I AM STILL ALIVE. THANK YOU!

Excuse me, if I feel a little like a wounded animal. Why, you say? Because everyone who knows me knows I’m in real estate and wants to know if I am doing okay. Or, as they put it, "Are you surviving!"

I am happy to report, I am alive and well, thank you. In fact, some would say we are beginning to see a little light at the end of the tunnel. Though some economistd are still talking about a possible upcoming recession, some are saying, "Hold on, not so fast." The UCLA Anderson Forecast (which tends to be quite conservative) came out with a report stating recession is unlikely. According to Edward Leamer, director and co-author of the forecast, "We still think an official recession is not in the immediate future." This, with the strong report we just had on employment being up, and the fact we are holding steady on the unemployment number at 4.7%, are all positive signs. This, and the fact that the President, Congress and financial institutions are taking our mortgage lending problems seriously, all indicate that we may be out of the woods in the next twelve months or sooner.

The other bit of positive news is that we are seeing a number of sellers taking their listings off the market and renting them or deciding to remarket them in the first part of 2008, or later. This is beginning to have the effect of reducing listing inventories. As I have mentioned in the past, if you don’t really need to sell, or aren’t serious about selling, don’t put your home on the market - it will just sit there!

Price reductions continue to drive more sales. As sellers continue to become more realistic about the current environment and reduce their list prices, buyers are eager to seize the opportunity. In my own family, my daughter and son-in-law listened to their real estate agent (no, it wasn’t me listing their home as they live out of area), and reduced the price of their home to the point they were the most competitive home in their subdivision. This helped them put together a sale within weeks. Good advice, good results.

My last point, there are still serious buyers out there as we enter the holiday season. People who need to buy, who want to be in their new home to start 2008 will still be looking during the Christmas holidays. Serious agents will still be working, and as we close the year, I am confident that there are better times ahead. I am entering my 29th year in this business and it is still just as rewarding as it was when I started. Happy Holidays...

Great Opportunities - Don’t Pay Attention to Doomsayers!

Does the name Chris Thornberg ring a bell?

If not, Mr. Thornberg currently works for Beacon Economics in Los Angeles. He was one of the first economists to warn of a housing bubble starting in 2004. Mr. Thornberg was formerly with the UCLA Anderson Forecast. His latest predication is that there is a 75% chance of a recession and that housing prices will continue to fall. Ouch, big time.But how accurate is this info?

This information came from an article Mr. Thornberg recently wrote that was featured in a wide spectrum of newspapers around the country and had a headline that stated "Grim forecast for Economy, Housing." It seems Mr. Thornberg loves to spread bad news about housing and real estate in general (the glass half empty syndrome?).

It is interesting that further on in the same article it mentions that, "Best in 5 months - Payroll adds 166,000 jobs in October." Wait, I thought the sky was falling. And further on Mr. Thornberg indicates that the Bay Area might not be hit as hard as other regions. In fact, he says, the Bay Area economy is diverse and strong in the technology sector which will likely be a bright spot. He further states that trends in the Bay Area are some of the best in the nation. Now you’re talking!

I could go on, but I think I’ve made my point - the local, state and national press love to post headlines that are negative, jolting and not always balanced. I am not saying that all is wonderful in real estate at this moment, but it’s not all dire news either. But give the press half a chance and they will jump on a piece of bad news and ignore a parcel of good news.

Speaking of which, on the good news front, there has been a slight decline in both interest rates and number of homes listed. I predicted that November and December will show an overall drop in the listing inventory and mortgage interest rates - an even better reason for real buyers to start making offers to purchase. Sellers are beginning to understand that we have moved away from the hot market days of 2003 through 2005. You need to be a serious seller. If you don’t have a good reason to sell - don’t.

As for buyers, if you are concerned about further erosion of prices, then write offers at price levels that you feel comfortable offering. You never know, many sellers are now becoming more realistic about pricing and the values of their homes. This is a market where buyers for the first time in many years have negotiating power. Use it!

I am so proud of our team of real estate professionals. We continue to grow market share and have a wonderful camaraderie in our offices. Everyone is working hard, and seeing the great opportunities that come from a Buyer’s Market. Gang, keep up the outstanding effort. It is appreciated.

DOES IT PAY TO BARGAIN?

Does it pay to bargain? When is the ‘best time’ to ask for and expect a discount? What should be considered ‘unrealistic’ when it comes to making an offer? All good questions. Most of us have the bargain hunter gene in us. We like, and expect, a good deal! When it comes to real estate it is no different. We want value and we want a discounted price if possible when we are buyers.

This is true for most of the consumer goods we purchase. In fact, according to an article I just read, a Consumer Reports National Research Center survey of 2,167 households this past summer found that more than 90 percent of those who tried to talk down the price succeeded on furniture, electronics, appliances, even medical bills.

Experts in the field of ‘haggling’ remind consumers there’s nothing wrong with asking for a cheaper price. The worst that will happen is the merchant will say "no" and you won’t be any worse off.

It is the same when it comes to purchasing real property. The only difference here is that if you offer too low a purchase price a seller may feel ‘insulted’ and outright reject your offer (or counter back at full price). Yes, this is true even in today’s buyer’s real estate market. It is also important to remember, your agent’s can’t tell you what to offer, they can only give you history of recent sales of like homes as a gauge of what seller’s have been getting for their properties.

Why do seller’s feel insulted when they receive a ‘low ball’ offer? Because seller’s have an ‘emotional’ investment in their home. They often feel the buyer is trying to ‘steal’ their home - not bargaining in good faith. Of course, when it comes to bank owned properties (homes that have been foreclosed on) the investor who owns the note usually doesn’t have an emotional attachment to the property. They are just looking at their bottom line - how much will I make if I accept the offer (or lose). As an aside, we currently have over 38 bank owned properties, which we feature on our website (click on the Bank Owned icon to view the properties and to receive more information).

Most retail merchants often price items with wiggle room. Home sellers, if they have been counseled correctly by their agent, usually have some wiggle room in their asking price and expect to accept less (though not in a hot sellers market). It is the fine art of negotiating that usually comes in to play here - figuring out how much less to offer without insulting the seller and finally arriving at a price both of you can live with and feel okay about (as can the seller).

It also helps to negotiate from a position of power. Bargains are most likely when you have the upper hand. Being fully pre-approved for a loan (or being an all cash buyer) helps when it comes to making offers on property. This takes out the drama of whether you, the buyer, will be able to perform. This means you need to get together with your lender early on to start the process to be fully pre-approved. It pays to do this, believe me...

There are others things to consider, therefore my suggestion is that you seek real estate counsel by talking to one of our professionally trained real estate associates. With two offices, and 85 plus associates to help you, your chances of finding the right home at the best price in today’s market is greatly increased. I wish you a win-win scenario.

ONLY THE SERIOUS NEED APPLY!

I think by now, most of you have figured out that today’s real estate market is not for the fainthearted. If, in fact, you are just ‘hoping to sell your home or condo’, but don’t need too, then you are better off not putting up a For-Sale-Sign and going through all the work of preparing your home for the market.

Not only is there an overabundance of homes listed for the few serious buyer’s out there, but the media keeps stirring the pot with ‘bad news’ about the real estate market. Every opportunity they get to quote statistics that are negative then are shouted from the print and radio/ TV channels.

I am a realist. I have been in this business going on 29 years and I have seen the ups and downs of the market. It’s true we are experiencing a down period - that’s why only serious buyers and sellers should be dealing in this market.

Buyers, on the one hand, can still get very favorable interest rates and financing, if they have a good job history and credit scores. There are ‘bargains’ out there - trust me. If a buyer is not buying to ‘flip’ a property, but own it as a personal residence, or a long term investment opportunity, it is a great time to buy. Remember, if you need a larger home, or need to move down, or just want better schools for your kids, this is a great time to consider making a move.But seller’s who are stuck on what my property was worth a year or so ago are in for an ‘expired listing’ experience. I would hazard a guess, based on the latest MLS statistics, that 2 to 3 homes out of each 10 listed actually sell. And, with foreclosed properties now hitting the market (our company has over 33 homes listed that are bank repo’s) priced by the lender to ‘move them’ off their books, a seller has to ask themselves what they need to price their property for so a buyer views their home as the best deal and value.

An analogy would be stock market. So you bought a stock for $1000 and over a few years it goes up to $2000. Then over the next 24 months it’s goes down in value to $1,200 and you decide you want to sell it. What can you sell it for? Of course, $1,200, not what it was worth 24 months ago, or 12 months ago. So your choice is, either sell it for $1,200 or hold onto it and wait and see if the value increases. Then you can sell it for more in the future.

Unlike stock, that can go down to penny’s on the dollar, real estate may decline in value short term, but in the long run it has always recovered and then gone higher. Again, personal experience has shown every homeowner in California this is true. The first home I bought, in 1968, was purchased for $19,700. I thought that was the end of the world. I wasn’t totally convinced I could afford it, or that it would ever be worth more in a few years. Silly, me. Today that same home (or similar homes in the area) now sell for in excess of $600,000 in today’s market.

In this short column, I also want to take my hat off to the sales associates who work in our company. I am proud to report that over the past few months we are closing close to 22% of all the sales taking place in Benicia, Vallejo and American Canyon. They are doing an outstanding job counseling their clients, helping them stage their homes, and advising them every step of the way. Great job, team!

RETIREMENT AND MY HOME - WHAT GIVES?

Aging! Can I really be approaching that dreaded time when I need to sign up for Medicare? Yes, and actually, maybe it’s not that bad.

Just so you know, according to the U.S. Department of Health and Human Services, Administration on Aging, the older population, those persons 65 years or older, numbered 37.3 million in 2006. And yes, I am almost at the landmark age - as I will turn 63 on my next birthday. If you are keeping track, that means that 12.4 percent of the U.S. population, about one in every eight Americans is already 65 or older.

Which leads to my thoughts on this subject when it comes to where I live (and my future retirement home). But wait, it’s not just about me, but about the builders who build the product that I might want, are they changing with these times? Are they taking advantage of this social and demographic shift? Or, are they conducting business as usual? Does this mean more "retirement" communities? More Sun Cities?

I guess for some it does. According to Bill Kaplan, co-founder and CEO of Senior Lifestyle Corporation, "We serve our residents with respect and dignity in a comfortable, enjoyable and safe community with opportunities to choose additional services according to need and personal preference. To their families, we provide a support system and peace of mind in the confident knowledge that their loved ones will be cared for with sensitivity, expertise and compassion."
Yes, for a lot of people who are aging, but not yet old, the idea of a safe, fun place to live and recreate sounds like a winner. Obviously, there wouldn’t be the large growth in retirement communities (or adult communities where one of the parties has to be at least 55 years old), if this weren’t so.

I guess my wife and I look at things a little differently. We are certainly not interested in "downsizing" (we need all the room we have in our home) and we aren’t interested in hanging out where a majority of the people are 55 or older. We like living in a mixed neighborhood of young families, working and retired people. We plan to stay in our present neighborhood for as long as possible. We know our neighbors, wave at everyone we see when we take a walk, and love to see our neighbors’ kids growing up. We stay young, we feel, by hanging around with younger, vibrant mix of people.

To answer the question - are builders paying attention to us who are growing older? - the answer is yes. Builders are going to be offering more types of adult communities, with more services, and it will be something that many will be drawn to, and enjoy living in, but it’s not for us. At least not yet.

FLOATING METAL JUNKYARD NEEDS CLEANUP SOLUTION!

I grew up a good portion of my life in Concord. One of the things I used to enjoy as a teenager was fishing near the "mothball fleet" in the Suisun Bay. This is when Benicia was a sleepy community with barely five thousand residents, and a downtown made up of bars or antique shops.

What’s changed? Where do I start? We used to think the closer we anchored off the fleet the better chance we had of catching a sturgeon - something we are now warned not to eat at risk to our health. Benicia is also now the jewel of the Suisun Bay, in my opinion. Great homes, great schools, a vibrant main street and downtown and wonderful people who care about our city, county and country.

Though we do have people who argue over ‘global warming’ and other such controversial issues, I believe that 90% or more share the same concern I do about the once majestic fleet of ghost ships that make up the ‘mothball fleet’ (actually the official name for this obsolete group of vessels is the Suisun Bay Reserve Fleet). Some of these ships go back to World War II vintage. Which begs the question "what are they being held in reserve for?" I don’t know, nor can anyone in charge give a concise answer. Nor what they will ultimately do to rid us of this once picturesque, but now toxic, decaying floating metal junkyard.

According to the people in charge - well, it’s a complicated question. The actual controlling governmental agency is the U.S. Maritime Administration. Part of their solution to cleaning up these now toxic ships is to have them towed through the Panama Canal to Brownsville, Texas to be dismantled for scrap metal.

There are various problems with this plan. First, the U.S. Coast Guard has indicated it would want the cruddy species that are attached to the ship’s hulls scraped before the ships are scrapped or moved. But wait, this would probably then leave large hunks of paint loaded with toxic materials, which would sink to the bottom of the brackish waters and further pollute the Suisun Bay. The officials of the Panama Canal would also not throw a welcome party to have these rust buckets pulled through the canal. In fact, most likely, they would nix any such plan.

So is there a solution? Probably, but it looks like with most governmental clean up issues it will not get done quickly, efficiently or possibly in my lifetime. I’ve had a colleague suggest having them hauled out to sea about 50 or so miles and sinking them for fish habitat. Of course, though there is merit to this idea (but one that would never get government approval), in my opinion, the only thing I (and you) can do is request help from our Congressman George Miller to see if he can’t use his influence to move things along. In my opinion it will take congressional action to finally get a resolve to this issue. Please join me in making a call (or writing a letter, faxing or emailing) to Congressman Miller at his local office headquarters: 375 G Street, Suite #1 Vallejo, CA 94592 - (707) 645-1888 - Fax: (707) 645-1870 or email address George.Miller@mail.house.gov.

ONLINE SEARCH ENGINES A BOON, NOT A THREAT!

Online property searches are no longer limited to Association of REALTOR’s web sites, or company web sites for that matter. More and more consumers are turning to Trulia.com or Zillow.com as a source of property information. It is interesting to note, like all new ideas that cost money, neither has announced profitability to date. Trulia now claims around 1.5 million unique visitors per month, while Zillow claims somewhere around 4.1 million unique visitors per month. If you haven’t visited one of the two sites I would encourage you to check them out.

Trulia and Zillow have built a consumer offering no-strings-attached real estate information site that is free and searchable at one destination. They’ve made the consumer the first priority while trying not to step on the real estate industry’s toes. So, having said that, I believe that the real estate industry also puts the consumer first. If we didn’t, we would soon be out of business. And, remember, the information that these two sites supply doesn’t take into account the neighborhood information that is unique to each city and/or location, such as the "award performing" school down the street, or the proximity to shopping, freeway access or backyard open space. It is these intangibles that can add or take away value.

Taking this a step further, I decided this morning to go on both the Trulia.com and Zillow.com sites to search for available condos for sale in the city of Benicia. I put in simple search parameters of $300,000 to $400,000 asking price, minimum of 2 bedrooms and 2 baths. I then hit the search button. What happened, you asked? Well, Trulia came up with 5 properties to view, and Zillow came up with 3 properties to view. I then went on our www.solanopacific.com site (which you are on if you reading this blog) and put in the same parameters. Lo and behold, 14 properties showed up, with more photos and information for someone like you to view. Another problem with Zillow is that Zillow presumes to really know market value and gives estimates of the value of each listing they show. The truth is Zillow’s estimates of value are usually either too high or too low (you find this out later when the property sells and closes).

This begs the question - are Trulia and Zillow a threat to our industry? Hardly! I can remember when the only information available to the public (or us agents) was a monthly MLS book followed up a with weekly hotsheets. It didn’t serve the agent or the consumer well. Both parties need accurate, full and the most up-to-date information available about properties and neighborhoods. Fortunately, with technology that is now available, we can have that. I just feel that until all brokers list all of their properties on these separately owned search engines, the public will get better, more accurate information from those of us who actually listed the properties and know the neighborhoods because we live and work in them.