Monday, May 7, 2012
Monday, October 10, 2011
722 Roble
Fall is usually the 2nd best active market in real estate in our area. I say usually. There have been changes to that trend in the past. Buyers that have been forced out of the market due to bank inability to borrow, or stringent lending rules find any window of opportunity to exercise their pent up demand.
The volatility of the stock markets, either nationally or internationally , questionable security of international currencies and banks; along with a sell off in silver and gold has driven buyers to the luxury home market.
Bloomberg News, sent from my iPhone.
London Luxury-Home Prices Gain as Buyers Seek Secure Assets
Sept. 26 (Bloomberg) -- Luxury home prices in central London climbed the most in 11 months in September, Knight Frank LLP said, as the European sovereign debt crisis encouraged investors to buy less-risky assets.
Values of houses and apartments costing an average of 3.7 million pounds ($5.7 million) rose 11.4 percent from a year earlier, the London-based real-estate broker said in a report today. On a monthly basis, prices rose at the slowest rate since October 2010 as buyers delayed purchases after the worst riots in Britain since the 1980s.
“The Eurozone crisis is probably the biggest concern, primarily because people are very uncertain about what would happen if the euro broke up,” Liam Bailey, head of residential research, said by telephone. That makes assets in the U.K. attractive because they’re denominated in pounds, he said.
On Sept. 20, Italy became the sixth euro-region country this year to have its credit rating downgraded. Two days later, the Stoxx Europe 600 Index slid to the lowest level since July 2009, extending a decline from this year’s high on Feb. 17. The world economy faces high “downside risks,” International Monetary Fund Managing Director Christine Lagarde said in an interview with Tom Keene on Bloomberg Television last week.
Gross domestic product in the euro area will expand 1.7 percent in 2011, according to the median economist estimate in a Bloomberg survey. Last year there was growth of 1.8 percent.
Russian Buyers
The number of prospective buyers viewing prime central London properties increased 25 percent in the third quarter from a year earlier, according to the report. Prices are at a record, 4.5 percent higher than the market’s last peak in March 2008.
The U.K.’s record-low interest rates and the pound’s weakness are making central London’s real estate more attractive to overseas buyers, Bailey said. International purchasers now account for 55 percent of luxury-home deals in the city compared with 49 percent a year ago.
“Russians are rising in number at the moment,” Bailey said. “There’s a bit of uncertainty because there’s an election next year and people are looking to invest money overseas.”
Buyers from Russia accounted for 6.3 percent of all purchases in the 12 months through September, followed by the United Arab Emirates with 4.7 percent and the U.S. with 3.9 percent. About 3.2 percent of sales were to French buyers, the highest of any mainland European country.
Homes bought by billionaires in London cost 3,090 pounds a square foot at the end of June, a 3 percent increase from six months earlier, Savills Plc said last week. Prices in Britain’s most expensive city climbed 38 percent in the five years through December 2010, the London-based property broker said.
London Riots
Values rose 0.6 percent in September from a month earlier, the market’s worst performance since prices fell 0.2 percent in October 2010. At the beginning of August, arson and looting in the city’s Tottenham district sparked riots in which more than 3,000 crimes were committed in the capital alone.
“In the final weeks of August and first week of September there was a slowdown in deals being made,” Bailey said. “There was a slight knock-on from the riots, which delayed a few purchases.”
Knight Frank said luxury-home prices will increase by as much as 12 percent this year, maintaining a forecast the broker made last month. Values climbed about 10 percent in 2010.
In the U.S. the carry over of Spring Buying has boosted Home Prices for the fourth straight month in most major U.S. Cities. READ
I have stated that real estate and especially residential homes will find themselves to be the safe haven for investors, either domestic or foreign; as well as, just everyday folks who look at their home as their castle and security from outside chaos.
Start looking at the news that generates the concern to pull in ones horns and place assets in the safety of real estate. Not only the Blomberg article of above should convince you, let’s look at the news of the week.
European Banks Downgraded as EU fights over bailout.
U.S. Facing Dangerous Threat From Euro Debt: Greenspan
Here in the Camelot; also known as, Silicon Valley, we had a Russian billionaire purchase a home for $100 million!
The article I find most interesting is in the California Association of Realtors for September, “REO Properties in Short Supply”.
In a move counter to the nation and the news reports of the nation’s real estate woes, California homes sales improved on a month to month basis and on a year to year basis. Median price homes increased slightly from December 2010 due to the steady increase in “EQUITY SALES”. This should be a new term to you. It refers to the sale of NON-DISTRESSED home sales. That means REO, bank owned properties, and Short Sales.
In our area, sale price to list price and days to sell rose slightly. This chart offer some insight to the change in the normal cycle.
What I find interesting in this chart is the low days on market for the months February to August. This to me indicates that buyers were now out of the normal cycle of buying in spring, off on vacation in the summer, back in fall and off for the year after Halloween until spring the next year.
What could be happening in rise in September may be found in this article from the California Association of Realtors, Pending Home Sales Index Post the Largest Year Over Year Sales in More That Two Years. Our normal closing has increased. Gone are the days of 7-15 day close. Today the closes are 45-60 days to close. Short sales and REO’s are even longer. With the trend of longer closing the register of a sale creates blips such as the one we see in September. Only October will tell us if this is the case.
I spoke with my brother in law this morning and he is the voice of many. “I can’t stand this up 500 down 500 in the Dow”. Investors are leaving equity funds in droves. Foreign investors are looking elsewhere to place their money. On top of it all you can’t trust the money market fund which may have short term European Bank debt as an asset that could become worthless over night. Even if the money market fund ducked the bullet, the rate of return is so low and will be for at least 2 years, per Bernanke, that one wonders WHY risk my assets.
The long process of stability in our banking and credit markets will take time, a long time. We are now seeing the public disenchantment with the solutions of Congress and Governments with the growing size of protesters in Wall Street growing to other parts of the nation. I saw a sign that sums it all up, “Save the banks, bailout Wall Street and I loose my house!’ That says it all. The next response as the wave continues as the Arab Spring unseats entrenched dictatorships, will be for Congress to return back to the legislation of the 30’s that separated banks and brokers. To Big to Fail will be a curse rather than a blessing. The SEC is now looking at the program trading. The volatility must stop, but that will not happen over night. It is your chance to look now. Short Sales will not continue to be the best place to buy homes, simply because they will become less available as the sales take out the weak hands and home prices increase and negative equity vanishes. The opportunity is there take advantage of it now.
Monday, September 5, 2011
New Post
Hi everyone,
I just updated my website and thought you might want to check it out. To visit, just click on the links below or paste the URLs into your browser.
McKae Properties Blog http://www.mckaepropertiesblog.com
PUT AWAY YOUR WHITES
I just updated my website and thought you might want to check it out. To visit, just click on the links below or paste the URLs into your browser.
McKae Properties Blog http://www.mckaepropertiesblog.com
PUT AWAY YOUR WHITES
Tuesday, February 15, 2011
Wednesday, June 2, 2010
Come join the fun & support your local rodeo! The 60th annual Junior Rodeo in Woodside, Ca. http://bit.ly/9j5glE
Monday, May 10, 2010
May 6, 2010 European Union
Mayor McKae’s Blog
May 6, 2010
“May you live in interesting times”?
There is supposedly an old Chinese Curse, “may you live in interesting times”. I would say that certainly appears to be the case today. The motherland of democracy, Greece, has protestors against the democratic process in the streets; the Communist Party of Greece has taken over the Parthenon. Greece may be the first Sovereign Nation of Euro land to default on its debt. Portugal, Ireland, Italy, Spain and possibly the UK are looking like they are next to the “chopping block”. Gold has broken $1200 an ounce and forecasters are saying, “$5000 is the target”. Glass Steagal Act is being brought back from the dead as the political parties now bite the hand that has fed them for years, Wall Street (if we get a return to Glass Steagal watch financials drop 25%). To make that all confusing the rate of interest on U.S. Government debt has dropped! All forecasts for rates were that they were to rise. Yours truly was making that forecast too!
OK, what’s going on? First I must admit that it appears we are getting a return back to post Euro. This means that world banks had prior to the Euro; Gold, the U.S. Dollar and their local currencies were used as bank reserves. When the ECB and IMF came about, the reserves of Gold were jettisoned and the Euro Sovereign Debt was replaced along side the reserves in U.S. Government Debt. The mix I hear is 65% US Debt + 25% Euro Sovereign Debt + 10% Other Sovereign Currency Debt) That all sounds wonderful, but if one nation can keep on printing debt without any backing other than the “full faith” of the Euro or the US Dollar, is that a reserve worth?
Let me digress on this subject and take you back to the days of Teddy Roosevelt. Not really TR but his predecessor, McKinley. The US $ back then was 100% backed by gold. When Teddy went up San Juan Hill and the US became a nation to be noticed, Governments of the world were astonished that this pipsqueak country, the United States of America, financed the $50 million Spanish-American war with its own reserves. We were a nation of savers. Today we go hat in hand to those same Barbary Pirates, who the Marines made humble, “on the shores of Tripoli”, and borrow so we can live!
Enough digression, the change you are witnessing is not changing but a return back to the original status quo. The world banks are returning back to the old reserve system. Gold is back as a reserve. You saw it not too long ago when India bought the full IMF offering. You see it today as Gold vaults over $1200. U.S. Treasury bonds have rallied in price and dropped in yield. This is a great opportunity for the FED to unload their inventory of bonds. The FED has already stated that it does not need to unload all the $1 Trillion plus in debt. The FED says only half need to be sold in an orderly fashion and the balance will mature or be redeemed through re-financing. To my pleasure, my forecast for higher rates is now put off.
Europe will go into a recession; if austerity is in vogue in Spain, Italy, Ireland, Greece and Portugal; who is buying and with what? I lost track on the amount Greece gets in loans, but I do know it has an interest rate attached and the payment of the rate of interest will be paid before a pension is paid, a hospital is built, a tank is bought, a building is built and increased taxes will create a burden on businesses. Greece needs to re-invent itself. It needs to create an environment for investment and an industry to attract investments. Listen, I was a successful broker in Hawaii. I loved the view of Waikiki while I worked the market. The Aegean is a beautiful blue body of water. Reinvention, money to help transition, some sacrifice of the socialistic society and return to economic health without the chaos of the Euro being terminated.
That takes Europe out of the world trade equation for a while. What about the rest of the world? Who or what country or countries or geographic area will pick up the slack? China, the Asian Tigers, Latin America, Africa or maybe a new orientation of countries; may be it will be just a singular country. Maybe it will be a country that is known for safety, security and is the most trusted world currency. Could that be the US?
I wrote in the past that this recession and bubble burst is no different that the 1974 recession. Look to the past to predict the future. I will expect the reserves of world banks to return to US$, Gold and Sovereign debt. Frankly, I doubt if I were a Banker I would own Greek Sovereign Debt, rather, I would replace it with German Sovereign Euro debt, US Treasuries and Gold.
Investing in the US will become the new vogue. Hard Currencies will be in vogue and assets on the books will be hard assets first and debt last. Hard Assets like Gold, Real Estate, local business loans and government debt. I can tell you, I would prefer to have a loan from a local business on my books than a foreign government who uses repo’s and other sham transactions to hide its debt.
We will go back to the old fashion way of making money, “Earning it”, “Saving it”, “Investing it” and “making it productive”. China has jumped the game. China has begun to diversify its broad portfolio of trade balances. The Euro’s and US Dollars and other currencies are being circulated into the system as China buys companies and hard assets like Gold.
I don’t think that the Euro will end. It is logistically too difficult to terminate the Euro. There is no mechanism to force a country out of the Euro. The solution may be the most unpalatable of decisions, default. Default will not ruin the Euro. Greece borrowed using the Euro as a crutch and hid their finances with sham transactions. Look here, we had New York City in default in the 70’s and it did not collapse the $US. New York City came out of it, there was something called the Municipal Assistance Corporation to help NYC regain and solve their problems. All it took was money. Generated by debt, guaranteed by the US Government. We bailed out Europe once before, it was called THE MARSHALL PLAN, and IT WORKED! We did it with more debt historically than ever as a result of financing from WWII. We survived and so will Europe and the US!
If you want to see a real crisis in the World try and figure out how to untangle the complex transactions in Euros. I can imagine mountains of debt left with countries unable to service them. The results could be legal wrangling, mass personal bankruptcies and creditor losses. Then there is what to do the European Central Bank? Not an acceptable solution! All it is going to take is MONEY, LOTS OF MONEY!
Let me give you another sickening feeling in your stomach, while money is being thrown as the solution. If you’re upset about the spending to help banks and Wall Street and the new health care bill, or the great bonus to traders; get ready for the IMF bail out of Greece. The US owns 49% of the IMF and will put in some $39 billion. Yes, Mr. and Mrs. American Taxpayer you will now bailout Greece. How do you feel about that? Oh, wait on your timing using Maalox; soon it will be Portugal, Ireland, Italy and Spain. Don’t drink the full bottle all at once. The kid with the Big Ears in Washington needs some too! But wait, you may not need that full bottle. The contagion may end with Greece. If Greece is allowed to default and re-structure and survive, the rest of Europe can sit back and have a sigh of relief. Better yet, if the money allows Greece time to re-invent itself and re-structure, so much the better and the same sigh of relief. The line is in the sand and we must wait out the outcome. I think of a TV series of the 50’s, “Life with Riley”, his favorite saying was, “what a revolting development”.
With all this chaos what is happening here in our real estate market? To tell you the truth, it is GREAT! I have listings, I have buyers, the sellers are now realistic and the buyers know that the days of stealing a property are over. One of our Keller Williams agents has been rumored to have had closed $150 million in real estate transaction so far this year. Yours truly has over $21 million in deal pending. That does not look like a dead real estate market to me.
Keep looking for my tweets and short emails on daily events.
Good Buy!
Gary McKae
May 7, 2010
May 6, 2010
“May you live in interesting times”?
There is supposedly an old Chinese Curse, “may you live in interesting times”. I would say that certainly appears to be the case today. The motherland of democracy, Greece, has protestors against the democratic process in the streets; the Communist Party of Greece has taken over the Parthenon. Greece may be the first Sovereign Nation of Euro land to default on its debt. Portugal, Ireland, Italy, Spain and possibly the UK are looking like they are next to the “chopping block”. Gold has broken $1200 an ounce and forecasters are saying, “$5000 is the target”. Glass Steagal Act is being brought back from the dead as the political parties now bite the hand that has fed them for years, Wall Street (if we get a return to Glass Steagal watch financials drop 25%). To make that all confusing the rate of interest on U.S. Government debt has dropped! All forecasts for rates were that they were to rise. Yours truly was making that forecast too!
OK, what’s going on? First I must admit that it appears we are getting a return back to post Euro. This means that world banks had prior to the Euro; Gold, the U.S. Dollar and their local currencies were used as bank reserves. When the ECB and IMF came about, the reserves of Gold were jettisoned and the Euro Sovereign Debt was replaced along side the reserves in U.S. Government Debt. The mix I hear is 65% US Debt + 25% Euro Sovereign Debt + 10% Other Sovereign Currency Debt) That all sounds wonderful, but if one nation can keep on printing debt without any backing other than the “full faith” of the Euro or the US Dollar, is that a reserve worth?
Let me digress on this subject and take you back to the days of Teddy Roosevelt. Not really TR but his predecessor, McKinley. The US $ back then was 100% backed by gold. When Teddy went up San Juan Hill and the US became a nation to be noticed, Governments of the world were astonished that this pipsqueak country, the United States of America, financed the $50 million Spanish-American war with its own reserves. We were a nation of savers. Today we go hat in hand to those same Barbary Pirates, who the Marines made humble, “on the shores of Tripoli”, and borrow so we can live!
Enough digression, the change you are witnessing is not changing but a return back to the original status quo. The world banks are returning back to the old reserve system. Gold is back as a reserve. You saw it not too long ago when India bought the full IMF offering. You see it today as Gold vaults over $1200. U.S. Treasury bonds have rallied in price and dropped in yield. This is a great opportunity for the FED to unload their inventory of bonds. The FED has already stated that it does not need to unload all the $1 Trillion plus in debt. The FED says only half need to be sold in an orderly fashion and the balance will mature or be redeemed through re-financing. To my pleasure, my forecast for higher rates is now put off.
Europe will go into a recession; if austerity is in vogue in Spain, Italy, Ireland, Greece and Portugal; who is buying and with what? I lost track on the amount Greece gets in loans, but I do know it has an interest rate attached and the payment of the rate of interest will be paid before a pension is paid, a hospital is built, a tank is bought, a building is built and increased taxes will create a burden on businesses. Greece needs to re-invent itself. It needs to create an environment for investment and an industry to attract investments. Listen, I was a successful broker in Hawaii. I loved the view of Waikiki while I worked the market. The Aegean is a beautiful blue body of water. Reinvention, money to help transition, some sacrifice of the socialistic society and return to economic health without the chaos of the Euro being terminated.
That takes Europe out of the world trade equation for a while. What about the rest of the world? Who or what country or countries or geographic area will pick up the slack? China, the Asian Tigers, Latin America, Africa or maybe a new orientation of countries; may be it will be just a singular country. Maybe it will be a country that is known for safety, security and is the most trusted world currency. Could that be the US?
I wrote in the past that this recession and bubble burst is no different that the 1974 recession. Look to the past to predict the future. I will expect the reserves of world banks to return to US$, Gold and Sovereign debt. Frankly, I doubt if I were a Banker I would own Greek Sovereign Debt, rather, I would replace it with German Sovereign Euro debt, US Treasuries and Gold.
Investing in the US will become the new vogue. Hard Currencies will be in vogue and assets on the books will be hard assets first and debt last. Hard Assets like Gold, Real Estate, local business loans and government debt. I can tell you, I would prefer to have a loan from a local business on my books than a foreign government who uses repo’s and other sham transactions to hide its debt.
We will go back to the old fashion way of making money, “Earning it”, “Saving it”, “Investing it” and “making it productive”. China has jumped the game. China has begun to diversify its broad portfolio of trade balances. The Euro’s and US Dollars and other currencies are being circulated into the system as China buys companies and hard assets like Gold.
I don’t think that the Euro will end. It is logistically too difficult to terminate the Euro. There is no mechanism to force a country out of the Euro. The solution may be the most unpalatable of decisions, default. Default will not ruin the Euro. Greece borrowed using the Euro as a crutch and hid their finances with sham transactions. Look here, we had New York City in default in the 70’s and it did not collapse the $US. New York City came out of it, there was something called the Municipal Assistance Corporation to help NYC regain and solve their problems. All it took was money. Generated by debt, guaranteed by the US Government. We bailed out Europe once before, it was called THE MARSHALL PLAN, and IT WORKED! We did it with more debt historically than ever as a result of financing from WWII. We survived and so will Europe and the US!
If you want to see a real crisis in the World try and figure out how to untangle the complex transactions in Euros. I can imagine mountains of debt left with countries unable to service them. The results could be legal wrangling, mass personal bankruptcies and creditor losses. Then there is what to do the European Central Bank? Not an acceptable solution! All it is going to take is MONEY, LOTS OF MONEY!
Let me give you another sickening feeling in your stomach, while money is being thrown as the solution. If you’re upset about the spending to help banks and Wall Street and the new health care bill, or the great bonus to traders; get ready for the IMF bail out of Greece. The US owns 49% of the IMF and will put in some $39 billion. Yes, Mr. and Mrs. American Taxpayer you will now bailout Greece. How do you feel about that? Oh, wait on your timing using Maalox; soon it will be Portugal, Ireland, Italy and Spain. Don’t drink the full bottle all at once. The kid with the Big Ears in Washington needs some too! But wait, you may not need that full bottle. The contagion may end with Greece. If Greece is allowed to default and re-structure and survive, the rest of Europe can sit back and have a sigh of relief. Better yet, if the money allows Greece time to re-invent itself and re-structure, so much the better and the same sigh of relief. The line is in the sand and we must wait out the outcome. I think of a TV series of the 50’s, “Life with Riley”, his favorite saying was, “what a revolting development”.
With all this chaos what is happening here in our real estate market? To tell you the truth, it is GREAT! I have listings, I have buyers, the sellers are now realistic and the buyers know that the days of stealing a property are over. One of our Keller Williams agents has been rumored to have had closed $150 million in real estate transaction so far this year. Yours truly has over $21 million in deal pending. That does not look like a dead real estate market to me.
Keep looking for my tweets and short emails on daily events.
Good Buy!
Gary McKae
May 7, 2010
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