Real Estate Investing

California is getting closer to having one state-wide MLS system, according to the San Francisco Chronicle.  Expected to be available in 2009, 66 local REALTOR® associations and three regional MLS groups — representing 60 percent of the market in California — have signed nonbinding letters of intent to participate in CALMLS so far.  Read more from Realtor.org.  In my own MLS area, we’ve faced challenges simply to get the various associations to embrace on preferred lock box … this will be very interesting to see how one MLS works itself out.

Donald Trump is lending a helping hand to Ed McMahon who has been facing foreclosure of his personal home following health issues.  He is buying the home so he can lease back to McMahon.  Says Trump, “When I was at the Wharton School of Business I’d watch him every night,” the mega-developer said. “How could this happen?”

Austin, Texas is set to recover from the real estate slump faster than the rest of the U.S., according to the Austin Business Journal. 

In the coming year Austin will outperform the rest of the country in job growth and in the health of its housing market, according to Mark Dotzour, chief economist at Texas A&M University’s Real Estate Center.

Finally, ghost towns are popping up all over the country due to halts in new construction developments.  According to MSNBC,

The Colonial-style brick home had four bedrooms, three-and-a-half bathrooms, and designer touches and offered everything they expected in a town known for great public schools and homes fit for Ford execs. 

Everything, that is, except neighbors.

When the MacDonalds arrived, there were fewer than 15 homes in Kirkway Estates, where 179 were planned. Their home was the only one built thus far on a cul-de-sac with six lots.

I’ve seen many developments that look like this.  There’s a monster-sized subdivision near where I live and I’ve seen that construction has come to a skidding stop.  I have to wonder what all those workers are now doing to earn a living.

My friend and fellow Realtor told me this morning that he’s been working with a potential buyer for two years and she refuses to buy.  He found her a $225,000 all-brick gorgeous home that was on the market for $180,000.  She refused it. He has explained to her that interest rates are going up, so if she wants to buy at an inexpensive rate she should do so now.  Note: Interest rates actually went up a quarter percent yesterday, from 6.0% to 6.25%.  It looks like the rate increase is across the nation because my buyer just had their rate jump, just as it happened in California.

Meanwhile my friend’s possible buyer still won’t commit.  She says her dentist has told her, “Real estate hasn’t hit the bottom yet.” He advises her to keep waiting.

The buyer is taking real estate advice from her dentist, not from a Realtor who is quite aware of the housing market.  As my friend says,

I am confused by people that say they want to wait or the market to hit bottom. The reason for this confusion is that I spend many hours per week studying the Real Estate market and I can’t even tell when that will happen. I can tell when it is starting to happen and when it is over. With that said here is my advice we are in the best time in 25+ years for people to buy a home. 

I’ve commented before that we’re near the bottom.  Then I change my mind and think we have a ways to go thanks to articles like this on MSNBC.com which lists four reasons housing won’t recover quickly.

[Reason #4] There’s a bigger underlying inventory of homes for sale than you realize
We’re all aware of the number of homes available for sale from the homebuilders, and the Realtors’ association keeps us up to date on the pace and price of existing homes turnover, but those numbers don’t tell the whole story. How many of your friends or neighbors would list their homes in a New York minute if they thought there were any realistic prospect of a sale?

In other news, I saw Ed & Pam McMahon on Larry King last night and they are a class act. They said they made their foreclosure problems public to try to bring comfort and hope to the million other people in foreclosure.  They aren’t giving up and don’t want others to lose hope either.  Mr. McMahon said,

I wanted to, in a sense, speak for the million people you mentioned [facing foreclosure]. I heard that figure today and I just couldn’t believe it. Anyway, the million people that now have foreclosure signs on their house, or nearby. And I just want to give them hope, give them optimism, give them some kind of guidance. Get the best corrective people you need around you. Keep working on it. Don’t stop. There’s a lot of people that are hard workers, did everything right, didn’t do anything wrong, and all of a sudden, they’re in this boat. And I speak for all of them, as far as I’m concerned.

Finally, let’s welcome the weekend with some Friday dental humor.  Afterall, I’d much rather laugh and focus on good things than to let let bad news take over my head:

A guy goes to visit his grandmother and he brings his friend with him. While he’s talking to his grandmother, his friend starts eating the peanuts on the coffee table, and finishes them.

As they’re leaving, his friend says to his grandmother, “Thanks for the peanuts.”

She says, “Yeah, since I lost my dentures I can only suck the chocolate off ‘em.”

Angelina Jolie, Brad Pitt, and their four - soon to be six - children will be moving into a home located on 1,000 acres in the south of France.  In addition to 35 bedrooms and a forest surrounding the estate for privacy, the home has some mighty fine neighbors including Bono and Johnny Depp.  The rest of the story.

I’m not kidding when I tell sellers that the return isn’t as great when placing ads in magazines and newspapers rather than investing in some online promotions.  I use Visual Tour software and Animoto (we talked about that earlier this week).  But another company offers “short documentaries” about high-end homes which I find fascinating.

In today’s residential real estate market, off by as much as 20- to-30 percent on a year-over-year basis in some regions of the country, brokers and home sellers have been forced to find ways to get biggest bang for their marketing bucks. And it’s no surprise that most of their budgets are being spent on the Internet.

According to the National Association of Realtors, between 85 percent and 90 percent of today’s buyers depend on the Internet for links to individual real estate agent home pages, ColoradoRealtor.com, Realtor.com, Zillow.com and corporate real estate Web sites.

The rest of the techno story here.

I still believe we are near the bottom of the market, though this writer disagrees. 

Can we expect a lone realtor to determine the exact bottom of the market for a potential buyer? NO! Not even the most esteemed experts know exactly when the real estate market is at bottom. What the realtor must do is give the best assessment possible and the best advice they can muster, and let the buyer decide - without hype.

And even if we haven’t reached the bottom … who cares?  If you are ABLE to buy a home at a GREAT INTEREST RATE and you NEED to buy a home, then by all means:  Buy a Home.  The thing is, it’s not just about your “investment” - rather it’s about having a place to live.  If you’re qualified and find a place you love, it may or may not be there in a month or two or five when the real estate market “hits bottom.”  If you feel like it’s home, then make it your home without being distracted by the yaysayers and naysayers.

If you’re waiting to see what the future holds, remember the future never comes. 

Unless you live on Mars, then the future could be coming.  And it could look like this.

Photo from here.