East Bay Real Estate

This is a day that will be remembered for the rest of our lives - 777 points down in the DOW Jones!

OK, is today the time for HOPE regarding the Bailout?  Well, the world markets say NO!  We need to bring the message of HOPE to all of our friends and family TODAY.  One of the many reasons for the strength of our country’s economy is our ability to make mistakes, and learn from our mistakes and move forward.  OUR money is now being spent to re-tool Wall Street and Banks who still are creating the credit for consumers and companies - finally, the HOPE of the bailout is that a common sense of lending as the base of the way money will be lent will be used.

My view is that I still do not believe that we should look to Washington to fix what we can change.  However, this crisis is too big!  The current financial crisis is ONE part restructuring of Wall Street credit methods, and TWO parts a crisis of FEAR and a lack of faith in Capitalism.   A massive change in our financial structures is happening this week.  The media headlines are running rampant.  Remember, blood and guts sell!  Change is not good or bad, it is simply a different way of doing things.  We, as Americans, need to recognize that all of us participated in this mess by not saying STOP! 

I am a raving fan of free markets as opposed to Government “band aids” that may actually take longer for our economy to heal.  Our financial systems are in a real mess, along with millions of home owners.  And, stress is only relieved by CHANGE.  Well, change is what we are getting this week, whether we like it or not.

Another hopeful fact this week is there are billions of dollars in money market funds and investment accounts that are waiting for the bottom of this market.  When the consumers start to feel the “calm”,  that bundle of cash will rush back into the Market.  When that happens, a brand new business cycle will begin.  So, where is the bottom?  Well, it may have finally come.

My view is that we have had a drunken economic party for the last six or so years and this week the waiter brought the bill.  Instead of allowing those who hosted the party paying the bill, some bright person in the Government decided that the bill should be paid by our kids and grandkids.  Our kids now “own” a bunch of paper assets that may help pay the bill some time in the future, but I promise it will not pay the entire tab.

The message for us to consider today is that real estate has still been the best place I have EVER placed money.  There are non-stop bargains on the market and mortgage rates are AWESOME!  So, let’s make sure we bring the message of hope to all of our clients!  There has never been a better time to buy real estate than NOW!  Let’s start spreading the message TODAY!  Let me know your thoughts!

No Comments yet »

In the midst of the biggest financial meltdown since the 1930s Jim Walberg is still focused on making lemonade out of lemons.

You remember my article about “Do not be fearful”?   Well, this is the most important time to keep a focus on this mantra given the economic meltdown that accelerated in our country this past week.  We need solutions, and we need them fast!  There is no getting around the fact it is a historical financial mess.  My focus is to always get to “what is” as fast as possible, and start making lemonade out of the truck load of lemons that has just been dumped on all of our front porches.

I have a Realtor friend in Naples, Florida.  His name is Mike Lissack.  He is one of the smartest financial minds that I know.  He came to real estate from a long and successful career on Wall Street where he was named by Worth Magazine as one of “Wall Street’s 25 Smartest Players”,  and is one of the top 100 Americans who have influenced “how we think about money.”  Before he retired from money management he directed more than $25 billion of investments, supervised their financial reporting, and assisted in the design of their risk management and investment operations.

So, we are corresponding about the financial meltdown that is surrounding all of us.  He has some pretty interesting ideas as to what he would do if he was in charge of the direction our Nation takes next regarding making sure these events never happen again.  I felt it was important for you to also review what he proposed to me as what he would do immediately.  So, here it is:

Mike Lissack’s view on the financial solutions of our current crisis:

“A vast portion of the mess is caused by the mark-to-market accounting rule and the lack of liquidity (and thus a market and thus a meaningful market price) for uncertain and “tainted” assets (mostly mortgages, credit card debt, and related derivatives).

“The mark to market rules ASSUME a liquid market and thus meaningful market prices.  Such is not our present environment. It is too late in the game to suspend the mark to market rules.  That solution would have worked well a year ago, but today investors would merely be even more spooked by the uncertainty.

“The solution lies in recognizing the shift between equity and debt which the market turmoil has created.  Since the government now control Fannie and Freddie it also controls the very mechanisms to solve the problem.

“Fannie and Freddie should mandate that every conforming loan outstanding be subject to an appraisal for the underlying property.  If the appraisal suggests a loan to value ration in excess of 110%, it is time to recognize that a PORTION of the loan is in reality an equity investment.  All such loans should then be subjected to a mandatory split such that 90% of the appraised value receives a Fannie/Freddie guarantee and the other piece does not.

The first piece would have an established market value based on par for the principal and current interest rates. The second piece would become in effect participating equity.  Banks and borrowers should have the option of exchanging the second piece for up to 75% of the future appreciation in the property valuing each 25% of future appreciation (above the current  appraised value determined above) at 5% of the current appraised value of the home.

“These two steps would restore value to perhaps 70-80% of the currently illiquid uncertain mortgage assets plaguing the US financial markets. The mess would be over.”

Do you get the message?  Mike knows what he is taking about.  Check out his second email to me regarding his thouhts after the AIG bailout.  Let me know your thoughts.  Also, if you want to contact him directly, go to www.Lissack.com .  Until next time….I guarantee we will figure out a way to make lemonade out of lemons with this financial mess.  Do you know why?  BECAUSE WE DON’T HAVE A CHOICE!

2 Comments »

Viscape University has booked renown bloggers Jim Walberg - EastBayRealEstate.com, and Jim Cronin - RealEstateTomato.com to moderate their teleconference on October 6th!

Remember… a Blog = A citizen journalist writing about things they are noticing or personally experiencing and sharing those with the world through the internet.  Viscape is the world’s first social marketplace to rent or buy vacation properties on-line!  Because it is a social network focused on vacation destinations they also provide a blogging forum for world travelers to share their stories and resources.  One of the services they provide their Internet marketplace is Viscape University.  This is their education division that focuses on practical topics for world travelers who are interested in rentals and vacation property purchases.  On October 6^th at 9PM EST they are hosting another one hour seminar.  The topic is Blogging and how it can be THE tool one uses for many purposes, but specifically how to use it as an additional profitable marketing tool for your business.

Because of the success of EastBayRealEstate.com, and RealEstateTomato.com’s blog sites Viscape have arranged for the owners of these businesses to be the moderators of a one hour teleconference on this topic.  Jim Cronin and I will be the contributors as we share our experience of how blogging can be the most effective tool possible to connect with people who are looking for the services you are providing.

Jim Cronin’s internet site - RealEstateTomato.com, is built to be a “hub” to assist the real estate community to better understand how to embrace blogging as the center of their marketing efforts.  He recently launched Tomato University,  serving the needs of the blogging world.   Jim moved to California in the mid 90’s as the Senior Internet Marketing Consultant for Z57 Inc. from 2000 - 2006.  He then had the idea of creating a method where he could share his incredible strategies regarding blogging as a marketing profit center for real estate businesses, and RealEstateTomato.com was launched.  Jim has helped thousands of Realtors gain a superior Internet presence by using the tool of blogging on their websites.

No matter if you have been checking out my EastBayRealEstate.com site for the last year, or you just found us, we have become the real estate resource center for the San Francisco Bay Area, with thousands of visitors using our real estate services and information.  And, our readership continues to grow daily.  Our blog site has also evolved into being your Bay Area lifestyle information center with ME - for better or worse,  as your on-site detective letting you know about the stuff I am discovering each day in this place I love so much.  Not only is EastBayRealEstate.com a resource center for Bay Area real estate, we also assist those who want to purchase a piece of their Caribbean paradise as a second or third home.  At CaribbeanIslandsRealty.com  we represent real estate opportunities from Aruba to the British Virgin Islands.  Check it out!

So…if you want to discover the rules and strategies of blogging as a very profitable marketing tool for your business - whether it is for real estate or for any enterprise, check out this FREE teleconference on October 6^th.  RSVP to RSVP@viscape.com  by October 3rd in order to get the call-in information.  Today you can start posting your questions that you would like addressed during our time together.  Contact me if you have further questions.  Until next time…your Bay Area lifestyle detective remains on duty!

No Comments yet »

Marianne Bordogna has thrown her hat into the race for on of the Danville council seats to be decided on November 4th.

Who would have thought that a community activist who has never run for public office would throw her hat into the ring for the November election of the new Danville Town Council?  Well, it has just happened!!!  Marianne Bordogna, is the “new kid on the block” who has been nominated to have her name on the November ballot.  Until she showed up there were only three incumbents to vote for, and….there were only three spots to fill.  SO…what type of “choice” is that?  Marianne decided that she has sat on the sidelines long enough and is now ready to make a difference in the direction of how The Town Of Danville evolves.  There are many issues facing the Town Council today - Responsible growth in the Tassajara Valley;  Affordable housing; Infrastructure;  Senior Services;  Addressing specific projects, such as the Veteran’s Hall and the Danville Hotel complex; and, many more that need to be effectively addressed.  Marianne has the qualifications and the commitment to address them all!

I had a chance to speak with her today regarding why she believes she would be the best candidate for the Danville Town council.  Marianne told me,  “I am running for town council because I love where we live and want to maintain the uniqueness My experience of resolving issues within the context of the ‘bigger picture’ brings a new voice and a much different perspective in creating solutions that makes us all Danville.”  She laid out five specific items that make up her campaign’s platform;

• Proactively engage San Ramon and county officials on future Tassajara boundaries, which directly impact our town - the unincorporated parts Danville and Blackhawk;
• Seek solutions to traffic and downtown parking via stronger relationships among our school district, businesses, planners and council;
• Expand activities and meeting places for teens, singles and seniors
• Streamline our building permit and planning process for homeowners and builders, while ensuring that appropriate studies, architectural standards, community input and common sense have been applied in decision-making so that new projects (Danville Hotel, Veteran’s Hall) augment our town
• Grow Danville’s business community, while balancing downtown events that attract potential new residents - and revenue.

If elected, she wants to hear from you - often!  She is new to the political arena, but not to leadership roles. I have discovered over the past five years that she listens with an open mind and analyzes the facts, before reaching a decision.  She is a very quick study - and fully committed to win/win outcomes. When she is elected she will implement fiscal policies that continue to enhance all aspects of the quality of life that is so valued in the Danville community.

Obviously, she would appreciate your vote, and I know she would be a welcomed addition to the leadership, and stewardship of the Town of Danville.  Check out her website and learn more about her plans for addressing the important issues that are facing our community - www.DanvilleTownCouncil.com .   Your Bay Area lifestyle detective is always on duty.  Until next time…

2 Comments »

“The Feds took over Fannie Mae and Feddy Mac today!  Time will tell what happens next for East Bay Real Estate consumers and who will pay the bill.”,  says Jim Walberg.

The Federal Government made their historic announcement today - a Federal bailout of Fannie Mae and Freddie Mac could not wait another day!  The straw that broke the camel’s back was the liquidity condition of both of these mammoth financial entities.  It is frightening to imagine that both of these companies own or guarantee about $5 TRILLION in home loans - about half of all the nation’s total home loans!  And, we need to be reminded about my phrase, “Do not be fearful!” - False Evidence Appearing Real!   

The plan that was announced today by Treasury Secretary Henry Paulson and James Lockhart, director of the Federal Housing Finance Agency, places the two companies into a “conservatorship” to be run by the Federal Housing Finance Agency. Under conservatorship, the government would temporarily run Fannie and Freddie until they are on stronger footing. “A failure of Fannie and Freddie would affect the ability of Americans to get home loans, auto loans and other consumer credit and business finance.  And a failure would be harmful to economic growth and job creation.”  Paulson said at a news conference today in Washington.  With this bailout, the Feds have now made $200 BILLION available to them to shore up their liquidity issues.  Again, this money is coming from US as an addition to the national debt.

The roll of these two financial institutions is to buy mortgage loans from banks and package those loans into securities that they either hold or sell to U.S. and foreign investors.  This allows that national banks like Wells Fargo Bank and Bank of America to make more loans.  The problem affecting the mortgage meltdown has hit Fannie Mae and Freddie Mac VERY hard!  The past twelve months have seen an alarming number of their loans started going into default, emptying out the companies financial reserves and sending ice through the veins of the credit markets around the world.  Costs have skyrocketed and the Feds could not wait another day by placing them into a conservatorship.   The Treasury Department is now guaranteeing the solvency of these two lenders.  That means that YOU and ME are the ones guaranteeing the loans because more money is just going to be printed to bail them out.

With this bailout mortgage rates on conventional 30 year fixed rate loans are expected to fall by the end of September.  If the mortgage interest rate falls for home loans, it should attract more Buyers into the market, which would then have a positive effect on home prices.  However, Greg McBride, a senior financial analyst at Bankrate.com did say,  “Continued investor wariness and a depreciating housing market may keep rates from dropping.  We are not looking at sunshine and daffodils in the housing market anytime soon.”

Paulson stressed that both Fannie and Freddie are still in business and will open their doors on Monday with a new management team.  Freddie CEO Richard Syron and Fannie CEO Daniel Mudd will no longer run the companies, with the FHFA taking over control of their boards.  Syron and Mudd will be replaced by two market veterans with the job of restoring the mortgage agencies to a profitable condition. Herb Allison, the former chairman and CEO of pension provider TIAA-CREF, will head Fannie Mae. Allison formerly served as president of Merrill Lynch.  David Moffett, who served as vice chairman and chief financial officer of U.S. Bancorp until early 2007 and then joined the Carlyle Group private-equity firm as a senior adviser, will take over Freddie Mac.

Federal Reserve Chairman Ben Bernanke, who led the efforts to help get the U.S. housing market and the broader economy back on track, applauded the decision by Lockhart and Paulson.  “These necessary steps will help to strengthen the U.S. housing market and promote stability in our financial markets,”  Bernanke said in a statement.  The real test will come when financial markets around the world open Monday.  Pimco’s  Bill Gross, a widely followed bond fund manager, said that the Freddie-Fannie plan was the right move.  “This is a significant step and almost exactly what we had hoped for,” Gross told CNNMoney.com  Sunday.

Time is always the judge of any decision, especially one of this magnitude.   I am not a fan of ever increasing our national debt.  Today it is already staggering without the additional billions required to support this bailout.  Still, the rescue of Fannie and Freddie may go a long way towards bringing stability to the housing market while making it easier for consumers to obtain affordable mortgages.  We will see.  I look forward to your comments.

No Comments yet »

There is a mixed bag of critical information for Buyers and Sellers to consider for the 4th quarter.

There are MANY factors that are still mixing together that makes it critical for consumers and Realtors to understand the economics of how these factors will impact their decisions regarding Buying and Selling real estate in the San Francisco Bay Area.  And, as you read my report remember that all real estate is LOCAL!  Here are just a few of the factors that will be impacting the 2008 fourth quarter real estate sales in our Bay Area region.

• Mortgage interest rates have been adjusting downward this past week. The markets believe that inflation is not the BIG factor at this time, even though in August it was at a 27 year high. The biggest inflation factor was the price of oil. The speculation on that commodity has cooled down dramatically bringing gas prices down, therefore lower the inflation rates.
• Short Sales and REO sales are bringing down the median price for homes in the Bay Area. What this means is that appraisers are one of the BIG hurdles when purchasing a home, because in some communities there are so many distressed sales that it is the trend impacting those homes for sale that are not in a distressed condition. For example, communities such as Antioch/Brentwood/Oakley are receiving appraisals on any home sale that are based on a much lower median price trend because of the number of distressed sales.
• Positive reports on the housing markets helped regain some confidence in the past week. Preliminary Growth Domestic Product estimates showed the U.S. economy growing at a surprisingly healthy pace while the Consumer Confidence Index posted its second straight monthly gain. However, here is the catch that needs to be watched. The GDP may be a false indicator because most of this gain is generated from exports because of the world taking advantage of the weak dollar. Remember, on Friday the unemployment figures are now up to 6.1% - the highest in five years. So, the GDP is growing but that growth is not creating new jobs.
• All of the housing sales indicators are showing that we may be getting close to the bottom of housing price corrections. However, there is a wild card that may be showing up soon - pay-option adjustable-rate mortgages may show a dramatic increase in defaults in 2009 after the payment option period expires. This could be the second wave of defaults with most of these in higher priced communities.
• Remember that all real estate markets are local! The national averages do not mean anything in the Bay Area, or any other specific geographic area. The local markets are the real indicator to watch. Within a 25 mile radius in the East Bay the markets are as different as night and day. It even gets more specific by city. Some of the communities that are on fire right now are Danville, San Ramon, Dublin, and Pleasanton. The very large sales activities in Antioch/Brentwood/Oakley are still caused by the Short Sale/REO properties that continue to flood the markets. As much as 45% of the sales in these communities are distressed sales. As opposed to Danville where they are 8%. Do you see how “local” the real estate markets really are?

So, how does a consumer filter all of this information into actions?  If you are a Buyer, lock your loan and buy a house NOW.  If you are a Seller that does not need to sell right now, HOLD.  If a Seller needs to sell their home, then price it aggressively, prepare the home in turn key condition and get it SOLD.  A Seller will only hurt their chances for the best price if they do not pay attention to price and condition.  The longer a home stays on the market the likelihood of getting their expected price will decline.  One last thought for the day…there is no BAD market or GOOD real estate markets, there is just THE market we are in.  We are very effective at turning lemons into lemonade no matter what the economic conditions.  Contact me any time with questions, and I welcome your comments about my real estate market observations.  Until next time.

No Comments yet »

After much consideration regarding the situation with both the Democrats and the Republicans,  Jim Walberg has decided to run for President as a fifth alternative!

A grass roots effort has already begun.  Please log on to the U-Tube that just surfaced!  I welcome your comments and support during the next 68 days.  It will require a miracle of millions of write-in votes, but I have a feeling that it just may work.  I am also looking for any input regarding some policy issues you would like me to be focus on.  I am standing ready to serve!

No Comments yet »

Back to Southern California to enroll our last child into college!

We are gladly taking donations from all of our friends, family and the internet world.  As of yesterday we have all THREE of our kids in college - Matt at Loyola-Marymount University in West Los Angeles, and JJ and Bryana in Santa Barbara, California!  It has been a hectic time of transporting ALL of them and us to the various campuses to get them settled into their college dorms and apartments.  In addition, it will be the first time in 22 years that Ann Marie and I will be “empty nesters”! 

Bryana, as a freshman, is very excited, nervous, and filled with anticipation of how the next chapter in her life will be unfolding.  Her three girlfriends since the second grade have said their goodbyes, since they are all going to different universities.  Ann Marie found a blanket manufacturer that could weave in a photo into the blanket.  We found the girls’ favorite photo of them and surprised them with a blanket for each of them so they could be reminded of their dear friendship.  Bryana is currently focused on a career in journalism.  As you can see, she may want to start in television since she is so beautiful and so darn smart.

JJ continues his passion for surfing and golfing while attending college in Santa Barbara.  As a Junior he has kept a 3.0 GPA, and he has lowered his golf handicap significantly between his class work.  If I could pick a career for JJ it would be doing something with kids.  He is an amazing coach with sports, and he has a natural knack of having kids bond with him and listen to his advice and direction.  At the moment his major is social science.  He would be a great elementary school teacher, too.  However, no matter what he does he will need to live by the beach.  We are so glad that he and Bryana will be in the same college town, just so they know there is a family member close by.  It is comforting to us, too.

Matt is completing his last few courses at LMU.  He already graduated last June with double degrees in Economics and Music - what a combination of interests.  He is passionate about both, and during his last four years he has more than tripled his stock portfolio because of studying the stock markets daily.  He has made some BIG hits with Apple stock purchases over the last few years.  His next step will be in some type of international experience.  We will be taking him to London in January to interview with the London School of Economics.  And, next we will open some doors in Geneva, Switzerland with the Nestle Group.  He would really enjoy a year’s internship with Nestle. ( Any contacts would be greatly appreciated.)

Ann Marie and I are already planning an adventure when Bryana graduates in four years.  As she exits college at that time, we will get an immediate raise in our income.  With that in mind, we are planning to sail in the Caribbean for six months starting in the BVI and heading south with no other plans than beautiful sunsets, SCUBA diving, fair winds, and having friends meet us along the way at various islands.  I will let you know how these plans unfold.  Wish us well as we launch our last child into a new world.  ( Bryana already called today to see if we could assist her in figuring out the public transportation system to her college from her dorm. Life’s little leasons have already begun for her! )  Until next time…fair winds to all of you!

No Comments yet »

The value of borrowers homes may not be enough to pay off their loans.  Short Sales are now impacting appraisals of properties and the ability of borrowers to secure their next mortgage.

Not since the early 1990s have I seen so many Short Sales being processed.  The challenge today is that most Realtors servicing a Short Sale were not in business in the early 1990s.  In fact, most of the people working for the lender’s side of the Short Sale negotiations have never participated in this type of transaction.  This may be one of the reasons why less than 30% of the Short Sales actually close escrow.  We now have the solution  for borrowers considering this method of negotiating with their lenders.  Our real estate Team is looked upon as one of the most successful in actually completing the Short Sale process because of having a dedicated department to serve these difficult situations.  Ellen Muzzio has just joined our Team as our Short Sale Specialist.  She is the most experienced professional we have found regarding the successful management of a Short Sale.

A ‘short sale’ is when a lender accepts a discount on a mortgage to avoid a possible foreclosure or bankruptcy. For example: A homeowner, who is facing foreclosure, has an existing first mortgage of $700,000.   The value of the home in today’s real estate market is only $600,000.  The borrower hires a Realtor to sell it for current market value.  A Buyer presents an offer for $600,000.  The purchase offer is submitted to the lender for consideration.  This is a ‘Short Sale’.

Deciding to participate in the Short Sale process is a BIG decision for a Buyer.  It is usually triggered when someone is at the point of not being able to afford their home due to; high interest rates, dips in property values, divorce, loss of employment, decrease of income, etc., then they are forced to make a life altering decision.  I will be the first to tell that a short sale is bad, but a foreclosure is worse.  However, the Buyer may have the ability to save their credit from reflecting a ‘foreclosure’ as to simply having a ‘settled debt’.

Why would a lender today be willing to take such a loss?  Here are just a few of the reason:  First, banks do not like excess inventory and delinquent loans on their books. An opportunity to sell the property is very attractive in today’s real estate market.  Secondly, lenders know they could lose a substantial amount more if the property goes to foreclosure - a trust deed sale. There are many fees involved: i.e., property taxes, liens, repairs, etc. The lender may be better off taking the loss beforehand and be finished with the headache and liability if in fact it goes to a ‘trust deed sale’.

The short sale negotiation with the lender is a difficult, frustrating and very time consuming.  A purchase contract from a Buyer is required to begin discussions with the lender.  This is the first step of many that will need to be successful taken in order of a lender approval to be secured.  A short sale approval is further complicated when there is a 1^st and 2^nd mortgage on the property.  Here is a list of the items a lender will require before they will even begin the negotiations. 

• A letter of hardship from the borrower.
• A copy of the purchase contract from a prospective Buyer of the property.
• Two years tax returns.  (If you have not filed, include that information in hardship letter)
• Two most recent paycheck stubs for each person on loan.
• Two most recent bank statements from the borrower(s).
• A copy of your mortgage statement(s).
• A signed borrowers authorization for our Short Sale Specialist - Ellen Muzzio, to communicate directly with the lender(s).

The outcome of a Short Sale will be up to the skill of the professionals managing the case on behalf of the borrower(s).  Again, it is not for the faint of heart, but it may be the best solution for a borrower in a very bad situation.  There are very important tax considerations for a borrower to also consider.  Before they even begin the process they will need to seek counsel from their tax and legal advisors.  Let me know  if you would like to learn more about how this may benefit your current real estate situation.  Until next time…

2 Comments »

Jim Walberg’s viewpoints regarding key factors impacting today’s real estate market results!

There are non-stop changes happening in residential real estate - locally and nationally.  Also, there are a multitude of factors that are involved in the current condition of residential real estate.  If one does not understand these factors then they will be stuck in the mental state of a “victim of the market”, or they will decide to be “paralyzed from taking action”.  Neither of these conditions will have a positive outcome.  Here are some of the pieces of the puzzle that need to be examined.  The observations are being done by a non-economist - me.

Mortgage Industry:  In the past 18 months over 250 mortgage lenders have closed their doors.  The result for the consumer is that there are VERY FEW choices left for securing a home mortgage.  In fact, the two emerging key players are Freddie Mac and Fanny Mae.  The remaining few banks and mortgage lenders have been badly damaged financially from the poor decisions they made in making the wrong bet on lending products and the belief that future appreciation would support some of the “creative” interest only and/or negative amortization loans. 

The result of the condition of today’s mortgage markets is an atmosphere of fear and over reactions as to who can be granted a home loan.  It is as if they want your first born child pledged as collateral before a home loan will be granted.  You had better have a GREAT credit rating and real money for a down payment if you want to purchase a home.

The good news within the remaining lenders is interest rates are still relatively low, even though they are contrary to what is happening with inflation rates - the highest in 20+ years!  What this means to me is that interest rates will adjust higher before the year is over, maybe right after the election.  The Feds may want to defer any more bad news regarding interest rates until a new president is elected.  They will let him deal with the realities of rising inflation rates.

Consumer Fear:  Remember my definition of FEAR?  False Evidence Appearing Real.  It has been a long time since home prices and interest rates have been so favorable.  If this novice economist is correct, a real Buyer needs to lock their loan today and purchase a home.  If a Seller does not need to sell their house they need to wait until a clearer picture of the future economy unfolds.  If a Seller needs to sell their home today then do it NOW!

World Issues:  What is happening in our local and National economy is not happening in a vacuum.  We are in a World neighborhood where what happens in oil markets of the Middle East impacts the Bay Area.  What is happening in Georgia, with the Russians in charge of their country because they want control of the oil pipeline running through Georgia, is impacting the economy of the rest of the world.  What is unfolding in China and India as major consumer of oil within the next few years will determine the price of our oil no matter how much the U.S. can come up with conservations numbers.     

So, are you getting a BIGGER picture that is causing your brain to take a moment to consider the issues that are impacting real estate and all other factors of our economic lives?  I hope so.  I welcome any of your thoughts about the experience you are currently having, and maybe even expressing what some of your fears are for the future.  Until then…I promise to not stop keeping an eye on real estate and sharing my thoughts.

No Comments yet »