East Bay Real Estate

This past week Congress interviewed some of the top executives in the Banking industry to find out what was delaying their institutions from providing liquidity back into the mortgage markets.

The heads of the major Banks had tough questions presented to them this past week in Washington.  They did not have any credible answers.  They are still holding on to cash that has been provided to them from the $850 Billion bailout Congress passed last month.  It appears that they are adding to the delay in having consumers start to recover from credit meltdown.  Congress told them that the bailout was meant for them to provide instant cash into the mortgage markets.  It is not happening.

Further, Congress let them know that if the liquidity issues is not addressed immediately, the next steps in the economy may cause it to sink further into the abyss of a deep recession.  The facts are that until the real estate markets are back in business the U.S. economy will be hard pressed to make a comeback. 

In addition, the added CRISIS is the U.S. auto industry’s pending collapse.  Now they have their hands out for an additional $25 Billion “loan” from us, the consumers.  The president of GM, Mr. Wagner, was asked in an interview on Thursday how he could justify a 30% increase in his compensation this year to a $17 million salary when GM is tanking.  His repsonse was that GM was considering an executive pay freeze.  What a novel proposal!?!?!?  Six years ago Toyota started a complete re-tool of their line-up of car choices to the consumer with an focus on fuel efficient cars - including the Prius Hybred.  It is a stretch to imagine that because GM, Ford, and Chrysler continued to focus on quarter profits instead of long term planning Toyota was planning for the future.  Now, it appears we are expected to bail out GM/Ford/Chrysler because of their shortsighted vision for their companies.  Does this make sense to anyone else.  I welcome your thoughts about the steps that need to be taken in the next few months to begin our long awaited economic comeback.  Until next time. 

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One of the key challenges in current market conditions is short term memory!

I am about to get on my soapbox and address one of the key issues that is happening in the East Bay real estate markets - SHORT TERM MEMORY!  There are only a handfull of Realtors who are serving the East Bay who were also here in 1989 - 1994.  Because of that, there is a large population of Realtors who have no memory of largest recession in California history that was taking place in the early 90s.  The defense industry generally left the State.  California’s economy at that time was based on the revenue from the defense industry.  So, when it left, there was a huge income void with California. 

The economic factors impacting East Bay real estate are much different today, but the effects are similar in many of our markets - declining prices, tightening of credit for home loans, businesses downsizing, loss of jobs, increased divorce rates, and so on.  So, we are having a similar experience as the early 90s, but for different economic reasons.

Here is a prediction for you to consider…“We will have a similar experience with our real estate in about ten years.”  The reason I predict this is because of short term memories.  Our current economic conditions are complicated, but let’s pretend they are because consumers were hooked into the banks providing a “FREE LUNCH” with mortgage money.  Remember, there are no free lunches!  The mortgage industry was giving money away without any checking to see if the borrower could pay back the money.  One of the aspects of our real estaet market that they were betting upon was the non-stop increase in values that had accellerated to galactic speed in the early 2000s.  There is no way that appreciation spike was sustainable and a house of cards began to crumble with many people standing in amazement as the debris started falling on top of them.  Still the median home price in California has jumped from $450,990 in 2004 to $588,970 in 2007!

Now we have banks and lending institutions that don’t know what to do with the mountain of foreclosures and bank reposed homes.  One of the reasons why there is so much chaos within the banks is because there are very few bank employees, if any, that were at the banks.  So, there is no LONG TERM MEMORY at the banks as to how to serve this current economic consequence of them lending money without any basis of customers paying the loans back.  It took almost two years in the early 90s for the banks to get their act together and figure out how to efficiently and effectively manage the sale of the real estate they were taking back.  Hopefully, it won’t take them that long this time around.

Last week the Wall Stret Journal posted an interview with Mr. Mervyn King, the head of the Bank of England.  He shares a similar opinion I have regarding the short term memory issue and why he is convinced we will have a similar experience in the next ten years.  Regarding this topic, he said, “Optimism takes over.  It’s a natural human instinct to interpret success as a sign of one’s own ability, rather than good luck.”

Here is the GREAT NEWS on May 4th…Interest rates are GREAT!  Inventory is shrinking so Buyers are understanding the urgency to make decisions instead of wondering around hoping they prices will decline further, and the East Bay real estate markets, espcially in the San Ramon Valley are doing very well this year regarding pricing and a lowering of days on the market.  It is time for Sellers to become Buyers as fast as possible.  And it is time for Buyers, to jump in with both feet and buy a home!  As always I welcome your comments.  Until next time…

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Jim Walberg and Ann Marie Nugent received the

Platinum Award For The success of their company this week!

Atlanta, Georgia:  This week Jim and Ann Marie, operating partners of The Bay Area Team, were at the international convention of Keller Williams Realty in Atlanta, Georgia, participating in their mastermind conference with 8,500 other Realtors.  At the conference’s awards banquet, Jim and Ann Marie were honored with the company’s Platinum Award for the 2007 successes of their team.  This award is given to the top 1% of Realtors in North America and the Territories.  Their dedication to non-stop customer service and just plain hard work as Realtors allowed them to achieve this accomplishment.

In addition, to the awards banquet, there were three days of idea sharing among top Realtors with a focus on internet marketing.  Jim and Ann Marie’s results from their EastBayRealEstate.com blog site / website was an example that was used to exemplify what can be done to connect with a worldwide audience searching for the “San Francisco Bay Area experience” that are awaiting anyone who wants to discover the quality of life offered in this magical region.  For further information contact them today.
 
 

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Your Bay Area Realtors

Your Real Estate Resource Center

With 30+ years of doing business in the East Bay, no one knows the Bay Area real estate markets like Jim and Ann Marie…no one! Their commitment to non-stop customer service has created thousands of raving fans who have used their real estate services.

• Who’s Who In Luxury Real Estate
• Top Listing and Top Buyer’s Agents
• Local & International Relocation Specialists
• Realtor Of The Year
• Realtors Marketing Association Hall Of Fame
• Service Above Self Award

Besides their commitment to serving Buyers, Sellers, and their communities, they have a passion for the entire San Francisco Bay Area experience. You follow them around for a few days in the Bay Area and you will see “The Best Of The Best” from a “locals” point of view - from restaurants, to entertainment opportunities, outdoor experiences, the wine country, the Monterey peninsula, and the Sierra Nevadas! From the Golden Gate to the Sierra Nevadas, no one knows real estate like they do!

“Contact them today for any of your real estate needs!”

1 (888) 415-TEAM

Jim@JimWalberg.com

AnnMarie@AnnMarieNugent.com

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