Monthly Archives: September 2010

Fear Never Sleeps

C’mon fellow Realtors.  Fess up.  Who doesn’t relapse into moments of fond reverie for those thrilling days of yesteryear ?   When greed was good. Money was no object. Liars loans were handed out like Halloween candy. And transactions flowed like manna from heaven.  Even if our  “mantra of more”  was really just the soundtrack behind Wall Street’s thorough mugging of Main Street.

I catch glimpses of my inner-Gekko staring sideways at me in the mirror sometimes.  He whispers naughty things in my ear.  He wants me to get up in front of that crowd of Buyers sitting on the sidelines and exhort them all  to get off their butts. Step up.  Grab those low interest rates spread out on the buffet table.

Wouldn’t a little bit of greed (for lack of a better word) do us all a lot of good in this impasse? Money can’t wake up if fear never sleeps.  As a further act of insidious manipulation, I could summon the pop-wisdom of Deep Pockets Chopra and urge Buyers to “Embrace Uncertainty.”

But apparently, they aren’t ready to “buy in.” They are afflicted with Intention Deficit Disorder. They seem to want to play the part of Buyers without actually having to consummate the act – no matter how low rates and prices limbo down.  For now, they are content to reside safely in the bosom of their own fear.

How can you  truly avoid risk? Easy.  Call your worst fears something else.  Rationalize them. Evade them.  Circumvent them in advance.  Make sure you always leave the back door open so that nothing can continue to happen. It’s called hedging. And today’s Buyers have designed some incredibly creative hedges for all that fearful baggage they are dragging around.

Here’s a short list:

BENEATH THE MEANS TIDE:  Get pre-qualified. Then decide to buy $100k below that, just to be “safe.” Don’t worry, you won’t find the champagne you want on the beer budget you’ve given yourself.

DOWN-SIZE ME:  Decide to leave a smaller footprint.  3 bedrooms, 2 baths.1100 sq ft and 3 kids.  Keep trying houses on for size with your mental shoehorn in hand. You may want to save the planet but you can only sacrifice so much sanity.

LIVE FOREVER:  A great ploy.  Decide you are going to live the rest of your life in whatever home you buy.  Then it has to cover all contingencies until the day you die.  Relax. You’ll never find it.

THE IDEAL DEAL:  Make a list of 100 priorities.  Perfection for $600k. Single-level,  3 bedrooms plus office. Total privacy. Move-in condition. Huge lot. Great views.  You can stall forever because it ain’t there.

THE WORLD IS MY OYSTER: From Bonny Doon to Rio Del Mar, rural to city, total fixer to small remodel,  make your search parameters so wide that neither you or your Agent will ever zero in on something that fits your fuzzy lack of specifics.

BAIT YOUR SWITCH: Insist on finding your perfect replacement property first. Then put your house on the market.  Make a low contingent offer. The odds are in your favor that nothing will happen.

SHORT STUFF: Get into a short sale. That will make you feel like a real Buyer. You can get out anytime.  It could take months to get a first response letter from the lienholder(s).  No pressure to perform here.

NON-COMPETE CLAUSE: Vow not to participate in any multiple offer situations  that arise – “on principle.”  Take them as a personal offense to a Buyer in a Buyers Market. That way, if anything really good comes on, you are already out of the running.

WAITING GAME GAMBIT: Sit and wait for price reductions.  Wait. Wait. Wait.  Not doing something can easily be construed being “active” in today’s and tomorrow’s market.

THE LOW BLOW: Wait until a big juicy price reduction arrives and then offer them $100k less the next day.  They are sure to reject your offer.

The CHINA SYNDROME:  Arm yourself with every economic factoid your analysis-paralysis can muster. When the right house arrives,  simply cite your concerns with currency pressures from the Yuan and blow the deal out of the water.

GROUND MEAT:   Just in case you actually find yourself in escrow, you better have an exit strategy.  There is always some excuse to get out of any transaction but it can be embarrassing to make an excuse that everyone knows is an excuse.  Better just to grind on inspection issues. Big. Small. Doesn’t matter. Just keep grinding until  the Seller says good bye instead of good buy.

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A Meditation on Home-Ness

(On the occasion of the 5th Anniversary of the Rebele Family Shelter)

Life is endlessly rich and full of  irony. Things don’t always turn out exactly as we plan or hope.  Sometimes outcomes are just the opposite of what we expect. There are twists and turns along the way.  Juxtapositions that mysteriously occur.  Never underestimate irony.   Embrace it.   Irony is one of our greatest teachers. It always reminds us that everything has the seed of something else growing inside of it.

Given my history, I could say  that  I’ve looked at home from both sides now. We could queue up the Joni Mitchell record but that would be a bit corny. And that would be a little bit too simple.  We are all just people on the continuum.  Maybe we are and maybe we aren’t homeless.  Maybe we have a roof over our heads for now. Maybe we don’t.

What  I can tell you, both from being without home and then from working as a Realtor and having danced so closely with so many  people going through such  an incredible  variety of life transitions  ( all the biggies:  marriage, divorce, birth of twins, death, illness,  old age, coming of age,  new job, job loss)   is this:  Home isn’t just an either/or thing.  Home isn’t just an all-or-nothing thing.

My  theory is: It’s not just  home-less issues we are fighting.  The entire country is locked up in a steel-cage wrestling match with its own demons.  We’ve got lots of  “issues” as they say.  I think the home less issue is just one expression sitting at the end of the much larger spectrum of home-ness  issues we face.

And home- ness is about  learning how to find and appreciate our own unique relationship to heart and home.   Even as the culture all around us is busy becoming more discombobulated, more out of  touch and more out of whack with what home really ought to be. That’s the challenge.  That’s the extra assignment of home-work we all need to keep doing.

If we think of homeless people  as somehow being people outside the loop,  existing in some other strange dimension  apart from  everyone else…..then….. they become the  OTHERS. They become LESS THAN –  HOME LESS THAN the rest of us who have homes.

My contention is that there just isn’t that much that separates any of us who are journeying around the great wheel of life.  There is almost no degree of separation.  Just a bunch of tiny threads and small choices and snap decisions and brief moments in time that are getting pulled and tugged  in different directions while things remain in constant motion. And the story keeps turning.  All  around us.

If anything has shown us how fluid this notion of home-ness is,  it’s the last five years.  The Rebele Family Shelter has done its home-work. Tirelessly and heroically it has helped to bring more than 300 families back to home. Helped them find a place of re-entry into the world.

But an ironic thing happened on the way to all those families finding their way back.
The world itself was going kind of crazy.  Spinning out of control. Millions of other people were losing their homes in the bursting bubble of the late, great real estate boom. People losing their homes became a national pastime. A sad truth that will be reflected in the stats on the front page of tomorrow’s paper. And the next day’s.  And the next’s.
The world has been drifting out of orbit, further and further away from home and heart all this time.

There was leverage and low interest rates. Equity lines and negative amortization. There were subprime loans and credit default swaps. People began viewing their homes as cash cows and milked them for all they were worth.  There were ego homes and monster homes and homes that were getting flipped and re-flipped on Reality TV.

And ….now…. we’re here on the ultimate flip side of all that flipping. And not surprisingly…we’re flipped out. We’ve got ghostly subdivisions and sprawling tracts of homes sitting empty in the fields of the Central Valley.  And ringing the outskirts of Las Vegas, where the betting capital of the planet lost the bet. We’ve got bailouts and a credit crunch.  We’ve got late payments and notices of default. Foreclosures and  short sales. Declining values and shrinking nest eggs.

And meanwhile…  Rents are rising as fewer and  fewer people can afford to be homeowners. And even more people are living paycheck to paycheck. And more people are struggling to make ends meet – one small disaster away from a much bigger disaster.
Is there anyone that doesn’t know someone who is  underwater?  Late on their payments? In default?  Or in foreclosure? Or in the middle of a short sale? Or  worried about some or all of the above?  Anyone?

So there you have it.   Home isn’t something that happens while we are busy making other plans.  It is right here. Right at the center of everything we do and everything we are.

While all this is happening, someone, somewhere has to stay home and keep the home-fire burning. The hearth warm.  Keep the porch light on.  Continue to leave a trail of bread crumbs for others to follow. Somebody has to stay in the trenches and keep it all simple. Help people with food…shelter….warmth…clothing,…. showers….safety…a place of refuge…  That’s the work of the Shelter. To maintain balance and hold the center in the face of the maelstrom.  Hold the center.

So We’re all here in one way or another  to pay homage to home.   Not to any particular story about home…but to all the stories about home.  This is a celebration of some of the beautiful ways that the people of Santa Cruz have found to share home with each other…

My past and present have given me a deep appreciation for all the things that home is for people. A deep reverence for its meanings.   The trick is to remain mindful of it all. To be able to hold it all in your heart. The good, the bad and the sometimes ugly. The strange, the touching, the sad and the glorious. All of it. All of it at the same time.  Because all of it is what fills our hearts up.

I’m convinced  that in order to do this work day in and day out, we each have to keep reminding ourselves where home resides inside of us. We have to keep going there and renewing that place.

This brief meditation was a small metaphor for what the Rebele Family Shelter does every single day.  It slows things down so folks have time to think and perhaps even more important, time to feel. Time to breathe. Time to accept and acknowledge the help of others. And time to remember and appreciate those simple things about home that can mean the whole world to someone in need.

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Deleveraging the Dream

Welcome to the day after. And the weeks after. And all the months and years yet to come here in the “after-life.”

What died?  Apparently, real estate did.  When a huge wave of statistical evidence washed over the country recently,  reflecting just how poorly the market was really doing, plenty of pundits took the opportunity to surf it. They hopped on their editorial boards, declared the market “dead on revival” and added quick post-mortems on the twin notions of home ownership and the American Dream.

The meme that tsunamied  across the nation, in bold font, was: “Sales Plunge 27% in July.”
Those numbers weren’t surprising to many of us working in the business. When you live it, there’s a gut-level of knowing that doesn’t require trailing statistics for validation.

But those numbers came as a shock to almost everyone else. Specially those sleepwalking through the elaborate smoke and mirrors game created to convince us that all was vaguely going according to plan. A trick of misdirection designed to buy time to build a façade.  An illusion the truth could get stuffed behind.

Fingers have been busy plugging holes in that imaginary dike.  Band-aids of spin and obfuscation plastering over cracks as they appeared. But with the new news, that damn dam seems to be crumbling. Fingers are twisting in the wind.  Pointing in the wrong direction in light of the whole.

Now that this particular dream bubble is bursting, I’m happy and wide awake.  In the odd, contrarian way my real estate of mind works, I’m suddenly feeling much more positive about the future of homes and our relationship to them than I have felt in a long time.  This is an auspicious moment.

That which shall not be named has been said out loud, We can toss out our false recovery and get busy having a real one.  We don’t have to be chickens with our hearts cut off anymore running around in our heads trying to prove what is happening isn’t happening.

We’ve put incredible amounts of precious energy and resources into not saying what we were really seeing.  But we can stop holding up the blue sky now..  We can let it go. It’s ok. In fact it’s more than ok. It’s just what the acupuncturist ordered.  Start treating the causes rather than flogging the symptoms to death endlessly up and down the torturous rack of the ladder of success.

Our real estate recovery has been a fragile house of cards.  It makes sense in a sick kind of way.  Try to recover from the house of cards that fell by putting  together another house of cards in its place. It’s the fragmented language  real estate speaks in.   Leverage is the mortar that holds it all together.  Leverage is the key to astronomical heights.  We can leverage recovery together from the pieces left on the ground.  And leverage works for a while.  Until the tipping point is reached and gravity eventually intervenes.

Expecting the market to return quickly to normal isn’t realistic.  In part, because we’ve been using 2004-2005 as the yardstick for what’s real.  And that normal wasn’t ever normal. It was madness.. It made no sense then. And it makes even less sense now. Unless you are an unhappy seller with blinders on trying to regroup and recoup. Or a buyer still hoping to cash in on the flippant greed of buy-gone days with a myopic vision of what home ownership ought to be about.

Part of deleveraging the old dream is going to mean giving up our manifest destiny to make every single person on the planet a homeowner. That dream was manufactured.  Give everyone free, no-strings-attached money in the form of subprime loans or exotic hybrids. Enlist them on the debt rolls. Everyone becomes an indentured servant.   And debt is a commodity that can be sold and repackaged and resold again.  When that’s exhausted, money can be wagered against it all, betting on the short with credit default swaps.

Just because owning a home isn’t for everyone doesn’t mean it isn’t for anyone. And it doesn’t mean we can’t have a robust market full of happy, well-balanced, ready, willing and able buyers and sellers.  There’s a dream for you.  The one that says that this doesn’t have to be just another circuitous orbit of the real estate market.  Instead of one more cycle of binge and purge this could be fundamental change.  The end of history as we know it.  A new door opening on the future.

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Extra Innings with Yogi

I’m wracking my brain. Looking for one simple word or expression that comes close, within a few million miles or so, to explaining this…this…thing to you.

This thing Realtors know painfully well but can’t quite describe.  This thing anyone who has recently bought or sold a house knows but probably wants to forget as quickly as their burned-out neurons will let them.

This odd place real estate has stumbled into.  This strange dream it has woken up in. This brave new world that gets more scary all the time.  Some kind of chaotic force or unintelligible intelligence has hijacked real estate. An uncaring non-process has abducted the process and won’t let it go. Or flow.

I don’t mean one transaction. I mean all of them. The whole kit and kaboodle. Sucked into the same wormhole that grabs socks between the time they go into the washer and are supposed to come out clean and smooth from the dryer.

Welcome to escrow ladies and gentlemen. The new and unimproved version. A discombobulated dimension of realty where transactions don’t exactly go to die in – just get stuck in and drag on, in a bone-numbing, jaw-dropping, eye-rolling torturous drip of endless delay-without-closure.

What do we call this period between when escrows are supposed to close and when they sorta, kinda should close, if we are lucky, for reasons we may or may not ever understand? We better find a word for it. It’s the rule now rather than the exception.  And these interminable intermezzos are taking up incredible amounts of energy. Drowning our professional souls.

Escrow bardo? The never-ending denouement? Purgatory? FUBAR? The twilight zone? Extra innings? Overtime?  Real estate held hostage. Day 382.  We’re in a sudden death play-off game that isn’t very fun.

Honest.  The old notion of Close of Escrow (COE in Realtor-speak) was something you could pretty much depend on. It wasn’t liquid. Or gas. It was a solid you held in your head.

There was a contract. The buyer and seller signed it. A point was picked on the horizon. Wheels were put into motion that would eventually converge in time and space. And voila – the deed would record and money would change hands. The buyer of the house became a buyer. And the seller, a seller.  All, more or less, proscribed in the timeframe known as COE.

Now COE has become something completely fuzzy and amorphous. It is a moving target. Constantly moving backwards in time that is. When will a particular escrow really close? That’s anybody’s guess. And I mean anybody.

Realtors are just trying to have a real estate market here.  The escrow officers, appraisers and loan brokers are on board. Doing their part. What happened?

Didn’t that seedy underbelly of the beast known as underwriting get the memo? Or they got the memo but lost it?  Or they got the memo, but the “team” lost it’s jobs last week? And we have to send another memo to the new team? Or they got that memo but we need to verify that we’ve insured the memo for the third time? (Is that the same as insuring the insuring of the insurance?)  Or we have to certify in a separate memo that it was really us that sent the first memo that is now lost? And that needs to be a non-faxed, non-scanned memo with wet signatures delivered in person on bended knees? Handed to the processor who will move it along to the closer who will run it by the committee who will assign it to the great decider-er for a really quick turnaround?

Folks, the system is in the throes of a grand mal. It affects the entire brain of real estate.  I’d love to explain it to you but I’m waiting for someone to explain it to me first.

In the meantime all I can do summon the wisdom of Yogi Berra, the man known as Mr. Malaprop,  for answers to the avalanche of malaproperty-isms we are experiencing. Yogiisms are just about the only things that do make sense in this impasse of an escrow juxtaposed between now and the future.

Try this one: “The future ain’t what it used to be.” Or: “If you don’t know where you are going, you might wind up someplace else.”  And… If you are in the middle of an escrow that isn’t closing:. “It ain’t over till it’s over.”

Me? I’m sticking with this one:   “I wish I had an answer to that because I’m tired of answering the question.”

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