Kenmore, WA

Many economic reports have suggested that the Northwest is not suffering the severe downturn experienced in many other parts of the country. Indeed, until recently Boeing, Microsoft, PACCAR Trucks and a number of other strong performers had been sheltering our area. The job market was still stable and the big players seemed to be doing well.

The announcement on Monday of the shocking layoff of 3400 high level Washington Mutual employees and the virtual standstill in real estate sales are only two of the many signs that the easy times are over. Also, the "experts" finally acknowledged that we have been in a recession for almost a year now (aren't the experts always the last to know!).

Real estate agents and brokerages are not doing well. No matter how optimistic one wants to be, things are not looking good. In a recent article by Kirsten Grind of the Puget Sound Business Journal entitled "In Washington, real estate agents switch to smaller firms, or quit," she reports that:

• 2800 agents have abandoned the business since the beginning of 2008, a 9% drop
• The Department of Licensing reports that hundreds of others have put their licenses on hold
• There has been a huge migration of agents from the traditional full-service brokerages to smaller low-cost offices
• Sales were down 16% in September and 20% in October (based on last years sales)

My colleagues and I believe that Ms Grind's numbers are optimistic as they are based on statistics compiled by the Northwest Multiple. We find it hard to believe that almost 27,000 agents are actively engaged in the business at this time. Even though there is a record-high inventory of properties, only 11% of the inventory is turning over in the last several months.

So what's an agent to do? I highly recommend you all buy a copy of Jim Collins' "Good to Great" and read the chapter about the Stockdale paradox. In short: we all need to take a cold, hard look at our current reality while at the same time act as if we will overcome in the end.

picture courtesy of jaredchapman

I received an email from a good friend who just got back from a vacation in Italy. Quote: "We reluctantly returned today........."He and his wife visited Lucca which happens to be the main town in the province where my relatives live (on my father's side). My wife and I visited there this August so hearing about Italy made my heart race. If you're familiar with the weather here in the Seattle area, you know that the sky is usually gray from October through June (there is an occasional sun-break or two) so the thought of being back in Italy makes me crazy......so much so, that I went back through some pictures of Italy. I hope you enjoy this short, little vacation:

This is a 300-year-old mill (situated over a river) that is currently a guest house five minutes away from the home of my cousins.

A shot of the valley below my cousins house (rustico).

All of the pictures above were taken around Lucca. Ah, I feel better already. Oh, this little vacation wouldn't be complete without a "real estate" angle. Below, I've included a YouTube clip highlighting Tuscany. Watch it and weep.

One of the most interesting programs on Radio today is Weekend America (American Public Media & National Public Radio). The program’s topic today is about the “meaning of home” and it’s and incredibly interesting and timely program. Coincidentally, yesterday I wrote a brief post about how the current financial challenges in America may change our perspectives about the true value of our homes. Are they merely an “investment” or are they more than that? Seems like a simple question but, as you’ll find, the concept of home is amazingly complex. Just click on the picture below and you will be linked to this program:

A couple of my favorite sections of the program are highlighted below. The first is “Your Stories of Home” which includes short essays by many different people around the U.S. Click on it to see more:

As a real estate agent, “The Tragedy of Stuff” strikes a particularly deep cord. In the course of doing my job, I have seen how the human tendency to accumulate things holds a deep psychological grip on our lives. Click on the picture to listen to this story.

I hope you enjoy the variety of stories told in this episode of Weekend America.

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.