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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
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Stop Making Sense
September 10, 2008 /Regardless of whether your glass tends toward half empty, or half full, the last week has provided plenty to talk about. Starting with the announcement Sunday that Treasury Secretary Hank Paulson was busy cleaning house at the 2 GSE's, and then Monday's market rally, along with the dramatic 1/2 point mortgage rate drop, it was one for the history books, as they say. And this all follows a bold prediction by CNBC's Jim Cramer, of Mad Money fame, stating unequivocally that the third quarter of 2009 will see the housing bottom. Whew- Now that's a lotta meatballs! Whatever your perspective, there's more than enough to chew on for a while. So, while you're digesting, I'm going to review where we are: Rates have dipped to the mid 5% range, as a direct result of news that Fannie and Freddie are now property of the taxpayers, stocks jumped over 300 points as Wall Street's Monday juices got flowing, and we've had a prediction from one talking head that housing will reach its nadir in a year. And no, I didn't make any of this up. What does it mean? If I knew the answer to that.... My short answer goes like…Read more
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Architecture: Inhabited Sculpture
September 5, 2008 /Art is where you find it, and Architecture provides unique opportunities to unite form and function. As Realtors, we have occasion to experience a wide swath of the offerings made available to the buying public. I feel a deep sense of accomplishment when I walk into a space with a client and see the serenity that envelops their being as they recognize 'home'. This is a very personal business. Few things in the material world are more sacred than the space we inhabit and call Home. It's a blissful combination of quality (both in materials and execution), location, size, amenities, lighting, openness, and of course, price, but most critically, the thoughtful, even artistic arrangement of all of these elements in a given space. However, in the mass-produced world of P & L statements, and the ubiquitous drive to 'maximize', 'home' often gets lost in the 'house'. For that reason, I feel compelled to open a new category on this blog- a Showcase of Homes, in all the various permutations that represent the best expressions of the unique, the unusual, the classic, and the new. This category will openly request your entries, and the only guideline is that the homes must…Read more
