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Saturday, October 31, 2009

Get out from behind the mask

“There’s nothing that gives more assurance than a mask.” (Colette) from the Jack’s Winning Words Blog, of course. We think about masks at Halloween, but many people wear a “mask” of sorts all the time, when they hide their true emotions behind a stoic face or, even worse, if they hide malice or anger behind the mask of a smile.

We have sayings like “mask your feelings” in our vernacular and phrases like “don’t let them see you sweat” in business and sports. It is a part of our culture to be somewhat circumspect and to “keep a stiff upper lip” in times of trouble or pain. It is this tendency to hold things in and not share your emotions that likely leads to depression or worse. By being willing to open up, to share your feelings and needs and to ask for or accept help from others in dealing with highly emotional events, you will get the support that is needed by all humans. We are not islands. We are very social animals who need the interaction and support of those around us to deal with life’s curveballs.

There is hope and help to be found in one’s religious beliefs for sure; and sometimes self reflection and solitude are needed to internalize what is happening around us; however, at the end of the day, having someone that you can talk to is the best thing for getting through tough situations. Many times the two become one and the same and you can share your problems or needs with your pastor/preacher/priest/rabbi or imam.

I know that this advice is toughest for men, since we are the ones who are supposed to be keeping the stoic, stiff upper lip through everything; however, we are also the ones most in need of finding a way to let some of our bottled up emotions, fears, concerns and other pent-up feelings out. Hopefully you have an understanding and loving wife that you can talk things through with or maybe a best buddy that you can share things with; otherwise seek out that religious leader and get it off your chest. There is nothing more cathartic than being able to verbalize what is eating away at you with someone else.

So, leave the masks to Halloween or masked charity balls and share your feelings more openly with those around you. You’d be surprised how many people are there to help and support you, if only they knew that you needed their help. Sometimes all it takes is a good cry with a friend to get it all out, so that you can deal with it. At least that will get you started on the road to dealing with whatever it is that is troubling you.

Friday, October 30, 2009

Some kind of extention to the tax credit now likely..

The Senate yesterday seemed to be in some sort of agreement on some form of extension of the first time buyer tax credit and President Obama signaled that he supports an extension. It's not clear from the various messages being put out by various Senators (Senator Dodd of Connecticut said is is a done deal, but other Senators said not so fast) that agreement has yet been reached on the details or how what they want might be reconciled with whatever the House wants, but it does seem fairly sure that something will become law soon to extend the home buyer tax credit program.

There is still disagreement on the issue of who will be eligible - whether the program for first time buyers will just be extended or whether it will be expanded, as some Senators want, to include other buyers - so-called move-up buyers. While first-0tie buyers have provided a great boost to the market and have helped clear out a bunch of the cheaper foreclosed homes from the inventory, it would have a bigger impact if the people who now own a home and who wish to move up to a bigger home also had this incentive. They have largely been frozen out of the current market by the lack of credit by big lenders and no tax incentive at all to take action.

Other details to be worked out include what payback,if any will be required and over what period and what income restrictions the new program might have (that has been another stumbling block for move-up buyers, who in generally aren't in the lower-income brackets that the original program was aimed at helping).

So, even thought the news media rushed to tell everyone that the program had been extended, it has not yet even been officially voted upon in the Senate and has not been reconciled with the House or signed by the President. Remember that song from Sesame Street - "I'm just a bill." It may not even be that, yet. Let's all keep our fingers crossed that they actually do pass something soon.

Wednesday, October 28, 2009

Getting educated by the market

From the Jack’s Winning Words Blog come this little gem - “There’s no education like adversity.” (Disraeli). Well, if Disraeli were a Realtor today he’d have earned a PhD by now. From the sames source, Bill Gates, the Microsoft founder, put it a different way - “Success is a lousy teacher. It makes smart people think that they can’t lose.”

I guess Realtors are all getting a free education in the current market. Just think of all of the things that we’ve all learned about foreclosures and short sales; things that most of us probably thought we just didn’t need to know before this market downturn. And how many of us regularly dealt with HUD sales or even FHA and VA sales before the current crisis? How well-versed were we on Sheriff’s Sales and redemption periods or on helping to write hardship letters to lenders? How many of us had ever negotiated with a second mortgage holder to accept a partial payment on a short sale? Were we equipped to advise clients on buying houses that had been stripped or damaged by vandals or used as crack houses? Did we know how to look for the signs of real estate fraud and other sleazy practices?

I suspect that the answers to most of the questions above would be that we didn’t really have to know about any of those things before the current real estate crisis and recession hit. We were likely all fat, dumb and happy with success in the “normal” real estate market. Now, like a character out of some Charles Dickens novel, we’ve been thrust out on the street to fend for ourselves in a strange world full of empty, foreclosed houses, shady operators and new organizations and new rules, which many times are made up by each individual lender.

While most of us have found ways to cope with the new world of real estate, many have found it to be too confusing and too complex and have exited the business. New agents, who have never experienced a normal, balanced market in a normal, non-recessionary market, are learning the business under a worst-case scenario, but will likely be better equipped than most old-times to role with future market changes – assuming that they stay in the business that long. I only hope that they don’t see the temporary success of some of the sleazy operators on the fringe of the business as role models for their careers.

It’s hard sometimes to explain to the new people how things should be done (or would be done) in more normal real estate deals. This is, after all, the “new normal” that we are living through right now. There’s another old saying that probably applies to our current environment – “What doesn’t kill you makes you stronger.” Those who survive the “Great Recession” will be some of the smartest and strongest Realtors ever.

Sunday, October 25, 2009

The American Clean Energy & Security Act of 2009

I've been seeing alarmist ads of TV about this bill for some time now, but it took an email from one of my past customers to get me to look into it a bit further. I certainly had no idea that is may have such a dramatic impact on housing and the ability for owners to sell their homes as it appears that it may. A part of the problem is that very few people anywhere, including the Congress, have any real idea of what is hidden in this bill and what impact it might have on everyday life.

The name of the bill is innocuous enough. I mean who can argue that we don’t need cleaner energy and that saving on energy use and costs wouldn’t somehow make us all more secure. But in this nice sounding bill, as in many things in life, the devil is in the details. The bill, as it was passed by the House of Representatives and sent to the Senate, is 1427 pages long. It has 835 Sections dealing with all sorts of rules regulations and programs. The bill was sponsored primarily by Representative Henry Waxman of California, which in itself explains a lot. Waxman, you may recall, staged the palace coup that toppled Michigan Congressman John Dingell from the Chairmanship of the House Energy and Commerce Committe.

When I received the email from my past client, he passed on some comments that he had received from someone who apparently took the time to read through the bill and highlight the areas that should be of concern to homeowners. Below, in parentheses are a few of his comments. The author has obviously reached his own strong opinions about the bill, so take these with a grain of salt. Since this Arthur has interspersed so much of his personal opinion into the content below, you may wish to go read the bill yourself, which you can do at http://www.govtrack.us/congress/bill.xpd?bill=h111-2454 . I have also put a complete PDF version on my Web site at http://www.themilfordteam.com/PDF/HR2454_Bill.PDF

Here are the comments that came with the email (edited to remove some of the more strident opinion expressed by the author)-

Beginning 1 year after enactment of the Act, you won't be able to sell your home unless you retrofit it to comply with the energy and water efficiency standards of this Act. H.R. 2454, the "Cap & Trade" bill passed by the House of Representatives, if also passed by the Senate, will be the largest tax increase any of us has ever experienced. The Congressional Budget Office (supposedly non-partisan) estimates that in just a few years the average cost to every family of four will be $6,800 per year. No one is excluded. However, once the lower classes feel the pinch in their wallets, these voters may get a tax refund (even if they pay no taxes at all) to offset this new cost. Thus you, Mr. and Mrs. Middle Class America, will have to pay even more since additional tax dollars will be needed to bail out everyone else.

But wait. This awful bill (that very few or no one in Congress has actually read) has many more surprises in it. Probably the worst one is this: A year from now you won't be able to sell your house. Yes, you read that right. The caveat is (there always is a caveat) that if you have enough money to make required major upgrades to your home, then you can sell it. But, if not, then forget it. Even pre-fabricated homes ("mobile homes") are included.

In effect, this bill prevents you from selling your home without the permission of the EPA administrator. To get this permission, you will have to have the energy efficiency of your home measured. Then the government will tell you what your new energy efficiency requirement is and you will be forced to make modifications to your home under the retrofit provisions of this Act to comply with the new energy and water efficiency requirements. Then you will have to get your home measured again and get a license (called a "label" in the Act) that must be posted on your property to show what your efficiency rating is; sort of like the Energy Star efficiency rating label on your refrigerator or air conditioner If you don't get a high enough rating, you can't sell. And, the EPA administrator is authorized to raise the standards every year, even above the automatic energy efficiency increases built into the Act.

Sect. 202: Building Retrofit Program mandates a national retrofit program to increase the energy efficiency of all existing homes across America . Beginning 1 year after enactment of the Act, you won't be able to sell your home unless you retrofit it to comply with the energy and water efficiency standards of this Act. You had better sell soon, because the standards will be raised each year and will be really hard (i.e., ex$pen$ive) to meet in a few years. The Act allows the government to give you a grant of several thousand dollars to comply with the retrofit program requirements if you meet certain energy efficiency levels. But, wait, the State can set additional requirements on who qualifies to receive the grants. You should expect requirements such as "can't have an income of more than $50K per year", "home selling price can't be more than $125K,.

Sect. 204: Building Energy Performance Labeling Program establishes a labeling program that for each individual residence will identify the achieved energy efficiency performance for "at least 90 percent of the residential market within 5 years after the date of the enactment of this Act." This means that within five years, 90% of all residential homes in the U.S. must be measured and labeled. The EPA administrator will get $50M each year to enforce the labeling program. The Secretary of the Department of Energy will get an additional $20M each year to help enforce the labeling program.

Sect. 304: Greater Energy Efficiency in Building Codes establishes new energy efficiency guidelines for the National Building Code and mandates at 304(d) that 1 year after enactment of this Act, all state and local jurisdictions must adopt the National Building Code energy efficiency provisions or must obtain a certification from the federal government that their state and/or local codes have been brought into full compliance with the National Building Code energy efficiency standards.


I’m generally not a fan of alarmist rants by people with a particular ax to grind or anyone who even listens to clowns like Rush Limburger; however, I’m also not a fan of radical liberals like Henry Waxman. This bill has lots and lots and lots of things buried in it that will cost everyone lots of money to comply with in the future. It deserves to be exposed to much more scrutiny than it has received and hopefully the Senate, in its deliberate style, will find and remove or modify some of the more onerous provisions that the House bill contains.

I’m generally in favor of doing things to decrease our use of energy in all aspects of life; however, having the government come into my home and tell me that I must do this or that to improve it’s energy efficiency before I can sell it feels more like a home invasion than a helpful program.

The American Clean Energy and Security Act appears to be another misguided attempt by our so-called leaders to save us from ourselves. I think they should stick to passing legislation that lawn mowers need labels that say that one shouldn’t stick their hand under the mower while it running. That’s still stupid, but at least it didn’t cost us much. One has to believe that, if John Dingell were still chairman of the House Energy and Commerce Committee, we would not have seen a bill with some many costly and questionable provisions.

Saturday, October 24, 2009

Make me feel that I matter…

From the Jack’s Winning Words blog comes this advice - “Pretend that every single person you meet has a sign around his or her neck that’s says,” “Make me feel important.” (Mary Kay Ash). Jack added - I can imagine that Mary Kay used this in a pep talk to her sales people. I might adjust the sign to read: “Make me feel that I matter.”

What great advice and what a simple thing to do to make people fell better. Jack also related the story that was in the Detroit Free Press about General Motors CEO Rick Waggoner and how he used to greet the janitor every morning and inquire about his family. That janitor would tell people about that forever and how Rick was the only GM bigwig who took the time to recognize him. It made his day every time.

How many times each day do we get opportunities like that? Have you spoken to the clerk at the checkout? Did you say hi to someone on the street today? When you picked your child up at daycare, did you stop long enough to talk to the caregivers and let them know how important they are in your life? This isn’t rocket science; it’s just common courtesy, which all too many of us just don’t take the time for in our busy lives.

Even clients sometimes don’t get the personal touch that they deserve and need. I realize that in my dealings when my wife asks me some simple questions about my clients that I should know, but don’t – like “how many kids do they have?” or “what are the kids names and ages?” or even “why are they selling (or buying)?” Sometimes I get so wrapped up in the real estate process that I forget those all-important personal touches. I’ve got to use that Mary Kay technique of imagining a sign around the necks of my clients that says “Make me feel important, ask about my life.” In the final analysis, it’s not about the houses, it’s about the people.

Friday, October 23, 2009

Fraud plagues the first-time buyer program

There was a report on the news last night about the growing cases of fraud being discovered in the first-time buyer tax rebate program. The sleazy operators of the world will always find ways to game the system. What was interesting to me in the report was not the thousands and thousands who have made claims to be first time buyers, when in fact they either already own a home or certainly are not first time buyers (even by the 3 year rule in the program). You could have bet on that happening, as I have opined here before. What was more surprising is that well over ten thousand people have claimed the tax rebate without even buying a house – they just said that they planned to buy a house. Well, excuse me, how the hell did that happen. Why couldn’t everyone in America just say that they planned to buy a house and ask for their $8,000.

I am a proponent of the program and I think it has done a lot of good to re-ignite the housing market; however, I’m appalled that our government is so inept that it would actually send checks to people who have no proof that they’ve actually bought a house. We can only hope that someone in whatever bureaucratic office is in charge of that gets canned AND that everyone whom they catch committing fraud gets a new home - behind bars somewhere. I know it won’t happen. Bureaucrats never get fired and most people caught in fraud cases usually just get a slap on the wrist and a fine that they likely never pay anyway.

I think I’ve figured out a legal way to work this whole thing. I’m going to send in a rebate request and make the claim that I will absolutely not buy a house, because I don’t qualify; however, that I feel that I deserve $8,000 anyway for being honest about it. There’s probably some government boob somewhere who would authorize the check. It wouldn’t be fraud, since I would be honestly admitting that I’m not buying a house and that I don’t qualify. What do you think?

Wednesday, October 21, 2009

It ain't over 'til it's over - Yogi Berra

From a press release by the National Association of Business Economists –

“The Great Recession is over,” according to NABE’s latest survey. “The survey found that the vast majority of business economists believe that the recession has ended but that the economic recovery is likely to be more moderate than those typically experienced following steep declines.

The NABE panel upgraded the economic outlook for the next several quarters, compared with the previous survey,”said NABE President-elect Lynn Reaser, chief economist at Point Loma Nazarene University. “Following a sharp 6.4 percent (annual rate) contraction in the first quarter of this year and another 0.7 percent drop in the second quarter, NABE forecasters expect real GDP to rise at an above trend 2.9 percent rate in the second half.

The more-than-three-year downturn in the housing market is very close to coming to an end, with substantial growth (from a low base) expected for next year. According to the survey, the key areas of concern involve the large increases in federal debt and unemployment rates that are expected to remain very high through next year. The unemployment rate is forecast to rise to 10 percent in the first quarter of next year and edge down to 9.5 percent by the end of 2010. (Ed. – In Michigan we are still above 15% unemployment, so we have a ways farther to go to get back to “normal”)

Inflation is expected to remain contained throughout 2010. The good news is that this deep and long recession appears to be over, and with improving credit markets, the U.S. economy can return to solid growth next year without worry about rising inflation.”


I have to respond with a somewhat muted “Yea!” to this article, since Michigan is so far beyond the rest of the country in terms of unemployment (over 15%) and still in the top 10 in terms of things like foreclosures. I certainly hope that the rising tide of things getting better elsewhere will raise our boat, too; however, as that great philosopher Yogi Berra said - "It ain't over 'til it's over"

It's too early to tell whether the state’s commitment to attracting “green industries” will provide enough new employment to replace the lost automotive jobs in Michigan. We are becoming a smaller state, with a different employment focus. Let’s hope that the other side of the fundamental re-set that we are going through in our state’s economy provides most with the ability to live well and prosper (or at least afford a place to live).

Tuesday, October 20, 2009

Waiting for something good...

“You never wait too long when you wait for something good.” (Swedish Proverb) from Jack’s Winning Words. This most certainly could be applied to real estate, especially to those who have been searching fore the right new home for quite a while. However, it may also betaken too far. Searching forever for that perfect house – a foreclosed property at a ridiculously low price but on that is also in absolutely move-in condition – can become a never-ending process.

It is especially hard to find a foreclosed house that has no issues at all. Most have been left unoccupied for long enough that they have begun to deteriorate. Some have actually been vandalized or stripped (sometimes by the old owners). Sometimes defects are not found until you’ve gone through the inspection process and that can be really disappointing, since the buyer has committed emotionally to “buying” the house, only to find something that gives them reason to reconsider and walk away. These days there are also appraisal issues that sink many deals, which is also a bummer.

I’ve hit cases lately where buyers actually get tired of looking and start getting a lot more “flexible” on their list of requirements. It may even feel like giving up to them, unless we can find a house that they can get emotional about again. Then we can have a good laugh and repeat the Swedish proverb from above. You just never know how long is too long. I finally found homes for two couples that I have kiddingly referred to as my "three oil changes" couples - meaning that we have been looking for so long that Ive gone through three oil changes on my car. In both cases we had made multiple offers prior homes. Hopefully the current homes are the ones they've been waiting for all along.

Sunday, October 18, 2009

To thine own self be true...

“To wish to be the person you aren’t is to waste the person you are.” (John Wesley) from the Jack’s Winning Words Blog. How apropos as I agonize over that person that I’m not. That person is unafraid of cold calling as a prospecting activity. That person is out there socializing around town and making new contacts everyday. That person is out front, in your face and probably wildly popular at bars or in certain social circles. I’m not that person and the truth is that I’m not wishing that I was.

I don’t like cold-calling, so I just don’t do it. I get out in a few social circles, but I’ll never be mistaken for the most popular guy at the bar. I’ll likely never get “in your face” about very much, but I’d enjoy a good discussion with you. I’m not “that person” and I’m OK with that.

I’m pretty comfortable with the person that I am. I seem to do well with people whom I meet in the circumstances that I’m comfortable with. I enjoy working with them and they seem to enjoy working with me. We have fun if we’re house hunting and we even have some fun with the sales process, assuming that the sellers have a sense of humor and aren’t too depressed about the market. I’ve even managed to become friends beyond the real estate relationship with a few and that’s kind of nice, too.

The real estate business, like lots of other sales jobs, is populated with people who are self-confident, outgoing and sometimes a little overbearing. There are big egos in real estate. Especially among the so-called super agents or teams. That’s OK, I guess, so long as one doesn’t just have ego and nothing else going for them. I have won more than one listing after one of the super agents was in and totally turned off the clients with their self-centered pitch. My approach is that it’s not all about me; it’s all about the clients – their needs and wants – and not my ego and its need to be stroked.

So maybe Shakespeare’s line “to thine own self be true” is the best advice. I’m happy with me and I think you would be, too. Give me a call if you want to buy or sell a house and let’s find out.

Friday, October 16, 2009

An optimistic realist....


“In so many areas of life, you need to be a long-term optimist, but a short-term realist.” (Chesley Sullenberger) Sully was the pilot who safely ditched Flt 1549 in the Hudson River. In his new book he says that all of life is a preparation for how we react to emergency situations. A spirit of optimism helped him when he was faced with reality. It was more than luck. From the Blog http://jackswinningwords.blogspot.com

Capt. Sullenberger was lauded as the “Hero of the Hudson” for his quick thinking and calm actions on the fateful day when he was forced to land his crippled plane in the Hudson River. In the countless interviews that followed he has been consistent in making the claim that a lifetime of planning and thinking about what he would do in an emergency like that prepared him to be able to calmly execute the maneuvers that resulted in everyone getting out of the plane alive. That day, a lifetime of optimism about his ability to do the right things, made the difference within the short-term reality that played out.

In real estate we all need to be optimists, especially in the gloom and doom that has surrounded the market for the last few years; yet we also need to be realists when it comes to setting prices for homes that we list. The trick is not to let yourself tip over the edge of realism into pessimism. There is a fine line between the two, one all to often crossed without much warning. One must find a way to discuss a depressed market with becoming depressing about it. That’s not always easy, especially with sellers who may have bought at the height of the market.

Long-term we all know that the market will return to a more balanced state (I hesitate to use the term “normal”, since that is hard to define). Short-term we have to deal realistically with the foreclosures and short-sales that dominate the current market. Long-term we can state with a great degree of assurance that real estate values will appreciate over time. Short-term, we still have value declines in progress that may this year add another 8-10% to the losses that owners have felt already. Long-term, as Realtors we know that this can be a very satisfying and rewarding profession to be in. Short-term most of us have to find some way to supplement severely depressed earnings from real estate.

So, what’s the take-away from all of this? You must remain optimistic about the future, about the profession and about the market; while at the same time conducting your business and your life in a realistic way to deal with the current conditions. To paraphrase and badly mangle an old saying, “It ain’t heavy, it’s my profession.” Wow, now there’s an optimistically realistic statement.

Wednesday, October 14, 2009

Forever Me…

In what reads like the penultimate salute to themselves by the ME generation my Iconoculture Web report this week focused upon a new service available in Switzerland to immortalize oneself. As reported in Iconoculture -

- Thanks to technology, immortality is surprisingly affordable and available. Swiss DNA Bank, located in an underground vault in Gstaad, offers swab-n-send DNA collection materials and access to a secure website to record audio, video and written life experiences, which will be stored indefinitely (Springwise.com 9.16.09).

- Your essence is kept in bank-level security in a nuclear-proof facility.

- Given two passwords, relatives or friends can purchase access to the information for $69.

- The $399 cost of the DNA-plus-digital kit is the one-time-only charge. Digital-only storage is available for $299.

For those who indeed value their LegacySM, DNA storage provides confidence times two: white-coat expertise and the security of a nuclear-proof vault.


So, in theory, one could at some future time be cloned, using one’s own DNA and then have one’s digital memory somehow reinstated. Of course one would have to start over as a “mini-Me”, but I guess that’s not all bad, except maybe going through the raging hormones teen stage again.

I suppose that this makes as much sense as having yourself cryogenically frozen in hopes of one day being thawed out and cured of whatever killed you. It costs a lot less, too. It would probably be a little weird to have all of those memories of a prior life bouncing around in your cloned little head, but that would give others around you an answer to what it was that just made baby smile. People will say that you just remembered something funny that you did the first time around.

Maybe you could hide a bunch of money in a secret Swiss bank account before you kicked off and then only the future you would know the code. The possibilities are an endless as is the stupidity of the whole idea. Hey, save some money. For only $199, I’ll remember you; then, you won’t have too.

Tuesday, October 13, 2009

Boomers Aren't Choosing Urban Retirement

Part of the prevailing wisdom of the now-late-lamented housing boom was the theory that baby boomers were ready to trade in their suburban ranch houses for an urban retreat, thus saving themselves from lawn maintenance and automobiles.

Now many of the condos that were built in urban centers in anticipation of that happening are sitting vacant.

“Someone who grew up living in 2,500 square feet with a driveway leading up to the front door isn't going to downsize to 850 square feet until he's ready for assisted living," says Joel Kotkin, a scholar on urban development who wrote The City: A Global History.

"The new urbanists convinced the idiot development community there was going to be this massive move that never happened."Do these empty buildings further doom the future of cities?

Maybe not. "I wouldn't write off a storybook ending yet," says University of Central Florida economist Sean Snaith. "It just depends on how many chapters it takes to get there."

Source: Orlando Sentinel, Mike Thomas (10/11/2009)

One of the obvious reasons in our area that Boomers aren’t snapping up urban condos (or anything else for that matter) is that they are trapped in their current McMansions. Boomers are the poster child for the mistakes that were made during the real estate bubble. They bought more than they could really afford, because they got those great ARM loans. Many refinanced every year to pay for other toys or expenses. They lived as if there was no tomorrow and for many there’s won’t be a tomorrow. These are the successful couples where one got laid off and now they’re losing the house. These are the parents whose kids where into everything and now they’re being forced to move into a rental unit or another neighborhood. These are the couples that are now experiencing some of the highest divorce rates, due mainly to financial pressures.

So, will some or many of these Boomers end up in urban lofts or 900 Sq Ft condos downtown somewhere? It’s not really likely. These are also the same people who are frightened by urban crime statistics and who shy away from diversity, rather than embrace it. There will always be a sub-group within the age groups classified as Boomers who have been, and will remain, adventuresome, open to new ideas and new people. They will migrate into the cities because it makes perfect sense to them. They understand and appreciate the “green” aspects of not having to drive to get to things. They embrace diversity and find great value and interest in the various cultures that make up the inner city. They likely have been long-time supporters of the museums and art galleries and theaters and other cultural amenities of the city and now they can live and be a part of that culture. The main thing that they will ask is that the streets be relatively safe and clean and that there exist some reasonable form of public transportation.

The issues of safety, cleanliness and transportation are still the biggest challenge for big city governments, especially in the Detroit area. I have visited many big cities that have vibrant urban communities – Boston, Baltimore and Chicago come to mind. Detroit has a long way to go on all of those issues. Detroit has somewhat put the horse before the cart by promoting the building of Riverfront condos before they have solved these other issues. Now those condos mostly sit empty while the buyers wait for the city to get its act together. The saying from the movie about baseball - “build it and they will come” – doesn’t work if they think they’ll be mugged if they come or if they still need a car to get everywhere.

Hopefully, Detroit and other local urban centers will see what they need to do and do it. Otherwise we may see Boomers and other coalesce around other town centers, but not our urban areas

Monday, October 12, 2009

Not as much as you had hoped, but not as little as you might have feared.

I have lots of opportunities to respond to would be sellers who inquire about the state of the market and what their house might sell for on today’s market. I use the phrase above a lot as an opening positioning statement. There is absolutely no doubt left in anybody’s mind that the value of their home has gone down over the last 2-3 years. There are still those who are convinced that their home was somehow passed over for most of the devaluation and that it must be worth nearly what it was the lat time that they had it appraised for a refi loan (usually within the last 5 years). There are also the Eeyore’s of the world who are sure that their home has lost most of it’s value and that they are so far under water that they can’t sell.

Of course neither extreme view is correct in most areas. We do have some pockets of deep loses, such as Detroit, Ypsilanti and Pontiac. And we have some areas that have held values up fairly well – Ann Arbor comes to mind. The statistics that I track tell me that we have generally lost between 20-40% of home values over the last 3 years. The peak is generally acknowledged to have occurred in the 2005-6 timeframe. Obviously statistics based upon averages only give one a starting point from which to evaluate any particular house. Things like the quality of the house and its condition weigh in heavily to moderate the averages.

One of the reasons that people believe that they can’t sell is that they see and hear so many stories of homes just sitting on the market. It is true that the Days On Market (DOM) for many price bands has gone up considerably, especially for higher-end homes; however, a major factor in the elongation of the selling process is the lack of buyers out looking in the higher bands, rather than the price (perceived value) itself. Homes in price bands above $250,000 have always been considered to be “move-up” homes and with all of the turmoil in the local job market that have been few people brave enough (or secure enough in their jobs) to risk moving up right now. We probably get as much traffic in those higher price bands from corporate relocations as we do from local people seeking to move up.

So, is it a good time to sell and what can you get for your house? To answer the first question I always ask what the motivation is to sell. If you have a good reason, whether it be to downsize because of retirement, or because you need to move (for work or whatever reason) or you need to or want to move up in the housing market; then it is a good time to sell. As for what you can get for your home – less than you had hoped but more than you feared. Let me do a Market Analysis and I’ll tell you what that is likely to be.

Friday, October 9, 2009

Searching for contentment...

“Be content with your lot; one cannot be first in everything.” (Aesop) from the Jack’s Winning Words Blog. Jack posted this the day after the Tigers had lost to the Twins for the Division title. I suppose it had better meaning for that occasion. The Tigers did have a very good season and posted an enviable record for the year; however, that is scant consolation for their loss in what was a great baseball game.

In life and in real estate this is a tricky phrase to properly position. There is value in being able to be content with what one has in life, yet one cannot help but to keep striving to be first in everything that one tries. Winning certainly isn’t everything, but trying to win is important. In many peewee sports the participants are told initially that winning isn’t the goal of participating. The goal at that level is to learn how to play the game. Yet at each match, game or event, you’ll see and hear the coaches and parents urging on the kids to win. It’s human nature. If the parents, coaches and kids of the losing team can be content with the fact that the loss was a learning experience, then so much the better.

In real estate, one must deal with the relatively high probability of a loss - a property that doesn’t sell and goes to some other agent, a listing appointment that doesn’t go your way and goes to some other agent, a sale that goes south and can’t be saved, an offer that is rejected and cannot be turned around. Fortunately there are also many chances for wins and lots of things to be content about. I suppose that I would really be a malcontent, if I worried all the time about being number one in my market.

There are agents who have been Realtors for 20-30-40 years in my market. There are large, multi-person teams in the market that I serve. I could work 24 hours a day, 7-days a week (i.e. a few more hours than I currently work) and never catch those agents. So I have to be content with what I can achieve. I’ve set my goals at a reasonable number of listings and sales per year and I’m working hard to meet those goals. Meeting them won’t make me number one in my market, but maybe it would help me be more content.

Still, I can strive every year to maybe move up a notch in the local pecking order. I can celebrate small victories, like my local Web sites coming up higher in Google searches than some of those big guys. I can find happiness in being found on the Internet and getting out of state calls because of my Web presence. Like a peewee player, I’m still learning this game (after “only” 8 years in the business), so I try to learn from my mistakes and losses and get better out of every defeat – and maybe that is a victory in itself.

Wednesday, October 7, 2009

And then my phone rang…

I just got back from a short “vacation” of sorts. We went over to Chicago to visit some old fraternity brothers and then on up into Wisconsin and across the UP and down the state to home - inadvertently doing “The Circle Tour” around Lake Michigan. I say it was a vacation of sorts because I never really got away from business.

On the drive over to Chicago I was on the phone at least 5 times discussing various deals that are in progress and instructing people what to do. Friday night we went out to dinner with the friends that we were visiting and then the phone rang. Saturday night, when we got to the home of the friends, the phone rang (I finally turned it off that night). Sunday we went to the Circus museum in Barabo, Wisconsin and the phone rang. Monday we toured Door Country, Wisconsin on the peninsula across from Green Bay and then the phone rang. Tuesday we decided to head home and I had 4-5 more conversations on the drive home.

Real estate is a 7 day-a –week job and there is little provision for taking time off, even if you have someone “covering” for you. The needs of the clients and the decisions that keep coming up in deals often can’t be satisfied by someone who has volunteered to watch things for a realtor. In addition to the phone, I was in daily email contact (really twice a day) the whole trip too and had to make sure that every hotel had Internet access. To a larger extent it was as if I’d never left home.

My long-suffering wife is a saint about putting up with what she knows will happen when we travel; however, I’m starting to question whether it is really worth it to try to keep up with the business while also trying to relax a bit and enjoy a vacation. It was perhaps a poor choice of timing for this trip, since I have 4 deals in process right now; but the timing was dictated by the schedule of one of the participants in Chicago, who came into country from England for a visit and who really was the reason for the get together. The next vacation will hopefully be better timed to a lull in my business.

I’m going to try again in the winter to just take off and enjoy some time away from the business. I’ve been in other businesses over my lifetime and none were as hard to get away from as real estate. Perhaps it’s just me and how seriously I take my responsibilities and obligations to my clients. I certainly have hit other Realtors with much less concern about the needs of their clients or the timeliness of decisions in deals. Intellectually I know that the world will not end if I do not answer that ringing phone; however, it might be important and it certainly seems important to whomever is placing the call. I could just turn the phone off and check it once or twice a day for messages and maybe just check email once a day. Oh, excuse me, my phone is ringing…got to go.

Monday, October 5, 2009

Put a grin on your face.

“I really do believe I can accomplish a great deal with a big grin. I know some people find that disconcerting, but that doesn’t matter.” (Beverly Sills) from my favorite source for quotes – the Jack’s Winning Words Blog. I suppose going through life with a grin on your face is better than with a frown. Grins are happy expressions that are almost a smile. Some may wonder what you are grinning about, but that’s good; maybe they’ll ask and that will start a conversation.

One of the things that I always disliked about ex-President George W. Bush was the little smirk that he often displayed right after he’d said something that was sure to appeal to the right and tick off the left. A smirk, it seems to me is half of a grin and somewhat sinister in nature, rather than happy and inviting. You smirk to say, “I win and you lose” or “I know the answer and you don’t.” Smirks will stifle conversation, rather than encourage it.

I suppose that Beverly Sills had a point about seeing someone grinning can be somewhat disconcerting, especially for anyone paranoid enough to think the world is somehow thinking about them. A grin could mean lots of bad things to the paranoid, like “you have something stuck in your teeth” or “your fly is open” or “you’re having a bad hair day.” In those cases the paranoid person sees a grin as a suppressed laugh (at their expense). A more normal person might just assume that the grinning person that they just met has remembered something pleasant or funny and might ask what they are so happy about.

So, go practice a pleasant grin in front of a mirror (making sure that it does not appear to be a smirk) and try that out today. See, if like Beverly Sills, it helps you accomplish more or maybe just interact more with the people that you meet. And if we meet and you see that I’m scowling, put on a big grin. I’ll spend the rest of the day wondering what the hell that was all about and you are then allowed a smirk.

Sunday, October 4, 2009

Should old acquaintance be forget and never brought to mind?

I think that’s how the line goes from the song Old Lang Syne. I would certainly answer a resounding NO. I had a delightful evening last night with some old acquaintances who are actually old (literally and figuratively for all of us now) college fraternity brothers. Both were also in my wedding, some 43 years ago, now.

Like many, I left college and never looked back. In my case the Army had something to do with that. It was the Viet Nam era and I had to go in to avoid being drafted. I went through Officer Candidate School and was commissioned and sent to Iran of all places. When I called my new bride, Carolyn, I told her; “Remember how you promised to follow me to the ends of the earth, well I think I found one of the ends.”

We actually had a fairly reasonable life in Iran. I ran the Armed Forces Radio and TV station and we had our son over there. My next assignment in Viet Nam was not nearly so nice. In any event, our travels and the normal stuff of life got in the way of keeping in touch with most of my friends and acquaintances from my college days.

It wasn’t until 20-30 years later that we reestablished some contact. For the past few years we try to get together whenever Floyd Parks, who was my pledge son in college comes over from England, where he ended up living, with his wife Carole. Another fraternity brother and classmate of Floyd’s, Tom Flanders and his wife Lois, live in the Chicago area and acts as host for these affairs. Tom and Lois have been very generous and gracious hosts and have done a great job of making everyone feel at home in their home.

It was fun the first time just catching up and discussion the lives that we all had lived, our families, the careers, now mostly over for us all (except of course for my new real estate career), and all of the water that has followed under our collective bridges. Now when we meet it is more about our lives now and just relaxing and enjoying being together again. It is amazing how easy it is to fallback into the friendships that we enjoyed back in our college days. It’s not the same, heaven help us if it was; but it’s still fun to talk and laugh and just enjoy getting together. I look forward to these visits every year or two.

So maybe I’d have written the song that old acquaintance should be remembered and oft brought to mind. I hope to see a few more faces from my distant past on this trip and visit. We’re still trying to locate 1-2 people from our wedding – my fraternity brothers made up most of the grooms side of the wedding party – and convince them to join us on a future get together. So, Steve Yaw, Joel Hartman, Jim Hatch or Dick Barton, if you’re out there and read this, shoot me an email and we’ll include you in the next visit. We'd love to see you, too.

Saturday, October 3, 2009

Acknowledge the situation you're in...

“Acceptance is not submission; it is acknowledgement of the facts of a situation. Then deciding what you’re going to do about it.” (Kathleen Casey Theisen) from Jack’s Winning Words blog. I have a feeling that lack of acceptance (denial, if you will) of what has happened to home values, at least in my area, is one of the biggest issues facing Realtors. Home sellers who refuse to see, or believe, that their home has lost the same 30-40% as everyone else’s home has and then deciding what to do about it are certainly a contributing factor to the stall of the market above $300,000 locally.

I track the market on a weekly basis and for months now (in fact for most of the year) the markets above $300K have been extremely slow and above $400K it has been dead, with the Days On Market (DOM) for listed houses at well over a year and with the $500K plus market over 2 years in some Townships. The $300 to 400K market has bounced up and down, but has stayed fairly consistently between 200 and 250 days in most townships that I track.

I believe that there are two major factors at work here – a lack of the traditional “move-up” buyers in the market right now; and, stubbornness on the part of the sellers to acknowledge the situation that they find themselves in and deal with it as they are undoubtedly being advised to do so by their Realtors - lower the price to the market value.

There seems to be a certain false sense of pride in some communities at their ability to “hold home values up”; albeit at the cost of there being no sales. I could claim that my house is worth $400K forever. No one would pay that for it, now or maybe ever; but I could brag at work that I live in a $400,000 house. Does that make sense? No more than the seller waving a 3-year old refi appraisal in my face and claiming that his house is still worth what they said back then.
I liked the other quote that was in Jack’s blog post, this one from Casey Stengel - “There comes a time in every man’s life, and I’ve had plenty of them.” As a Realtor, I can certainly relate to that. In fact it seems that every deal is a memorable one these days.

Thursday, October 1, 2009

What's important in life...

“What you possess in the world will be found at the day of your death to belong to someone else. But what you are will be yours forever.” (Henry Van Dyke) from the Jack’s Winning Words Blog. Jack also had this follow-on - “I’ve never seen a hearse pulling a U-Haul trailer.”

As I get older I have started to realize that possessions and the immense amount of time and effort that I have put in on amassing them don’t really matter all that much. I am more richly rewarded by the love of my devoted spouse or having my grandchildren be happy to see me than by being able to point to some “thing” that I’ve been able to buy. Whenever someone blurts out something like “I hate that (put in whatever possession you can think of here)”, I often retort, “Hate is such a strong emotion to waste on an inanimate object.” Love is, too. Love and hate need to be directed towards other people or maybe a favorite pet, not things that you have collected over time.

I suppose this whole topic is really about maintaining balance in your life and being more aware of what’s really important when one makes decisions about how to allocate one’s time. Time spent working is important and necessary, but only if the purpose is to allow for quality time doing things with those we love. If all we do is work and never make the time to enjoy life with friends and family, then what kind of life do we really have?
So, later this week my wife and I are off on a much-needed vacation. I’m trying to get everything wrapped up or at least in a state where it can wait for my return; however, the nature of the real estate business is such that I know there will be a crisis or two while I’m traveling. I just hope that I can get away from it enough that I can focus upon the purpose of the vacation in the first place – to relax a bit and recharge and to just enjoy life with my wonderful wife. I’ll let everyone know how that went when I get back.