A sign of the times that signs are coming down.

It’s been a double edged sword lately, hasn’t it? On one hand, you hate getting up every morning for another day of living in a listing. Making sure everything is ship-shape. Cleaned and preened. Nicely pressed and all addressed up and ready to go at a moment’s notice.

What’s worse is, when you keep doing it and not enough of those moments of notice ever come? What if you keep staging a party at your house and no one shows?

It’s confusing. You hate the fact that no one is coming. But you love the fact that no one is coming. It is easier when no one comes. It is less hassle. You can let down your guard. Relax and lower your hopes and expectations.

And then…all of a sudden…like a rude noise that wakes you up out of a peaceful slumber, the phone rings and someone wants to see your home. Simultaneously you are thrilled to have a showing and horrified that you didn’t put away all the groceries or take out the trash.

You want to cancel the showing. But you can’t cancel it. You want to move but you don’t want to move anymore. You really do want to sell your house. But you hate selling your house.

It was all so much easier back in the day, when everything sold in two weeks with multiple offers. Escrows got done in 30 days or less and it was all over so fast you didn’t have time to think. We could use a lot more of that. Less time to think about it that is.

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Real Q and A

Making an offer shouldn’t be like throwing spaghetti against the wall to see if it will stick.

(Originally Published 7-08-06)

Dear Tom: We are interested in a house that has been on the market for a long time and hasn’t sold. Clearly the Seller is asking too much or someone would have bought it by now. We want to make an offer but we don’t want to waste anyone’s time. So, we thought we would just make our offer to the Seller verbally through our Agent and their Agent. What do you think? Waste Not, Want Yes

Dear Want: Except for rare instances (mostly relating to counter offers and counter to the counter offers) I am not a strong proponent of throwing verbal offers casually out into the ether of the marketplace, as though one were tossing strands of spaghetti against a wall, just to see if something might stick.

As anyone who has worked in this business long enough will tell you – talk is cheap, even if the houses aren’t. I don’t know how many times in my career, an Agent has called to say that he/she was bringing in an offer on one of my listings, only to have some sudden mysterious act of “client interruptus” take place in the form of a last minute change of heart or a debilitating attack of buyers remorse – in which case the mythical offer got hijacked before it actually ever materialized in the flesh.

I stopped telling Sellers a long time ago that we “might” have an offer coming in every time someone calls to say they are “working on something.” Too often it gets emotions worked up and adrenalin shooting through the system needlessly. There’s nothing worse than a Seller waiting  in vain for their date to show up and the dance to begin – sitting all “addressed up with no place to go.”

So rule of thumb is: unless there is a bona fide Purchase Contract completely filled out with someone’s John Hancock on it staring up at me from the safe harbor of my own desk – it ain’t an offer.

It might be a dream. It might be a flight of fancy. It might be a negotiating ploy. It might be unrealized potential. But it ain’t an offer.

As a Buyer there’s another angle you might want to consider. By making a verbal offer, you could be selling your own interests figuratively short if you are really trying to convince the Seller of  a property that has been on the market for a while to sell his/her interests literally short.

Think about it! When you tender a verbal offer, you are in effect saying to a Seller: “If I were to hypothetically think about writing an offer on your home somewhere in the range of some price, how do you think you would hypothetically respond to such an offer, were I to actually make it?” Hardly compelling stuff, is it? Specially for a Seller stuck in the morass of their own mind-set.

I guarantee you that as long as Sellers are thinking about the prospect of selling their property on a purely hypothetical basis, rather than a real one, the vast majority are going to revert back to the same conceptual set of expectations that convinced them to overprice their property in the first place.

There is only one way to transition your interest and their dreams out of the realm of the hypothetical and into the real. Put your offer in writing. Make it appear on their dining room table. Force them to review its terms and conditions in a way that requires them to do some actual soul-searching and confront their own presuppositions.

A real written offer alters the internal process of even the most recalcitrant Seller. It says to them that the whole ordeal can be over if they just agree to sign on the bottom line. And that is compelling to someone who is tired of living in the fish bowl of the marketplace.

This isn’t to say, of course, that you can write any offer at any price and expect Sellers to immediately cave in and hand you the keys and the deed to their property. What it hopefully means is that you can create an opportunity to get your foot in the door and begin a dialogue about acceptable price and terms without getting it slammed shut abruptly in your face.

Talking the talk isn’t enough. You’ve got to help the Seller walk the walk and do the difficult work of coming to grips with their own deflated expectations. Don’t worry about wasting anyone’s time. It should only take your Agent 20 minutes to write up the Purchase Contract assuming you have a reasonable sense of what you want to offer. The Seller has already wasted much more of their own time than you ever could.


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THE AMAZING ASSET BUBBLE PIPE!

Different tokes for all you folks!

Hey, let’s face it… like the song says…We’re Forever Blowing Bubbles! You might as well be the first one on your block to own your very own Asset Bubble Pipe before someone else gets a whiff and takes a crack at it!  If there’s lemonade to be made out of all that bitter fruit lying around, it might as well be you getting high on the next big hit!

There’s always another bubble waiting in the pipeline when it comes to other people’s money.  Carpe Dinero! Grab it!  Put it in your pipe and smoke it!  Let low interest rates fire up your imagination!  One man’s toxic asset is always another man’s treasure and greatest source of pleasure!

Here’s the best part!  You can blow it all up but you can’t really blow it away. Why?  Because there’s always more OPM and another new asset class to smoke. That’s the beauty of forever blowing bubbles with the Amazing Asset Bubble Pipe. You might not go long but you also can’t go wrong.

A free recording of  Forever Blowing Bubbles by the beloved Cockney Rejects comes with every purchase.



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ARMANI HAZMAT SUIT!

New! Straight off the torture rack!  Show and sell foreclosed homes like your life depended on it!

In the Middle Ages,  Beak Doctors roamed the squalid streets of infested cities visiting the homes of untold millions of unfortunates severely impacted by the bubonic plague. The shadow inventory of death was truly remarkable back in those days! Almost a third of humanity was underwater.  Despite dark ages and depressing times,  nattily-attired physicians found a way to continue to care and yet always remain in style.

Sound familiar?   We thought so!  As an ode to the classic look of the ubiquitous Beak Doctor, we are proud to bring you our new designer rendition featuring the famous fashion that outlasted the pandemic plague more than five centuries ago!  Our all-weather, all-purpose, all-terrain suit is just what the doctor ordered for all you caring real estate agents worried about survival every time you go out of the house and into one of those “other” houses.  The Armani Suit is living proof that there is a big difference between the haz’ and the haz-nots.  It will protect you from the spreading effects of economic fallout while it also projects your status as a well-dressed professional.

You too can wander the nearly empty streets and the surrounding sprawl of urban ghost towns in safety and comfort with your Armani Hazmat Suit. No more worries about toxic mold spores sprouting up in all those toxic assets. No more holding your breath in fear of  errant strains of Hantavirus emanating from the spoils left behind.  No more nagging concerns about ingesting lead paint or  sheet rock particles floating around in an environmentally-noxious stew of household harm. .Our new Designer Duds  even come with  special tinted visors to shield your eyes from harmful exposure to too many atrocious paint colors left behind on the walls of those bargain basement bank-owned buys.

Its never too late to dress for success while you address for distress.  Special short sale discounts are now available on all our close out inventory. Inquire within.

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