The good news is, I have lots of listings. The bad news is, I have lots of listings. The real estate market of 2009 is the worst for sellers in 20 years as prices have tumbled and demand, (until August) was poor. There have been homes in some markets, including multis, that have sold for 35-50k. That is with good, even impressive ,interest rates, but no new local job growth. The good news is, for buyers and investors, it may never be better.(I know, never say never)
 Not that I don’t expect more price drops, but the interest rates are still incredibly low and if a first time home buyer closes by December 1,2009,you get $8,000. That’s a real $8,000 refundable cash.So,if you owe $1,000 in taxes next year, you get $7,000 back.

 The hard side right now is the mortgage market itself. The government went out and said, “lend, lend, lend, but be very careful”. Their reserves had to be ratcheted up as well and there is virtually very little 0 or low down payment loans out there and the ones that are mostly VA,CHFA,and FHA products. The other products are requiring 10% down. The CHFA,FHA,VA are only requiring blood samples, shackles and a note from your mom saying you played fair when you were a child. Its been tough to get these government products to work on foreclosures, though I have had some successes slithering through the system and making deals to get the work done on the side to make it happen. After all, where can you get homes for around 100k,incuding multis ,some that were in real good condition, though they were the exception.

 These deals required lots of extra looking and long hours to get them done. 100 hour (I am not kiddin on this one) weeks were the norm ,especially in August where for 3 weeks I did 4:30 a.m. to 9:00 p.m. days without a day off. Why couldn’t that have been in January? I just wish someone would have told me this when I got into this business as I should be out in the gulf stream with a big fishing reel screaming watching porpoises and ending the day with a margarita. Oh, sorry, I strayed there. I feel fortunate to be surviving and I know hard times will still be on the horizon.

What the Future Holds
Anyone reading this rag back in 2006 knew I knew the end was near, even though the numbers looked good back then. History does repeat itself, so I will take a shot at what is coming. Expect one more year of buyers price declines. By that I mean, we have hit the bottom, but some of the list prices don’t reflect it and buyers have a lot of choices. There is still a pack of foreclosures coming. Remember, we are basically at 2003 price levels right now and there are those who bought with 0 down between 2003 and 2007 who cannot recapture their money and cannot afford to pay off. We are returning to a point where the cost of owning is very similar to the cost of renting, if you include the tax benefits. Here lies the problem however. We are looking at a ballooning national debt and low interest rates,. When the tide turns and there will have to be no doubt it will, interest rates will rise and taxes will rise with it, which could put a damper on everything if the employment situation does not get significantly better. The government pulled too many rabbits out of the hat ,too quick and someone has to put them back in again. This is not an easy fix. At this time ,layoffs have been everywhere and a lot in our local economy. We are having a booming market this August on lower price homes due to lower prices, the $8,000 credit and foreclosures, but that is only a temporary fix. I see no price gains for 3-5 years as inventory levels are at 11 months instead of a healthy 3-4 months and more products continue to come on the market.

 If you are house swapping right now, expect to take a big hit, but on the upside, what you will buy has come down as well. Its not a great time to cash in your real estate cookies. For buyers ,it’s a great time , but expect to hold for 5 years to expect enough gains to off set the cost of selling. Remember though, in 5 years at $1,000 a month rent, you would have spent $60,000 with no tax benefits and no gain at all. Sharpen your credit up and start hunting as long as the interest rates remain low.

 For investors, it’s a buy, rent and hold market and their actually have been a few decent flips out there (if you have the do-ray-me and a strong stomach). But for the most part, you can get decent cash flow and have someone pay off your investment and ride the wave to the next peak. This is not a 5 year retirement plan, but more of a 10 year plan where you can see significant returns. Some cashed out early on the last wave and still made out ok, but some missing upwards of 50% returns by playing it safe.          

Changes In My Own Strategy
As the market continued to fold, I cut support down to almost zero. I do now have Jody Smith working with me,  a licensed agent with a shared philosophy of protecting and educating the client. I am slowly pulling from print ad, concentrating on internet presence through good descriptions and pictures of properties. I am now using the Home Review ,year round, The Day for about 10 large ads a year and an occasional jump into a new paper product, but these have been less than spectacular. I will continue the website as that has been very successful and will be doing the magnet as I have pictures with the kids already this year and will be taking advantage of that whether they like it or not.

  There was no doubt I needed to trim expenses as you cannot survive spending the same money you spent when you were making 4x more. I just wonder why this had to happen while Amanda is going to college and John will hopefully be heading that way, but what fun is life without challenges. ( I would like to find out!)

  The hardest part of all of this is the listings. As bad as I felt for my buyers when the market was off the charts and it was hard to find a good home, when I have the weekly contact (ok, maybe not in wild August) with my listing folks, I have to explain that only the wild bargains are selling. Every week I take a deep breath and face the music with the calls, wishing there was a magic pill for to make it all happen for them and me. Why cant only my listings sell at a high price and my buyers choices go down. I think that is fair!

  I have faced some criticism  for my straight forward comment on the market, some kindly from my group stating that as Realtors our comments can effect the market. My comments are two fold in that regard. One, I am just a quiet local Realtor who blabs to just his clients and I feel it is my responsibility to guide my clients based on what I feel is going on and what the future holds, and most certainly at this time as opposed to the past, I believe it will get better and it’s a great time to buy. This comment is put out to my group of 500 or so, who may not even read this far into the newsletter.#2 I will not do what our industry has done when a year ago they were saying the market recovered and now we should be prepared for multiple offer situations. I don’t think any of you would believe me this year or in the future, if I went that route and many of you have been reading my thoughts for over 10 years. I am obligated to my clients and cant put money in any ones pocket to buy a house.

Blackberries Are Good For Eating
Yes, I don’t have a Blackberry. Part of it is, the 30 bucks a month, but a lot has to do with the fact that my road time is driving and looking at houses or in meetings, town halls, closings (never enough) inspections etc ..When you are severe ADD like me you can only focus on one thing at a time (I now tell Shirley what I am going out to the car for as I may notice the grass needs cutting, go to mow it and forget why I was going outside in the first place. Admit it, if your over 40 something its happened to you)

 I have tried to set up the system to give one place to call at the office that pages me from 5 a.m. to 8 p.m., so I can return calls quickly. I try not to use the cell phone while on appointments and info I take while driving has a far less chance of being completed than one that is on my work voice mail. At the end of the day, I review all my voice mails so I can be assured I followed up on everything. Its my management tool. Showing requests are kept on there til I contact the seller and verify the appointment. If I am on vacation or taking the day off, everyone knows when to expect a return call or who is covering for me. I did the system because I think everyone’s’ call is important and many businesses have lost the art of returning calls. When I was in training for this profession, it was even cautioned against not to return calls too quickly as folks will not think you are busy. .Personally ,I think its rude not to return the call quickly when folks are engaged in one of the most important transactions of their life. When I retire ,I may not have email at all. Don’t like it, would rather talk to you, but I make sure at 5 am. every morning that all my email traffic is cleared.

In Closing
You have all out did yourself this year. The amount of folks referred to me has been truly incredible. And everyone has been great! Everyone sent my way has been friendly and I want to take them all home. Of course all of them called the first week of August this year, which made that month a challenge, so if you can pile everyone up in January, it would be helpful. The sad part for me was that some days my brain was divided and I would have liked to give more attention to everyone. I am constantly amazed at the amount of new folks I meet that make me smile. I will continue to provide the best service I can and try to be in tune with your goals and make them mine. My apologies again to my friends out there that I didn’t call all summer. In 11 years when I retire I will be a thorn in your side and you will never get rid of me. The next issue is, dare I say it, The Holiday issue which will be by mail. No, I wont try my crazy idea of last year to hand deliver them. Thanks for all you do for me. Oops, looks like the lawn needs mowing. I’ll be back.