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Reverse Mortgage Psychology
December 17, 2008 /Remember when interest rates were bouncing around the 6-7% mark, and homes were flying off the shelves? And remember how buyers in that wild market would forgo inspections, write offers on the hoods of their cars, and painstakingly draft impassioned letters of introduction to sellers, pleading for clemency in the life-sentence of homelessness the market was imposing on them? We've all watched the steady deflation of the confidence that accompanied those times, to be replaced by the looming grey cloud of indecision and angst. However, the reality is that rates have fluctuated less than 3 points in the past 8 years (2000-2007)- all the way back as far as 2000, when we reached a high that year of 8.52%, right around the time the DotBombs were imploding, and the country was talking recession. The lowest we've seen since then was June of 2003, when rates briefly bottomed at 5.23%. Throughout the next 4 years, the lowest point was a short stop at 5.45% in March of 2004. The remainder of that timespan was spent hovering between the high 5's, to the high 6's. On the surface of it, there are a few obvious reasons for the mental shift; the subprime collapse, Wall Street's subsequent malaise, an…Read more
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Risk & Reward
December 11, 2008 /As 2008 winds to a close, I feel compelled to do a little reflection and projection. From a Real Estate perspective, it has been a challenging year. Historically, we've not seen such froth in the economy as a whole as we've witnessed in the past 12 months, since the Great Depression. This hyperbole has become a staple for 6 o'clock news reports; in fact, if there has been any consistent theme to sum up the year, I'd think a heading along the lines of "Great Depression: the Sequel", would encapsulate the general media mood, and the extent of most reporting on the subject. However, there are a few key points that have gotten lost in the rush to spill red ink on the headlines. Just this past week, I finally saw a new piece in the PI that touched on the opportunities this market presents for first-time buyers. Another point that's frequently forgotten in all the talk of recession is the amazing fact that we've never seen the unique set of factors currently in place: low interest rates paired with a buyer's market. Recession typically is accompanied by high interest rates- the last big one in the eighties saw rates over 18%! We're looking at a realistic…Read more
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Jesse Moore & Lisa Bender: 5-Star Real Estate Agents indeed!
December 10, 2008 /We think a lot of ourselves here at Pickett Street, but it's always nice when others validate it in the form of an award or designation! It's with great pleasure that I announce that two members of the Pickett Street team have been selected by Seattle Magazine as 5-Star Real Estate Agents, Best in Client Satisfaction for 2008. My business partner, Jesse D. Moore, and our fellow associate, Lisa Bender, have both been selected among this year's honorees. What exactly does this mean? Seattle Magazine says it best: Experts say that at least 90 percent of homebuyers rely on real estate agents for advice and guidance. But with more than 14,000 Seattle residents holding real estate licenses, how do you find someone who knows the market, represents your interests and operates with an emphasis on integrity and service? Seattle magazine can help. For the fifth year, the magazine has formed a partnership with Crescendo Business Services, an independent research firm, to find out which real estate agents have most consistently wowed their clients. This past May, Crescendo surveyed by mail and phone, 29,000 Seattle area residents who had recently purchased homes. An additional 250 surveys were sent to mortgage and…Read more
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Forbes ♥ Seattle real estate market: Quick to Rebound
November 6, 2008 /You have to love good news about our real estate market - and if it happens to come from one of the premier authorities on wealth, well that doesn't hurt. Forbes recently published an article declaring Seattle's real estate market as the most likely to rebound. I'm posting the beginning of the article here, with a link to the full story below: If you're a homeowner seeing property values plummet, look to the commercial real estate market for solace. It might tell you which areas will recover fastest--and which will likely remain weak. The Urban Land Institute recently asked 700 real estate professionals to name the best (and worst) places to invest in commercial real estate in the coming year. Those surveyed included private developers, Realtors and Real Estate Investment Trust executives. Their answers also apply to the residential market, since the single-family-home sector typically follows the economy. As wages go up and there are more jobs, more people can buy homes, pushing prices up. The best cities in which to invest are those that are considered gateways to international investment, have vital downtowns where people can forgo cars, and don't have a glut of condos or office space. These traits…Read more
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Fear and Trembling; Madison Ave vs. Wall St./Main Street
October 21, 2008 /Are we living in unprecedented times of unsettling uncertainty? How have you been sleeping? How are your nerves? How's your portfolio? Talked to your broker lately? Are you too busy running for cover to worry about the future? In times like we've been told these are, it's far too easy to get caught up in the 'lemming tide', and allow emotions to rule the day. And, truth be told, as a member of an industry that is on the front page of multiple publications on a daily basis, and on the tongues of every breathing adult, it would be easy to succumb. There are days when I shake my head after a look at my latest 401k statement, and think it might be time to start investing in a bunker somewhere in Idaho. However, one small detail seems to get lost in all this: Fear is an emotion. It's not a reflection of reality, it has no place in financial decision making, but is simply a conditioned response to input. In caveman days, fear was the appropriate response to the toothy feline crouched on your path. With a few minor exceptions, we have evolved. Or at least we like to think we have.…Read more
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A Stake in the Game
October 14, 2008 /Speculation. It makes the world go 'round. The financial world, in particular. It's the bedrock of gambling, the essence of markets, and a human trait we just can't seem to shake. If the possibility of multiple outcomes exists, for any given activity, there will be at least two people willing to stake odds. An industry unto itself, gambling is the life's blood of many municipalities who rely on the ironically predictable nature of people to take a chance. 'Win some, lose some' is the fatalistic mantra of the veteran. Recent weeks have seen more of the downside of this reality than most are comfortable with. Especially those who had become accustomed to winning. Receiving the latest Mutual Fund statement is a painful reminder that stocks are, in fact, institutionalized gambling. When it's your retirement, it really hurts. When it's your home, well, that's personal. In reality, it's called 'investing' specifically because there's 'Risk'. If there wasn't risk, it would be a sure thing, and everybody knows there's no percentage in that. No percentage, no return. We all have to develop a personal comfort level with risk; Some climb mountains, others daytrade, and still others buy homes. Some do all three.…Read more
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Wine & Chocolate intersect at Pickett Street
October 2, 2008 /We just sent out the order for the postcard above, inviting friends and clients to Pickett Street's First Annual Customer Appreciation Event on Saturday, October 18th. Look for the postcard in your mailboxes within the next week (hopefully!), but until then, please use this post as an excuse to save the date. We’ll be holding court at Wicked Cellars in North Everett, hosting a tasting of an exclusive collection of wines from Maryhill Winery, all uniquely paired with handmade truffles from Buchanan Chocolates. Maryhill Winery will be conducting the regular Saturday tasting for Wicked Cellars (which you’re welcome to attend for $5), but will be saving a few exclusive offerings for our event, which will be held in the back room of the wine shop. Buchanan Chocolates will be preparing new truffles specifically for this event, and if initial responses are any indication, at least one of the new flavors is sure to be an instant success! This event is free to Pickett Street clients and friends. If you don't get a postcard, please accept our apologies and make plans to join us anyway. If you've ever bought or sold a home with us, then you've received a box of…Read more
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Our thoughts on the “bail out”
September 30, 2008 /I was talking with a customer yesterday and they asked me what I thought about the 700 Billion dollar “bail out” of Wall Street using tax payer dollars. Well, I said, I am not an economist, but I think it is a good deal for tax payers. The response from my client was a gasp of surprise. A good deal for tax payers? How could funneling $700 billion to Wall Street be a good deal for us? Well, I said, it depends on how the money is spent. These funds are not designed to just be handed over. The government, thus you and I are buying mortgages from the banks. These mortgages, while underperforming and in many cases are for an amount over the current market value of the property, are backed by REAL property. A house, or condo, a real asset that has value. The governments plan is to buy these mortgages at .40 to .50 cents on the dollar of what the face value is. So lets look at the math really quick. The bank did a mortgage at 95% of the value of a house worth $300,000, so they now have a mortgage at $285,000. Economy is bad, house values decline, buyer can’t pay the mortgage…Now we have a…Read more
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Punkin Patches 2008
September 24, 2008 /For those of you who've been looking forward to Halloween, and all the fun leading up to it, Here's a downloadable list of Events and Venues for the Month Pumpkin Patches 2008 .Read more
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When bad news is good news for the housing market
September 21, 2008 /I attended an annual private function on Camano Island yesterday, where I soaked up the rain with an extended family of clients and friends. As is the case with almost anything I attend lately, most of the questions I fielded were about the local housing market. One client was looking for a part-time assistant, and mentioned that a majority of applicants were real estate agents who needed a steady paycheck. A cousin of one of my friends asked me about foreclosures and short sale opportunities. But overwhelmingly, most were curious when I thought this current slump might be over. In the face of a volatile week in the stock market, and with the government bailout of Lehman Brothers and AIG, I stunned almost all of them when I said that all of the bad news is an indication of forthcoming stability in the real estate market. If things are going to get worse before they get better (as so many pundits like to say), then I say let's look for the worst and we'll see markers for coming improvements. Here are a few indications why I think we may be seeing the worst: Foreclosures Rise Locally Excuse me while I put on my rose-colored…Read more
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Bright Spots: A story of Fred and Fan
September 18, 2008 /Water cooler conversations, the media and your pocketbook make it hard to escape the fact the economy is affecting personal finances. Grocery prices are climbing, gas and oil are near all time high and goods and services have increased across the board. If these concerns are on your mind you are like most Americans. There is a bright spot on the horizon. In the past few days, the U.S. government has taken over mortgage giants Fannie Mae (FNM) and Freddie Mac (FRE). The rescue puts the companies under the control of their regulator, the Federal Housing Finance Agency, and includes a plan for the Treasury to purchase these mortgage bonds as well as the firms' senior preferred stock. The government's plan should alleviate growing concerns about the financial sector in general now that two of the most troubled companies enjoy the explicit backing of the U.S. government. Fannie Mae and Freddie Mac own or guarantee more than five trillion dollars in mortgages and play an essential role in supporting the U.S. housing market. This will provide a sizable boost to the market for mortgage bonds guaranteed by Fannie Mae and Freddie Mac. In a nutshell, this is a positive step…Read more
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The Silver Lining
September 17, 2008 /Every job has its challenges. In the last few weeks, for many, remaining employed is becoming a primary challenge. That, of course, is one of the many reasons I pursued self-employment; I may not have control of many external things, but at least I'm in good with the boss, and I know what I've got to do to keep food on the table. Another of my key reasons for being a Realtor is the knowledge that I am in a position to help good people who are frequently making decisions that will have a huge impact on the futures of themselves and their families. It's a weighty responsibility that I take very seriously, and that incurs some sleepless nights, frequently long hours, and a challenging schedule, but the satisfaction that I get from being a part of their lives at this vital juncture keeps me striving to be at the top of my game. A prime example of this is the young couple I'm currently working with on their first home purchase. I'm going to call them Ted and Jennifer, for the sake of privacy. Ted is a graduate of West Point and has spent the last 9 years in…Read more
