Entries Tagged 'Newsletters' ↓

Your Home Is Not A Piece of Stock

 I guess none of us should be surprised that the media is beginning 2008 the way they ended 2007…with numerous “insightful” stories about how bad things are in real estate.  But what do I know.  I am just a professional Realtor who works for one of the largest real estate companies in the Riverside/Inland Empire area.  How can I compete with the all-knowing media?  But just for fun, let’s try anyway. When the media is busy telling anyone who will listen that this is a horrible time to purchase a home, they miss a huge point…which is…your home is not a piece of stock, so why are we treating it that way?Understand, I am talking here about your home, not a rental purchased solely for investment purposes.  While I completely understand that when you purchase a home, you want to get the most you can for your money, that is not the only reason for someone to buy a home.  Your home is more than simply an investment.  It is where you raise your children, play your music loudly, grow your own plants, mow your own lawn, and paint the walls any color you want.  No one raises your rent, kicks you out, or decides to sell the property and force you to move.  There is a reason for the saying “Pride of Ownership,” instead of “Pride of Rental.”  Owning a home is a huge part of the American Dream and yet the media would have us all think that this ownership notion should play second fiddle to the idea that your home is solely about making money.

Don’t get me wrong…I am all for making money on the sale of your home.  That is a wonderful secondary benefit to home ownership.  However, I do not believe monetary gain should be the sole determinant of when and why a family should purchase a home.  Somewhere along the line, the public has bought into the notion that your home is first and foremost to be thought of like a piece of stock; to be bought at the lowest price, and sold at the highest price.  Doesn’t matter if that is right for your family. Just buy low and sell high.  But again, that adds to the misconception.  Just look around you right now at all the people who are waiting to buy until the media tells them it’s OK.

Purchasing a home should be thought of as a long term proposition (long term meaning 5 years of more).  Yes, sometimes life forces us into situations that won’t allow us to use all those 5 years, but at least we can start out with that plan.  Once you look at your home with a 5 year window, then you can begin to see the folly of listening to the media.  Want proof?  OK. Then consider this.Is there anyone reading this newsletter who thinks that if they buy a home in 2008, they will regret it financially in 2013?  The answer is probably not.  Put it another way.  Even given our challenging real estate market of today, is there anyone in 2008 who would pass on buying a home at its value in 2003?  Again, probably not. We have incredible real estate prices, and loan interest rates are at historic lows, and the media is telling everyone to wait.  Call me crazy, but I don’t get it.  My point here is that when the media does what it does so well (scare us all into doing nothing), we should analyze what is really happening.  If you fall into their trap, and plan on buying a home today and selling it sometime later this year, then no…you should do exactly as the media says, and stand on the sidelines.  However, if you subscribe to the 5 year plan, and believe your home is much, much more than simply an investment, then now is a great time to purchase…and I haven’t even touched on the massive tax benefits of owning a home.  That’s a whole other newsletter…and a benefit, I might add, you do not get with the stock market.So…as I have said before…We at Westcoe believe very strongly in the American Dream, and take great pride in helping you achieve it.  Rest assured, no matter how loud the media cries wolf, we will be there with an alternative message.  In the meantime, go paint your walls, and turn your music up…just because you can.  

Welcome to the Parade – Fall 2007

Imagine going to the Rose Parade this year, and everyone watching on the curb is being told the following: That at any time you wanted, you could jump on a float and ride along…BUT…once you picked your float, you had to stay there for the entire parade, and that the “Parade Experts” generally felt the best floats were towards the end.

SO…now the parade begins, and you are all excited about picking a float. Float after float comes by, but you are going to wait…because the “Parade Experts” have told you to wait…even though you are seeing one fantastic float after another. Soon, you become torn. You wait, like the “Experts” said you should but what if they are wrong? What if by waiting, you passed on the best float? Or, worse, that you pick a float near the end, and since everyone else waited like you, the only ones left are super-crowded with other parade watchers? What do you do? Stand there and continue to wait, or pick a float now, that you can enjoy? And when is the end of the parade anyway?

Understanding Our Current Real Estate Market

If you can relate to our parade watcher in the above story, then you can truly understand what is happening in our real estate market right now. Sellers are forming a long parade of homes for sale, and buyers are simply standing on the curb, waiting. They are waiting because the TV and newspapers and internet are telling them to wait. They are waiting because they do not want to look silly or stupid, so they will wait until everyone tells them it is OK to buy. They are missing a lot of very nice “floats” while they wait, but the “Experts” have told them to wait, so wait they will.

As a seller, what does that mean for you? Well, as the real estate market stands right now, you must create a strong enough desire in a buyer that
they are comfortable jumping off the curb right now, onto your float, and are not worried about the “Experts” and what may be coming in the parade behind them. If you can do that, then you will find a buyer for your “home/float”. If you cannot, then the buyers will continue to wait for the “so-called” better floats that everyone is telling them are on the way. For a buyer to purchase today, you must help them overcome their fear of everyone telling them they should have waited. Unfortunately, some sellers are still locked into the thinking of 2003-2005, and assume that it is good enough to simply “be for sale and eventually a buyer will see how nice our home is”. That is not the case. A buyer must feel good about purchasing a home today in spite of the “Experts” telling them to wait. If you understand this, then you understand our current market.

As a buyer, all I can say is there are amazing values in our market today…values that will be purchased by someone else who understands that the purchase of a home is a long-term investment and not something to be bought and sold in a 6 month period of time. Real estate was never intended to be traded like the stock market, and the financing changes being implemented by the banks will make the “easy money” to flip houses much, much tougher to get. However, for a family purchasing a home to live in, or an investor who wishes to purchase a property and hold it for a few years, then you have just entered the candy store of real estate. Good values are everywhere, and many people are beginning to understand that waiting on the curb for the end of the parade might make you miss your float all-together. Remember, no one rings a bell at the top and bottom of any economic market…you only know the top and bottom when it has passed you by. So…be careful, be smart, and don’t let the parade get too far down the road…because there really are some incredible floats right here, right now.

Take care, and as always, I am only a phone call away to assist you with your real estate needs.

The Real Meaning Of Our Real Estate Numbers

Real estate numbers and data get bounced around the media like ping-pong balls in a lottery drawing. Far too often, statistics get quoted and then are left hanging out there like laundry on the line, waiting for an explanation that never comes. In this newsletter, I thought I would give you some pertinent numbers about our real estate market, and also explain the real meaning of these numbers…sort of a behind-the-scenes look at how this could affect you as either a seller or a buyer.

As a seller, one of the most significant numbers to know is the availability of inventory. The media would have you think the more homes for sale, the harder it is to sell…and they are right, but only to a degree. When they quote the number of homes available now as compared to some point in the past (for example, as of July 1, 2007, there were 2963 homes for sale in the Riverside/Moreno Valley area vs. 803 on July 1, 2005), they leave it at that and let you assume the worst…and most people do just that. However, in
reality, it is not the number of homes for sale that is the issue, but the QUALITY of those homes…and right now, there are a lot of “non-quality” homes for sale.

In our real estate world, housing quality is defined not only by the amenities a home offers and the condition of those amenities, but also by the price…specifically, does the price make sense relative to the amenities. It is easy to think that with 2963 homes for sale there is a lot to pick from, but many Realtors will privately say that much of what is for sale right now has issues with either pricing or maintenance. If I had to give you a very unscientific guess, I would say that easily 60% of the homes for sale today have limited appeal to a buyer based upon their current price or condition. In the marketplace of 2-3 years ago, almost anything would sell…but in the marketplace today, not so. A home has to be well priced and well maintained to attract a buyer. Hence, when the media scares you with the 2963 homes for sale, the real number of homes that truly look attractive to a buyer is far less imposing than 2963.

For a buyer, the important number the media shouts about is the number of closings…and again, they compare today with the past (for example, 145 homes sold in July of 2007, vs. 351 in July of 2006). Here, they would have you believe that since the number of homes sold is off by almost 60%, then this must be a bad time to buy…and just the opposite is true.

In actuality, the best time to buy a home is when nobody else is. Think about it. If you buy when everyone else is trying to buy, then the price gets driven-up and you end up paying more. That is exactly what happened in the real estate market during
2000-2006. Everyone was buying because the media was telling everyone to buy, and the prices shot up like a bottle rocket on the 4th of July. Ask yourself the
following question…Would you rather have bought your home in 2000, or in 2004? While either time would have been nice, of course you would have rather
already owned the home in 2000. Do you think this next cycle will be any different? Beware of the herd mentality when it comes to purchasing real estate. Buying now really is a great idea.

In the end, owning a home is truly the American Dream. It’s a home, not just a house. Your home combines the potential for equity when held long enough, and still keeps you dry in the rain. You can’t beat that. What you can beat though, is the alarm level the media inadvertently creates when they tell only part of the story, and that’s where I come in. Please…please…please, call me with any questions, concerns, or fears you may have about our real estate market. I will give you the entire story about anything you ask as it relates to our local area. I really do enjoy helping you any way I can.

Take care, and as always, I am only a phone call away to assist you with your real estate needs.

Realistic Optimism…Our Local Market Overview

As you might imagine, I get asked a lot of questions about the real estate market. It’s big news in the press these days (mostly negative), and the media is quick to make household words out of terms like “sub-prime lenders” and “foreclosure rates”. However, no problem is
generally as large as the media would have you believe, so I have decided to discuss in this newsletter what I would like to call “realistic optimism”. “Realistic” because indeed there have been market changes from the glory days of a few years ago, and “optimism” because you need to understand that the real estate world is not
ending tomorrow. We need to mentally balance-out this housing equation before it gets too crazy.

Unless you have been stranded on the same island as Tom Hanks in Castaway, you must be aware that our local real estate market has changed in the last year or two…but how much? Let’s look at some numbers that pretty much tell the story as it stands right now.

At the end of February 2005, there were 705 homes for sale in Riverside area priced at $3,000,000 or less…and during that same month, there were 280 closings. In February 2006, those numbers had changed to 1505 homes for sale and closings held steady at 281. In February of 2007, the numbers changed again…2230 homes for sale, and only 187 closings. In just 2 years that is an increase of over 200% on the supply side, and a decrease of almost 40% on the demand side. This would explain why in almost any neighborhood you drive, there appears to be so many homes for sale. Not only are there more homes on the market, but they stay on the market longer because there are fewer buyers. That’s our market in a nutshell…too many homes, not enough buyers. However, unlike the media, I will discuss the positive aspects of this market as well.

Certainly the market is down from it’s historic high…and in the big real estate picture of the next 5-10 years, that’s not necessarily a bad thing. The market had to take a breather and slow down for a while, or we would have eventually priced ourselves so ridiculously high, that the ultimate fall would have been equity carnage. History tells us the real estate market will cycle, just as it is doing right now…but the prevalent assumption is that this cycle will be softer and shorter than those of the 80’s and 90’s.

Why? Because our local economy is still strong (construction and real estate are off a bit, but everything else appears to be holding steady), interest rates are incredibly low, and the projected population growth in the Inland Empire over the next 15 years is forecasted to be the 4th largest in the country, behind California as a whole, Florida, and Texas.
That leads to the optimistic side of our real estate equation. First, the short term. If you want to move up or move down, go right ahead…because whatever you “lose” on the sale side, you will “gain” on the buy side! Too many people fixate on “what they have lost” and forget that they gain as much or more when they re-purchase. For those who sell and will not be purchasing right now, that’s OK too. You can still sell your home, and as long as you understand this is 2007 and not 2005, you will be fine…because a number of those 2230 homes for sale are trying to get 2005 prices in a 2007 market…and that simply isn’t going to fly. In the long term, whether you keep the home you are currently in, or purchase a home anytime in the next 5 years, history provides us with one certainty…that 5-10 years from now, you will be glad that you own a home. As I have said in previous newsletters, is there anyone around who would turn down a home priced at the peak prices of 1990…1995…2000? Of course not, and 5-10 years from now, you will feel the same way about 2007.

In the end, the market is what it is, and neither you nor I can change it. However, while I acknowledge these changes, I will not give in to the doom and gloom of the media. I can get your home sold if that is what you desire, or find you a new one if that is your need. I am optimistic about our area, our market now and in the future, and my ability to get results for my clients. As your potential real estate broker, you can be assured that I stand ready to help you at any time your life situation requires the services of a real estate professional. Belief is not a buzzword to me. You have a right to a real estate professional who truly believes in you, the market, and their ability to help. That’s the least I can offer…and the part the media seems to forget.

Take care, and always, I am only a phone call away to assist you with your real estate needs.

Real Estate Market Update

There is an old saying about worrying…something like “90% of all the stuff you worry about never happens, and 5% of what’s left you can’t do anything about anyway.” Life is probably not that simple, but the general theory here is to lighten up a little about the future. Yes, it’s good to plan and be prepared, but let’s not get so concerned about what may happen that we become paralyzed by our own analysis.

At the beginning of any New Year, the same can be said regarding the real estate market. With the changing of the calendar, there is no shortage of “experts” who are totally prepared to tell us all what the future holds. Each voice is certain they have the correct vision of what is to come for 2007. Some are right and some are wrong, but regardless, these experts stir the pot until it is almost impossible to have a clue about anything. Too many opinions, too many interpretations, and in the end, the only consensus is the confusion they all leave behind. Predictions about our housing future may sound good for the media, but sometimes they come at the expense of accuracy.

Therefore, I will fight the desire to add my own personal thoughts to the 2007 mix…and will instead focus on the present…since that’s where most of us hang out anyway.

For Buyers, in a nutshell, what are you waiting for? I realize it is now popular for the “experts” to tell you to wait for the market to bottom out sometime this year, but good luck trying to figure out when that event will occur. Most of the time, history has shown that the only way to know when you are at the bottom of a real estate market is to look back to see when you missed it. There will be no billboards announcing the absolute rock bottom, and no universal sign saying now is the time to buy. You will simply start attending social functions where everyone will be talking about what price they could have bought a home for in 2007, and how they wish they had taken advantage of the market then, instead of trying to
“time-it-just-right”. Remember, to maximize your position, you need to buy when others are selling, and sell when others are buying. All I know is that in the last 10 years, every person who purchased a home would have loved to have bought their home at the prices of 2-3 years prior. Does anyone really think that in 2010 or 2012, they would be unhappy with the price they paid in 2007?For Sellers, I’d love to have a quarter for every time some entity…newspaper, TV, magazine, radio, etc…announces to their fan base that the real estate market is bad, sellers are in trouble, and that we are all destined for financial oblivion. For sure, I would have a lot of quarters to spend…but let’s look deeper into those negative statements that seem so popular now.

A bad real estate market is characterized by one or more of the following: 1) High interest rates that make purchasing a home extremely difficult, 2) A horrible economy that is eliminating jobs in our local area, or 3) a massive influx of bank repossessions that represent such a high percentage of our market place that a normal seller cannot compete…and none of the above are happening. Rates are terrific, the economy is good, and repossessions are sexy for reporting, but still represent such a small portion of our market that they are almost negligible. While our market for sellers is not the “out-of-control-super-frenzied” market of a few years ago, it is solid, and it is working. We sell houses every day for our clients. The only caveat for a seller is the following: be serious, be logical, and be fair about pricing your home. That is not code for “give it away”. All that means is that you must be reasonable about pricing your home. You may get a little more than your neighbor, or you may get a little less…it depends on where you live and what is for sale at the moment. But you will not have to give your home away to get it sold.

In the end, our local real estate market falls under the 5% of life we can’t control anyway, so it’s going to do what it’s going to do. But here at Westcoe, we take a realistically positive approach to how we can help our clients. It seems to have worked well for the past 21 years, and 2007 will be no different. Take heart, not everyone believes the real estate sky is falling.

Take care, and always, I am only a phone call away to assist you with any real estate questions or needs you may have.