• Long Island Tea Circuit
• Market Analysis& Statistics
• New Loan Requirements
One of the annual events of summer for the East Coast/NYC circuit are parties on Long Island. They are usually at a Beach Club or Country Club; and they all have one thing in common (What’s Hot in the Market). Of course the market on the Long Island Sound is Wall Street, Hedge Funds and the Hot Managers. This Saturday it was the annual Keller William Bar-B-Q. I was given the great complement from the newer agent to our group specializing in Commercial Investment Real Estate to be asked: “based upon your experience and training, what is your outlook on the economy, real estate and investments”? Boy what a big subject, my wife then said “are you sure you want to hear it?”
My Response: One of our greatest Generals was George Patten. General Patten believed he was the re-incarnation of military men going back to Sumeria, but could not determine if he was an officer then; but was certain for all the succeeding lives he was an officer. General Patten attributed his success with his tank corps in Europe to studying the battles of Caesar. Patten move so quickly through western Europe against the German’s he went beyond his supply line and was ready to cross the Rhine and take Berlin. Well what does that tell you? History is your greatest teacher. Lord Toynbee said “history repeats itself”.
The last “great recession” we had was the 1973-74 recession. The loss in value to the stock market was greater than the Great Depression as the Dow Jones Industrials declined some 55% from a hair over 1000 in 1971. What followed was a recession, unemployment of 10% and lay offs and slow down and cut backs. The exception was GM and Ford Cadillac and Lincoln Continental division ran 3 shifts. It took 10 years before we once again had steady growth and the Dow Jones went beyond its former high of 1000+.
It will take us over 10 years before the Dow and the various averages you follow to regain and exceed their former highs. The industries to follow and invest in will be “Green”, Biotech, and selective Technologies. Real Estate will stabilize in growth sectors of the US as the “rust belt” and industries de-stabilized from the reorganizations, but don’t expect a return to the growth and real estate market of the past. Value will be gotten from “estate sales”, “divorces” and “relocation”. The residential rental markets will see stable growth in rental income and amortization of principal of mortgages. The commercial area still looks foggy and needs a cleaning out. Expect regulation to return similar to the late 70’s and early 80’s, expect mergers and acquisitions to be the sole sector of growth in companies. To Big to Fail, will be the FTC battle cry as it dismantles Big Business, Banks, Financials, Insurance Companies and sues to stop mergers. Expect tax rates to increase; do not expect interest rates to escalate in the near future. The day of real estate for wealth growth will not be here for quite awhile.
Jeremy Siegel, of Wharton School of Business wrote a paper a number of years ago about the decline of growth and the future of the Western World as the “baby boom” generation mature. Baby Boomers will now be sellers of stocks, real estate and buyers of bonds as they look at retirement. The big homes for families will be sold and the available buyers will be limited. The take up in buyers will come from immigration. Immigration will come from the countries will large population increases such as the mid-east and Latin America. The “baby boomers” will live longer and probably work longer, they will have numerous careers. That means smaller homes, community life styles and inheritance will be further out for their children that it was from their parents, the frugal savers of the Depression Children. Days on the market will increase as it will take longer to sell the more expensive larger home to buy the empty nester smaller home. Don’t expect China to take over as their birth rate is below 2 and they will be importing or out sourcing labor duties to the nearer nations with higher birth rates.
My wife’s elbow in my ribs stopped me there!
This week’s statistics:
Menlo Park
Actives:90
Pending:10
Pending No Shows:13
Sold:58
Portola Valley
Actives:33
Pending:5
Pending No Show:1
Sold:6
Woodside
Actives:57
Pending:2
Pending No Show:5
Sold:3
Atherton
Actives:37
Pending:3
Pending No Show:10
Sold:7
Palo Alto
Actives:117
Pending:13
Pending No Show:25
Sold:27
All markets except Palo Alto had increases in homes sold. A home is sold when it closes escrow. A home remains pending until the contingencies are removed and then it becomes Pending Do Not Show. The active list is a new category for you to review. Every 14 days about 38 properties are either canceled or expire.
The Federal Reserve has put in more regulations for lenders to comply with in the Truth-in-lending area. Here are some items per US Trust Company Bank America.
• At application a “disclosure statement” is sent to applicant.
• If rates change 1/8% from the rate quoted in the disclosure, a new disclosure packet is sent and the applicant has 3 days to review.
• Loan Documents are drawn after 3 day waiting period and approval of loan.
• If applicant changes any of the terms and type of loan and if interest change by 1/8%, a new disclosure packet is sent and new documents written after 3 days and approval of loan.
• There is no 3 day right of recession with a new loan on a purchased property
• There is a 3 day right of recession on a refinance or Home Equity Loan.
• If you have great credit, balance sheet and income a loan could close in 15-20, increases in time line dependent on stable interest rates and no changes in the loan by the applicant.
• What should you look forward to in a loan closing? How about 45-60 days.
Wednesday, July 29, 2009
Friday, July 10, 2009
June 23, 2009
• Market Statistics
• San Carlos is "hot"
• Palo Alto leads list is closings
• Pending's and the risk
• Are we in a bubble?
City Pending/Show Pending/Do not show Sold
Palo Alto 21 43 39
PortolaValley 4 5 0
Woodside 5 3 0
Atherton 4 10 0
Menlo Park 17 19 2
RWC +$800K 16 10 0
San Carlos 23 19 1
The past 3 weeks has seen some notable changes. The pending does not show, or those offers that removed all contingencies, have dramatically increased. We are either to have an avalanche of sold's within the next week or some offers collapsing, and home back on the market. The risk, as I see it, is FINANCING. I am hearing more comments from agents that lenders are asking for another appraisal, increase in deposit, compensating balances, and or more due diligence in closing a transaction.
What started the buying?
1. Commitment letters for financing were based upon rates of 30+ days ago when interest rates were 1% point lower. "Use it or lose it" is the short answer.
2. Pent up demand caused by the dead zone from November 2008 to March 2009. Buyers walked from the market when the financial system tottered.
3. Cash no longer placed in the stock, bond and or hedge fund market saw greater value in real estate.
I have been asked to explain why is our real estate market vibrant when the rest of the world east of 101 and north of San Francisco and south of Los Altos struggling? Cash is king, alternative investments are lacking, and technology still remains to be the driving power of our employment figures. Once the excesses of the past leveraging era are cured, the substance or firm base of our technology base holds our economy together. Let's look at Telsa versus Ford, GM and Chrysler. The former is building plants in our area and will be hiring people; whereas, the later will be closing plants and laying off people. The RUST BELT continues to erode away.
Our residents are not stock market investors, they may own stocks, but they own them from Venture Capital deals and stock options. Investing to our Valley people come in cash in banks, and treasuries, investments in VC partnerships and then the ties of success: cars, homes and education for their children. That is different from the east coast and the mid west. They are stock and bond investors and to some extent hedge funds, usually fund of funds. When the stock market tanks the mid west and east coast feel it hard and their real estate market suffers; because their economy is based on industrial production and finance.
Are we in a bubble, I don't think so. We just have a stronger and more solid economic base. When the crisis hit in November it was not based upon the same economy of the "29" Crash. People had money in banks, money market funds, and various other cash equivalents. The trust had been broken when Lehman was allowed to fail and the short term paper in Lehman failed. The dominoes began to fall and trust disappeared. Then fell the money market funds, the banks began to shutter and the commercial paper market disappeared. Investors went to the safest paper, the US Government paper. The dominoes not only fell in the US they fell all over the world; we are in a global economy.
Where are we now? Cash buyer predominate the over $2 million market. Atherton homes are beginning to close very quickly. Those sellers who had to sell are now gone; whether that be Atherton, Menlo Park, Palo Alto, Woodside and Portola Valley.
The market of under $1 million gets very hot once you drop down in list price. If I give you San Carlos as an example; the price of $500,000 to $800,000 last days once listed.
A client said to me businesses are closing in SF, the news on the economy stinks and I can't buy a home in San Carlos because I can't move fast enough. It is not the economy it is de-leveraging of the financial system and all those who relied on excessive leverage. The excesses will be eliminated and sound base of our economic system will remain. If our economy is in trouble ask yourself who is buying the IPhones in such unprecedented numbers. Or how can a band make $1 million on 99 cent downloads onto an IPhone IF are truly in a recession? Or how many Telsa's sold at $100,000+. I remember the last big recession in 1974. I bought my first Mercedes for $1000 more than a Ford Fairlane for one simple reason, I had cash.
It is unfortunate that some business will fail, that could simply be the fact that they only existed due to unsound leverage.
Use your common sense when making offers. Do not think that because you are a cash buyer you are going to steal a property. There are other cash buyers in the same situation. Some of whom will pay up to get the house they like in the neighborhood they want. If you are listing or selling a house or plan to sell a house, make reasonable expectations. This is not 2006. If you bought in 2006 and must sell, you make take a loss.
In the next several weeks we will see if pending’ do not show become sold’, or if fails occur and homes are back on the market, or if the pending’ continue. Sellers may see a greater risk by canceling an offer rather than working with buyers. My bet is they work with buyers.
Regards To All
• San Carlos is "hot"
• Palo Alto leads list is closings
• Pending's and the risk
• Are we in a bubble?
City Pending/Show Pending/Do not show Sold
Palo Alto 21 43 39
PortolaValley 4 5 0
Woodside 5 3 0
Atherton 4 10 0
Menlo Park 17 19 2
RWC +$800K 16 10 0
San Carlos 23 19 1
The past 3 weeks has seen some notable changes. The pending does not show, or those offers that removed all contingencies, have dramatically increased. We are either to have an avalanche of sold's within the next week or some offers collapsing, and home back on the market. The risk, as I see it, is FINANCING. I am hearing more comments from agents that lenders are asking for another appraisal, increase in deposit, compensating balances, and or more due diligence in closing a transaction.
What started the buying?
1. Commitment letters for financing were based upon rates of 30+ days ago when interest rates were 1% point lower. "Use it or lose it" is the short answer.
2. Pent up demand caused by the dead zone from November 2008 to March 2009. Buyers walked from the market when the financial system tottered.
3. Cash no longer placed in the stock, bond and or hedge fund market saw greater value in real estate.
I have been asked to explain why is our real estate market vibrant when the rest of the world east of 101 and north of San Francisco and south of Los Altos struggling? Cash is king, alternative investments are lacking, and technology still remains to be the driving power of our employment figures. Once the excesses of the past leveraging era are cured, the substance or firm base of our technology base holds our economy together. Let's look at Telsa versus Ford, GM and Chrysler. The former is building plants in our area and will be hiring people; whereas, the later will be closing plants and laying off people. The RUST BELT continues to erode away.
Our residents are not stock market investors, they may own stocks, but they own them from Venture Capital deals and stock options. Investing to our Valley people come in cash in banks, and treasuries, investments in VC partnerships and then the ties of success: cars, homes and education for their children. That is different from the east coast and the mid west. They are stock and bond investors and to some extent hedge funds, usually fund of funds. When the stock market tanks the mid west and east coast feel it hard and their real estate market suffers; because their economy is based on industrial production and finance.
Are we in a bubble, I don't think so. We just have a stronger and more solid economic base. When the crisis hit in November it was not based upon the same economy of the "29" Crash. People had money in banks, money market funds, and various other cash equivalents. The trust had been broken when Lehman was allowed to fail and the short term paper in Lehman failed. The dominoes began to fall and trust disappeared. Then fell the money market funds, the banks began to shutter and the commercial paper market disappeared. Investors went to the safest paper, the US Government paper. The dominoes not only fell in the US they fell all over the world; we are in a global economy.
Where are we now? Cash buyer predominate the over $2 million market. Atherton homes are beginning to close very quickly. Those sellers who had to sell are now gone; whether that be Atherton, Menlo Park, Palo Alto, Woodside and Portola Valley.
The market of under $1 million gets very hot once you drop down in list price. If I give you San Carlos as an example; the price of $500,000 to $800,000 last days once listed.
A client said to me businesses are closing in SF, the news on the economy stinks and I can't buy a home in San Carlos because I can't move fast enough. It is not the economy it is de-leveraging of the financial system and all those who relied on excessive leverage. The excesses will be eliminated and sound base of our economic system will remain. If our economy is in trouble ask yourself who is buying the IPhones in such unprecedented numbers. Or how can a band make $1 million on 99 cent downloads onto an IPhone IF are truly in a recession? Or how many Telsa's sold at $100,000+. I remember the last big recession in 1974. I bought my first Mercedes for $1000 more than a Ford Fairlane for one simple reason, I had cash.
It is unfortunate that some business will fail, that could simply be the fact that they only existed due to unsound leverage.
Use your common sense when making offers. Do not think that because you are a cash buyer you are going to steal a property. There are other cash buyers in the same situation. Some of whom will pay up to get the house they like in the neighborhood they want. If you are listing or selling a house or plan to sell a house, make reasonable expectations. This is not 2006. If you bought in 2006 and must sell, you make take a loss.
In the next several weeks we will see if pending’ do not show become sold’, or if fails occur and homes are back on the market, or if the pending’ continue. Sellers may see a greater risk by canceling an offer rather than working with buyers. My bet is they work with buyers.
Regards To All
June 10, 2009
I am returning to the old form of communications. We have moved offices, the phone lines are in, but not the internet. My laptop at home has a problem accessing the Blog. This will have to do.
Big TWO WEEKS, homes went pending all over the area. Sounds like the return of the past market with those who were waiting for a bottom, or those who could not wait any longer jumping in. The big change was the price per square foot paid. Three weeks and more ago, buyers were getting big discounts for last year. Menlo Park saw the larger homes of 3000+ square feet going down below $600 per square foot. West Menlo and Allied Arts were down to the mid $700 per square foot. And then, pop went the weasel. What caused the pop and what happened?
The big POP was how quickly homes went pending. Multiple offers were not uncommon. In Palo Alto on Middlefield a home went off above list with 7 offers above and one offer below. Multiple offers were not uncommon in Menlo Park. There were over bids too!
What these homes sell at will be the big question on all buyers and their agent's minds.
What caused the run? I think two things caused the run. School ended and those parents who wanted to enroll their children in Oak Knoll and Hillview want in early. From what I have heard form listing agents, the offers were all cash. The other cause could be the jump in mortgage rates in the past two weeks. We saw rates move into the 5.5% to 6% range from the 4.5% to 5% range. If buyers had a locked in rated they jumped in once they rates increased, rather than lose the lowest rates in history.
Here is how the stats run:
Atherton 10 pending
Portola Valley 8 pending
Woodside 11 pending
Menlo Park (west of 101) 42 pending
Palo Alto 60 pending
Redwood City (over $800,000) 32 pending
All it tells me from the statistics and my experience with buyers is that we have seen the end of the wait and see group. New listings are returning to the $900 range in Menlo Park. Palo Alto is picking up along with Menlo Park. Redwood City is seeing great activity outside of the REO, Short Sale, and Foreclosure market.
We have some time to see what the FED will do on interest rates. If home sales/pending sales continue to move along with rates in mid 5's to low 6's. We may not see the FED buying bonds in the after market to drive down rates. If pending and sales slow down, the FED is a buyer and rates will come down.
Buyers have finally gotten smart about price versus rates. If you have a 4.5% loan it is cheaper than have a 5.5% loan and a lower price. Go figure it yourself. $500,000 with a 1% savings is $5000 per month, per year $60,000. Over the life over three times the original mortgage. Waiting for the bell to ring at the bottom will cost you in mortgage rates.
Big TWO WEEKS, homes went pending all over the area. Sounds like the return of the past market with those who were waiting for a bottom, or those who could not wait any longer jumping in. The big change was the price per square foot paid. Three weeks and more ago, buyers were getting big discounts for last year. Menlo Park saw the larger homes of 3000+ square feet going down below $600 per square foot. West Menlo and Allied Arts were down to the mid $700 per square foot. And then, pop went the weasel. What caused the pop and what happened?
The big POP was how quickly homes went pending. Multiple offers were not uncommon. In Palo Alto on Middlefield a home went off above list with 7 offers above and one offer below. Multiple offers were not uncommon in Menlo Park. There were over bids too!
What these homes sell at will be the big question on all buyers and their agent's minds.
What caused the run? I think two things caused the run. School ended and those parents who wanted to enroll their children in Oak Knoll and Hillview want in early. From what I have heard form listing agents, the offers were all cash. The other cause could be the jump in mortgage rates in the past two weeks. We saw rates move into the 5.5% to 6% range from the 4.5% to 5% range. If buyers had a locked in rated they jumped in once they rates increased, rather than lose the lowest rates in history.
Here is how the stats run:
Atherton 10 pending
Portola Valley 8 pending
Woodside 11 pending
Menlo Park (west of 101) 42 pending
Palo Alto 60 pending
Redwood City (over $800,000) 32 pending
All it tells me from the statistics and my experience with buyers is that we have seen the end of the wait and see group. New listings are returning to the $900 range in Menlo Park. Palo Alto is picking up along with Menlo Park. Redwood City is seeing great activity outside of the REO, Short Sale, and Foreclosure market.
We have some time to see what the FED will do on interest rates. If home sales/pending sales continue to move along with rates in mid 5's to low 6's. We may not see the FED buying bonds in the after market to drive down rates. If pending and sales slow down, the FED is a buyer and rates will come down.
Buyers have finally gotten smart about price versus rates. If you have a 4.5% loan it is cheaper than have a 5.5% loan and a lower price. Go figure it yourself. $500,000 with a 1% savings is $5000 per month, per year $60,000. Over the life over three times the original mortgage. Waiting for the bell to ring at the bottom will cost you in mortgage rates.
April 16, 2009: Market Update
• Once bitten by Bears, Twice Shy of Bulls?
• FED Bond Buying piddles out the first day
• Outlook on Economy is Brightening, Poll Finds
• SURPRIZE! They made $$$$$$, more than they said they would!
• Intel says we passed the bottom
• Economist react, Housing may finally be near a bottom
• Is Silicon Valley’s housing market leveling off?
• Homes Sales and Homes Pending
• 10 Things Every Remodeling Contract Should Include.
There was a great article in Friday’s Wall Street Journal of April 10th, on the attitude of investors after a Bear Market. For all those of you, who thought shares prices only went up, SURPRIZE! , even the best Bull’s die. Welcome to the new Bear Market. Of course the big question is, have we hit a bottom? Is the rally just a Bear Market Rally and a Bull Trap? What do I do with my 401K and my savings? Back to the article, do investors shun stocks or do they flock back into the in search of reward? A study found that from 1964 to 2004 those who suffered a loss in bear markets were less likely to return quickly. Of course quickly was dependent on age and past experience. You would think that Depression Babies would shun the market, right? But would you believe it that young people with experience in the past 10 years were the most pessimistic! That pessimistic attitude would last 10 to 20 years. History tells me that. I remember the 1974 recession and the enormous losses taken by investors in that bear market. It took until 1983 for the Dow Jones Industrial to break out of the old high! That was 9 years. So this market should have the same effect, a picket fence of highs and lows and no long term trend.
What do you invest in, what did the investors of 1974 invest in? Would you be surprised if I said REAL ESTATE? See is Silicon Valley leveling off below for details. I saw the frustration of investors in 1974. From then on real estate was the chosen medium. Second homes, rentals, condos were all part of the chosen medium. Of course it all went too far as real estate was then bought with negative income, rather than positive income. The rationale was higher prices will pay off. Sooner or later those bull market beliefs all have a lesson to be learned, trees do not grow to the sky!
The FED is buying $300 billion of Treasuries over the next six months. TIPs, or Treasury Inflation Protect securities was the first buy yesterday. $1.5 Billion were purchase by the FED from dealers and $15 Billion tendered….OOPPS! It was not surprise to see US Treasuries sell off today!
Another great paper I have read since my college days was is the New York Times. It is now my favorite in electronic form. April 7, 2009 it was sated that Americans have grown more optimistic about the economy and the direction of the country in the 11 weeks since President Obama was inaugurated. GOSH, I knew that, my phone and in box was turning red form all the requests to see homes. The same people who told me in December that it is getting worst were now looking to buy. It is all about confidence. Bush did not have it, Obama has it. It is not the case that people do not have money. Wrong, there is a great deal of money around, especially here in Silicon Valley. I am sorry for those in the “Rust Belt” or the East Coast who are suffering, but we here have suffered the ups and downs of the technology cycle. It is fast and one day a new technology has workers looking for a new employee. That makes saving very important. They also know that the high flyer of yesterday is not the high flyer of today. Do you know that the Hoover Vacuum Tube was once in the Dow Jones? It is confidence that creates bottoms. I don’t care if it is housing, stocks, bonds, pork Bellies or Gold. If you have confidence you will buy, support and trust. That is where we are today and that is why foreclosures and REO’s are being bought in record numbers and multiple offers.
Banks and financials are making money, more than the experts forecasted. I don’t want to be a party pooper, but let’s face it. If you can borrow money free or almost free and lend it out at 29% on a credit card would you make money? This is Tony Soprano’s game. Steal the money and lend it to someone at usurious rates. Oh, I forgot the law lets the bank do so. Wasn’t that our tax dollars that we gave them at almost no interest? There has to be something done about this game of high interest rates to people who cannot afford them or are not smart enough to understand. I am beginning to think that the KORAN is right, interest is sinful
Otelini of Intel has declared the bottom of our economy, hurray! But more important is that the San Jose Mercury News has the housing market leveling off. More homes changed hands last month than in March of 2008. Is that a sign of lack of confidence? A number of readers and clients have asked me is it a bottom, will it go lower. If that was the case would people be buying in record numbers? Bottoms and recovery are characterized by mixed news, good and bad. The comment is “climbing a wall of worry”
Market Action since April 4, 2009
1. Palo Alto: zero closed escrow and 37 pending + 6
2. La Honda zero closed escrow and 3 pending + 2
3. Portola Valley, zero closed escrow and 11 pending + 1
4. Woodside zero closed escrow and 5 pending
5. Atherton zero closed escrow and 6 pending + 2
6. Menlo Park (east of 101 not included) 1 closed escrow and 27 pending + 4
7. Redwood City (over $800,000) zero closed escrow and 17 pending. - 1
The + and or the – represents the change since April 4, 2009.
• FED Bond Buying piddles out the first day
• Outlook on Economy is Brightening, Poll Finds
• SURPRIZE! They made $$$$$$, more than they said they would!
• Intel says we passed the bottom
• Economist react, Housing may finally be near a bottom
• Is Silicon Valley’s housing market leveling off?
• Homes Sales and Homes Pending
• 10 Things Every Remodeling Contract Should Include.
There was a great article in Friday’s Wall Street Journal of April 10th, on the attitude of investors after a Bear Market. For all those of you, who thought shares prices only went up, SURPRIZE! , even the best Bull’s die. Welcome to the new Bear Market. Of course the big question is, have we hit a bottom? Is the rally just a Bear Market Rally and a Bull Trap? What do I do with my 401K and my savings? Back to the article, do investors shun stocks or do they flock back into the in search of reward? A study found that from 1964 to 2004 those who suffered a loss in bear markets were less likely to return quickly. Of course quickly was dependent on age and past experience. You would think that Depression Babies would shun the market, right? But would you believe it that young people with experience in the past 10 years were the most pessimistic! That pessimistic attitude would last 10 to 20 years. History tells me that. I remember the 1974 recession and the enormous losses taken by investors in that bear market. It took until 1983 for the Dow Jones Industrial to break out of the old high! That was 9 years. So this market should have the same effect, a picket fence of highs and lows and no long term trend.
What do you invest in, what did the investors of 1974 invest in? Would you be surprised if I said REAL ESTATE? See is Silicon Valley leveling off below for details. I saw the frustration of investors in 1974. From then on real estate was the chosen medium. Second homes, rentals, condos were all part of the chosen medium. Of course it all went too far as real estate was then bought with negative income, rather than positive income. The rationale was higher prices will pay off. Sooner or later those bull market beliefs all have a lesson to be learned, trees do not grow to the sky!
The FED is buying $300 billion of Treasuries over the next six months. TIPs, or Treasury Inflation Protect securities was the first buy yesterday. $1.5 Billion were purchase by the FED from dealers and $15 Billion tendered….OOPPS! It was not surprise to see US Treasuries sell off today!
Another great paper I have read since my college days was is the New York Times. It is now my favorite in electronic form. April 7, 2009 it was sated that Americans have grown more optimistic about the economy and the direction of the country in the 11 weeks since President Obama was inaugurated. GOSH, I knew that, my phone and in box was turning red form all the requests to see homes. The same people who told me in December that it is getting worst were now looking to buy. It is all about confidence. Bush did not have it, Obama has it. It is not the case that people do not have money. Wrong, there is a great deal of money around, especially here in Silicon Valley. I am sorry for those in the “Rust Belt” or the East Coast who are suffering, but we here have suffered the ups and downs of the technology cycle. It is fast and one day a new technology has workers looking for a new employee. That makes saving very important. They also know that the high flyer of yesterday is not the high flyer of today. Do you know that the Hoover Vacuum Tube was once in the Dow Jones? It is confidence that creates bottoms. I don’t care if it is housing, stocks, bonds, pork Bellies or Gold. If you have confidence you will buy, support and trust. That is where we are today and that is why foreclosures and REO’s are being bought in record numbers and multiple offers.
Banks and financials are making money, more than the experts forecasted. I don’t want to be a party pooper, but let’s face it. If you can borrow money free or almost free and lend it out at 29% on a credit card would you make money? This is Tony Soprano’s game. Steal the money and lend it to someone at usurious rates. Oh, I forgot the law lets the bank do so. Wasn’t that our tax dollars that we gave them at almost no interest? There has to be something done about this game of high interest rates to people who cannot afford them or are not smart enough to understand. I am beginning to think that the KORAN is right, interest is sinful
Otelini of Intel has declared the bottom of our economy, hurray! But more important is that the San Jose Mercury News has the housing market leveling off. More homes changed hands last month than in March of 2008. Is that a sign of lack of confidence? A number of readers and clients have asked me is it a bottom, will it go lower. If that was the case would people be buying in record numbers? Bottoms and recovery are characterized by mixed news, good and bad. The comment is “climbing a wall of worry”
Market Action since April 4, 2009
1. Palo Alto: zero closed escrow and 37 pending + 6
2. La Honda zero closed escrow and 3 pending + 2
3. Portola Valley, zero closed escrow and 11 pending + 1
4. Woodside zero closed escrow and 5 pending
5. Atherton zero closed escrow and 6 pending + 2
6. Menlo Park (east of 101 not included) 1 closed escrow and 27 pending + 4
7. Redwood City (over $800,000) zero closed escrow and 17 pending. - 1
The + and or the – represents the change since April 4, 2009.
April 4, 2009: Weekly Commentary
• Existing Home Sales up another 5.1% as of March 23, 2009
• Pending Homes Sales up 2.1% nation-wide with West leading
• Market to Market accounting returns ( little) to the past standards
• California Association of Realtors Launches Mortgage Protection Plan
• Bargain Prices bring out Investors and Novice Buyers
• Larry Kudlow of CNBC Declares New Bull Market
• Market Value versus Replacement Cost advantage for buyers Protection notice to owners.
• 5 Home Trends for 2010
• 6 Landscaping Tricks to WOW buyers
• Special Commentary: Does your DNA affect your investing and home/selling attitude?
Sorry for the lapse in a week, as the two notes at the top state Existing Homes Sales were up and Pending were up. That translated into calls, showings and listing presentation for Jim and me.
Amazed aren’t you? With all the Media news on lower home prices, and the poor situation of America, America was out buying what they have faith in before all else REAL ESTATE! Here are our local numbers for the past 14 days:
1. Palo Alto: zero closed escrow and 31 pending
2. La Honda zero closed escrow and one pending for 15+ acre Ranch for $1,399,000 list
3. Portola Valley, zero closed escrow and 10 pending
4. Woodside zero closed escrow and 5 pending
5. Atherton zero closed escrow and 4 pending
6. Menlo Park (east of 101 not included) zero closed escrow and 23 pending
7. Redwood City (over $800,000) zero closed escrow and 18 pending.
A big pick up in sales or offers pending closed occurred in the past 14 days. Is confidence back and the pent up demand beginning to show itself. From my stand point it is. If you are a buyer don’t wait, the tendency of sellers to accept lower offers will stop as the news begins to filter out among the agent community. By the time the media picks it up the opportunities will be over!
To jump out of sequence to my notes above the SF Chronicle featured a story on how investors and novice buyers are active and buying the low end of the market of foreclosures and short sales. There is a good article in the Saturday April 4, 2009 issue of the San Jose Mercury News, Real Estate Section in the “Market Wise” column. “Be Realistic in offers, even in a buyer’s market”. The question given is that the writer has made many offers and are rejected, no response or out bid and don’t even get a counter offer. In short sales and foreclosures the lender’s loss mitigation departments will not give property away. The response is that the buyer and agent will keep writing offers until the market shifts. It further states that the prices reflected in today’s listing prices do reflect the present “market”. Well crafted offers will get the property with experienced agents. ALL WELL SAID! Here is one experienced agent willing to help!
California Association of Realtors (CAR) has launched a Mortgage Protection Plan. It is for 1st Time Home Buyers. It is to give peace of mind when purchasing a home. It will provide six months of payments up to $1500 to meet mortgage payments for 1st Time Home Buyers who lose their jobs. For more information write or call me or see www.car.org/aboutus/hafmainpage/carhafmortgageprotection/
Larry Kudlow you’re the man! If you don’t watch CNBC in the morning it is a good show to give you a pulse of the Financial Markets. This guy puts on quite a show! I enjoy watching and listing on my headset while I work out in the gym at 7:30 am to 9:30 am. Larry has stated that the stock market begins a new bull trend 6 months before and economy bottoms and the recession ends. The Wall Street Journal recently stated that Bear Markets average length is 17 months and we have either seen it or we have 3 months to go. We will see if Larry is right. To back Larry though is Friday’s Wall Street Journal front page “Stocks Leap as Fear Ebb”. It has been happening for some time if you have read my prior letters. This time it was more pronounced. Investors bought globally equities, oil futures, industrial commodities, technology stocks, and junk bonds! These same investments they shunned weeks ago says the article. But if you were watching the slow movements up in the prices of these investments the pros were slowly nibbling weeks ago. What did they sell? “They were selling Treasury Bonds, gold, the US $ and other safe-haven refuges”.
Market Value versus Replacement Cost drives markets off of recessionary bottoms. Whether it is company shares or home values; it is cheaper to buy than to build is the motto of takeover plays, mergers and acquisitions. We get USAA Magazine, our insurance company. The spring issue had a great article on Market Value versus Replacement Value. It stated that what you buy your house for may actually be lower than the cost of building the same house from scratch. That is important to know if you presently own and are in the process of buying. In many parts of the country home prices have fallen as much as 30%. While Silicon Valley may be protected in some regards there has been a fall off in home prices from 2006 of at least 13% on average. Meanwhile construction costs which include concrete, lumber, steel and labor are ever rising. A tip for the buyer who is looking at buying and fixing up the property, take the purchase price and cost of repairs and add that together and look at another house that needs no work for the same price. You will buy it with a cheap mortgage in historic terms; Home Mortgage Rates have NEVER been this low. Does it really matter cutting off on the sales price and missing a buy when you will have the cheapest mortgage rate ever for the next 30 years?
FIVE HOME TRENDS FOR 1010
1. The Live-in Kitchen
2. Living Within Our Means
3. The Green Kitchen
4. The Wellness Kitchen
5. Cooking for Fun
“For more on this subject write me for details.”
SIX LANDSCAPING TRICKS
1. Add Splashes of Color: iceberg roses, purple salvia, lavender, crape myrtle tree will add color to the seasons.
2. Size trees and shrubs to scale. Don’t block doors, windows and other architectural features on the home’s façade
3. Maintain a perfect lawn. Don’t have brown spots, some rocks, pebbles, boulders, drought tolerant plants and ornamental grasses will generate more kudos, especially in drought times and water conservation times as we may have after our rain season ends.
4. Light up the outside with good illumination, create drama at night. Use low voltage lamps to highlight branches of specimen trees, a front doors, walks, and corners of the house.
5. Let them HEAR THE WATER, nothing is more soothing than the sound of water. Use fountains or create a small stream with rocks to provide pleasant gurgling to block street noise.
6. Use decorative architectural elements, a new mail box, planted window boxes, and a low fence wrapped in potatoes vines ass cachet, particularly in winter months.
Special feature: DOES DNA AFFECT YOUR INVESTING PERSONALITY?
Again a feature in the WSJ (Wall Street Journal), thanks to Jason Zweig, did you buy high, sell low zig when you should have zagged. Maybe it was your ancestors who gave you this trait. Or are you the fortunate that are just never on the wrong side?
25% of people with European ancestry have a gene that dampens their fear circuitry when it comes to making money. 20% of Caucasians have a gene that makes them more responsive to gambles. Some people are 50% more sensitive to fear. Well, does that mean we all go out in swab our mouths and get tested? 20% of the variation in risk taking among individuals is genetically determined; the rest comes from upbringing, experience, education and training. There is always a tug of war inside us all between nature and nurture. Bear Markets and Recessionary Markets give nature the upper hand, it never more important now to stick to disciplines that can over ride your genetic impulses.
Warren Buffet said it perfectly, during time of greed there should be fear, during times of fear there should be greed. Find a seasoned pro and work with them to guide you through the times of nature. I didn’t get this gray hair from a bottle!
Until later…..
• Pending Homes Sales up 2.1% nation-wide with West leading
• Market to Market accounting returns ( little) to the past standards
• California Association of Realtors Launches Mortgage Protection Plan
• Bargain Prices bring out Investors and Novice Buyers
• Larry Kudlow of CNBC Declares New Bull Market
• Market Value versus Replacement Cost advantage for buyers Protection notice to owners.
• 5 Home Trends for 2010
• 6 Landscaping Tricks to WOW buyers
• Special Commentary: Does your DNA affect your investing and home/selling attitude?
Sorry for the lapse in a week, as the two notes at the top state Existing Homes Sales were up and Pending were up. That translated into calls, showings and listing presentation for Jim and me.
Amazed aren’t you? With all the Media news on lower home prices, and the poor situation of America, America was out buying what they have faith in before all else REAL ESTATE! Here are our local numbers for the past 14 days:
1. Palo Alto: zero closed escrow and 31 pending
2. La Honda zero closed escrow and one pending for 15+ acre Ranch for $1,399,000 list
3. Portola Valley, zero closed escrow and 10 pending
4. Woodside zero closed escrow and 5 pending
5. Atherton zero closed escrow and 4 pending
6. Menlo Park (east of 101 not included) zero closed escrow and 23 pending
7. Redwood City (over $800,000) zero closed escrow and 18 pending.
A big pick up in sales or offers pending closed occurred in the past 14 days. Is confidence back and the pent up demand beginning to show itself. From my stand point it is. If you are a buyer don’t wait, the tendency of sellers to accept lower offers will stop as the news begins to filter out among the agent community. By the time the media picks it up the opportunities will be over!
To jump out of sequence to my notes above the SF Chronicle featured a story on how investors and novice buyers are active and buying the low end of the market of foreclosures and short sales. There is a good article in the Saturday April 4, 2009 issue of the San Jose Mercury News, Real Estate Section in the “Market Wise” column. “Be Realistic in offers, even in a buyer’s market”. The question given is that the writer has made many offers and are rejected, no response or out bid and don’t even get a counter offer. In short sales and foreclosures the lender’s loss mitigation departments will not give property away. The response is that the buyer and agent will keep writing offers until the market shifts. It further states that the prices reflected in today’s listing prices do reflect the present “market”. Well crafted offers will get the property with experienced agents. ALL WELL SAID! Here is one experienced agent willing to help!
California Association of Realtors (CAR) has launched a Mortgage Protection Plan. It is for 1st Time Home Buyers. It is to give peace of mind when purchasing a home. It will provide six months of payments up to $1500 to meet mortgage payments for 1st Time Home Buyers who lose their jobs. For more information write or call me or see www.car.org/aboutus/hafmainpage/carhafmortgageprotection/
Larry Kudlow you’re the man! If you don’t watch CNBC in the morning it is a good show to give you a pulse of the Financial Markets. This guy puts on quite a show! I enjoy watching and listing on my headset while I work out in the gym at 7:30 am to 9:30 am. Larry has stated that the stock market begins a new bull trend 6 months before and economy bottoms and the recession ends. The Wall Street Journal recently stated that Bear Markets average length is 17 months and we have either seen it or we have 3 months to go. We will see if Larry is right. To back Larry though is Friday’s Wall Street Journal front page “Stocks Leap as Fear Ebb”. It has been happening for some time if you have read my prior letters. This time it was more pronounced. Investors bought globally equities, oil futures, industrial commodities, technology stocks, and junk bonds! These same investments they shunned weeks ago says the article. But if you were watching the slow movements up in the prices of these investments the pros were slowly nibbling weeks ago. What did they sell? “They were selling Treasury Bonds, gold, the US $ and other safe-haven refuges”.
Market Value versus Replacement Cost drives markets off of recessionary bottoms. Whether it is company shares or home values; it is cheaper to buy than to build is the motto of takeover plays, mergers and acquisitions. We get USAA Magazine, our insurance company. The spring issue had a great article on Market Value versus Replacement Value. It stated that what you buy your house for may actually be lower than the cost of building the same house from scratch. That is important to know if you presently own and are in the process of buying. In many parts of the country home prices have fallen as much as 30%. While Silicon Valley may be protected in some regards there has been a fall off in home prices from 2006 of at least 13% on average. Meanwhile construction costs which include concrete, lumber, steel and labor are ever rising. A tip for the buyer who is looking at buying and fixing up the property, take the purchase price and cost of repairs and add that together and look at another house that needs no work for the same price. You will buy it with a cheap mortgage in historic terms; Home Mortgage Rates have NEVER been this low. Does it really matter cutting off on the sales price and missing a buy when you will have the cheapest mortgage rate ever for the next 30 years?
FIVE HOME TRENDS FOR 1010
1. The Live-in Kitchen
2. Living Within Our Means
3. The Green Kitchen
4. The Wellness Kitchen
5. Cooking for Fun
“For more on this subject write me for details.”
SIX LANDSCAPING TRICKS
1. Add Splashes of Color: iceberg roses, purple salvia, lavender, crape myrtle tree will add color to the seasons.
2. Size trees and shrubs to scale. Don’t block doors, windows and other architectural features on the home’s façade
3. Maintain a perfect lawn. Don’t have brown spots, some rocks, pebbles, boulders, drought tolerant plants and ornamental grasses will generate more kudos, especially in drought times and water conservation times as we may have after our rain season ends.
4. Light up the outside with good illumination, create drama at night. Use low voltage lamps to highlight branches of specimen trees, a front doors, walks, and corners of the house.
5. Let them HEAR THE WATER, nothing is more soothing than the sound of water. Use fountains or create a small stream with rocks to provide pleasant gurgling to block street noise.
6. Use decorative architectural elements, a new mail box, planted window boxes, and a low fence wrapped in potatoes vines ass cachet, particularly in winter months.
Special feature: DOES DNA AFFECT YOUR INVESTING PERSONALITY?
Again a feature in the WSJ (Wall Street Journal), thanks to Jason Zweig, did you buy high, sell low zig when you should have zagged. Maybe it was your ancestors who gave you this trait. Or are you the fortunate that are just never on the wrong side?
25% of people with European ancestry have a gene that dampens their fear circuitry when it comes to making money. 20% of Caucasians have a gene that makes them more responsive to gambles. Some people are 50% more sensitive to fear. Well, does that mean we all go out in swab our mouths and get tested? 20% of the variation in risk taking among individuals is genetically determined; the rest comes from upbringing, experience, education and training. There is always a tug of war inside us all between nature and nurture. Bear Markets and Recessionary Markets give nature the upper hand, it never more important now to stick to disciplines that can over ride your genetic impulses.
Warren Buffet said it perfectly, during time of greed there should be fear, during times of fear there should be greed. Find a seasoned pro and work with them to guide you through the times of nature. I didn’t get this gray hair from a bottle!
Until later…..
March 21, 2009: Commentary and updates
• Federal Reserve announces a Bond Buying Binge!
• Interest rates decline from FED action
• Mortgage rates at 4% level
• Housing Starts Surge 22%
• Multi-Billion Dollar Mergers a way to get money home
• Tax Credits for home purchase and home construction
• Home & Design: Staging on a Budget
FED ANNOUNCESNEW POLICY:
It is called Quantitative Easing, for the record and for those in finance and economic theory. The pro’s and those in the know thought it would not happen, but Professor Bernanke surprised them all. From all I have read Bernanke had studied this strategy long before anyone had any clue it would ever be used.
Before I explain the process and how it could benefit us all, let me start with a lesser known fact. The FED, Federal Reserve System, is the ONLY department of the U. S. Government that positively contributes to the income of the United States. It should it is a legal insider trading department. Just think it over, the FED creates which way interest rates will go, they can buy or sell in the market bonds, inject cash buy gold and virtually anything the FED deems necessary to manage our economy. If they bought bonds before the announcement the FED already has a profit as those bonds are worth more because interest rates declined!
The bond buying binge will put $300 billion in a purchase program of long-term treasury bonds. The FED will also buy mortgage backed securities. All told the FED will buy $1.15 Trillion into the economy in the next 6 months to jump start the HOUSING INDUSTRY and REAL ESTATE.
When I started my career as a floor trader I was told one CARDINAL RULE: DO NOT FIGHT THE FED! If there is any sign you will see our real estate market pick up this is it!
HOUSING STARTS SURGE
Boosted by an 82% increase in construction of apartment buildings housing starts in the U.S. surged 22%.
MORTGAGE RATE BELOW 5%!
(COMPLIMENTS OF MIKE COLYER OF COUNTRYWIDE)
High Conforming Loan Limit at 80%
REFINANCE - 30 year fxd = 4.625 with 1 point
PURHCASE - 30 year fxd = 4.375 with 1 point
417K and under
REFINANCE/PURCHASE - 30 year fxd = 4.375 with 1 point
JUMBO TO 1.5MM to 80%!!!! 3MM to 70%
REFINANCE/PURHCASE - 30 year fxd = 5.75 with 1 point
REFINANCE/PURHCASE - 5fxd Int Only = 5.25 with 1 point
Mike Colyer
Sales Manager
Countrywide Bank, FSB
650-257-7777 Office
650-288-8170 Cell
866-511-9024 Fax 40 Hawthorne Ave
Mail Stop: BR 737
Los Altos, CA 94022
http://www.TheBayAreaLender.com
Mike_Colyer@countrywide.com
ARE PLATFORM COMPANIES BRINGING THEIR OFFSHORE CASH HORDE HOME?
On February 12, 2009 I wrote you about Platform Companies. To review the company definition, A Platform Company has a fractionalized production process, keeping knowledge intensive activities like design and distribution in-house, while outsourcing low-value added physical production. They develop new product, new markets, and new products for new markets. They aggressively invest in foreign countries, they are growth companies like our Silicon Valley Companies, and they are Drug Companies. The amount of potential repatriated $US is estimated at $545 Billion.
1. Roche is buy Genentech for $6 Billion
2. Merck is paying $41.1 Billion for Schering-Plough
3. Pfizer purchase of Wyeth of $68 Billion.
Why is that important? Tax write offs of R&D and Goodwill and merger expenses will allow the potential re-patriot of billions of $US held over seas without a tax potential. Billion of $US here mean more for the U.S. Economy.
Economic growth comes from money. If any of you are history buffs, like me, you will know the Dark Ages did not disappear until Gold was taken from the Aztecs, Incas of the newly discovered America’s and used by the King of Spain and the Pirates of England to jump start the stagnant European Economy. Locally 2001 DOT.COM fueled our real estate and economy just as the low interest rates after the DOT.COM bust fueled the real estate industry further.
TAX CREDITS & INCENTIVES GALLORE!
• $8000 Federal Income Tax Credit for first-time home buyers with $10,000 State of California tax credit for buying a new home.
• FHA loans in the 4% range for up to $729,750
• Purchase price mortgages up 7.1% in February
• Energy efficiency upgrades for windows, insulation are eligible for a tax credit of 30% of qualifying costs
• Renewable Energy Systems as solar, wind, and geothermal may qualify for 30% tax credit
• Heating stoves that use renewable biomass fuel: such as, wood pellets, plants, now qualify for a tax credit.
HOME & DESIGN
Deciding on listing your home? Here are some budget ideas that can help you on the CHEAP!
Expand the Closet: One of the most overlooked areas of staging is the closet. Declutter stops at “out of sight out of mind”. It should take into effect the closet. If it looks stuffed, remove it. The ideal closet should have two hanger spaces between the next hanger.
B.Y.O.B. (BRING YOUR OWN BED) I love this one; arrange some moving boxes into the shape of a bed. Dress it up with some nice bedding and pillows. It takes about a half hour, great idea right?
PUT A LID ON IT: The best thing you can do to eliminate odors and bugs is to close all your drains, sinks and tubs; close all the lids on toilets close all the closet doors. Now, let all the sun in! You will get immediate results for zero dollars
GO GREEN: If your home has green features like EnergyStar Appliances, generator, double paned windows, bamboo flooring, make certain you list them in your MLS listing and advertising. Continue the theme with strategically placed soy candles, homemade guest soaps, and green cleaning products under the sink. Believe me this will put your home up a notch to current day buyers.
CREATE A FOCAL POINT: Pick out a visible corner and put in a large plant, live or silk will do just fine. Set up a spot light behind so it lights up the leaves and throws a shadow on the wall. It is a space perception, especially for a large room without too much natural lighting.
SET UP A CHAT ROOM: Whether it is a living room, family room, breakfast nook or den; set up an area that furniture does not have to be moved around so a conversation can proceed. Place fresh flowers and bring in a sense of caring and pride of ownership.
ADD BATHROOM ELEGANCE: Get some decorative hand towels, tie a sheer ribbon around them, and place them on towel racks in all the bathrooms. Use dried flowers and candles to complement colors and add a little SPITZ!
NIX THE PERSONAL PHOTOS
BRIGHTEN IT UP: Get the energy efficient light bulbs in with higher watts. Keep those drapes and shades open and up!
FRAME A LOCAL SCENE: Take those family pictures out and replace the family photo with local photos. Use some you have or from local calendars. The web is great for giving you great pictures of the bay and the ocean and the area around us.
REDO THE PET AREA: My wife has a trick of using a bowl or container of coffee beans to take away the odor of the pet area. She also uses them in closets. New food bowls are a must clean litter boxes and beds and put them in an area such as the laundry room or utility room.
ENTICE THEM AT THE ENTRANCE: Tighten the loose doors and cabinets, re-stain and paint or varnish the doors. Paint the trim on the floors and the ceilings. Paint outside trim, nicks on the house especially where the buyer comes in the house.
More next week on staging on the cheap, 6 Landscaping Tricks that WOW Buyers!
• Interest rates decline from FED action
• Mortgage rates at 4% level
• Housing Starts Surge 22%
• Multi-Billion Dollar Mergers a way to get money home
• Tax Credits for home purchase and home construction
• Home & Design: Staging on a Budget
FED ANNOUNCESNEW POLICY:
It is called Quantitative Easing, for the record and for those in finance and economic theory. The pro’s and those in the know thought it would not happen, but Professor Bernanke surprised them all. From all I have read Bernanke had studied this strategy long before anyone had any clue it would ever be used.
Before I explain the process and how it could benefit us all, let me start with a lesser known fact. The FED, Federal Reserve System, is the ONLY department of the U. S. Government that positively contributes to the income of the United States. It should it is a legal insider trading department. Just think it over, the FED creates which way interest rates will go, they can buy or sell in the market bonds, inject cash buy gold and virtually anything the FED deems necessary to manage our economy. If they bought bonds before the announcement the FED already has a profit as those bonds are worth more because interest rates declined!
The bond buying binge will put $300 billion in a purchase program of long-term treasury bonds. The FED will also buy mortgage backed securities. All told the FED will buy $1.15 Trillion into the economy in the next 6 months to jump start the HOUSING INDUSTRY and REAL ESTATE.
When I started my career as a floor trader I was told one CARDINAL RULE: DO NOT FIGHT THE FED! If there is any sign you will see our real estate market pick up this is it!
HOUSING STARTS SURGE
Boosted by an 82% increase in construction of apartment buildings housing starts in the U.S. surged 22%.
MORTGAGE RATE BELOW 5%!
(COMPLIMENTS OF MIKE COLYER OF COUNTRYWIDE)
High Conforming Loan Limit at 80%
REFINANCE - 30 year fxd = 4.625 with 1 point
PURHCASE - 30 year fxd = 4.375 with 1 point
417K and under
REFINANCE/PURCHASE - 30 year fxd = 4.375 with 1 point
JUMBO TO 1.5MM to 80%!!!! 3MM to 70%
REFINANCE/PURHCASE - 30 year fxd = 5.75 with 1 point
REFINANCE/PURHCASE - 5fxd Int Only = 5.25 with 1 point
Mike Colyer
Sales Manager
Countrywide Bank, FSB
650-257-7777 Office
650-288-8170 Cell
866-511-9024 Fax 40 Hawthorne Ave
Mail Stop: BR 737
Los Altos, CA 94022
http://www.TheBayAreaLender.com
Mike_Colyer@countrywide.com
ARE PLATFORM COMPANIES BRINGING THEIR OFFSHORE CASH HORDE HOME?
On February 12, 2009 I wrote you about Platform Companies. To review the company definition, A Platform Company has a fractionalized production process, keeping knowledge intensive activities like design and distribution in-house, while outsourcing low-value added physical production. They develop new product, new markets, and new products for new markets. They aggressively invest in foreign countries, they are growth companies like our Silicon Valley Companies, and they are Drug Companies. The amount of potential repatriated $US is estimated at $545 Billion.
1. Roche is buy Genentech for $6 Billion
2. Merck is paying $41.1 Billion for Schering-Plough
3. Pfizer purchase of Wyeth of $68 Billion.
Why is that important? Tax write offs of R&D and Goodwill and merger expenses will allow the potential re-patriot of billions of $US held over seas without a tax potential. Billion of $US here mean more for the U.S. Economy.
Economic growth comes from money. If any of you are history buffs, like me, you will know the Dark Ages did not disappear until Gold was taken from the Aztecs, Incas of the newly discovered America’s and used by the King of Spain and the Pirates of England to jump start the stagnant European Economy. Locally 2001 DOT.COM fueled our real estate and economy just as the low interest rates after the DOT.COM bust fueled the real estate industry further.
TAX CREDITS & INCENTIVES GALLORE!
• $8000 Federal Income Tax Credit for first-time home buyers with $10,000 State of California tax credit for buying a new home.
• FHA loans in the 4% range for up to $729,750
• Purchase price mortgages up 7.1% in February
• Energy efficiency upgrades for windows, insulation are eligible for a tax credit of 30% of qualifying costs
• Renewable Energy Systems as solar, wind, and geothermal may qualify for 30% tax credit
• Heating stoves that use renewable biomass fuel: such as, wood pellets, plants, now qualify for a tax credit.
HOME & DESIGN
Deciding on listing your home? Here are some budget ideas that can help you on the CHEAP!
Expand the Closet: One of the most overlooked areas of staging is the closet. Declutter stops at “out of sight out of mind”. It should take into effect the closet. If it looks stuffed, remove it. The ideal closet should have two hanger spaces between the next hanger.
B.Y.O.B. (BRING YOUR OWN BED) I love this one; arrange some moving boxes into the shape of a bed. Dress it up with some nice bedding and pillows. It takes about a half hour, great idea right?
PUT A LID ON IT: The best thing you can do to eliminate odors and bugs is to close all your drains, sinks and tubs; close all the lids on toilets close all the closet doors. Now, let all the sun in! You will get immediate results for zero dollars
GO GREEN: If your home has green features like EnergyStar Appliances, generator, double paned windows, bamboo flooring, make certain you list them in your MLS listing and advertising. Continue the theme with strategically placed soy candles, homemade guest soaps, and green cleaning products under the sink. Believe me this will put your home up a notch to current day buyers.
CREATE A FOCAL POINT: Pick out a visible corner and put in a large plant, live or silk will do just fine. Set up a spot light behind so it lights up the leaves and throws a shadow on the wall. It is a space perception, especially for a large room without too much natural lighting.
SET UP A CHAT ROOM: Whether it is a living room, family room, breakfast nook or den; set up an area that furniture does not have to be moved around so a conversation can proceed. Place fresh flowers and bring in a sense of caring and pride of ownership.
ADD BATHROOM ELEGANCE: Get some decorative hand towels, tie a sheer ribbon around them, and place them on towel racks in all the bathrooms. Use dried flowers and candles to complement colors and add a little SPITZ!
NIX THE PERSONAL PHOTOS
BRIGHTEN IT UP: Get the energy efficient light bulbs in with higher watts. Keep those drapes and shades open and up!
FRAME A LOCAL SCENE: Take those family pictures out and replace the family photo with local photos. Use some you have or from local calendars. The web is great for giving you great pictures of the bay and the ocean and the area around us.
REDO THE PET AREA: My wife has a trick of using a bowl or container of coffee beans to take away the odor of the pet area. She also uses them in closets. New food bowls are a must clean litter boxes and beds and put them in an area such as the laundry room or utility room.
ENTICE THEM AT THE ENTRANCE: Tighten the loose doors and cabinets, re-stain and paint or varnish the doors. Paint the trim on the floors and the ceilings. Paint outside trim, nicks on the house especially where the buyer comes in the house.
More next week on staging on the cheap, 6 Landscaping Tricks that WOW Buyers!
March 16, 2009: Happy St. Patty’s Day
Did you know there were never any snakes in Ireland? Apparently, snakes came from our prehistoric past and Ireland has always been locked by water, ergo, no snakes. The same holds true for New Zealand another island without snakes. I am like Indiana Jones, I HATE SNAKES!
• Good-bye McMansions
• Looking for a Mortgage says the New York Times, Check out FHA rules
• Stock Market Bottom, New York Times says even for veterans this is unchartered waters.
• New York Times says Housing Market’s Upside: AFORDABILITY
• Upside Down on Stocks, check out rules for tax loss selling
• Private Equity, Apollo Management raises stakes on Realogy in attempt to keep it afloat.
• Mortgage Applications Raise
• Mortgage Bankers seasonally adjusted index for Re-financing surges 13.3%
Mortgage Rates: CNBC.com
• 15 year fixed 4.54% down from 4.73%
• One year adjustable rate mortgages increased to 6.21% from 6.13%
Mortgage Rates: Mike Colyer Countrywide Bank
• $625,000 30 year 4.875%
• $800,000 30 year 5.875%
Housing Inventory & Statistics
Palo Alto Active Pending Sold
129 * 25 0
* $4,098,000
La Honda Active Pending Sold
11 * 2 0
* $625,000
Portola Valley Active Pending Sold
20 * 4 0
* $2,898,000
Woodside Active Pending Sold
44 * 6 0
Atherton Active Pending Sold
41 *2 0
* $1,399,000
Menlo Park Active Pending Sold
120 * 23 0
* $2,195,000
Rwd City Active Pending Sold
161 * 64 0
* $2,499,000
I made some changes to the lnventory statistics for the week and I have added the highest sales to the “Pending” list. When sales occur I will add the highest to that list. A present the gap between pending and sales is attributed to the delay in financing approval. What use to be done in 30 days or less is now in the 45 days or more category. I also added all of Menlo Park and all of Redwood City. There are areas in each city where the districts are lower income areas that are hard hit with REO’s and Foreclosures and Short Sales.
Good-bye McMansions was an interesting article in the latest issue of California Real Estate an issue sent to all realtors who are members of the California Association of Realtors. You can learn a great deal of housing history from the homes. Cookie-Cutter rows of small tract homes indicate the lack of building materials. Grand Victorians are time pieces form the early 20th Century. McMansions and their energy inefficient cathedral ceilings will remind us of the excesses of the Dot.com era and the sub prime melt down, says the CAR article. Evidence is trends are pointing to smaller homes, possibly with attached units, sound proofing and closer to other homes, energy efficiency and solar panels are noted demands for new buyers.
The National Association of Home Builders reports that 89% of its members planned homes of 2438 square feet down from 2629 square feet.
Look at the FHA rules says the New York Times. As I noted in a previous letter FHA is an area home buyers should look when getting competitive pricing for mortgages. FHA loans were once an area for low income borrowers the FHA has become a new area for all borrowers. The reason for this is the fees that lenders are tacking onto all mortgages. At present the FHA loans can be obtained for as little as 3.5% down and has become the least expensive when it comes to fees. Loan limits do apply and at present for our area the maximum loan is $729,750. FHA never marked the exotics of sub prime, 30 year and 15 year and adjustable rate mortgages are in the FHA offerings. Contact me or see the Department of Housing website for approved lenders. In many cases you will have to work with mortgage brokers.
Even for Stock Market Veterans it unchartered territory say the New York Times. During the last commentary I noted that all charts indicated the stock market had hit the downside targets technicians forecasted, but today we have the veterans unsure where we are going. Bryon Wein of Pequot Capital says he is an optimist. Barton Biggs, forever a bear o, of Traxix Partners places himself in the optimist’s camp. Peter Lynch, forever a bull, declares himself “bullish as ever”. That being said, I still believe it will take many years, maybe 10, for the new bull market to take over. There has been too much technical damage done. The trust has been destroyed and it must be earned back. Large investors both domestically and internationally are looking at the base strength of the United States, Real Estate, as the first to come back. As one of my clients has sate, “Dirt will always be worth something”
With that last comment in mind it makes much sense to consider A rising dollar lifts the U.S. but adds to the Crisis Abroad. Last week a colleague held a bus tour of visiting Chinese investors looking for high end and luxury homes in the East Bay. Two weeks ago I had the same tour in the Skyline area. The world is seized with anxiety. The safest place in the world for store of value (savings) and political and personal safety is the United States. American investors are ditching foreign ventures and bringing their dollars home. The raise in the dollar is adding to the inability of Third World nations balance their budgets or to finance their internal programs. The cost of the dollar makes Chinese goods more expensive at a time China must use their reserves to support their economy. This is common to all the Tigers, India, Pakistan and the rest of the Third World nations who prospered on the dollar’s weakness and the consumer spending of the United States. This tilt is also forcing locals within those nations to look at the safety of their accumulated wealth and personal safety as the authoritarian governments look to ways to fiancé their short falls and blame to their woes. Add to that the OPEC countries’ inability to finance their budgets due to the falling price of oil.
Before ending the Stock Market commentary, Upside Down on Stocks, selling stocks for tax losses? While the end of the year is the best time, around October and before November is the best time to install tax strategies, many investors panic at tax time to think about selling now and take the tax loss. Before doing so, talk to your tax professional or seek the help of one before dumping wholesale out of panic. There are many strategies from doubling down to 31 day buy and sell or sell and buy strategies.
The Wall Street Journal says Apollo Management raises stake on its Realogy stake. The price tag keeps growing for Apollo Management and its investment in Realogy. Realogy is the largest residential real estate brokerage business as parent to Coldwell Banker, Century 21, and Sotheby’s International, Better Homes and Garden and other major brands. Apollo pledged $150 million to keep Realogy afloat for 2009. Realogy continues to cut costs and is trying to increase market share by launching Better Homes and Gardens Real Estate brand.
U.S. Mortgage applications rise for the first time in three weeks. The jump came after the strongest government action recently taken to aid homeowners.
The Mortgage Bankers Association said the seasonally adjusted index of mortgage applications surged 13.3% for refinances to 3470.7, up 41.8% from one year ago.
• Good-bye McMansions
• Looking for a Mortgage says the New York Times, Check out FHA rules
• Stock Market Bottom, New York Times says even for veterans this is unchartered waters.
• New York Times says Housing Market’s Upside: AFORDABILITY
• Upside Down on Stocks, check out rules for tax loss selling
• Private Equity, Apollo Management raises stakes on Realogy in attempt to keep it afloat.
• Mortgage Applications Raise
• Mortgage Bankers seasonally adjusted index for Re-financing surges 13.3%
Mortgage Rates: CNBC.com
• 15 year fixed 4.54% down from 4.73%
• One year adjustable rate mortgages increased to 6.21% from 6.13%
Mortgage Rates: Mike Colyer Countrywide Bank
• $625,000 30 year 4.875%
• $800,000 30 year 5.875%
Housing Inventory & Statistics
Palo Alto Active Pending Sold
129 * 25 0
* $4,098,000
La Honda Active Pending Sold
11 * 2 0
* $625,000
Portola Valley Active Pending Sold
20 * 4 0
* $2,898,000
Woodside Active Pending Sold
44 * 6 0
Atherton Active Pending Sold
41 *2 0
* $1,399,000
Menlo Park Active Pending Sold
120 * 23 0
* $2,195,000
Rwd City Active Pending Sold
161 * 64 0
* $2,499,000
I made some changes to the lnventory statistics for the week and I have added the highest sales to the “Pending” list. When sales occur I will add the highest to that list. A present the gap between pending and sales is attributed to the delay in financing approval. What use to be done in 30 days or less is now in the 45 days or more category. I also added all of Menlo Park and all of Redwood City. There are areas in each city where the districts are lower income areas that are hard hit with REO’s and Foreclosures and Short Sales.
Good-bye McMansions was an interesting article in the latest issue of California Real Estate an issue sent to all realtors who are members of the California Association of Realtors. You can learn a great deal of housing history from the homes. Cookie-Cutter rows of small tract homes indicate the lack of building materials. Grand Victorians are time pieces form the early 20th Century. McMansions and their energy inefficient cathedral ceilings will remind us of the excesses of the Dot.com era and the sub prime melt down, says the CAR article. Evidence is trends are pointing to smaller homes, possibly with attached units, sound proofing and closer to other homes, energy efficiency and solar panels are noted demands for new buyers.
The National Association of Home Builders reports that 89% of its members planned homes of 2438 square feet down from 2629 square feet.
Look at the FHA rules says the New York Times. As I noted in a previous letter FHA is an area home buyers should look when getting competitive pricing for mortgages. FHA loans were once an area for low income borrowers the FHA has become a new area for all borrowers. The reason for this is the fees that lenders are tacking onto all mortgages. At present the FHA loans can be obtained for as little as 3.5% down and has become the least expensive when it comes to fees. Loan limits do apply and at present for our area the maximum loan is $729,750. FHA never marked the exotics of sub prime, 30 year and 15 year and adjustable rate mortgages are in the FHA offerings. Contact me or see the Department of Housing website for approved lenders. In many cases you will have to work with mortgage brokers.
Even for Stock Market Veterans it unchartered territory say the New York Times. During the last commentary I noted that all charts indicated the stock market had hit the downside targets technicians forecasted, but today we have the veterans unsure where we are going. Bryon Wein of Pequot Capital says he is an optimist. Barton Biggs, forever a bear o, of Traxix Partners places himself in the optimist’s camp. Peter Lynch, forever a bull, declares himself “bullish as ever”. That being said, I still believe it will take many years, maybe 10, for the new bull market to take over. There has been too much technical damage done. The trust has been destroyed and it must be earned back. Large investors both domestically and internationally are looking at the base strength of the United States, Real Estate, as the first to come back. As one of my clients has sate, “Dirt will always be worth something”
With that last comment in mind it makes much sense to consider A rising dollar lifts the U.S. but adds to the Crisis Abroad. Last week a colleague held a bus tour of visiting Chinese investors looking for high end and luxury homes in the East Bay. Two weeks ago I had the same tour in the Skyline area. The world is seized with anxiety. The safest place in the world for store of value (savings) and political and personal safety is the United States. American investors are ditching foreign ventures and bringing their dollars home. The raise in the dollar is adding to the inability of Third World nations balance their budgets or to finance their internal programs. The cost of the dollar makes Chinese goods more expensive at a time China must use their reserves to support their economy. This is common to all the Tigers, India, Pakistan and the rest of the Third World nations who prospered on the dollar’s weakness and the consumer spending of the United States. This tilt is also forcing locals within those nations to look at the safety of their accumulated wealth and personal safety as the authoritarian governments look to ways to fiancé their short falls and blame to their woes. Add to that the OPEC countries’ inability to finance their budgets due to the falling price of oil.
Before ending the Stock Market commentary, Upside Down on Stocks, selling stocks for tax losses? While the end of the year is the best time, around October and before November is the best time to install tax strategies, many investors panic at tax time to think about selling now and take the tax loss. Before doing so, talk to your tax professional or seek the help of one before dumping wholesale out of panic. There are many strategies from doubling down to 31 day buy and sell or sell and buy strategies.
The Wall Street Journal says Apollo Management raises stake on its Realogy stake. The price tag keeps growing for Apollo Management and its investment in Realogy. Realogy is the largest residential real estate brokerage business as parent to Coldwell Banker, Century 21, and Sotheby’s International, Better Homes and Garden and other major brands. Apollo pledged $150 million to keep Realogy afloat for 2009. Realogy continues to cut costs and is trying to increase market share by launching Better Homes and Gardens Real Estate brand.
U.S. Mortgage applications rise for the first time in three weeks. The jump came after the strongest government action recently taken to aid homeowners.
The Mortgage Bankers Association said the seasonally adjusted index of mortgage applications surged 13.3% for refinances to 3470.7, up 41.8% from one year ago.
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