Yesterday I posted an entry about hope. I got to thinking afterwards about my earlier (a coupe of weeks ago) post about the three horsemen of the current financial apocalypse – Fear, Uncertainty and Doubt (FUD). Perhaps hope is part of the best triumvirate on the positive side – faith, hope and optimism.
I mentioned faith a couple of times yesterday, but didn’t dwell upon it. I failed to mention optimism at all yesterday. I really think that the current adverse environment has been both a test of out faith or perhaps has served to develop a latent faith in many. There is a point that one gets to after experiencing hopelessness that can only be explained by faith – a faith that grows out of giving up on trying to figure out how to solve your problems and putting them in bigger hands. Once you come to the point where you finally say – not my will but Thy will be done – then hope and optimism can also enter your life and things begin to change for the better.
So, perhaps the acceptance of reality that I wrote about yesterday was really acceptance of something else altogether. There are things that we can change and there are things that we just have to accept and move on. Accepting those things and making the best of the situation is so much easier when one has faith, hope and optimism going for them. The alternative is living a life ruled by fear uncertainty and doubt and leading towards the dark realms of despondency and despair. I do not choose to go there.
So, rather than cowering in fear, fretting about the uncertainty of things and having doubts about the future; you can chose to have faith in a higher power, have hope for a better tomorrow and be optimistic that things will get better. In fact, if you embrace that approach to life you may be surprised that you can be happy with what you have and not spend a lot of time focused upon what you don’t have. You may find that living happily in the moment is much more satisfying than worrying about the future.
Tuesday, November 30, 2010
Monday, November 29, 2010
Reality-based hope for the future.
There are lots of stories, articles, blogs and other communications that based on the concept of hope. Having hope is a uniquely human trait. Hope combined with faith gives even the most downtrodden of people a reason to go on living. But, hope must also be based in reality. It is all well and good to say I hope I win the lotto; but the reality, which almost every player of the lotto begins with, is some cursory understanding of the odds against that happening. So, that hope is really a wish or a dream more than a real hope.
We are faced with much the same scenario in our lives and in real estate these days. People may say, “I hope things get back to normal soon”; where the “normal’ that they are referring to is the state that things were in 3-4 years ago – before the big recession. Well, that’s not any more real than hoping that you win the lotto. You can wish that things would go back to how they where or you may dream about how things were a few years ago; but none of that is likely to happen. In fact it can’t happen.
The current recession has caused such a fundamental realignment and adjustment of things that a return to the state of affairs of the earlier 2000’s is impossible. Many jobs are just gone. They will never return. Many homes are just gone. You’ll never get them back. Many savings accounts, and retirement accounts and college funds are just gone – they will never come back. The automotive companies in this new reality now hire new workers at $14/hour, not $24/hour and there is no going back.
For would be home buyers, new lending rules require that you prove that you can actually can afford the house that you want to buy and that you have some down payment funds and closing cost funds. There’s no going back to the good ole days of no-doc loans. Lenders, once burned by their own greed and stupidity, now demand more assurance (and more insurance) of the buyers ability to pay; even as they find new ways to package and monetize new portfolios of mortgages.
So where is the HOPE in all of this? I think the new hope is found in the young Millennial couple out looking for a first home in the range of $50-80K with 800-900 Sq Ft; rather than a $150K 1,500 Sq Ft first home. There is hope to be seen in the retiring couple who have taken the loss on their McMansion and downsized into a comfortable small ranch home. Hope might be expressed by the couple who were planning to move up to a bigger house, but who now are adding on to their current home instead. Hope that is based upon accepting the new reality is truly hope for a better future, not necessarily based upon material things, but a better life with the important things that we have – family, health and faith.
For many letting go of dreams of the past and accepting that this is where we are and this is were we must base our hope from is tough. Denial is a strong adversary to overcome, almost as strong as despair (which all too many people in denial slip into when they are finally overwhelmed by reality). The good news is that hope combined with faith can work miracles no matter where you start from. So, are things going to get better soon? I certainly have hope.
We are faced with much the same scenario in our lives and in real estate these days. People may say, “I hope things get back to normal soon”; where the “normal’ that they are referring to is the state that things were in 3-4 years ago – before the big recession. Well, that’s not any more real than hoping that you win the lotto. You can wish that things would go back to how they where or you may dream about how things were a few years ago; but none of that is likely to happen. In fact it can’t happen.
The current recession has caused such a fundamental realignment and adjustment of things that a return to the state of affairs of the earlier 2000’s is impossible. Many jobs are just gone. They will never return. Many homes are just gone. You’ll never get them back. Many savings accounts, and retirement accounts and college funds are just gone – they will never come back. The automotive companies in this new reality now hire new workers at $14/hour, not $24/hour and there is no going back.
For would be home buyers, new lending rules require that you prove that you can actually can afford the house that you want to buy and that you have some down payment funds and closing cost funds. There’s no going back to the good ole days of no-doc loans. Lenders, once burned by their own greed and stupidity, now demand more assurance (and more insurance) of the buyers ability to pay; even as they find new ways to package and monetize new portfolios of mortgages.
So where is the HOPE in all of this? I think the new hope is found in the young Millennial couple out looking for a first home in the range of $50-80K with 800-900 Sq Ft; rather than a $150K 1,500 Sq Ft first home. There is hope to be seen in the retiring couple who have taken the loss on their McMansion and downsized into a comfortable small ranch home. Hope might be expressed by the couple who were planning to move up to a bigger house, but who now are adding on to their current home instead. Hope that is based upon accepting the new reality is truly hope for a better future, not necessarily based upon material things, but a better life with the important things that we have – family, health and faith.
For many letting go of dreams of the past and accepting that this is where we are and this is were we must base our hope from is tough. Denial is a strong adversary to overcome, almost as strong as despair (which all too many people in denial slip into when they are finally overwhelmed by reality). The good news is that hope combined with faith can work miracles no matter where you start from. So, are things going to get better soon? I certainly have hope.
Friday, November 26, 2010
Believing is seeing...
“I’ll see it, when I believe it.” (Dr Wayne Dyer), from a post last week in the Jack’s Winning Words Blog.
Read it again. That’s where we are with a lot of sellers right now. They don’t believe it, so they don’t see it. They don’t believe that it happened to them, to their house, to their equity. It may have happened to a neighbor down the street; but surely their house was spared and didn’t loose any of its value. They just don’t see it, because they don’t believe it.
Other sellers just don’t see the time that it’s going to take to get back the lost equity in their homes. They don’t believe that the so-called experts are right about it taking 10 years of more and they certainly don’t believe the Realtor sitting there in front of them who just told them the same thing. They see things coming back in a few months, if they just wait it out a little longer.
And what about those lowball offers that they might have been getting? They just can’t see “giving away their house, “ at those ridiculous offer prices. They don’t believe that the comps used by the other agent reflect the current reality. After all they used houses that were foreclosed or in short-sales; surely those don’t count when someone is looking at my house. I can’t see it.
And now, they say; you’re telling me that I need to lower my price again. What is this, some kind of bait and switch game you’ve been playing? We’ve only been on the market for 4 months. So what if we haven’t had a showing, it must be something that you’re doing wrong as my agent. It’s a great house and I can’t see that there’s anything wrong with my asking price.
What’s an agent to do with a non-believer? Educate, educate, educate! There are tons of articles and news reports and other third-party material out there to use with the non-believers. Sometimes it takes lots and lots of repetition to get the point across. Sometimes it takes more drastic actions – drag them out and show them what the comps and what they are selling for in this market. Sometimes it’s just a lost cause and you need to cut bait. You’ll see that too, when you believe.
Read it again. That’s where we are with a lot of sellers right now. They don’t believe it, so they don’t see it. They don’t believe that it happened to them, to their house, to their equity. It may have happened to a neighbor down the street; but surely their house was spared and didn’t loose any of its value. They just don’t see it, because they don’t believe it.
Other sellers just don’t see the time that it’s going to take to get back the lost equity in their homes. They don’t believe that the so-called experts are right about it taking 10 years of more and they certainly don’t believe the Realtor sitting there in front of them who just told them the same thing. They see things coming back in a few months, if they just wait it out a little longer.
And what about those lowball offers that they might have been getting? They just can’t see “giving away their house, “ at those ridiculous offer prices. They don’t believe that the comps used by the other agent reflect the current reality. After all they used houses that were foreclosed or in short-sales; surely those don’t count when someone is looking at my house. I can’t see it.
And now, they say; you’re telling me that I need to lower my price again. What is this, some kind of bait and switch game you’ve been playing? We’ve only been on the market for 4 months. So what if we haven’t had a showing, it must be something that you’re doing wrong as my agent. It’s a great house and I can’t see that there’s anything wrong with my asking price.
What’s an agent to do with a non-believer? Educate, educate, educate! There are tons of articles and news reports and other third-party material out there to use with the non-believers. Sometimes it takes lots and lots of repetition to get the point across. Sometimes it takes more drastic actions – drag them out and show them what the comps and what they are selling for in this market. Sometimes it’s just a lost cause and you need to cut bait. You’ll see that too, when you believe.
Monday, November 22, 2010
Let go and move on…
In these tough times it is sometimes very difficult to just let go and move on with life. Agents are pulling out all stops and trying everything that they can think of to save deals. I can’t blame them for trying and sometimes the extra effort or new approach might actually turn up something that works. But, other times it amounts to beating a dead horse and it’s time to let go and move on. Sometimes, no matter how many suggestions one can make about trying something different for financing or taking a different approach to dealing with an inspection issue; there just isn’t any way to save the deal.
Sometimes agents get so involved that they start taking lost deals personally. It’s not about them. It’s all about the clients involved; and, no matter how hard the two agents work in the middle, if the two clients involved don’t agree there is no deal. Now, I understand that sometimes clients need to be counseled and educated and even cajoled a bit to stop over analyzing everything and make a decision. Who hasn’t hit that type of client? But the, “we’ve got to make this work,” mentality that sometimes sets in between the agents in a deal can end up doing a disservice to one or both clients. It’s the clients who need a win-win out of the deal, not the agents.
The frustrations of the current market have exacerbated the tendency on the part of some agents to view every deal as a “must win at any cost” game. Having to deal with short-sales in particular has increased the agents’ “stake” in the game, since so much behind the scenes work is involved that most agents on both sides don’t want to see that effort go unrewarded by a closing. It’s that win at any cost mentality that can lead to agents taking shortcuts in the process or making marginal ethical decisions, sometimes on behalf of an unsuspecting client.
In these trying times it is all the more important to be able to step back and let things go when that is the best thing to do. Sure there are gong to be disappointed clients, on both sides of the failed deal; however, dealing with a disappointed client is much better than dealing with an angry client who feels that his/her agent led them astray or wasn’t acting in their best interests. It’s not about us. It’s about the clients and meeting their needs. So, when you’ve given it your best effort but the deal is still going south, remember the words of that classic Beatles song and “Let it be, let it be.”
Sometimes agents get so involved that they start taking lost deals personally. It’s not about them. It’s all about the clients involved; and, no matter how hard the two agents work in the middle, if the two clients involved don’t agree there is no deal. Now, I understand that sometimes clients need to be counseled and educated and even cajoled a bit to stop over analyzing everything and make a decision. Who hasn’t hit that type of client? But the, “we’ve got to make this work,” mentality that sometimes sets in between the agents in a deal can end up doing a disservice to one or both clients. It’s the clients who need a win-win out of the deal, not the agents.
The frustrations of the current market have exacerbated the tendency on the part of some agents to view every deal as a “must win at any cost” game. Having to deal with short-sales in particular has increased the agents’ “stake” in the game, since so much behind the scenes work is involved that most agents on both sides don’t want to see that effort go unrewarded by a closing. It’s that win at any cost mentality that can lead to agents taking shortcuts in the process or making marginal ethical decisions, sometimes on behalf of an unsuspecting client.
In these trying times it is all the more important to be able to step back and let things go when that is the best thing to do. Sure there are gong to be disappointed clients, on both sides of the failed deal; however, dealing with a disappointed client is much better than dealing with an angry client who feels that his/her agent led them astray or wasn’t acting in their best interests. It’s not about us. It’s about the clients and meeting their needs. So, when you’ve given it your best effort but the deal is still going south, remember the words of that classic Beatles song and “Let it be, let it be.”
Sunday, November 21, 2010
The games we play...
There is a popular definition of insanity that goes, ‘doing the same thing over and over and expecting different results.’ In real estate these days that definition might be better stated as, ‘doing the same thing over and over and expecting the same results.’ The market we are in is just insane. Each sale is a whole new adventure, with a steep learning curve and no predictable end result. What few “conventional” sales there are these days are subject to the whims of ever changing mortgage and insurance rules, as well as the interpretive magic of those wizards behind the curtains – the underwriters. Even long-time mortgage agents can’t predict what will happen when a loan request is sent to underwriting.
And what about short-sales and foreclosures? This is about as lawless a landscape as can exist in what is supposed to be a business environment. Business is normally done under a set of accepted norms and rules that everyone buys into and understands. Not so with short-sales and foreclosures. There are no norms or rules, except those that each bank makes up as they go along. Each bank has its own set of procedures and creates its own set of requirements, which become its rules (for that sale anyway). And, within each bank, individual asset managers (or whatever term is used by the bank for the people in charge of dealing with distressed assets) seem to have wide latitude (sort of like the notorious underwriters) to set requirements for each sale.
The result is a game, although not a game where anyone appears to have any fun playing. The game starts out when an offer is tossed into the black hole that is the bank’s short-sale process or maybe their foreclosure process. The players are instructed to stand around and await an answer. How long should one expect to wait? Players are not told. What things will the bank evaluate about the offer to make their decision? Players are not told. What other terms and conditions may the bank impose on the sale? Many times players are not told ahead of the decision; but, sometimes players are given a peak at those terms and conditions. How can a player find out the status of the decision making process? Most times even the listing agent player is not told. Just be patient and wait for your answer is the answer.
The game was recently thrown into even great turmoil (seems hard to imagine it getting any worse) by the legal challenges to the foreclosure processes being used in many states. That, in turn was exacerbated by the whole securitization process for pools of home mortgages, which left the question of who really owns the mortgage on each home open to further debate and legal action. Who has the right to take foreclosure action on assets within those pools of home mortgages that have been turned into securities? The players aren’t told and the banks who packaged and sold the securities don’t know. Even the holders of those securities are too sure about that, but the inquiring minds of the Attorneys General of several states would like to know.
So, what’s a Realtor to do when facing this mess? I think the biggest thing that we need to do is to focus upon counseling and educating our clients (both sellers and buyers) that they are facing an uncertain process that will take an undetermined amount of time and has a very unclear outcome. Client-players who decide to play this game should be prepared to respond to or deal with what may seem like unreasonable requests from the lender(s) involved. Client players may have to make the decision to sink money for inspections or loan processing or repairs into the process, with no guarantee of success. They may be asked to pay for services that have nothing to do with the sale or their mortgage. They may be asked to assume debt obligations that they did not incur, but which come with the property. Realtor-players will often be asked, after the deal is struck to reduce their compensation, even though these are the most time consuming sales that they work upon. It’s all a part of the game. Good luck. Let the games begin.
And what about short-sales and foreclosures? This is about as lawless a landscape as can exist in what is supposed to be a business environment. Business is normally done under a set of accepted norms and rules that everyone buys into and understands. Not so with short-sales and foreclosures. There are no norms or rules, except those that each bank makes up as they go along. Each bank has its own set of procedures and creates its own set of requirements, which become its rules (for that sale anyway). And, within each bank, individual asset managers (or whatever term is used by the bank for the people in charge of dealing with distressed assets) seem to have wide latitude (sort of like the notorious underwriters) to set requirements for each sale.
The result is a game, although not a game where anyone appears to have any fun playing. The game starts out when an offer is tossed into the black hole that is the bank’s short-sale process or maybe their foreclosure process. The players are instructed to stand around and await an answer. How long should one expect to wait? Players are not told. What things will the bank evaluate about the offer to make their decision? Players are not told. What other terms and conditions may the bank impose on the sale? Many times players are not told ahead of the decision; but, sometimes players are given a peak at those terms and conditions. How can a player find out the status of the decision making process? Most times even the listing agent player is not told. Just be patient and wait for your answer is the answer.
The game was recently thrown into even great turmoil (seems hard to imagine it getting any worse) by the legal challenges to the foreclosure processes being used in many states. That, in turn was exacerbated by the whole securitization process for pools of home mortgages, which left the question of who really owns the mortgage on each home open to further debate and legal action. Who has the right to take foreclosure action on assets within those pools of home mortgages that have been turned into securities? The players aren’t told and the banks who packaged and sold the securities don’t know. Even the holders of those securities are too sure about that, but the inquiring minds of the Attorneys General of several states would like to know.
So, what’s a Realtor to do when facing this mess? I think the biggest thing that we need to do is to focus upon counseling and educating our clients (both sellers and buyers) that they are facing an uncertain process that will take an undetermined amount of time and has a very unclear outcome. Client-players who decide to play this game should be prepared to respond to or deal with what may seem like unreasonable requests from the lender(s) involved. Client players may have to make the decision to sink money for inspections or loan processing or repairs into the process, with no guarantee of success. They may be asked to pay for services that have nothing to do with the sale or their mortgage. They may be asked to assume debt obligations that they did not incur, but which come with the property. Realtor-players will often be asked, after the deal is struck to reduce their compensation, even though these are the most time consuming sales that they work upon. It’s all a part of the game. Good luck. Let the games begin.
Thursday, November 18, 2010
True real estate reality wouldn’t make for great TV…
I’ve been watching the shows on HGTV a lot lately, especially the Property Virgins show. It’s interesting how editing can make the process look a lot better than it is in reality. I must give the producers credit though, they do mention in the show that the couple being featured may have looked at 20 – 30 homes during the process, even though they only normally show three homes in each episode.
They also at least bring up issues like waiting for answers on offers, especially bank owned or short-sale properties. I guess it wouldn’t be very good TV if you couldn’t compress months into the 30 minute show window. It would be very boring to actually watch months pass while the buyers are waiting for an answer from the bank, as we do all the time in the real world.
I always wonder what role the hostess on that show is really playing in those deals. She can’t be licensed as a Realtor® in the 4-5 states that I’ve seen her show houses in on the program; at least I don’t think so. I suppose they have a licensed Realtor behind the scenes on each deal. It just makes for good TV to have her gong from Miami on one show to Boston on the next and Toronto on the next. It would be great if we Realtors could do that, but we can’t.
They also seem to compress time a little too much some times, such as when they have the couple sit there while she supposedly goes and presents the offer, retuning a short while later with a counter offer or an acceptance. Would that things actually worked like that and worked that quickly.
Still it’s good reality TV and does show quite a bit about the real estate process and the role that the Realtor plays in the process. One aspect of house hunting that turns up on the show quite often is the buyers changing their minds about what they want in the middle of the search. That happens all the time.
Sometimes buyers realize during the hunt that some things on their wish list are just not gong to be possible within their budget constraints. Sometimes it’s because, when they find a house with all of the features they say they wanted; they see that they don’t really like them after all. Sometime they begin to realize the amount of work that might be involved in really buying that fixer-upper that they specified.
For whatever reason, buyers often end up happily buying a home that is completely different than what they described in the beginning of the process. That happens a lot when they start out looking at foreclosed homes and get tired of walking through cold, dark houses that have been badly damaged by irate ex-owners.
I like some of the other shows too. The one on income properties is informative. Some of the remodeling and staging shows also have great ideas and some are a little over the top. Still one can get something from all of these shows and for a Realtor it’s sort of a “busman’s holiday” thing to sit there and watch others do what you also knows how to do.
I sometimes yell at the people on the shows, if they do or say something really stupid, but that’s all part of watching TV for me; which is why my wife doesn’t like to watch with me. All-in-all I’d rater sit there and watch those show that most of the inane comedies and tired old formula cop shows, even if I know going in how each show’s going to end. Just once they should probably have the young couple fire the agent or have the agent tell the young couple that they really aren’t ready to buy and have her fire them as clients. Now that would be good TV.
They also at least bring up issues like waiting for answers on offers, especially bank owned or short-sale properties. I guess it wouldn’t be very good TV if you couldn’t compress months into the 30 minute show window. It would be very boring to actually watch months pass while the buyers are waiting for an answer from the bank, as we do all the time in the real world.
I always wonder what role the hostess on that show is really playing in those deals. She can’t be licensed as a Realtor® in the 4-5 states that I’ve seen her show houses in on the program; at least I don’t think so. I suppose they have a licensed Realtor behind the scenes on each deal. It just makes for good TV to have her gong from Miami on one show to Boston on the next and Toronto on the next. It would be great if we Realtors could do that, but we can’t.
They also seem to compress time a little too much some times, such as when they have the couple sit there while she supposedly goes and presents the offer, retuning a short while later with a counter offer or an acceptance. Would that things actually worked like that and worked that quickly.
Still it’s good reality TV and does show quite a bit about the real estate process and the role that the Realtor plays in the process. One aspect of house hunting that turns up on the show quite often is the buyers changing their minds about what they want in the middle of the search. That happens all the time.
Sometimes buyers realize during the hunt that some things on their wish list are just not gong to be possible within their budget constraints. Sometimes it’s because, when they find a house with all of the features they say they wanted; they see that they don’t really like them after all. Sometime they begin to realize the amount of work that might be involved in really buying that fixer-upper that they specified.
For whatever reason, buyers often end up happily buying a home that is completely different than what they described in the beginning of the process. That happens a lot when they start out looking at foreclosed homes and get tired of walking through cold, dark houses that have been badly damaged by irate ex-owners.
I like some of the other shows too. The one on income properties is informative. Some of the remodeling and staging shows also have great ideas and some are a little over the top. Still one can get something from all of these shows and for a Realtor it’s sort of a “busman’s holiday” thing to sit there and watch others do what you also knows how to do.
I sometimes yell at the people on the shows, if they do or say something really stupid, but that’s all part of watching TV for me; which is why my wife doesn’t like to watch with me. All-in-all I’d rater sit there and watch those show that most of the inane comedies and tired old formula cop shows, even if I know going in how each show’s going to end. Just once they should probably have the young couple fire the agent or have the agent tell the young couple that they really aren’t ready to buy and have her fire them as clients. Now that would be good TV.
Wednesday, November 17, 2010
Boomers dealing with the new reality.
From IconoCulture comes this report about things impacting the older generation – the so-called boomers and matures. Iconoculture is a consumer data collection and reporting company. You can sign up to receive their weekly posts about what's happening in teh world of consumers at http://www.iconoculture.com/ .
WHAT'S HAPPENING
According to figures from the U.S. government, personal incomes declined significantly in September 2010. Personal income dropped by $16 billion, and disposable income fell even more — a whopping $20 billion. That led to unexpectedly weak consumer spending during the same period (WalletPop.com, 1 November 2010).
With incomes flat or falling, continuing unemployment and the depressed housing market, the outlook for consumers going into the holiday season is not a happy one.
WHAT THIS MEANS TO BUSINESS
Consumer spending is the main engine of growth in the U.S. economy. As long as that stays depressed, recovery will be slow and painful.
Americans seem to be retrenching in deeper thrift mode as the economy sputters.
The following remarks added by this author –
WHAT THIS MEANS TO REAL ESTATE
The bottom line from all this is that the much anticipated and bally-hooed great Boomer migration just isn’t going to happen. Boomers were supposed to be buying retirement hoes by now, but most are stuck in underwater homes that they can’t sell, much less consider buying anything else. Many Boomers were in the older groups that got laid off and found that they were now too old or over qualified for the jobs in this new economy.
Lots of Boomers burned through their savings, savings that had been ear-marked for those retirement homes or they used it to pay for their kids colleges. Now they are broke and stuck where they are, unable to find jobs that pay at the high levels of their last, pre-bust employment. In any event, they are now adjusting to the new reality of the situation of the economy and the country. That is not an easy or pretty adjustment for most. The “me” generation is not used to sacrifice or having to make the tough economic decision that current conditions demand.
One thing that this has meant to real estate is that many Boomers have delayed any plans for their retirement homes. They have not listed their McMansions because they can’t afford the losses involved. But they are tapped out and can’t afford to purchase a second property that might have been their retirement home. They are frozen in place and likely to stay in that state for some time.
So, what are we as Realtors to do to help with all of this? Well, we definitely need to do a lot of educating. Many Boomers are still in the denial phase of dealing with how things have changed and we need to help them get past that stage and accept the new reality. Then we need to help them plan for how they can get on with retirement, albeit a much different retirement than they may have initially envisioned.
Boomers need to understand that they will likely take a loss (maybe mostly a paper loss, but still a tough thing for these folks to deal with) on the sale of their current home, but that they may make some of that back on the purchase of a retirement home. A lot depends on the “from-to” locations involved. One cannot sell in the deeply depressed Las Vegas market and expect to get whole by buying in the still relatively hot South Carolina Market. Adjustments to locations and well as expectations may need to be made.
Fortunately most retirees are at least trying to downsize somewhat. We may have to recommend that they go further down the size and amenity ladder than most had in mind. A smaller, upscale condo, with a view of the ocean may have to take the place of the ocean-front luxury condo that they had in mind. Or perhaps a smaller, 2 bedroom home within walking distance to downtown may replace the grander 3-4 bedroom retirement home with guest space for the extended family.
However we finally agree upon the level of sacrifice required by the new circumstances of our clients, we can help and we should. Retirement plans delayed do not have to become retirement plans abandoned; they just need to be adjusted and refined and a good agent needs to help their Boomer clients find happiness in their new downsized reality. Maybe that could become the catch-phrase – Downsized Realty for the new Downsized Reality.
WHAT'S HAPPENING
According to figures from the U.S. government, personal incomes declined significantly in September 2010. Personal income dropped by $16 billion, and disposable income fell even more — a whopping $20 billion. That led to unexpectedly weak consumer spending during the same period (WalletPop.com, 1 November 2010).
With incomes flat or falling, continuing unemployment and the depressed housing market, the outlook for consumers going into the holiday season is not a happy one.
WHAT THIS MEANS TO BUSINESS
Consumer spending is the main engine of growth in the U.S. economy. As long as that stays depressed, recovery will be slow and painful.
Americans seem to be retrenching in deeper thrift mode as the economy sputters.
The following remarks added by this author –
WHAT THIS MEANS TO REAL ESTATE
The bottom line from all this is that the much anticipated and bally-hooed great Boomer migration just isn’t going to happen. Boomers were supposed to be buying retirement hoes by now, but most are stuck in underwater homes that they can’t sell, much less consider buying anything else. Many Boomers were in the older groups that got laid off and found that they were now too old or over qualified for the jobs in this new economy.
Lots of Boomers burned through their savings, savings that had been ear-marked for those retirement homes or they used it to pay for their kids colleges. Now they are broke and stuck where they are, unable to find jobs that pay at the high levels of their last, pre-bust employment. In any event, they are now adjusting to the new reality of the situation of the economy and the country. That is not an easy or pretty adjustment for most. The “me” generation is not used to sacrifice or having to make the tough economic decision that current conditions demand.
One thing that this has meant to real estate is that many Boomers have delayed any plans for their retirement homes. They have not listed their McMansions because they can’t afford the losses involved. But they are tapped out and can’t afford to purchase a second property that might have been their retirement home. They are frozen in place and likely to stay in that state for some time.
So, what are we as Realtors to do to help with all of this? Well, we definitely need to do a lot of educating. Many Boomers are still in the denial phase of dealing with how things have changed and we need to help them get past that stage and accept the new reality. Then we need to help them plan for how they can get on with retirement, albeit a much different retirement than they may have initially envisioned.
Boomers need to understand that they will likely take a loss (maybe mostly a paper loss, but still a tough thing for these folks to deal with) on the sale of their current home, but that they may make some of that back on the purchase of a retirement home. A lot depends on the “from-to” locations involved. One cannot sell in the deeply depressed Las Vegas market and expect to get whole by buying in the still relatively hot South Carolina Market. Adjustments to locations and well as expectations may need to be made.
Fortunately most retirees are at least trying to downsize somewhat. We may have to recommend that they go further down the size and amenity ladder than most had in mind. A smaller, upscale condo, with a view of the ocean may have to take the place of the ocean-front luxury condo that they had in mind. Or perhaps a smaller, 2 bedroom home within walking distance to downtown may replace the grander 3-4 bedroom retirement home with guest space for the extended family.
However we finally agree upon the level of sacrifice required by the new circumstances of our clients, we can help and we should. Retirement plans delayed do not have to become retirement plans abandoned; they just need to be adjusted and refined and a good agent needs to help their Boomer clients find happiness in their new downsized reality. Maybe that could become the catch-phrase – Downsized Realty for the new Downsized Reality.
Tuesday, November 16, 2010
Turn "yucky" into "sweet" in your crawl space...
I recently did a short piece in my bi-monthly newsletter about crawl spaces and how putting in an encapsulation system can have a positive impact on the value of the home.To my great surprise, that article was the one mentioned most often by people who get my newsletter and see me at church or other places.
Crawl spaces are one of the foundation types used under homes - along with basements and concrete slabs. Crawl spaces are literally a space between the ground and the bottom of the house that are generally high enough off the ground to allow a person to crawl around under the house. Some crawl spaces are actually deep enough to walk around in under portions of the house and some are only a few inches off the ground. In many cases some or all of the major mechanical systems for the house (heater and hot water heater) may be located in the crawl space.
Crawl spaces are not something that get visited very often and thus they are the epitome of "out of sight, out of mind." That should not be the case, especially if you do not have an encapsulated crawl space. What's in or not in your crawl space can have a big impact on your living conditions within eh house itself. Unencapsulated crawl spaces allow moisture and smells to waft up through the floor and into the house. They also encourage critters to take up residence under your house. Most of the time you won't notice the critters until you get a skunk under the house. If the crawl under your home is damp there are multiple issues and mold could become one of them over time.
So, what can be done about this dirty, perhaps damp environment? If it's damp, you first need to find out why and fix that issue. It could be a simple fix like better routing of gutter discharge or is could be an issue with a source inside the house like a leak somewhere in the plumbing system. In either event, find it and fix the source of the leak before going further.
Once you have the crawl space dry find a company that does crawl space encapsulation and have them encapsulate your crawl space. They use thick polyvinyl films to create a vapor barrier between the ground and you home. Usually this barrier is run up the supports all the way to the underside of the floor. While this material has some small insulating value, it is not there for that purpose. It is there to seal out moisture. You may wish to also insulate the bottom of your house once you get the crawl space encapsulated.
Encapsulation will also discourage small critters from taking up residence under your home and will make the task of accessing any mechanicals that are under there much more pleasant. It is a relatively cheap home improvement and one that potential buyers will notice and put a positive value on, when it comes time to sell.
Crawl spaces are one of the foundation types used under homes - along with basements and concrete slabs. Crawl spaces are literally a space between the ground and the bottom of the house that are generally high enough off the ground to allow a person to crawl around under the house. Some crawl spaces are actually deep enough to walk around in under portions of the house and some are only a few inches off the ground. In many cases some or all of the major mechanical systems for the house (heater and hot water heater) may be located in the crawl space.
Crawl spaces are not something that get visited very often and thus they are the epitome of "out of sight, out of mind." That should not be the case, especially if you do not have an encapsulated crawl space. What's in or not in your crawl space can have a big impact on your living conditions within eh house itself. Unencapsulated crawl spaces allow moisture and smells to waft up through the floor and into the house. They also encourage critters to take up residence under your house. Most of the time you won't notice the critters until you get a skunk under the house. If the crawl under your home is damp there are multiple issues and mold could become one of them over time.
So, what can be done about this dirty, perhaps damp environment? If it's damp, you first need to find out why and fix that issue. It could be a simple fix like better routing of gutter discharge or is could be an issue with a source inside the house like a leak somewhere in the plumbing system. In either event, find it and fix the source of the leak before going further.
Once you have the crawl space dry find a company that does crawl space encapsulation and have them encapsulate your crawl space. They use thick polyvinyl films to create a vapor barrier between the ground and you home. Usually this barrier is run up the supports all the way to the underside of the floor. While this material has some small insulating value, it is not there for that purpose. It is there to seal out moisture. You may wish to also insulate the bottom of your house once you get the crawl space encapsulated.
Encapsulation will also discourage small critters from taking up residence under your home and will make the task of accessing any mechanicals that are under there much more pleasant. It is a relatively cheap home improvement and one that potential buyers will notice and put a positive value on, when it comes time to sell.
Monday, November 15, 2010
Is the sky really falling...again?
Let me begin by stating that I’m all for home ownership and being a Realtor®, I’m all for people buying homes – that’s how I make my living, listing and selling homes. I’m also a home owner.
Having said that; I read with interest the article in the November/December issue of REALTOR®, the bi-monthly magazine published by the National Association of Realtors (NAR), that had the front cover headline “Defending Home Ownership.” Inside the headline was “Countering the Critics.” While there were some thoughts expressed about the value to the community and the country of people owning their own homes, rather then renting; those thoughts were not fleshed out in the article.
Instead the NAR article was really just an overly simplistic explanation of the issue and some fear tactics aimed at heading off the political movement that is afoot to look at ending the mortgage interest tax credit – a sacred cow for the real estate and mortgage industries. Perhaps NAR hired some of the negative ads campaign writers from the recently completed elections to write this warning that the sky is falling.
There were of course some “facts” presented, such as the percentage of taxes that home owners pay each year (pegged at 80-90%) and an estimate by Lawrence Yun, the NAR Economist, of the potential negative impact on home values (pegged at 15% in the article), if the tax credit is removed and savvy buyers start factoring the value of homes, based upon lost tax advantages. Interestingly no facts were presented in the article about what percentage of home owners own their homes outright and thus get no benefit from this tax break.
According to Wikipedia, 67.8% of all occupied housing units are occupied by the unit's owner – the homeowner. A quick scan of Google returned the “fact” that 40% of all homeowners have no mortgage on their home, so they get no benefit from the mortgage interest deduction tax break. Do the math and that means that 59% of all people get no mortgage tax break. Put another way, as opponents of this tax credit are want to do, a minority (41%) of Americans are being given a tax subsidy by the rest of us taxpayers.
I should add in the interest of full disclosure that I am in that group with no mortgage and, thus, I get no benefit from the mortgage tax credit. I also recall the alarms that were sounded when the government stopped allowing the deduction of interest charged on credit cards. The sky was falling back then, too, and the end of credit as we knew it was direly predicted. Somehow we all survived and we’ll survive this tax policy shift if forced to do so.
What’s really under attack here? It’s not really the concept of home ownership. How many people make the decision to buy a house solely on getting that tax break? Admittedly, quite a few at the bottom end of the price ladder are heavily influenced by tax considerations. You just have look at the positive influence of the first time buyer tax credit and the negative impact on sales when it ended. Remember, too, that first-time buyers have made up between 40-50% of the overall homebuyer pool for well over a year.
So, tax policies do make a difference for first- time buyers. I can accept that; and, maybe the argument should be that we only need some form of low-end, entry-level buyer tax credit policy to get people started in the real estate market. There may also be a logical argument that the mortgage deduction incentive contributed to the housing bubble and subsequent bust by obscuring the true cost of housing and encouraging people to spend more than they really could afford. That was the good old pitch, “Hey I know the price is a stretch, but you’ll get it back in tax write-offs.”
But, does it follow that home ownership itself is under attack because the politicians are looking for more ways to pick our pockets again? Not really. The tax break is correctly identified in the article as an incentive. It was devised by the government in 1913 (along with the income tax, by the way) to provide incentive to people to own their own homes. For a good read on the topic click here. So let’s be clear. It is not a right. It is an incentive. Just like entitlement programs aren’t rights for the people who make use of them, neither is this tax break. Too many people have become confused about entitlements and incentives being “their right.” There’s probably a whole post that could be written just on that topic alone.
The NAR article had a call to action for Realtors to get out there and start pushing the advantages of home ownership. I think we all have always done that, just not primarily in tax code terms. Home ownership is a wonderful privilege in this country. I’m pretty sure that the founding fathers didn’t include any right to a tax break for that privilege. We should be espousing homeownership for reasons of security, comfort, and peace of mind – all of the things in the NAR video - not because of tax breaks. Hopefully, soon, we’ll be able to add that it’s a good investment back on the list. The sky is not falling. That’s my two cents worth.
Having said that; I read with interest the article in the November/December issue of REALTOR®, the bi-monthly magazine published by the National Association of Realtors (NAR), that had the front cover headline “Defending Home Ownership.” Inside the headline was “Countering the Critics.” While there were some thoughts expressed about the value to the community and the country of people owning their own homes, rather then renting; those thoughts were not fleshed out in the article.
Instead the NAR article was really just an overly simplistic explanation of the issue and some fear tactics aimed at heading off the political movement that is afoot to look at ending the mortgage interest tax credit – a sacred cow for the real estate and mortgage industries. Perhaps NAR hired some of the negative ads campaign writers from the recently completed elections to write this warning that the sky is falling.
There were of course some “facts” presented, such as the percentage of taxes that home owners pay each year (pegged at 80-90%) and an estimate by Lawrence Yun, the NAR Economist, of the potential negative impact on home values (pegged at 15% in the article), if the tax credit is removed and savvy buyers start factoring the value of homes, based upon lost tax advantages. Interestingly no facts were presented in the article about what percentage of home owners own their homes outright and thus get no benefit from this tax break.
According to Wikipedia, 67.8% of all occupied housing units are occupied by the unit's owner – the homeowner. A quick scan of Google returned the “fact” that 40% of all homeowners have no mortgage on their home, so they get no benefit from the mortgage interest deduction tax break. Do the math and that means that 59% of all people get no mortgage tax break. Put another way, as opponents of this tax credit are want to do, a minority (41%) of Americans are being given a tax subsidy by the rest of us taxpayers.
I should add in the interest of full disclosure that I am in that group with no mortgage and, thus, I get no benefit from the mortgage tax credit. I also recall the alarms that were sounded when the government stopped allowing the deduction of interest charged on credit cards. The sky was falling back then, too, and the end of credit as we knew it was direly predicted. Somehow we all survived and we’ll survive this tax policy shift if forced to do so.
What’s really under attack here? It’s not really the concept of home ownership. How many people make the decision to buy a house solely on getting that tax break? Admittedly, quite a few at the bottom end of the price ladder are heavily influenced by tax considerations. You just have look at the positive influence of the first time buyer tax credit and the negative impact on sales when it ended. Remember, too, that first-time buyers have made up between 40-50% of the overall homebuyer pool for well over a year.
So, tax policies do make a difference for first- time buyers. I can accept that; and, maybe the argument should be that we only need some form of low-end, entry-level buyer tax credit policy to get people started in the real estate market. There may also be a logical argument that the mortgage deduction incentive contributed to the housing bubble and subsequent bust by obscuring the true cost of housing and encouraging people to spend more than they really could afford. That was the good old pitch, “Hey I know the price is a stretch, but you’ll get it back in tax write-offs.”
But, does it follow that home ownership itself is under attack because the politicians are looking for more ways to pick our pockets again? Not really. The tax break is correctly identified in the article as an incentive. It was devised by the government in 1913 (along with the income tax, by the way) to provide incentive to people to own their own homes. For a good read on the topic click here. So let’s be clear. It is not a right. It is an incentive. Just like entitlement programs aren’t rights for the people who make use of them, neither is this tax break. Too many people have become confused about entitlements and incentives being “their right.” There’s probably a whole post that could be written just on that topic alone.
The NAR article had a call to action for Realtors to get out there and start pushing the advantages of home ownership. I think we all have always done that, just not primarily in tax code terms. Home ownership is a wonderful privilege in this country. I’m pretty sure that the founding fathers didn’t include any right to a tax break for that privilege. We should be espousing homeownership for reasons of security, comfort, and peace of mind – all of the things in the NAR video - not because of tax breaks. Hopefully, soon, we’ll be able to add that it’s a good investment back on the list. The sky is not falling. That’s my two cents worth.
Saturday, November 13, 2010
Why no lawsuits about this?
There appears to be no real shame about the lousy job on short sales that a few notorious big banks are doing on short-sales. Just as there was little attempt on their part to hide their obvious disdain for earlier programs that the federal government tried to encourage loan modifications, those same big banks are showing less than expected or hoped for backing of short-sales instead of foreclosure. The initial excuses about being surprised and overwhelmed might have worked for the first year or so, but we are well into the 3rd year of this mess and those excuses just don't hold water.
What is surprising is the lack of class action law suits against these banks by their stockholders. Think about the billions that have been lost in stock value for those investors because these banks have completely mismanaged the whole distressed home process. There would seem to be a case to be made that bank management that delayed reacting to this crisis, forwhatever convoluteded reasons, have caused billions in unnecessary losses and thus caused a loss in value of the stock.
Three years in to this foreclosure mess, there are still banks that can't process a simple short-sale offer in less than 2-3 months. We Realtors all know who the worst offenders are and so do their stockholders. Three years in, we still hear the same overwhelmed and understaffed excuses. They can't sell that excuse to us and I wonder how they continue to be able to sell it to their stockholders.
I'm no lawyer and I'm just not sure what the burden of proof would have to be for a stockholder class action suit to succeed. There doesn't seen to be anything so overtly crooked going on that any kind of fraud could be proven and unfortunately management stupidity is probably not justification for a suit; however, there does seem to be enough evidence of a pattern of failure to manage the situation or mimismanagement of the situation that some punishment and compensation for stockholders from management would seem to be in order, especially from those billion dollar bonus managers who have overseen this shipwreck.
I suppose this is just another area in which corporate management is not held accountable in any meaningful way. Banks, especially those that got Federal bailout money, are making money hand over fist off the inflated credit card rates and fees that they were allowed to hike ahead o new regulations, so they are in no mood to dampen their profits by taking the haircuts that they need to take on distressed properties. It's in their interest to turn down short sales and enven to delay foreclosures, rather than take the losses.
So, we seem stuck in this twilight zone where no decision is the best decision and inaction is the best action for the banks. The feds can't seem to get them to do anything; maybe their own stockholders could.
What is surprising is the lack of class action law suits against these banks by their stockholders. Think about the billions that have been lost in stock value for those investors because these banks have completely mismanaged the whole distressed home process. There would seem to be a case to be made that bank management that delayed reacting to this crisis, forwhatever convoluteded reasons, have caused billions in unnecessary losses and thus caused a loss in value of the stock.
Three years in to this foreclosure mess, there are still banks that can't process a simple short-sale offer in less than 2-3 months. We Realtors all know who the worst offenders are and so do their stockholders. Three years in, we still hear the same overwhelmed and understaffed excuses. They can't sell that excuse to us and I wonder how they continue to be able to sell it to their stockholders.
I'm no lawyer and I'm just not sure what the burden of proof would have to be for a stockholder class action suit to succeed. There doesn't seen to be anything so overtly crooked going on that any kind of fraud could be proven and unfortunately management stupidity is probably not justification for a suit; however, there does seem to be enough evidence of a pattern of failure to manage the situation or mimismanagement of the situation that some punishment and compensation for stockholders from management would seem to be in order, especially from those billion dollar bonus managers who have overseen this shipwreck.
I suppose this is just another area in which corporate management is not held accountable in any meaningful way. Banks, especially those that got Federal bailout money, are making money hand over fist off the inflated credit card rates and fees that they were allowed to hike ahead o new regulations, so they are in no mood to dampen their profits by taking the haircuts that they need to take on distressed properties. It's in their interest to turn down short sales and enven to delay foreclosures, rather than take the losses.
So, we seem stuck in this twilight zone where no decision is the best decision and inaction is the best action for the banks. The feds can't seem to get them to do anything; maybe their own stockholders could.
Monday, November 8, 2010
FUD reigns suppreme...
Fear, uncertainty and doubt - the triumvirate that make up FUD seems to be the order of the day in the housing market and indeed in the country's mood overall.
I can't say that I blame people for being fearful about things, maybe about the future. I think the people who do the "Fear This" signs for the back of pickup trucks should do one with Senator Mitch McConell's picture on it. It's a scary thought that this guy is in any position of potential power. I try to find some small comfort in the fact that at least McConell isn't majority leader of anything yet.
Uncertainty about the future wasn't helped much by the recent elections. We now have the devil we don't know in power verses the devil we did know. Is there any more certainty about what Speaker Boehner might do than what we all saw Speaker Pelosi doing? Sure he is less likely to push through big spending bills, but is he more likely to push through a conservative social agenda or worse? I'm not sure which is worse - Pelosi and the Democrats picking my pocket or Boehner and the Tea Party Republicans picking my lifestyle options for me
Doubt about the future is hard to hide. every politician mouths the words, "America's best days are still ahead of her"; but, that's a tough call right now. I'm pretty sure that lots of good days are still ahead of us, but they will be days measured against a new and different set of standards. Many American would be hard pressed right now to state that they see their children being better off than they were, that they are handing the next generation a better place to live in than what they inherited.
The soon-to-be retired auto worker is handing the next generation jobs that start at about 1/2 what he made when he came into the plant. But, at least there are still jobs to hand off. Too many retired manufacturing workers can only relate stories about how great the jobs at the now shuttered factories used to be. Now it is the Sung Lee family in China that proudly sends the next generation off to work in the factory for a good wage.
So, FUD is the order of the day. FUD keeps people from buying that move-up house - how can you be expected to move up when you fear that you might be in the next round of layoffs. FUD keeps people from being mobile enough to go to where the jobs are - after all you can't ever be certain that you can sell your current home for anywhere near what you need to pay off the mortgage; in fact, I doubt it. And FUD is still keeping many on the sidelines because they doubt that we've bottomed out yet. Just because some economist clowns in Washington have declared that the Great Recession ended last year doesn't mean that it feels like it on Main St., USA.
So, what is the cure for FUD? Hope is the best medicine for this debilitating condition. Hope for a more stable environment. Hope for a better tomorrow. Hope is built on two things - acceptance of the here and now and faith. If you can't accept the current state, then you don't have a foundation upon which to base your hope for a better tomorrow - you are still struggling with denial. And, if you don't have faith, then you have to face the daunting task of creating that better tomorrow alone. People with faith know that they are never alone and that gives them hope. So, what's the future for us all? I'm hopeful.
I can't say that I blame people for being fearful about things, maybe about the future. I think the people who do the "Fear This" signs for the back of pickup trucks should do one with Senator Mitch McConell's picture on it. It's a scary thought that this guy is in any position of potential power. I try to find some small comfort in the fact that at least McConell isn't majority leader of anything yet.
Uncertainty about the future wasn't helped much by the recent elections. We now have the devil we don't know in power verses the devil we did know. Is there any more certainty about what Speaker Boehner might do than what we all saw Speaker Pelosi doing? Sure he is less likely to push through big spending bills, but is he more likely to push through a conservative social agenda or worse? I'm not sure which is worse - Pelosi and the Democrats picking my pocket or Boehner and the Tea Party Republicans picking my lifestyle options for me
Doubt about the future is hard to hide. every politician mouths the words, "America's best days are still ahead of her"; but, that's a tough call right now. I'm pretty sure that lots of good days are still ahead of us, but they will be days measured against a new and different set of standards. Many American would be hard pressed right now to state that they see their children being better off than they were, that they are handing the next generation a better place to live in than what they inherited.
The soon-to-be retired auto worker is handing the next generation jobs that start at about 1/2 what he made when he came into the plant. But, at least there are still jobs to hand off. Too many retired manufacturing workers can only relate stories about how great the jobs at the now shuttered factories used to be. Now it is the Sung Lee family in China that proudly sends the next generation off to work in the factory for a good wage.
So, FUD is the order of the day. FUD keeps people from buying that move-up house - how can you be expected to move up when you fear that you might be in the next round of layoffs. FUD keeps people from being mobile enough to go to where the jobs are - after all you can't ever be certain that you can sell your current home for anywhere near what you need to pay off the mortgage; in fact, I doubt it. And FUD is still keeping many on the sidelines because they doubt that we've bottomed out yet. Just because some economist clowns in Washington have declared that the Great Recession ended last year doesn't mean that it feels like it on Main St., USA.
So, what is the cure for FUD? Hope is the best medicine for this debilitating condition. Hope for a more stable environment. Hope for a better tomorrow. Hope is built on two things - acceptance of the here and now and faith. If you can't accept the current state, then you don't have a foundation upon which to base your hope for a better tomorrow - you are still struggling with denial. And, if you don't have faith, then you have to face the daunting task of creating that better tomorrow alone. People with faith know that they are never alone and that gives them hope. So, what's the future for us all? I'm hopeful.
Saturday, November 6, 2010
Is it oxymoronic?
I passed a sign along side the road today that advertised Affordable Bankruptcies. Is that an oxymoron? I think so. What would happen if the person that was trying to get an affordable bankruptcy couldn’t afford to pay for it? Would the lawyer’s fee be added to the debtors list for that bankruptcy? Inquiring minds want to know.
Certainly the term short sale is an oxymoron if not completely oxymoronic. There’s nothing short about these sales and it’s getting worse. I’ve just had a bank that my client has been waiting to hear back from for 4 months come back and tell us that we have to close in 15 days. It’s not some cheap cash sale and the bank has known all along (or should have known as lawyers are want to say) that the buyers needs to get an FHA mortgage approved. That’s just moronic. The FHA mortgage people don’t even open the appraisal request to look at it within 15 days.
And now the foreclosure market is in such disarray that the best advice for many people facing foreclosure may be to wait it out. Some of those banks may never get things straightened up to where they can actually foreclose; especially if they were one of the ones that shredded the original mortgage documents when they went to electronic forms. I think every homeowner facing foreclosure anywhere in the U.S. should demand to see the written proof that the Electronic Registrant trying to evict them actually hold the mortgage that they signed. Since they want you to show them the money, maybe you should reply “show me the mortgage.”
In other real estate news, Bloomberg reported the following - The National Association of Realtors’ index of pending home resales dropped 1.8 percent after a revised 4.4 percent gain the prior month. Compared with the same month a year ago, pending sales were down 25 percent. Moratoriums on foreclosure and stricter lending are limiting progress, the group said.
The report went on to say that purchases have steadied after a 32 percent plunge in the months following the April expiration of a government home buyer tax credit. Mortgage rates near a record low have failed to stoke demand because foreclosures are depressing prices and unemployment is stuck above 9 percent.
In Michigan we are stuck above 13% unemployment and boy do we have a foreclosure and short-sale problem in the market. Right around 50% of all home sales for 2010 have been either foreclosures or short-sales. Distressed homes still make up a large percentage of the total listed homes, too. It’s been happy hunting for first-time buyers and investors for all of 2010.
Certainly the term short sale is an oxymoron if not completely oxymoronic. There’s nothing short about these sales and it’s getting worse. I’ve just had a bank that my client has been waiting to hear back from for 4 months come back and tell us that we have to close in 15 days. It’s not some cheap cash sale and the bank has known all along (or should have known as lawyers are want to say) that the buyers needs to get an FHA mortgage approved. That’s just moronic. The FHA mortgage people don’t even open the appraisal request to look at it within 15 days.
And now the foreclosure market is in such disarray that the best advice for many people facing foreclosure may be to wait it out. Some of those banks may never get things straightened up to where they can actually foreclose; especially if they were one of the ones that shredded the original mortgage documents when they went to electronic forms. I think every homeowner facing foreclosure anywhere in the U.S. should demand to see the written proof that the Electronic Registrant trying to evict them actually hold the mortgage that they signed. Since they want you to show them the money, maybe you should reply “show me the mortgage.”
In other real estate news, Bloomberg reported the following - The National Association of Realtors’ index of pending home resales dropped 1.8 percent after a revised 4.4 percent gain the prior month. Compared with the same month a year ago, pending sales were down 25 percent. Moratoriums on foreclosure and stricter lending are limiting progress, the group said.
The report went on to say that purchases have steadied after a 32 percent plunge in the months following the April expiration of a government home buyer tax credit. Mortgage rates near a record low have failed to stoke demand because foreclosures are depressing prices and unemployment is stuck above 9 percent.
In Michigan we are stuck above 13% unemployment and boy do we have a foreclosure and short-sale problem in the market. Right around 50% of all home sales for 2010 have been either foreclosures or short-sales. Distressed homes still make up a large percentage of the total listed homes, too. It’s been happy hunting for first-time buyers and investors for all of 2010.
Wednesday, November 3, 2010
Cue the fat lady...
Thank goodness the madness we call politics in America is over for this year. Pull the ads, pick up the yard signs and cue the fat lady. Now we can all have fun watching America greatest reality show - Congress in action (or maybe that should have been inaction). The Republicans won control of the House of Representatives, but they don't have control of the 800-pound gorilla in the room - the Tea Party.
All-in-all the uber conservatives did well, which speaks to the level of dissatisfaction in the electorate more than anything. It seemed a bit easier for them to campaign for things they were against than to provide any insight into what things they might do to change the status quo. There was lively debate going on as the TV commentators watched the results come in on whether or not one Tea Party winner in particular might choose to stand on principal and shut the U.S. Government down rather than vote for the necessary increase in the federal government spending cap, thus adding more debt. We shall see.
I got a kick out of the interview with the Democratic Party Chairman on one network when he was asked what the message was that he was hearing from this stinging defeat for the Democrats. His reply was classic political evasion of the topic. He replied that the American people were obviously telling all politicians that they must work together, rather than continuing the bickering and stalemate in Congress. This is like a fighter who just got his butt kicked getting up off the canvas and stating that his defeat obviously signals the need for more friendship and cooperation among pugilists, so that they can present a more unified show for the fight fans. Fights are as unlikely to move towards "Dancing with the Stars" presentations, with smiles all around; as are legislative sessions in Washington to become bipartisan love fests
So the American public fired Nancy Pelosi as Speaker of the House; but, retained Harry Reid as Majority Leader in the Senate. We also have a conservative father-son team in Congress - the Pauls, Ron and Rand. They could prove to be a hand full for the leadership of both bodies and should provide many entertaining moments in the months ahead. Maybe C-Span will become the new reality TV leader.
In Michigan we have put a non-politician businessman into the governors office, surrounded by a legislature full of amateurs. That will be interesting to watch, too. Rick Snyder ran on a theme of "hire me to be the next governor", as if the governors office is a CEO position. To a certain extent it is, and I wish him well in trying to bring good business practices into the state governing process. Good luck with the union contracts and huge pension liabilities that you've just inherited Governor.
So the "throw the bums out" movement worked in many places and now we can all watch to see if the new occupants turn out to be bums, too. I have this uneasy feeling, lurking in the back of my mind, that says telling me it's a bunch of different faces but the results at my level will largely be the same. I hope I'm wrong
.
All-in-all the uber conservatives did well, which speaks to the level of dissatisfaction in the electorate more than anything. It seemed a bit easier for them to campaign for things they were against than to provide any insight into what things they might do to change the status quo. There was lively debate going on as the TV commentators watched the results come in on whether or not one Tea Party winner in particular might choose to stand on principal and shut the U.S. Government down rather than vote for the necessary increase in the federal government spending cap, thus adding more debt. We shall see.
I got a kick out of the interview with the Democratic Party Chairman on one network when he was asked what the message was that he was hearing from this stinging defeat for the Democrats. His reply was classic political evasion of the topic. He replied that the American people were obviously telling all politicians that they must work together, rather than continuing the bickering and stalemate in Congress. This is like a fighter who just got his butt kicked getting up off the canvas and stating that his defeat obviously signals the need for more friendship and cooperation among pugilists, so that they can present a more unified show for the fight fans. Fights are as unlikely to move towards "Dancing with the Stars" presentations, with smiles all around; as are legislative sessions in Washington to become bipartisan love fests
So the American public fired Nancy Pelosi as Speaker of the House; but, retained Harry Reid as Majority Leader in the Senate. We also have a conservative father-son team in Congress - the Pauls, Ron and Rand. They could prove to be a hand full for the leadership of both bodies and should provide many entertaining moments in the months ahead. Maybe C-Span will become the new reality TV leader.
In Michigan we have put a non-politician businessman into the governors office, surrounded by a legislature full of amateurs. That will be interesting to watch, too. Rick Snyder ran on a theme of "hire me to be the next governor", as if the governors office is a CEO position. To a certain extent it is, and I wish him well in trying to bring good business practices into the state governing process. Good luck with the union contracts and huge pension liabilities that you've just inherited Governor.
So the "throw the bums out" movement worked in many places and now we can all watch to see if the new occupants turn out to be bums, too. I have this uneasy feeling, lurking in the back of my mind, that says telling me it's a bunch of different faces but the results at my level will largely be the same. I hope I'm wrong
.
Tuesday, November 2, 2010
The trouble with “guidance”…
I promise this will be the end of this election year rant. I have been receiving lots of “voting guidance” lately. Fortunately that will end tonight; however, my aversion to people attempting to guide me during any election will not end. There are few, if any, really intelligent voting information sites or articles or “guidance” available in any election and especially not in this one. All of the so-called guidance sites are not even thinly disguised attempts by highly biased groups to get people to see the world and their voting choices the same way as their group or block or cult sees it.
The message is always the same – you are intelligent and a real patriot of you see things this way and vote for our candidate; otherwise you are probably a socialist dirt bag and maybe an American-hating Al Qiada sympathizer. Or perhaps you are an ultra conservative Nazi out to make raped women have unwanted babies that threaten their very lives. Either way you are obviously unfit to call yourself an American unless you vote with us.
The real problem seems to me to be that we have, as a nation, become so polarized that is no room in the middle for thoughtful discussion of issues. You are either a conservative buffoon or a liberal idiot, with no in between - no middle ground – no moderate views allowed. You are either a Tea Party Patriot or a flaming Socialist. There are no liberal Republicans left and few conservative Democrats willing to raise their voices. Logic and civility have been quashed under the jack boots of extreme ideology.
The Tea Party has even dusted off old Joe McCarthy and said, “You know, he may have had the right idea.” So, maybe we’re ready for a Joe McCarthy for President kind of candidate. Maybe we need to elect someone so radically far right that they really would do away with the Federal Reserve and Social Security and Medicare and all of the other social and welfare programs and take the country into a kind of no-government is good government state of anarchy.
Everybody could get a gun and just hunker down at home protecting their own and shooting anyone who threatened their peace and quiet; while the Federal Government did as little as possible (aside of course from having the Army shut off the board with Mexico to stop the flow of illegals in to the country. We could seal off Fortress America from the outside world and turn inward. We wouldn’t need anything from anyone. Oh, wait; darn, North Korea has already taken that part on the global stage. Rats! We’ll have to think of something else.
Where’s that Constitution thingy. Let’s take another look at that and see if we can start fresh again. Where’s the part in there about passing a party litmus test on religion or abortion in order to be elected? And where in the Bill of Rights does it talk about entitlement programs becoming rights. Where did our insightful forefathers place the words that define providing health care for every citizen as socialism?
I guess I do need some guidance, but I’m not sure that the guidance being offered by the various political parties and activist groups provides much help. Barry Goldwater was roundly criticized by liberals when he said that “extremism in defense of liberty is no vice”, but he also said, “To disagree, one doesn't have to be disagreeable.” Barry turned out to be right about more than he was wrong about and would probably find today’s political environment to be very disagreeable.
The message is always the same – you are intelligent and a real patriot of you see things this way and vote for our candidate; otherwise you are probably a socialist dirt bag and maybe an American-hating Al Qiada sympathizer. Or perhaps you are an ultra conservative Nazi out to make raped women have unwanted babies that threaten their very lives. Either way you are obviously unfit to call yourself an American unless you vote with us.
The real problem seems to me to be that we have, as a nation, become so polarized that is no room in the middle for thoughtful discussion of issues. You are either a conservative buffoon or a liberal idiot, with no in between - no middle ground – no moderate views allowed. You are either a Tea Party Patriot or a flaming Socialist. There are no liberal Republicans left and few conservative Democrats willing to raise their voices. Logic and civility have been quashed under the jack boots of extreme ideology.
The Tea Party has even dusted off old Joe McCarthy and said, “You know, he may have had the right idea.” So, maybe we’re ready for a Joe McCarthy for President kind of candidate. Maybe we need to elect someone so radically far right that they really would do away with the Federal Reserve and Social Security and Medicare and all of the other social and welfare programs and take the country into a kind of no-government is good government state of anarchy.
Everybody could get a gun and just hunker down at home protecting their own and shooting anyone who threatened their peace and quiet; while the Federal Government did as little as possible (aside of course from having the Army shut off the board with Mexico to stop the flow of illegals in to the country. We could seal off Fortress America from the outside world and turn inward. We wouldn’t need anything from anyone. Oh, wait; darn, North Korea has already taken that part on the global stage. Rats! We’ll have to think of something else.
Where’s that Constitution thingy. Let’s take another look at that and see if we can start fresh again. Where’s the part in there about passing a party litmus test on religion or abortion in order to be elected? And where in the Bill of Rights does it talk about entitlement programs becoming rights. Where did our insightful forefathers place the words that define providing health care for every citizen as socialism?
I guess I do need some guidance, but I’m not sure that the guidance being offered by the various political parties and activist groups provides much help. Barry Goldwater was roundly criticized by liberals when he said that “extremism in defense of liberty is no vice”, but he also said, “To disagree, one doesn't have to be disagreeable.” Barry turned out to be right about more than he was wrong about and would probably find today’s political environment to be very disagreeable.
Maybe there still wisdom in some of those old sayings that came from writings even further back than our Constitution.
Monday, November 1, 2010
The moment is at hand...
The moment of truth in politics is at hand...the day we finally get to vote and bring an end to the madness of all of those rancid TV ads. The voting process is as much about ending the mud slinging as anything.
I'm one of those dreaded Independent voters, not willing to be permanently labeled with the identity of either of the political parties. As much as anything that is because both seem to have drifted off to the extreme edges of the philosophical ideologies that they espouse. Both seem to have various litmus tests that they apply to test the purity of thought and commitment that one might have towards their agendas. I refuse to play that game
I try to look at the candidates and discern how they might think out and vote on future issues, based upon their past records or public statements. That's a difficult task, given the amount of negative information, many times inaccurate or colored in its delivery, that fill the airways during the campaigns. I try to vote for the best people for the job, no matter which party they happen to align themselves with for purposes of getting on the ballot.
This year we are also seeing lots of candidates run for office who have never held elected offices before. There have been numerous articles written about whether that is a good or bad thing, with most leaning towards bad, since some level of political savvy is deemed to be a good thing. While I suppose having some understanding about how things work in government could be a good thing; many of these candidates quite correctly point out that things haven't exactly been working well for some time using the old methods. Perhaps there is value in having a bunch of new people in office who are not necessarily bound by "how things work around here."
So, tomorrow I'll go to the polls armed with what knowledge about the candidates as I've been able to discern in the din of political shouting. I'll cast my votes for some candidates from either party and maybe even for some that don't identify with either party. I'm sure that not all of the candidates that I vote for will win, but I'll feel like I did my part to uphold the original intent of the democracy that we live in - I will have voted. You should, too.
I'm one of those dreaded Independent voters, not willing to be permanently labeled with the identity of either of the political parties. As much as anything that is because both seem to have drifted off to the extreme edges of the philosophical ideologies that they espouse. Both seem to have various litmus tests that they apply to test the purity of thought and commitment that one might have towards their agendas. I refuse to play that game
I try to look at the candidates and discern how they might think out and vote on future issues, based upon their past records or public statements. That's a difficult task, given the amount of negative information, many times inaccurate or colored in its delivery, that fill the airways during the campaigns. I try to vote for the best people for the job, no matter which party they happen to align themselves with for purposes of getting on the ballot.
This year we are also seeing lots of candidates run for office who have never held elected offices before. There have been numerous articles written about whether that is a good or bad thing, with most leaning towards bad, since some level of political savvy is deemed to be a good thing. While I suppose having some understanding about how things work in government could be a good thing; many of these candidates quite correctly point out that things haven't exactly been working well for some time using the old methods. Perhaps there is value in having a bunch of new people in office who are not necessarily bound by "how things work around here."
So, tomorrow I'll go to the polls armed with what knowledge about the candidates as I've been able to discern in the din of political shouting. I'll cast my votes for some candidates from either party and maybe even for some that don't identify with either party. I'm sure that not all of the candidates that I vote for will win, but I'll feel like I did my part to uphold the original intent of the democracy that we live in - I will have voted. You should, too.
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