James Lupori, Associate Broker Keller Williams Realty - 206.713.2102

What do you believe? I don't mean your religious dogma. If you could express your most powerfully held individual beliefs derived from your experiences and motivations in life, what would you tell the world? How would you do this? Read further for an answer:

In 2005 one of the most inspiring and insightful radio programs of the last century was revived by two producers connected with National Public Radio, Dan Gediman and Jay Allison. This I Believe was created by Edward R. Murrow and was broadcast on CBS Radio from 1951-1955. The show featured five-minute essays by both famous and regular folks read over the air and broadcast on many CBS stations, on the Voice of America and on the U.S. Armed Forces Network to over 97 foreign countries. Over the years, several print versions of the essays were published (see Wikipedia for more details).Edward R. Murrow claims to have been motivated to create the series for "obvious reasons:" ...the uncertainty of the economic future, the shadow of war, the atom bomb, army service for one's self or loved ones, the frustration of young people facing the future. To illustrate the power of these short three-minute essays I've included one of my favorite segments. Click on the photo below to hear the reader's voice and read his words:

I am not a "spiritual" person which disturbs one of my good friends. One day he asked me, exasperated, "James, what do you turn to when you feel despair or pain? You must have a something to turn to!" The fact is, I find solace in knowing that the human experience is crafted by humans, for better or worse. There is freedom in knowing that, ultimately, we must face reality with courage, insatiable curiosity and laughter. Our job as human beings is to create a better world, here and now for the living not the dead.If you want to learn more about THIS I BELIEVE, just click on the picture below. I'm positive you will find many an essay that will inspire and move you:

1st, the Brutal Facts

The euphoria of this week's Presidential election is quickly wearing off. The ten-million pound gorilla, ECONOMIC CRISIS, is sitting smack-dab in the middle of our national living room. Friday's press conference by President Elect Obama was sober and somber. President Bush's reassurances that his administration will help with this difficult transition helped magnify the fragility in the current American economy.

Then, there were the Real Estate market reports and press releases from the local multiple service and newspapers. I must say, up-front, that there is little in these reports that makes one want to rush right out and buy a house. In fact it's obvious that the self-appointed leaders in the area aren't facing facts:

The NWMLS press release from November 6th is a mish-mash of facts and figures mixed together with half-baked statements such as:

"Despite the uncertainty of the financial markets, home-ownership continues to be one of the most solid investments an individual or family can make." (Lennox Scott)

Unfortunately, the report is peppered with facts and statistics that don't support this claim. King Co. pending sales dropped 27% from a year ago. There were double digit drops in all counties. Listings have dropped, prices are down 7.4% from a year ago. Prices for single family homes fell about 9% last month compared to a year ago. These facts don't justify an "optimistic" perspective in my book.

Let's review some of the headlines in the local press:

Area faces bleak real estate forecast, SeattlePI, November 7

Median King County house price falls below $400,000, Seattle Times, Nov 7

House sales slip in county, SeattlePI , November 6th

House prices down again, expected to get worse, SeattlePI, Oct. 29

This all reads like a bad dream, doesn't it? At times like this, I like to turn to those wiser than myself for advice:

Here's the lesson:

Jim Collins in his landmark book, Good to Great, describes what he calls "The Stockdale Paradox." Collins states that all great organizations embrace a worldview in which they "stoically accept the brutal facts of reality while at the same time maintain an unwavering faith in the endgame, and a commitment to prevail in spite of the brutal facts." (paraphrase). This concept is named after Admiral Jim Stockdale who was tortured over twenty times while in captivity during the Vietnam War. One of the key moments in Good to Great is when the author asks Stockdale: Who didn't make it out of the prison camps? His answer: "Oh, that's easy, the Optimists." Stockdale simply said that those who didn't survive lived with false hope; they didn't confront the brutal facts of the current reality. Tough words, indeed, yet I can't help but relate them to the current "brutal facts" in the real estate market. There is a disconnect between what experts hope will happen and what is actually happening in the market today. I would encourage you to read more about Admiral Stockdale but for now let me tell you what I think:

1) The facts show that this is the most challenging real estate market in recent memory.

2) The facts show that prices, sales, and market confidence are moving downward.

3) The facts show that lenders ARE lending. Homes are being sold. People are buying.

4) The facts show that national/international challenges are impacting the way in which banks are lending money.

5) The facts show that we may be in this situation for a long time.

6) The facts show that even the "leaders" are struggling to make sense of the market.

Conclusion: Confront the Brutal Facts. Toughen up. Realize that there are opportunities out there, you're just going to have to work harder and be smarter to prevail. Deal with it.

We elected a new President on Tuesday. It sounds so simple, yet, it’s the single most important right we have in America. This week brought about a huge shift in our awareness as a nation and as a people. Unless you’re a dead stone, it’s impossible to ignore the renewed sense of connection with our culture and politics. For the first time in many years a sense of hope pushed aside the angst and uncertainty that has permeated our society in the midst of war, financial collapse and indifference. And yet, you and I both know that we face huge challenges in the coming years.

Our industry, which is at the heart of the financial crisis, has suffered greatly this last year. Many of my colleagues have left the real estate business. Several have had to file for bankruptcy. There’s been a lot of hurt. Property values have eroded and many families are living with a sense of anxiety that they could loose their homes. This is the dark side of our current events. My most sincere hope is that the new leadership of this great country has the courage and resilience to bring us together to accomplish extraordinary things.

And one final thought: During my recent trip to Italy, my cousins were very curious about our election in the US. “Who are you going to vote for?” “Do you think a black man can win the election?” They seemed more interested in our election than many Americans I know. Then one night, after a particularly delicious meal, we had a little debate over the candidates. Some felt that John McCain was a good man but that he represented the current administration (they are not fond of Mr. Bush). Others hoped that Barak Obama would win. Then one of my relatives said if Barak Obama became President, it would mean so much to Italians. It would mean that the American dream is true. It would mean that all the struggles over race were worth it. It would mean that American was truly unique. Frankly, I wondered why they would care so much. I mean, how many Americans really follow Italian or Eurpoean politics? Here’s the point: WHAT WE DO HERE, IN AMERICA, IS IMPORTANT. IT MATTERS. We are looked-upon as a great nation. Our trajectory affects the world. Our example inspires and, sometimes, angers the rest of the world. This week made me reflect deeply about who we are and I have to say that I’m proud that we rejected the cynicism, avarice and narcissism that has gripped our leaders for so long now. America is about renewal, it’s about re-invention and, most of all, it’s about creating a better future. Let’s be the change we hope for. Let’s live it. Let's make it happen. YES WE CAN!

Founding Fathers Pic by INeedCoffee Lighthouse pic by RebelBlueAngle Barak pic by blvsboy

The Federal Reserve again lowered a key interest rate by .5% to 1%. This interest rate is called the “federal funds rate” which is the interest banks charge each other on overnight loans. From an historical perspective, this rate has not been lower since 1958 and represents an aggressive move by the Fed to restore confidence in the market and stimulate banks to make loans.

But here’s an important question: What impact does this interest rate cut have on the consumer’s mortgage rates, credit card interest or other loans? Does a reduction in this rate matter? Will home owners in Seattle, Kenmore or New York City be able to get a better rate on their mortgages? Well, the short answer is yes. In the long-term the theory is that lowering this interest rate exerts downward pressure on the whole economic system resulting in lower consumer interest rates. I have a colleague who has a degree in economics to whom I posed this question. He confirmed that the overall strategy of the Fed lowering the rate is intended to stimulate lending. He said there’s a fancy economics term called the velocity of money that applies here. However, he believes the the Fed is lowering the rates because there is a total lack of confidence and trust between the large lending institutions. ”It’s really about psychology,” he said. My friend also said something I think is critical: “If a consumer has good credit and the right amount of cash, they can still buy a house even in the current economy!”

So what does this all mean? The Federal Reserve has a number of “tools” to help influence banks and stimulate lending. Today they sent a clear message that action is needed and they will be monitoring the results of the interest rate cut. Let’s see what happens.

A special note: I am not an economist. It's such a dismal science!

In a former life, I was Mr. Freeze. I'm not kidding. I was a licensed bill collector in 50 states and my pseudonym was Mr. Richard Freeze. I was in the Credit Industry for many years and I worked both sides of the business. I collected and I also educated the public on sane money management. Before Mr. Freeze went "underground" he also worked for Consumer Credit Counseling Service which was one of the best jobs ever. I became the Financial Curmudgeon because, for so many years, I observed how most Americans get themselves into financial trouble: simply put, they don't know the meaning of the word "enough." In a larger sense there is a certain "class" of individuals who feel they are above the law (let's call them what they are: the wealthy elite financial class) who have perpetrated huge crimes against whole economic systems in the name of the "free market." Well, my dear readers, the Financial Curmudgeon is one angry honcho!!! As a public service, I, Mr. Freeze would like you to take a look at the two 60 Minutes segments below. They explain a lot about how we got into this mess. They also illustrate why capitalism, if left unchecked can be a dangerous thing:

Mr. Freeze and his minions have never believed that letting wolves tend the hen house was a good idea. Unfortunately, our financial system has been controlled by individuals who are only concerned with profit. There are a lot of capitalists who have been preaching the virtues of the "unfettered" free market for decades. Here is the constant refrain: "If we would just get out of the way and let the free market operate without the intervention of regulation, then business will prosper and everyone benefits." This is an expression of the Ronald Reagan "trickle down" baloney that so many Americans believe in. Mr. Freeze knows that in America if something is said over and over again, often enough, then it becomes true. Well, today Mr. Freeze takes great pleasure in pointing his big fat figure at all of the libertarian/conservative think tanks, investment "experts," day traders, financial publications and CEO's who have manufactured this get rich easy propaganda. It is a sort of money-idolatry of biblical proportions. The tragic thing is that this MYTH is now causing domestic and international markets to self-destruct.

Mr. Freeze pic by ElDave