Reflecting on My 10+ Years in Real Estate - the One thing

Something today made me start to think back over the last almost 11 years I have been a licensed real estate agent on the state of KY. I have been a broker for about 9 of those years actually, which who cares right? Anyway in those years we have seen both extremes, crazy "bubble" markets, to opening my own office the day several big bad Wall Street firms collapsed and no one seemed to really want to buy a home. (You now what they still did though)...

To then wondering OK now can I really make a living doing this, and coming to grip that there was no fall back or back up plan. If I could not convince people to allow me to help them buy or sell their home, I was in trouble. I heard at some point very early on that once you are a Real Estate Agent for 2 years, you virtually become unemployable anywhere else. (Maybe they were on to something here actually.) So with all of this weighing on my mind I got mad and quit my salary job one morning before 8am. Great idea right? I still remember that call to my wife, "Uh well I told Tom to kiss my butt this morning and I quit. He tried to fight me but that's a long story..." Then the inevitable "Now what...?" So I took a job building a fence for a guy that day...that lasted 1 day but I did build the fence. Then sold the house a few years later, and then sold it for the guy I sold it to, and may be selling it again in a few months...

So the next week I studied a little bit and schedule the exam. Since I had real estate as my degree emphasis in college I did not have to go through the classes again, which I did not know as they do not tell you that in class I guess. Once I passed the reality hit me, I had to find a broker. I didn't even plan for that so I called one of my buddies who graduated before I did and was already in the business and he gave me a name of someone who would take a part time agent who really didn't have a plan yet. From day one sitting in my new brokers office/living room wondering what the heck am I doing here, to going straight home and office shopping for a new place and trying to find the place I felt I fit in best. I did find it, after a couple tries, and the rest is history. I made more that year that my old job so I could see that this was going to be something I could handle.

Well that is the story of how and why, I still remember that first sale...here it is - (I never even got credit for it in the MLS she put the wrong agent on there??)

This was my first sale. A really good buddy of mine I have known almost my whole life and his new wife let me help them buy it. (This is actually the picture from when I sold it 6 years later, but you get the idea.) This was on 11/27/2003.

From there is went crazy the market that next two years was ridiculous. I remember listing a house, putting a sign in the yard and driving home all the way across town, and being worried that I had not had a call on it yet. I also remember selling one the split second I put the sign in the ground, and not really even remembering the price when they asked. Then there was 2008-2011 - we will just say I hope that is something we do not have to deal with again. The last two years have been incredible, and I think we are going to see an excellent market the next several years. Lexington, KY Real Estate is booming right now, and so is the Bluegrass Region. Yes we do wear shoes, and no we don't all ride horses, or drink bourbon and moonshine. At least not everybody all of the time anyway.

But through it all the one thing I really say is the best thing is helping people. Sure its how I make a living and put food on the table, and buy my kids all their shoes and clothes etc. But really knowing you do something that helps other people provide a safe and stable place for them and their families future is paramount in my mind. And when they call me back a few years later saying they need to sell and buy a bigger one, that is awesome. Seeing the look on a first time home buyer's face when they buy their first home, and handing them the keys is an awesome feeling.
Sometimes its calling a seller up and telling them they can finally move on because they have been living out of a suitcase for a few months, or that they can now be all together as they are in the new city and the family is still here, waiting on me to get the home sold so they can be together again.
That call is priceless. I even like the call saying you know what we bought this house for this much, and now we are selling it for this much. So you are getting a check for this much. That is cool too.

But it really is addicting. The feeling of helping others do that, no matter how really significant my role. Because lets face it what we do is not rocket science. Houses almost sell themselves, especially when they work with me on the front end to zero in on things like area, price, location, amenities etc., not to mention everyone needs to live somewhere. So there is a good size market to tap from.
But I have always been real cognizant of the fact it is a BIG deal. No matter how many I sell I alway remember that to that client it is the biggest decision they most likely have ever made.  My job is to make it a great experience. The one thing experience.

I alway refer to the sale/buy as "we" are buying, and "we" are selling. Because I am invested in the experience too. I really sometimes feel like I get more tied in to it than they do at times. Most of the things we do for our clients they never know about, like squeezing an extra thousand out for a seller just to see if you can, or helping a buyer get a refrigerator when is is not included in the sale. But I truly believe it is not a you or a they, it is a we deal. Maybe that is why well over 80% of my business is repeat and referral business. I don't know.

But I do know this, while writing this post I have been trying to think of 1 person or 1 deal I have done that I have regretted. Because you hear all the time that we real estate agents are greedy and try to push homes on people, we caused this and we did that...I cannot. Even on investment property deals, where it's numbers not emotion, I feel good about them all (except for a few I have bought myself that is....). Even through all of the foreclosure mess and down market I can't think of one person I sold a home to that lost it. I have some who may have lost some money, but all of them who came back to me to help, I did everything I could possibly to to lessen that loss. I feel really good about that fact. I really can not think of 1 out of several hundred sales that I felt the buyer or seller did not really do the right thing.

Now that I am also the owner/broker of the company, my role is not only to help my clients, as I still and in the business full force, I am responsible for the team. I not only have to recruit and train agents to the company, but I feel a strong need and desire to help them succeed. Every time an agent leaves our office, or decides to get out of the business I take it hard. I wonder what I could have done to keep them. Could I have been more accessible, offered more training, more leads, been less of a pain in the butt about activities?...whatever. But for the agents here now and for those to come, I am totally committed to helping them succeed.  The hard part is getting them to see what their potential is in the business. Some expect it to fall in their lap, some think other pastures are greener, but I can really say that the system we have, and where we want to be in the future as a company is pretty damn good.

If you are considering a career in the business you owe it to yourself to come check us out. We may not be a fit for everyone, and we don't want just anybody, you have to be committed and accountable for your success. But most of all you have to be the one thing for you client. The one thing is a big deal around here, but its my trade secret, sorry. If you are considering buying or selling a home in Lexington or the surrounding areas, I want to talk to you. Here are a few links for just this purpose:

www.Weichert.com/careers
www.SearchLexingtonKYHomes.com
www.TySellsHouses.com
www.MovetoKY.com

Lease to Own Requests....A Top Ten Pet Peeve of Mine

OK so at least once a day I have someone call to ask me about a rental property, and at least 50% of those ask  if the owner would want to do a lease to own, land contract, lease purchase or some variation of the term. (Seller financing is a whole other topic.) Every time I want to scream, here is why.

They simply do not work, and one side or the other will get screwed. Usually the "buyer",  but as I can attest the owner can as well. 

So, on properties I own and rent,  I routinely say that I do not participate in those arrangements, I will however agree to sell the property to the renter anytime they want as long as they are in the lease with me. That's where I leave it. Here is why. There is no benefit in it for either side, even if it works out the risk is not equal to the reward. The good old days of a deal on a handshake, or assuming both sides are acting in good intentions are over. There are too many scams and "Get Rich Quick Seminars" preaching ways to work these deals in favor of one side or the other. 

Typical Scenario you will see offered (you know on all the yellow signs written in black marker all over town that say "Rent to own...3 BR....$895 a month" or something similar. )

Owner say yes they will do a rent to own. With $x,000 down, and $xxx rent per month. 

There are usually two reason for either party to want to enter into a lease to own or similar arrangement, so for simplicity I will do both scenarios for each party.

Buyer - Reason  1. - The buyer / "Buyer" is either not able to qualify for a loan right now and want to presumably have some equity building while renting and presumably repairing or correcting reason they cannot qualify currently. 

Reason 2. - They want to trap the owner into a situation where they can screw the owner out of the property and drag the legal process out in foreclosure action, which is costlier and takes longer than a simple eviction, or hope the seller will not be able to afford the foreclosure process and simply live rent free for as long as they can drag it out then skip town. 

Seller - Reason 1. - They want to rent the property out and and at some point sell it so why not allow them to pay down on it as they go along? This would ideally take the burden of insurance and taxes off them as well and on to the "New Owner". 

Reason 2. - They know the odds are the renter/"Buyer" will not or cannot ever actually buy the property and plan to keep the usually significant deposit when they do not. Often they place obscure terms in the contract to do just this easier. 

Issues: When any of the above takes place, the "buyer" may have created equitable ownership in the home. So now you are no longer dealing with eviction, if or when the renter decides to stop paying rent. 

Mortgage: Often the property has a mortgage on it from a bank or lender. So this is an issue, a big one. 

I have been in this business for several years, I own rental property, I have sold rental property. I have agreed to one of these scenarios over the years, and a partner of mine agreed for us in another. Neither have worked for either party. I still own the first one, I kept the deposit. They never tried or were ever able to qualify to buy the property. We left on good terms however and I still consider them friends. But we had a clearly written agreement to the terms. This is the number one mistake most people make, not having a clearly written contract stating all scenarios and how they will be handled. 

The second one, not so good. Lets just say that we are still fighting this one and it will cost us a lot. Why? There was no benefit in it for us, we should have never done it,  and the "buyer" is in my opinion on the side where they are trying to work the system to screw us. 

So if you are considering one of these, I suggest you reconsider. (And consult YOUR attorney)  If you do decide it is in your best interest to do so then carefully draft and review the contract and terms. Both sides.  (I am not an attorney and do not play one on TV, so this is not intended to be legal advice you must consult an attorney for that before considering any of these options, or a sell or buy anytime in the future.)

I would be interested to see what if thought you have on the subject. Good or bad. 

3 Reasons Why Buying or Selling a Home Over the Holidays Can Be a Good Idea

This time of year it is inevitable to hear, "I am just going to wait..." to buy or sell a home until the market picks back up in the Spring. It does make some sense to think that, however I am going to show you three reasons I thin its good for either.

3 Reason to Sell over the holidays:
1. Anyone out looking in the cold, snow, and taking time from family and shopping this time of year, must be serious!
2. Less competition, many sellers will not read this article and will take their home off market and come back with the herd in the spring with the other sellers who decided to wait.
3. The buyers will feel good in your home with a little foresight. The home is festive and subconsciously the buyers will feel more at home with all the Holiday decorations, smells, warmth. Christmas trees, music, decorations, eggnog, a fire....use your imagination and go all out. Think of these two movies as guides:  Think This    -  What its probably like in Real Life

3 Reasons to Buy of the Holidays:
1. Only serious sellers will have their home on the market this time of year, if it has been on the market since this summer, then maybe they realize they made the mistake and overpriced it then and are ready to sell it now. Rates and prices will go up you know....
2. Sellers are people too and are often more understanding of needs this time of year.  Flexible closing terms, concessions, lower price who knows what is possible.
3. You get the enjoy the festiveness of the home and see it in its full real life glory, not a lot of staged fakery going on this time of year. You can see the house for how it is really utilized bu the current family to gauge how it will be when you own it.

The bottom line is that there never really is a bad time to buy or sell a home. It comes down to the desire or need to buy or sell by both parties. My advice is now is a great time to buy, so fire up the family truckster or get the home decorated and call your Realtor and get to it.

You Ready? Click here to contact Ty....

My List

Here is my ongoing list of my biggest pain in the butt companies and things to deal with....

Worst Companies... (Previous Rank)

1. AT&T Wireless (2)
2. Columbis Gas (1)
3. KY American Water (3)
4. Chase Bank (4)
5. National City Bank (5)
6. Any Bank (6)

Pet Peeves Related to Realty Business

1. Not showing up for a showing appointment
2. Not accurate listing info on MLS
3. Know it all clients or stakeholders
4. Wallpaper
5. Bad door knobs

Lexington home sales up 13 percent, region up 7 percent

By Scott Sloan - ssloan@herald-leader.com
The Lexington-Bluegrass Association of Realtors said home sales in and around Lexington grew in the third quarter, with September particularly strong. Residential sales rose 13 percent in Lexington and 7 percent in the region as a whole.
The growth for the full quarter, although lower, was still growth, which has been tough to come by as the real estate market suffered during the recession.
The number of residential real estate sales that closed during the third quarter in Lexington increased 4.7 percent, the Lexington-Bluegrass Association of Realtors said Thursday. In the 14-county area served by LBAR's members, single-family sales were up 4 percent.
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During the quarter in Lexington, 1,194 sales closed, up from 1,140 in the same quarter of 2008. Sales were gaining momentum as the quarter ended, with a 13 percent rise in September with 347 sales, 40 more than a year ago.
During the quarter in the region, 2,110 sales closed, up from 2,028 in the same quarter of 2008. Sales also gained momentum as the quarter ended with a 6.7 percent rise in September. That month saw 651 sales, 41 more than a year ago.
September is the first month this year that home sales in the region exceeded their 2007 figures, according to the data provided by LBAR's members.
Sales declined 0.7 percent in the region in August but were up 6.2 percent in July.
In Lexington, sales were up just 1.7 percent throughout July and August. The months are not broken out separately in LBAR's statistical report.
Year-over-year price changes varied during the quarter. Lexington saw a substantial decline in the median sales price for residential sales in September: The price fell 7.5 percent to $149,838 from $162,000 a year ago.
The region saw varied results. In July, the median sales price for residential homes was $147,398, down 1.7 percent year-over-year. In August, it fell to $144,000 from $152,900 in August 2008, a drop of 5.8 percent. In September, the percentage drop-off narrowed to 1.8 percent with a median sales price of $140,000.
Central Kentucky's drop in sales prices has not been as pronounced during the recession as other areas of the country.
The average days on the market for a single-family home in the region was 78 at the end of the quarter, down from 93 a year earlier. Lexington was better with an average days on market of 66 compared to 69 a year ago.
The inventory of homes also was down in the region, with 6,238 for sale in September 2009, a drop of 5.4 percent.
"Interest rates are very low; there is a good selection of homes on the market and there is no reason not to be able find the home of your choice," LBAR president Gale Fulton said in a statement.

Does this Sound Familiar?

Not that I am for taking the horse farms and turning them into subdivisions, I am not, but maybe we could learn something from here in Central KY?

Urban planning to blame for housing bubble? - REAL Trends

Between 2000 and the bubble's peak, inflation- adjusted housing prices in California and Florida more than doubled, and since the peak they have fallen by 20 to 30 percent. In contrast, housing prices in Georgia and Texas grew by only about 20 to 25 percent, and they haven't significantly declined. In other words, California and Florida housing bubbled, but Georgia and Texas housing did not. This is not because people don't want to live in Georgia and Texas: since 2000, Atlanta, Dallas-Ft. Worth, and Houston have been the nation's fastest-growing urban areas, each growing by more than 120,000 people per year. According to a new study by the CATO Institute and Randal O'Toole, this suggests that local factors, not national policies, were a necessary condition for the housing bubbles where they took place. The most important factor that distinguishes states like California and Florida from states like Georgia and Texas is the amount of regulation imposed on landowners and developers, and in particular a regulatory system known as growth management. In short, restrictive growth management was a necessary condition for the housing bubble, says the study. Read more click here.
Real Trends Comment: Thomas Sowell's book, "Housing Boom and Bust" is one great read to understand how it was government involvement at all levels, local, state and federal, that was mostly responsible for both the boom and the bust in housing. At local and state levels, governmental action to reduce the land available for development and the cost of development caused huge price bubbles that exacerbated the wild swings in prices in such markets as San Francisco and Los Angeles when compared to cities like Atlanta and Houston. At the federal level the stimulus to accelerate low income households entry into homeownership caused Fannie and Freddie to purchase too many low downpayment and low credit scoring families - ending with the high foreclosure rates even before the recession.

Extend or Not to Extend

I will make this short and sweet, which is unusual for me, but anyone either in the market to buy or sell, or a real estate professional has an opinion on this current first time buyer tax credit. Now to debate the actual effects of the credit, good or bad, or how it is or is not market manipulation or control at some level is beyond the scope of this post, no matter how well founded or accurate they may or may not be. But like the cash for clunkers this is indeed creating a real shift in demand at least in the short term. Again the long term effect will be another matter all togeher for another time. So here are the top 3 pros and cons as I see it as a real estate professional and a property investor. And my idea to continue the plan so there is no cash for clunker type hangover period should it expire as set to do so in a matter of weeks.
Pro's:
1. Stimulates many on the fence buyers to go ahead an purchase property now rather than later
2. Helps to reduce the inventory available and in theory stabilize prices in the target price range.
3. Gives real a tangible monetary benefit to the average person, not an untangible corporation or group
Con's:
1. Limited to the typical first time home buyer target market and price range which may not address problems that created the current climate
2. Artificial inducement to act may create hangover effect in the future and creates minimum expectation standard for the future, and which may arguably be the root of the problem in the first place
3. By creating a hard deadline creates problems by rushing to act by too much of a sense of urgency to act.
My solution:
Now the numbers are arbitrary and can and should be adjusted as required for area and budget reasons. But here is a plan I think could be introduced to extend and most importantly expand the current credit.
The Ty Brown Real Estate Stimulus and Recovery Act of 2009
- $8,000 Federal Tax Credit in the first year for ANY owner occupied purchaser to be given to the buyer similar to the same current guidelines, except open to ALL buyers.
- and additional $1,000 interest credit towards federal taxes for each of the next 6 years the purchaser remains in the home.
- $2,000 incentive to purchaser to make home more energy efficient should home be in need, again similar to current guidelines -or-
-$8,000 principal reduction credit for a current seller that must sell their home that in turn purchases a new home that will lower their monthly mortgage payment by at least 20%. Then they would not be eligible for the $8,000 credit but would be eligible for the $1,000 interest credit and energy efficiency credit.
So this would be a great deal for someone that wanted to sell their home and couldnt because the value has decreased. They could lower their price by $8,000, the buyer could still use the $8,000 toward the purchase, and both could go to a new home and use the remaining credits.
The two biggest hurdles are 1. Who would fund the $8,000 principle reduction, and 2. Again is this TOO much artificial stimulus in a open market....

Breaking News!

For the first time I have noticed in a long time, and yes its the last day of the month, and quarter, but pendings and solds, and even solds along have surpassed new listings. At least as of 4:21 pm. Note there are even 5 price increases...watch out!
LBAR
24-Hour Market Watch

New Listings 70
Back on Market 11
Price Increases 5
Price Reductions 53
Pendings 38
Solds 80
Expireds 19
Inactives 18

National vs Local Stats

Local vs. National News
OK once again I am going to say it, All Real Estate is Local, meaning I don't really care what Las Vegas is doing, and I REALLY do not care about California. So why is it that that is all we hear about? Florida is a little closer to home, and well New York is understandable, but still not relavant to Lexington, or Kentucky for that matter. However we have to realize this is what our clients see everyday. Like the article on Yahoo today...Home prices post 18.1 percent annual drop in AprilWidely watched index shows home prices down by 18.1 pct. in April, but trend is stabilizing Case-Schiller? Again that is only 20 cities, and none of them are in Kentucky. Plus it says that 8 of the 20 posted gains. WHO CARES ABOUT VEGAS!? But this seems to contradict what NAR says...Take a look at the recent local KAR and LBAR numbers to see what is happening in Kentucky and Lexington. Which one of these makes more sense to you and your clients who may be selling or buying a home? So share it...

What to Look for On Your First Investment Property

Here is a repost of a past article that I find very helpful still....

What to Look for On Your First Investment Property
I have already given you my 5 tips to make an investment purchase profitable.
But until you have done several deals, you may not know how to decide how to make the first one. So here are the things I look for in the property itself, the actual physical real property. Here are the 11 things I consider when I buy a property and again there are others, and there can be limitless different scenarios, which is why I think you must consult a professional Realtor to help. But here is what I look for and what I tell me clients to look for. —Disclaimer this should not be considered in any fashion a replacement for a full property inspection by a licensed professional or inspector. Please have this done on ANY property you consider especially the first few. Any real estate professional can help you include that language in your contract, regardless of the seller. Auctions can be an exception so use caution.

1. Easy cheap fixes – Is a home not selling because it has a bad paint job? Old outdated wall paper, is dirty, or needs landscaping? These are easy inexpensive fixes that can be a good buying opportunity. Always plan to repaint any home you buy to re-sell, its and easy cheap way to make almost any home look better. Pay particular attention to curb appeal and the entrance and little things like door knobs, lighting, and light switch covers.

2. Kitchen – Old cabinets fixtures and appliances are a big expense, but often necessary. If the kitchen is a wreck it can be an opportunity to add value and possibly get a better deal. If the space is good however they are a great investment. If they are in good shape and in working order that is a big, big plus.

3. Flooring – I love to see old worn out carpet over hardwood! 8 out of 10 times if you can see hardwood you can refinish it and make it look nice. Pet stains are a big problem sometimes, but a lot of people like the used antiquy (sic) look of older hardwood. Beware that many homes seem to have one bedroom that has something other than hardwood under there, I am not sure why but they do VERY often, so always plan to re-carpet the bedrooms.

4. Windows – The worse the better. Nothing makes a home look and sell better than new clean high efficient windows. Unless they have been replaced in the last few years plan to rip them out and replace them.

5. Heat and Air Units – Look for newer units with good brand names! If they are old they are costly to replace. Remember the new 13 SEER regulation, the old ones soon may not be able to be fixed even if they are not real old.

6. Foundation – Look for cracks and undermining of the soil around the foundation particularly near the down spouts. These are generally bad, and expensive to fix. Small cracks are usually OK, as all concrete will crack, but displaced, shifting, diagonally cracked blocks are usually not good.

7. Layout – Not only the room dimensions but the layout and style. In my opinion ranches are the best bet to start, as they are pretty straight forward and less can go wrong. But often the bathrooms or kitchens are deficient. However this is often easily fixed, but again it costs money so keep that in mind.

8. Lot/parking – Consider the slope of the yard and how useable it is, fencing and privacy are good. Looking around to see what is behind and around the house is also important. Is there sufficient parking?

9. Electrical – Look for an updated service panel in an older home, and check to see if any panel is full, old school fuse boxes are usually not a good idea. This could mean that you have to spend good money to be able to add circuits or could be a dangerous situation. This is best left to a professional licensed professional but a quick look can go a long way initially.

10. Plumbing – This can be especially tricky in vacant homes that may or may not have been winterized. Frozen pipes are usually not discovered until too late. Also pay attention to the tub or shower, one that appears to be in good shape can save a lot of money as it can be saved.

11. Roof – If there is any doubt about the integrity of a roof plan to replace it. The key is to find a nice looking flat roof, with no missing, bent, or damaged shingles. Always look in the attic for signs of leaking and on the ceiling. Leaks are not always bad if you can find the source and repair them easily. Also since you are doing the roof it’s a good idea to have new gutters and downspouts put on too.

More on CentrePoint Fiasco

If CentrePointe financing fails, Webb has plans B and C, he said
By Beverly Fortune - bfortune@herald-leader.com
Developer Dudley Webb told the Lexington Forum on Thursday he has a Plan B and Plan C for financing for the CentrePointe project and if those plans don't work, he will look for fill dirt to level the site and plant grass.
Also, Webb said he remains optimistic that funding from his unnamed, deceased, financial backer will still come through. He said assets of the international investor's estate are being held in numbered Swiss bank accounts.
Conversations with the man's family indicate they are aware of his commitment of $250 million to finance Webb's luxury hotel and condominium project on West Main Street in downtown Lexington, Webb said.
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Their concern is, on the advice of their attorney, that the funds are there, Webb said.
Recently, Webb and the family reached a compromise that Webb will not look to them to finance CentrePointe if the money isn't the estate.
Webb was notified in late September of the death of the major investor in this project, Webb said. The investor had signed an agreement to provide the funding for the project in June 2008.
Webb and his nephew Woodford Webb are developers for the proposed project. A major portion of the land is owned by businessman Joe Rosenberg and his family.
Webb said he had evidence one year ago that the investor had earmarked $550 million for three projects in the United States, one of which was CentrePointe.
When Webb revealed in April that the investor had died without a will, concern was raised about whether the building would be built. Lexington Vice Mayor Jim Gray said the community had been hoodwinked.
"Believe me, neither the Rosenberg family or we would have gone in and torn down buildings if we didn't think the funding was there for building this project," he said Thursday morning.
Webb also revealed that an original partner in the CentrePointe, John Anderson, backed out of the project a year ago. Anderson had lined up financing with a bank in Atlanta, Webb said. Anderson has developed other project including Marriott hotels, Webb said.
Webb's Plan B includes another unnamed investor, he said. Plan C, he said, involves an unnamed bank "in the states that is interested in getting involved in helping us do this deal."
Earlier in the week, Webb said he had an offer of 20,000 cubic yards of fill dirt that could be used to level the site. If The Webb Companies could get the dirt for free, it would spread it and plant grass, he said. But he said, he "would hate to spend $200,000 to $300,000" to fill the building site hole when in 90 days, construction might begin.
However, he's tempted to take that step, "to shut these people up," he said, referring to the critics of the site.

Day Two - What is Driving Today's Market?

What is driving today’s market?
The short answer is nothing really. It’s like an empty car in neutral rolling down a hill. Yes it will roll, and it will go until it either runs off the road or hits something big enough to stop it. Why? How? Gravity. No not a tractor beam (Borrowed Stimulus Money) sent from the mother ship (Gov’t) pulling it downhill, its gravity it has always been here.
Compare that visual to today’s burgeoning recovery (the car) which is starting to roll in many areas of the country the movement can be attributed to a few things.
1. The natural cycle (The gravity) for this time of year, the spring and summer naturally bring more activity, a good amount of stored up demand. (Which is in my opinion mostly due to the unfavorable, inaccurate, over generalized media coverage of the last year.)
2. Attractive first time home buyer incentives i.e. $8,000 tax credit, record levels of inventory, lower prices and increased affordability. The big if is the supposed increasing availability of mortgage financing available. (The road with a big 90 degree turn coming up)
While these are all nice, and depending on which party’s media machine you listen to, there are signs of optimism in the economy and overall direction of the housing market. There are signs of a bottoming out of the housing fall, an increased level of activity and consumer confidence in housing all over the place.
But for a true long term recovery there are a few items missing and a few time bombs (The Wall) lurking in the near future that could derail any recovery unless they are addressed; one of the most immediate being the $8,000 first time buyer tax incentive sunset of December 2009, not that this can continue indefinitely however. At some point virtually every person with the ability to purchase a home as a first time buyer is going to do so. Sure there will always be new people entering the market, but the level to drive a recovery will, has, level off and the effect will be less noticeable, they cannot drive the market for ever. Also the job market and banks starting to lend again are big deals, but those are obvious and yesterday’s news.
So what do I think is needed next? (Who can jump in our empty rolling car and steer us around that corner and away from that wall?) I think a new incentive should be introduced to spur the missing link in the housing recovery, the real estate investor. Not the jacked-up-on-HGTV flipping-manic-fly-by-night-know-it-all-jack-of-all-trades-price-war-bidding over exuberant type of the early to mid 00’s. But the professionals, and the rational small time investor looking to take advantage of an opportunity, and to make sound quality purchases of an asset that can never be worthless.* (As I have stated many times before, if you find a piece of property that is truly worth $0, tell me and I will buy it! Chernobyl excluded).
Tomorrow Day 3…The Investor the Missing Link

Todays Market - Tomorrows Market Part 1

I doubt there is anyone out there than can dispute that the home buying and selling process, whether new or existing, is a vital and important aspect of any economy. The velocity of money which accompanies each transaction is enormous. With so many different beneficiaries from builders, suppliers, real estate agents, insurance agents and companies, bankers, investors, lenders, inspectors, repairmen, roofers, local, state, federal tax coffers, attorneys,, ….the list can go on for a long time I think you get the point. Each property sale creates enormous income for many, people, who in turn take that money and spend it elsewhere, who take that and spend it, who take that….
I think it is time we take a step back and look at the reality of today’s market, to see what is really going on, and where it’s going tomorrow. What are the few key issues that are driving today’s market? Also what are the few missing pieces that are needed to bring the market back to a true recovery, or a true long term positive, sustainable healthy level?

That is what I am going to explore the next few days, and present my plan and my ideas. I would like your ideas too, so chime in as you please and I will use your input in the plan, good or bad. I will then present the final plan anyone that will listen, to see if anything happens....at worst we can look back and say we tried!

Tomorrow…What is driving today’s market?