According to Steve Kerch, the award winning real estate journalist of Market Watch, the current drop in home values should remind us that house aren’t really “investments.” In his article, entitled Core Values, Mr. Kerch asks us to consider the following:
“At its core, a house is a shelter. Unless the roof caves in, there is always some economic value in that. But most people when they dream about a house or start looking for a house or actually buy one think about value in a whole different way: they think about the fireplace they can gather around with their families, the kitchen where they can show off their culinary skills, the bathroom that they won’t have to share, the schools they will be able to send their kids to, the neighbors they will be able to entertain in the backyard, the parks they can bike and hike and the community events they will be able to attend.”
The current financial turmoil has forced lots of Americans to do some important soul-searching about their lifestyles and spending habits. Many now know that they can’t use their house as a piggy bank. They can’t continue to carry balances on 10 credit cards. They also know that we are all living a little closer to….well…..home.
Recently, one of my neighbors approached me, worried a bit about the softening housing prices. “I’m afraid I’m losing value in my house.” I asked him if he was moving anytime soon and he said no. I asked him if he liked living in our neighborhood. He said absolutely, yes. I then asked him if he liked his home. He said: “I love my house.” I then told him what I’ve always told my clients: unless you’re planning on moving, houses are where you raise your children, where you cultivate joy and togetherness and celebrate life. In general they do increase in value over a long period of time, but they have a much deeper value, a value I hope Americans can rediscover.
Two years ago, my wife and I were visiting my family in Italy during Thanksgiving. We had never been out of the U.S. during Thanksgiving, so we didn’t know what to expect. It is known as giorno del ringraziamento (day of thanks) in Italy. Not surprisingly, most Italians know little about our celebration except that turkey is involved. My family did try to accommodate us and my cousin, Caterina made rotello di tacchino, which is a filet of turkey rolled up around cheese and prosciutto pan fried and served in a light sauce. It was heavenly. BUT it wasn’t Thanksgiving……
The interesting thing is, Americans carry Thanksgiving in our collective DNA. It’s an idea that many cultures find odd. For many people around the world, every day is a constant struggle, so taking time off to be “thankful” is a luxury they can’t afford. This simple fact didn’t occur to me until we came back home.
It wasn’t long after we returned from that trip, that the U.S economy began to show signs of weakness. The real estate market was deteriorating and business got tough. As a real estate agent I have had to change brokerages and offices several times since returning. I have watched many agents leave the business and some have even had to file for bankruptcy due to the current economic situation. Here in Kenmore, WA, home sales are at a virtual standstill. Every day, more grim news comes out regarding bank failures, huge government bailouts and turmoil in the Middle East. We are, indeed, living in interesting times.
And you know what? This is why Thanksgiving matters. It matters because it’s simple. It matters because it doesn’t require advertising, corporate marketing or a religious affiliation. It matters because it’s uniquely American. It represents our deepest sense of generosity, unity and hope. And, yes, it’s the turkey, stuffing, ham, sweet potatoes, pumpkin pie and those delicious leftovers……Have a wonderful Thanksgiving.
Even though this is a reprise of my post regarding the market in Puget Sound, I thought some readers might have some other insights based on their local markets.
The Real Estate section of yesterday's Seattle Times tackles one of the most fundamental and important topics in the real estate industry today: what value does a real estate agent bring to the purchase or selling of a home. The article entitled "Slow housing market means more hours, more expenses for agents," focuses-in on the increased effort and cost agents incur in today's tough marketplace in order to be successful.
What I find most revealing about this particular article is the following confession:
"The days of just taking the listing and putting it into the [Multiple Listing Service] and letting the MLS sell the property are gone," said Brigitte Pascutoi, managing broker at John L. Scott Real Estate's Bellevue North office. (quote from the article)
This may be over-stating the simplicity of a real estate transaction; however, it should be no surprise to the public or, more importantly, the real estate agents themselves that times have changed. In 2004-2007 our local market was overheated to the point of third-degree sun burn. Almost 70% of listed homes were selling each month and prices were increasing at double-digit levels. Lending was, let's say, more liberal (this is a whole other subject) and it was truly the case that merely putting one's home in the multiple service was enough to bring a buyer through the front door and sell the house.
Fast forward to today:
These trends, among many others, have forced the Real Estate Industry to make huge changes in its business model. It has also revealed many of the weaknesses of agents, brokerages and business practices. I won't go into the subject of commissions in this post, but I will say this: I'm not sure that agents are, indeed, working harder nor am I convinced that "working harder" is what they should be doing. Let me explain:
I know I've gone on a bit here; however, I believe we all need to be more up-front about the current state of the real estate market. There are no magic bullets. There is no amount of hard work that will make this process easier. As the article correctly points out, this is a business based on trust and relationships. I have been in this business going on eight years now and I can tell you, after helping a huge number of families buy and sell homes, real estate can be complicated, emotional and difficult. When the time comes, choose your agent wisely.
Picture by mrsdalloway
The National Intelligence Council recently submitted it's "Global Trends 2025″ report to U.S. leaders in order to give them insight into looming problems and opportunities throughout the world. The report is compiled every four years and includes a huge number of stunning and, sometimes disturbing, global trends. Although the report is not intended to be a "crystal ball" analysis, it's assessments are provocative:
It projects a "multipolar" global landscape, where the United States is merely "one of a number of actors on the world stage" and where the U.S. dollar will only be "first among equals" in a basket of international currencies.
Other trends include:
If you're interested in reading the report (or skimming through it), just click on the icon below.
I've also included a NPR audio segment about the report which encapsulates it's trends quite well. I believe it is incumbent upon all of us to try and understand the United States within the context of a more global perspective. Anyone who is being intellectually honest in these challenging times knows that we are not, nor can we afford to be isolationists. The better informed we are, as citizens, the more effective our leaders can move us into the future. Living in ignorance is not an option.
Click this picture to hear the NPR report on "Global Trends 2025″
"If Google is the Web's reference library, Technorati is becoming its coffee house."
This is a quote from Time Magazine and, frankly, they got it right. Last month I was having a conversation with Larry Cragun, the founder of the Undressed Network of Community Blogs, regarding how bloggers can find out more about the phenomena of blogging, how blogs are ranked and if there was an organization that tracked the "best blogs" He immediately said TECHNORATI.COM. For those of you unfamiliar with Technorait, it is (in its own words): "is the recognized authority on what's happening on the World Live Web, right now."
I highly recommend Technorati for those of you who are currently blogging. There are a huge number of valuable resources to help you navigate the HUGE world of blogging. Required reading: State of Blogosphere 2008. Just click on the picture below to read the full report.
Some of the major points from the report are:
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I am an Associate Broker with Keller Williams North Seattle. I have lived in the Northwest for 22 years, grew up in Utah and was born in Nevada. A real Westerner who prefers a tandem bike to a horse!
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