Tag Archives: foreclosure

My Brain on Real Estate

It’s not even noon yet and my synapses are already misfiring on all cylinders.  The steady stream of data coming in feels like a bunch of square pegs trying to shove themselves into a dart board full of small, round, empty holes.  My right and left hemispheres might as well be ships passing in the night of day because my deepest gut instincts are in direct disconnect with the spin of information  orbiting a world that’s already wobbling woozily around on its own axis in full tilt boogie.

There’s an image of Adam Smith’s invisible hand of the marketplace, looming large on a video screen inside my head.  It keeps cracking eggs open into a sizzling frying pan while the voice-over in my inner ear keeps saying …”This is your brain on real estate…Any questions?”

Well…yeah. I’ve got some questions.  A  lot of questions.  That’s probably all I do have at the moment. Thank you very much.

Like…what happens when the bottom of the market is going up and the top of the market is coming down at the same time?  What do we call that? And how do we explain that to our clients? Do more and more people and places just get stuffed into a never-ending zone of price and property compression somewhere north of low and south of high?

How dense can it get in that space before the gravity of the situation gives – in one direction or the other?  Can the stirrings at the bottom of the market push the top back up? Or will the weight of all those pie’s hovering in the sky eventually get so heavy, they’ll force a carefully crafted façade of positive perception to fall to earth?

Is there a second dip coming to top off the cone of silence surrounding the shadow inventory of bank-owned properties getting held off the market? Not to mention the shadowier  inventory of  loan modifications not getting done, notices of default not getting foreclosed on, delinquent payments not getting issued notices of default and the next cycle of 5/1 Arm’s getting set (and reset) to appear right around the corner?

Why has the Mortgage Application Index (google it) fallen so abruptly at the same time interest  rates have dropped so remarkably low?  Money at 4.5%?!!  Weren’t they just warning us that rates were going to go up when the Fed Mortgage Purchase Program ended?

Shouldn’t the ranks of eager purchasers lining up to get their pre-approval letters be growing by leaps and bounds?  Aren’t more buyers out there chomping at the bit as summer inventory begins to expand right in middle of their very own buyer’s market?

And while we are asking the questions…even though it is probably true that the market is seasonal and the sellin’ is easiest in the summer when the catfish are jumpin’ and the cotton is high…isn’t it also true that more homes (as in a larger percentage of properties that are actually listed) don’t sell in the summer too? So which is it? Do more homes sell in the summer? Or do more homes not sell in the summer? Or both?

Is this just all about the end of the tax credit for first time buyers that expired on April 30th?   Would first time buyers  really have waited until the second or third week in April to get their loan applications in? Wouldn’t most of them have started their processes sooner?  Did we just move the time horizon up on purchases that would have otherwise happened later?  Like a cash for clunker homes program?  Was this just another version of all of us collectively kicking the can down the road to see if something else might happen in the meantime to pull our asses out of the fire?

Will the real, real estate market ever stand on it’s own again without huge transfusions coming from the Feds?  Or without interest rates being propped artificially down?  Will the private sector be able to make its own rain again? Without a house of cards built on liars loans and credit default swaps.?  Can it pick up the loose reins of laissez -faire even if it feels  very laissez-unfair in the short term?

Is there some secret escape route on the horizon the helps us get out of the Pavlovian Paradigm where we can’t help robbing Peter to pay Paul with yet one more hail Mary pass that leaves the answers blowing in the wind for future generations to figure out?

Time will tell. But not any time soon.  In the meantime, I’ve signed up to have my brain frozen at the cryogenics lab. Wake me up when we get there.

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Bigger and Better and More April Fools

* (Read to the end and receive your free gift for playing the game)

It’s no secret. We’re living it. Real estate can fool ya’ in a New York minute. Some of the time. Most of the time. All of the time. Just when you think there’s a fastball coming right down the middle of the plate, the invisible hand of the marketplace alters it’s grip on the seams and throws you one of those really nasty curveballs instead. Even when your eyes are focused clearly on the pitch, you can still miss by a mile on occasion.
It’s April Fools week folks. Real estate is buzzing with a crazy kind of trickster energy that has us doubting established truths, looking over our shoulders, questioning everything getting tossed in our direction. Since baseball’s opening day is also coming up, you are all invited to step into the batter’s box while I step up on the pitcher’s mound. I’m going to check the dream catcher’s signs, take my wind up and deliver a few patented knuckleballs your way – in true trickster fashion.
Decide whether each of the following pitches is true or false and then log onto my blog (real-estate-of-mind.com) to see what your batting average is. Everyone will be rewarded with a take home souvenir just for playing the game.
•    To encourage consumer confidence, the Obama Administration considered calling this spring’s time change – Daylight Spending Time. False

•    A Homeowner has officially been redefined to mean someone with more than 51% equity in their home. False

•    A Million Mortgage March is being planned for mid May. Throngs of angry mortgagees are expected to descend on Washington to present the White House and both Houses of Congress with ceremonial Notices of Default. False

•    More than 35% of the homes in both inland and coastal California are now considered underwater. True

•    Recordings of Rush Limbaugh have been used to kill termites in heavily infested progressive regions of the Country. True and False

•    A disgruntled winner of a $2 million dollar Dream House Raffle sued a Bay Area non-profit recently after an independent appraisal proved the home was only worth $1.2 million. False

•    Enterprising Agents are buying midget-sized statues of the patron saint of homes, St. Joseph, and burying them upside down outside of their short sale listings in the belief that it will make those oh so tedious bank processes move a lot faster. True and False

•    The median income in Santa Cruz County only allows a buyer to purchase a home for $350,000 assuming they could actually scrounge up a 20% down payment and that they could actually  survive the rigors of a full doc loan qualifying process. True

•    Using credit scores to determine a borrower’s loan qualifications has been declared unconstitutional and a discriminatory lending practice aimed at redlining people who don’t pay their bills. False

•    The EPA has declared the Orlando and Las Vegas real estate markets Superfund Hazard Sites in a bold new move to jumpstart remediation efforts to clean up toxic assets all across America. False

•    Disney’s California Adventure Park plans to open a new attraction featuring an underwater McMansion Ride. Thrill seekers will attempt to get out of homes turned upside down by an unexpected rogue tsunami. It is loosely based on the hit 70’s disaster movie – The Poseidon Adventure.  False

•    Locally, more notices of default have been issued in the first three months of 2010 than there have been sales. True

•    Nobel Prize winning Economists have declared it impossible for multiple offers with buyers competing against other buyers to exist in a buyers’ market. True and False

•    The housing market is being called “the Vietnam War of the American economy” and a new syndrome called PTDSD (Post Traumatic Distress Sale Disorder) has been identified in a high percentage of former foreclosure and short sale participants. True and False

•    Unemployed actors in Southern California are being hired to occupy vacant homes and coached to go through the motions of being “real” Sellers to help “psychologically stage” and market Bank-Owned listings. True

•    A host of new online real estate courses are being offered for enterprising Agents anxious to earn flashy new professional designations. In addition to CDPE ( Certified Distressed Property Expert), new webinars are focusing on GGC (Greed and Grief Counselor) and CYA (Liability Aversion Specialist) accreditation. True and False
Your Reward for Taking the April Fools Test: A free ride on the real estate market roller coaster…have fun and hang on! CLICK HERE

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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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