New Rules!

New Rules!

The following was inspired by Bill Maher’s hilarious "New Rules" on his show Real Time on HBO.

When everyone takes things too seriously, we can all use a little humor…

New Real Estate Rules:New_rules

  • Buyers–when working with discount or on-line brokers who don’t show property, stop complaining when the actual listing agent doesn’t accommodate your every whim-you’re getting a discount remember? Grow up-call your agent.
  • Sellers-stop thinking your home is better than everyone else’s-they can’t all be the best.
  • Agents-stop calling for access to listings that say "Vacant, GO DIRECT"-you’re wasting our time.
  • Title companies-start calling us when the deed records, not hours later. We’d much rather work with a professional organization than get free cookies at a sign off.
  • Lenders-you’re supposed to be forging lasting relationships, not devastating ones. Stop being short sided and do the right thing for your clients or Congress will do it for you.
  • America-stop repeating things so they’ll eventually become accepted fact–anyone remember "Weapons of Mass Destruction"?
  • That brings us back to on-line brokers-stop calling everyone but yourself "Traditional Agents"-most agents today are anything but traditional. From now on you’ll be called "Virtual Agents" and every one else a "Professional Agent".

Disclaimer: This information is for entertainment purposes only and includes no legal, accounting or real estate advice nor is this response in tended to be specific to your situation-consult a specialist for your specific situation.

My Little town

Belmont Bragging Rights–Just for fun of course…

There’s just got to be a reason why people choose to pay more to live in one city over another..help me figure it out! (Tongue in cheek folks…)

We live in a little town called Belmont. We bought a home there because back then no one else was. That meant it was a lot less expensive than other towns. San Carlos is a nearby town that a lot of people like to live in; though the cost of owning a home is a lot more there. And the affordability seems disproportionate to their differences. People always said they wanted to live there for the schools; though recent school data suggests that either schools do not have as much impact on where people live as years ago or buyers aren’t reading about it. Is that because literacy in America is down? The schools in San Carlos have always been known for their superior academic excellence; recently however, Belmont has school test scores which have surpassed her neighboring town.

Perhaps it’s lower crime rate that buyers are using to justify paying more for a similar home? No one likes to have their house broken into or their car stolen-not in the suburbs-that’s why we moved there in the first place. But Belmont’s violent crime rate is lower than most of the country and lower than any city she borders-San Carlos included.

Is it perhaps that Belmont just isn’t good at promoting itself? What else could affect the allure of San Carlos over Belmont? According to the latest census results the folks in San Carlos on average make more money than the residents of Belmont–$9,000 a year more to be exact. That’s good too since the median home costs $122,000 more according to August 2007 reports.

Maybe it’s all those sidewalks. I’ve always loved sidewalks; they remind me of being a kid. It’s good to feel like a kid again, though I wouldn’t want to pay $122,000 more to do so. I think I’d rather save all that money and take more vacations to feel like a kid.

I like to eat too. San Carlos has a lot of good restaurants and a lot more to choose from than Belmont. Could it be that other people enjoy eating as much as I do and are willing to pay dearly for it? Though-last time I ate in a San Carlos restaurant I don’t remember them asking for my residency card when they offered me a table.

What could it be that draws people to San Carlos over Belmont? They do have a lot of nice flags-you know-the ones with flowers and a lot of colors that they fly everyday-as if to show the world that their town is more colorful than others.

It could be the streets. The streets in San Carlos are much more laid out like a grid pattern-straight and predictable. Belmont’s streets are just the opposite-unpredictable and like a small mountain town ought to be. Maybe that’s why there’s less crime? Everyone knows criminals aren’t that smart or they wouldn’t be doing what they do for a living. Maybe they just get lost going to Belmont.

It makes my wonder where they’d all live if there weren’t city boundaries? But which name would we use-Belmont or San Carlos? I guess San Carlos since it’s got a Spanish name like most people think bay area towns ought to have.

Whatever the reason I like our little town-as unpredictable as it is.

You can read more about our little town here in our blog BeautifulMountainBlog.org

Disclaimer: This information is for entertainment purposes only and includes no legal, accounting or real estate advice nor is this response in tended to be specific to your situation-consult a specialist for your specific situation.

Chamber Events Update 10/18/2007

Sundays @8:30AM – 1:00PM ~ Farmers Market – Booth space available.

NOW YEAR ROUND!!!

If you would like to promote your company – come and share the Chambers booth.  This is a free service to members of Belmont Chamber.  Call the office at 650-595-8696 or Email us at execdirector@belmontchamber.org with dates and times that you would like to reserve part of the booth.  This is a GREAT way to reach the community.

Monday, October 1st – Monday, November 5th ~ Dolly’s Hal-O-Ween pet photo contest

Location:  Dolly’s Treasures

Enter up to 2, 5×7 or smaller, photos of your pet (costumes optional).  You may bring your photo(s) to Dolly’s Treasures in the Carlmont Village Shopping Center, Belmont. or e-mail to dollydawg@sbcglobal.net  The photos will be posted at our store and customers will be able to vote for their favorites– Nov 6th through Nov 17th.  The photos receiving the most votes will be eligible to win one of 3 pet gift baskets from dolly’s Treasures. Value up to $50.00.

September 10th – November 3rd @ 2:00 PM & 3:00PM ~ National Weight Loss Contest

Location:  Healthy Inspirations – 390 El Camino Real #H

Healthy Inspirations is having a National Weight Loss Contest called, "Get Inspired to lose it". The contest starts September 10th & ends November 3rd, just in time for the holidays. It is an 8 week fun program open to all women, including Teens. Everyone participating will receive a T-shirt & pedometer. There will be big cash awards!!  So hurry into Healthy Inspirations to register for the contest. Located at 390 El Camino Real, #H, Belmont. Call 650-595-5239 for additional information.

Monday, October 15th @ 12PM~ Rotary Meeting

Location:  The Van’s Restaurant "on the hill"

The Belmont Rotary meets every Monday at The Van’s Restaurant "on the hill"!

Tuesday, October 16th @ 8:00AM ~ Lions Meeting

Location:  IHOP on El Camino Real in Belmont

The newly constituted Belmont Lions Club meets on the First and Third Tuesday of the month at 8:00 a.m. at the Belmont IHOP.  New members are most welcome. 

Tuesday, October 16th @ 7:00PM ~ Planning Commission Meeting

Location:  City Council Chambers – One Twin Pines Lane

The City of Belmont Planning Commission meets on the first and third Tuesday of each month at 7:00 p.m. in the Belmont Council Chambers One Twin Pines Lane, Belmont, CA.  Planning Commission meetings broadcast live on Channel 27 – Also available on the Internet at: http://www.communitymediacenter.net/watch/belmont_webcast/index.html

Thursday, October 18th @ 4:30-6:30 PM ~ Fall Harvest Mixer

Location: Half Moon Bay Lodge

Please email your RSVP to stephanie@smccvb.com or print out this form and fax to

650-348-7687 by 10/15.

Saturday, October 20th @ 8 to 11 pm ~ Jazz Under the Stars at CSM
Location: CSM Building 36, Fourth Floor Observatory
Free and open to public
Contact: 650.378.7241 or collegeofsanmateo.edu/astronomy
This is a monthly star party near the first quarter moon and is held weather permitting. Through telescopes, see lunar mountains & craters, Jupiter, galaxies and more–all while listening to the sound of KCSM Jazz 91.1 FM. Free parking in lots 7 & 8 (collegeofsanmateo.edu/map). This event is co-sponsored by CSM and the San Mateo County Astronomical Society.

Saturday, October 20th @ 2PM  ~ Book Signing  

Location: Dolly’s Treasures

Dogs of all kinds, along with with their families, are invited to a unique, book signing event at Dolly’s Treasures, in the Carlmont Village Shopping Center.

Authors Shelley Frost and Katerina Lorenzatos Makris will be on hand to sign copies of their new book, YOUR ADOPTED DOG: Everything You Need to Know About Rescuing & Caring for a Best Friend in Need. Included in the book is the story of Dolly’s Rescue. adoption and her rise to becoming the proprietress of her own pet boutique. The authors are inviting

anyone who has adopted or rescued a dog to give a two-mitue videotaped "testimonial" the story of their own pet.

Monday, October 22nd @ 12PM~ Rotary Meeting

Location:  The Van’s Restaurant "on the hill"

The Belmont Rotary meets every Monday at The Van’s Restaurant "on the hill"! 

Monday, October 22, 2007 ~ Last Day to register to vote in November 6th election.   See Link for registering – http://www.sos.ca.gov/elections/elections_vr.htm

Tuesday October, 23rd @ 7:30PM ~ City Council Meeting

Location:  City Council Chambers – One Twin Pines Lane

City Council meets on the second and fourth Tuesday of the month at 7:30 p.m. in the City Council Chambers, One Twin Pines Lane in Belmont. Council meetings are broadcast live on Cable Channel 27 in Belmont.  If you would like to contact the City Council collectively, please use the following link:  CityCouncil@belmont.gov – Please be advised: Our Mail Server does not accept files over 2 megabytes. Planning Commission meetings broadcast live on Channel 27 – Also available on the Internet at: http://www.communitymediacenter.net/watch/belmont_webcast/index.html

Thursday, October, 25th @ 6:30PM ~ Water District Board Meeting

Location:  3 Dairy Lane

The Mid-Peninsula Water District Board of Directors holds their regular monthly meetings on the 4th Thursday of every month.  Meetings are held at the District office located at 3 Dairy Lane, Belmont.  Meetings start at 6:30pm and the public is invited at attend.  Change of meeting dates due to the holidays:  November’s meeting will be held on Tuesday, November 13, 2007 and December’s meeting will be held on Thursday, December 13, 2007.

Thursday, October 25th @ 5PM – 7:30PM ~ Mixer

Location:  Belmont Advanced Chiropractic – 1601 El Camino Real, Suit 301

Come and see a fellow members operation and promote yourself and your business with other people who are part of the Chamber.  Come and celebrate out 5th anniversary in Belmont!

Friday, October 26th @ 8PM, Sunday, October 28 @ 7 PM ~ Follies In Concert

Location: Ralston Hall Mansion Ballroom

Book by James Goldman, Music and Lyrics by Stephen Sondheim, Produced originally on Broadway by Harold Prince.  By special arrangement with Cameron Mackintosh.

A benefit on behalf of summer Music Theater Conservatory scholarships.

Musical Direction By William Liberatore

Directed By Marc Jacobs

Choreography By Dottie Lester White

Admission $42

Saturday, October 27th @ 10AM-5PM ~ Master Classes & Sondheim Seminar

Location: TBA

"Performing Songs Of The American Musical"

Master Class: Meg Mackay, 10 AM-noon

Master Class Marc Jacobs, 1-3 PM

"Sondheim And The American Musical"

Master Class: 3-5 PM  $30 each/participants, $15 each/auditors. Seminar $15

650-508-3429 or fcamus@ndnu.edu to register

Saturday, October 27th and 28th @ 12PM – 4PM ~ Bargain Book Sale

Location:  Book Nook, #7, Twin Pines Lane, Belmont

Sponsored by the Friends of the Belmont Library.  Information; 650-593-5650

Monday, October 29th @ 12PM~ Rotary Meeting

Location:  The Van’s Restaurant "on the hill"

The Belmont Rotary meets every Monday at The Van’s Restaurant "on the hill"! 

Oct 1 to Nov 5th.   

Tuesday, October 30th @ 8:00AM ~ Lions Meeting

Location:  IHOP on El Camino Real in Belmont

The newly constituted Belmont Lions Club meets on the First and Third Tuesday of the month at 8:00 a.m. at the Belmont IHOP.  New members are most welcome. 

Wednesday, October 31st, 2007 ~ CSM Fall Health Fair
Location: CSM Building 5
Free and open to public
Contact: 650.574.6396
This event will features more than 30 health services-related booths (for example, blood pressure screening, blood sugar testing, massage, podiatry, yoga & fitness, acupressure and pandemic flu preparedness). A

blood drive will also be held. Flu shots will be administered. Other highlights include free food and prizes.

Saturday, November 3rd @ 7:30 PM ~ Concerto Competition

Location: Taube Conference Center

Student performers compete for solo performances with the Redwood Symphony’s 2008 season.  Awards in Vocal and Instrumental categories.

Admission $5 general

Monday, November 5th @ 12PM~ Rotary Meeting

Location:  The Van’s Restaurant "on the hill"

The Belmont Rotary meets every Monday at The Van’s Restaurant "on the hill"!

Tuesday, November 6th, 2007 ~ General Municipal Election

Location:  City of Belmont

The City of Belmont will hold a General Municipal Election on November 6th.  More details to follow.

Tuesday, November 6th @ 8:00AM ~ Lions Meeting

Location:  IHOP on El Camino Real in Belmont

The newly constituted Belmont Lions Club meets on the First and Third Tuesday of the month at 8:00 a.m. at the Belmont IHOP.  New members are most welcome. 

Wednesday, November 6th @ 7:00PM ~ Park & Recreation Commission Meeting

Location:  City Council Chambers – One Twin Pines Lane

Meetings are held in City Hall Council Chambers – One Twin Pines Lane in Belmont; on the first Wednesday of each month at 7PM

Tuesday, November 6th @ 7:00PM ~ Planning Commission Meeting

Location:  City Council Chambers – One Twin Pines Lane

The City of Belmont Planning Commission meets on the first and third Tuesday of each month at 7:00 p.m. in the Belmont Council Chambers One Twin Pines Lane, Belmont, CA.  Planning Commission meetings broadcast live on Channel 27 – Also available on the Internet at: http://www.communitymediacenter.net/watch/belmont_webcast/index.html

Saturday, November 10th, and Sunday, Nov. 11th @ Library Hours ~ Second Annual Fobl Book Store Sale

Location:  Belmont Library, Taube Room

Many books at 50%, some at 20%, with Special books at 20% off for Friends’ members.

Sunday, November 11th @ 3PM ~ The Three Sopranos

Location: Ralston Hall Mansion Ballroom

An ireverent approach to operas greatest hits and musical theater classics: presented by Marcelle Dronkers, "Cackle-atura Soprano," Aurora Bardes, "Drama Queen," Debra Lambert, "Messy-Soprano."

Admission $20/$10 Seniors and Students

Thursday, October, 25th @ 6:30PM ~ Water District Board Meeting

Location:  3 Dairy Lane

The Mid-Peninsula Water District Board of Directors holds their regular monthly meetings on the 4th Thursday of every month.  Meetings are held at the District office located at 3 Dairy Lane, Belmont.  Meetings start at 6:30pm and the public is invited at attend.  Change of meeting dates due to the holidays:  November’s meeting will be held on Tuesday, November 13, 2007 and December’s meeting will be held on Thursday, December 13, 2007.

Tuesday, November 13th @ 7:30PM ~ City Council Meeting

Location:  City Council Chambers – One Twin Pines Lane

City Council meets on the second and fourth Tuesday of the month at 7:30 p.m. in the City Council Chambers, One Twin Pines Lane in Belmont. Council meetings are broadcast live on Cable Channel 27 in Belmont.  If you would like to contact the City Council collectively, please use the following link:  CityCouncil@belmont.gov – Please be advised: Our Mail Server does not accept files over 2 megabytes. Planning Commission meetings broadcast live on Channel 27 – Also available on the Internet at: http://www.communitymediacenter.net/watch/belmont_webcast/index.html

Friday, November 16th @ 8 am ~ CSM Jazz fest (All Day)
Location: CSM Theatre
Contact: 650.574.6163
More details are forthcoming.

Saturday, Nov. 17th & 18th @ 10-4 PM ~ Book Nook Holiday Sale

Location: Book Nook

Open during the Holiday Craft Faire

in Twin Pines Park.

Saturday, November 17, 8 to 11 pm ~ Jazz Under the Stars at CSM
Location:CSM Building 36, Fourth Floor Observatory
Free and open to public
Contact: 650.378.7241 or collegeofsanmateo.edu/astronomy
This is a monthly star party near the first quarter moon and is held weather permitting. Through telescopes, see lunar mountains & craters, Jupiter, galaxies and more–all while listening to the sound of KCSM Jazz 91.1 FM. Free parking in lots 7 & 8 (collegeofsanmateo.edu/map). This event is co-sponsored by CSM and the San Mateo County Astronomical Society.

Saturday & Sunday, November 17 & 18, 2007 @ 10AM until 4PM ~ Holiday Craft Faire

Location:  Twin Pines Senior & Community Center

Come and get ready for the Holidays; buy items to give and decorate your home.  For more information call 650-595-7444

Sunday, November 18, 2007 @ 1PM – 4 PM ~ Home for the Holidays

Location: Ralston Hall Mansion, Notre Dame de Namur University, 1500 Ralston Ave.

Join us for a festive afternoon including a light luncheon and deserts, spirits of the season, boutique marketplace, informal modeling of special occasion fashions, designer holiday decorations and lively entertainment.  Adults $30 before November 9th and $40 after November 9th.  Ages 11-17  $20.  Please call 650-508-3501 for tickets.  Information 650-508-3645.

Monday, November 26th, 2007 in the evening ~ Light of Belmont Christmas tree

Location:  Carlmont Shopping Center

The Christmas tree at the Carlmont Village Shopping Center will have its annual lighting of Belmont’s Christmas tree.  More details to follow – mark your calendar.

Friday, November 30th, 2007 @ 6PM-11:30PM ~ The 10th Holiday Gala "All that Glitters"

Location:  Oracle Conference Center

Annual Fundraising Gala – This event is to raise money for the Arts & Education Foundation to let the community have a grant source for arts and education.  An evening of entertainment, raffle items, dance and CHEER!!!

Wednesday, December 5th, 2007 @ 6:30 PM ~ Tree Lighting Ceremony

Location:  Civic Center, 1 Twin Pines Lane

We’re finalizing the adult choir and there will be refreshments!

Friday, December 7th, 2007 and Saturday and December 8th, 2007 @ 7:30 PM ~ Christmas Double Bill

Location: Cunningham Memorial Chapel

Amahil and the Night Visitors

Menotti’s famous Christmas opera, conducted by Henry Mollicone, directed by Greg Fritsch, performed by the NDNU/Pocket Opera Studio.

NDNU Concert Choir

The new choir makes its debut, performing music of the season, under the direction of Michael Najar.

Admission $20/$10 Seniors and Students

Saturday, December 8th, 2007 @10AM until Noon ~ Breakfast with Santa

Location:  Twin Pines Senior & Community Center

Come and have Breakfast with Santa Claus.  For more information call 650-595-7444

Saturday, December 8th @ 1PM – 4PM ~ Santa Paws

Location: Dolly’s Treasures, in the Carlmont Village Shopping Center

Bring your pet for a photo opportunity with Santa.  This event is to benefit

animal rescue organizations in the Bay Area.  Donations of $20 or more will receive 2 4×6"

prints of your pet (and or you) with Santa, plus a CD of all the original pictures taken of your pet during the photo shoot.

Tuesday, December 11th @ 7:30PM ~ Broadway Studio Showcase

Location: NDNU Theater

Directed by Marc Jackobs

Music Direction by William Liberatore

Choreography by Dottie Lester White

Songs, scenes and dances performed by the Fall 2007 Musical Theater Workshop

Admission $5

Tuesday, November 13th 

@ 6:30PM ~ Water District Board Meeting

Location:  3 Dairy Lane

The Mid-Peninsula Water District Board of Directors holds their regular monthly meetings on the 4th Thursday of every month.  Meetings are held at the District office located at 3 Dairy Lane, Belmont.  Meetings start at 6:30pm and the public is invited at attend.  Change of meeting dates due to the holidays: December’s meeting will be held on Thursday, December 13, 2007.

Park and Recreation now has online registration; http://activenet4.active.com/belmontparksandrecreation/.  If you have an Activity, Camp, Class or Swimming that you would like to sign up for, just click on the http above.  You can sign-up 24/7. 

Bay Area Real Estate Market Update-September 24, 2007

Drew & Christine Morgan Morganhomes.com

Visit our Real Estate Blog on Active Rain real estate network.

Disclaimer: This information is for entertainment purposes only and includes no legal, accounting or real estate advice nor is this response in tended to be specific to your situation-consult a specialist for your specific situation.

Many of the real estate stories you may be hearing are dealing with national or statewide issues and do not reflect our local market. That doesn’t mean that the overall housing picture doesn’t affect our market—it does. The perception of a declining market is all it takes to create one. As optimistic as homeowners are about the value of their homes, we believe that somewhere in the back of their minds there’s a nagging uncertainty of future valuation and a realization that at some point the run up in real estate values will come to an end. And of course it will. The question remains is this it? Are we there now?

In the Bay Area, conditions are not the same as many parts of the country where cities are reporting a rapid decline in home values. These are some of the factors which may enable the Bay Area to weather the current real estate storm better than other parts of the county:

  • The Bay Area is currently adding high paying jobs to the workforce,”… Jobs in the San Jose area increased 1.6 percent during the year.”—increasing the demand for housing with high paying jobs that can support the Bay Area home prices. Though the overall employment picture is not as rosy as construction and other jobs related to the housing industry are waning.
  • The Bay Area rental market is tapped out at near 100% occupancy rates adding to the pressure to buy a home.
  • New construction is limited due to land constraints and fewer new homes starts as developer try and keep inventories low to buoy prices. This is keeping the supply of homes (inventory) at reasonable levels.
  • The last major downturn in real estate for the Bay Area was in 1990-1994 “…The country’s last recession begin in July 1990 and lasted until March 1991. But NBER did not officially declare the downturn over until December 1992.” The actual decline in real estate values lasted about three years and then remained flat for another several years depending on what city you lived in). The difference between the last major decline in home values and the precipice we are on now is that we are not in a recession as we were in 1990.  Absent the need for homeowners to sell due to a job loss or relocation, sellers may choose to wait out the market. This would continue to keep inventory levels from skyrocketing as they did in 1990. Less motivated sellers equates to fewer “fire sales”, helping keep values from plummeting.

This isn’t to say we aren’t in for a bumpy ride. The issues facing the sub-prime lending have led to increasing mortgage defaults around the country and have even the most enthusiastic real estate investors on edge. The Bay Area real estate market weathered the recession of 2001 fairly well and may do so again but any protracted or significant recession will have a huge impact on the Bay Area housing market due to the current low affordability index.

The optimism and expectations for Bay Area real estate are very high—too high to be sustainable. A pull-back will happen. When it will happen and how deep it will go is yet to be seen.

What should you do?

First time buyers who can afford a home, feel their jobs are secure and are not planning a move in the next several years should seriously consider buying a home while there’s more to choose from and less completion. Chances are you’ll get a better deal than what the median prices reflect. In the early 1990’s the buyers who purchased a home despite flat (or declining) appreciation levels were in the best position when the market rebounded as pent-up demand for housing meant multiple offers and a rapid increase in home values (*the recession had been over for nearly two years before the Bay Area housing market had a significant rebound).

Trade-up sellers: This group really has nothing to lose by trading up in this market. Falling values means a more expensive trade-up home is less in real dollars. More inventory means more to choose from and seller’s are even considering a contingency on the sale of your residence—something we have not seen in years.

Disclaimer: This information is for entertainment purposes only and includes no legal, accounting or real estate advice nor is this response in tended to be specific to your situation-consult a specialist for your specific situation.

Belmont’s Candidates Speak out…

Belmont’s Chamber of Commerce is sponsoring a meet the candidates night Thursday, October 4th at the library from 7:00-9:00. This is a great opportunity to meet the new candidates before the November 6th election. There are some excellent candidates challenging the sitting council and you owe it to yourself to hear what they have to say.This should be an exciting race!

Candidateforum COME – HEAR – ASK

The candidates will be at the Belmont Library October 4th 7PM-9PM.

The Belmont Chamber is hosting this opportunity for you.

Come meet the candidates

Hear what the candidates are about and what they want for Belmont

Ask the candidates what their view is

This is a wonderful opportunity for you to get your answers.

Belmont Library ~ 1110 Alameda de Las Pulgas ~ October 4th ~ 7PM

Belmont’s Farmer’s Market

Most Sunday’s we’re busy working in real estate whether its holding an open house or showing property. This Sunday we had the day off and we were excited to be able to get over to Belmont’s Farmer’s Market.

Belmont_fm_image_2This week they were promoting the last grapes of the season and there were more varietals than I had ever seen in one place.

There’s also organic produce, fresh bakes berry pies, breads and a fantastic cinnamon loaf that reminds me of one my mother made when I was young (I’ve seen it at Piazza’s too if you can’t hold out for a week. Petes_logo Pete’s Coffee and stroll on over across the street.

It’s held every Sunday from 9:00-1:00 at the CalTrain Parking Lot at El Camino Real & O’Neill Street. Grab a cup of coffee across the street at

The Writing was on the Wall

The Writing was on the Wall

Addendum to Part 1 of a 2 part series–"Which End is Up" or Understanding Our Housing Market"

Historically low interest rates, low cost housing availability across the country, investors hungry to reap a return after the dot com crash all set the stage for an overactive interest in housing as an investment.

There are really three distinct factors which played into the current market conditions across the county. The first is the sub-prime market. Essentially, these are loans which are made to folks who otherwise could not qualify for an "A" paper loan-usually that means low credit scores. Anyone with even the foggiest crystal ball could foresee that giving loans to people with bad credit is risky. The second major players were investors. Aggressively seeking any new vehicle to safely invest thousands turned to real estate. The availability of innovative interest only and negatively amortizing loans fueled the investment fire. Investors were able to put little or no money down on a new housing development in Las Vegas and before the project was completed for occupancy could re-sell at a huge profit.

As with any scheme is better to get in early rather than later. Not only did the country as a whole have more sub-prime loans it had more investors with less emotional ties to their homes. Both of these relied on one thing-low interest rates. As the "fixed for five year adjustable loans" came due, for many investors it no longer made sense to hold onto their investment as rents could no longer cover the payments. This created a flood of inventory as investors-all with the same issues (rising interest rates) flooded the market. Since these were investment vehicles which had for the most part already established considerable equity-selling and selling fast was the exit strategy. Of course this meant selling lower than your competition. The third factor was Wall Street’s hunger for new high yield investment securities which neglected to understand the risk these investment vehicles carried.

On the homeowner side, many of the sub-prime loans also began to adjust with the difference being many of these folks could not afford the new higher payment. The few that had neg-am loans had no equity to fall back on since housing prices were falling due to the sell-off of investment properties. This forced those who could to try and sell, further increasing inventories and lowering values; while others simply had no choice but to fall into default–eventually losing their home to the banks.

Now the banks are on no place to hold onto all of those loans they made so they sold them as securities on Wall Street-another set of hungry investors who jumped on the bandwagon and bought up all the sub-prime loans they could get their hand on. With thousand of loans in default, mortgage companies and Wall Street was stung by portfolios which were now worth nothing and did what Wall Street always does-overreact. With the sub-prime rate of default was reaching 15%, the default on Jumbo loans was only leas than 1/2/ of one percent. Throwing the proverbial baby out with bath water, they hastily decided that all mortgage backed securities were bad and no longer bought any Jumbo loans either (those over $417,000 not backed by Fanny Mae or Freddie Mac). With no one to buy these loans this raised the cost of Jumbo rates since mortgage companies were now forced to carry the loans "in-house", or add it to their portfolio–substantially increasing their exposure and risk therefore charging more. In July the overnight rate for Jumbo loans increase over 1% in one day.

Since most of the loans in the Bay Area are Jumbo loans this effectively made the cost of homeownership increase substantially overnight-hence with homes less affordable and at already historically high prices, a pull back began.

Opportunities in an Emerging Market

Part II of a Two Part series

Part 1 "Which End Is Up" or "Understanding Our Housing Market"

Opportunities in an Emerging Market

There are always opportunities in any market. As in the stock market where you can profit on a given stock whether it is going up or down depending on the position you hold, real estate also has it’s opportunities in a changing market as well.

It has been a seller’s market for years. So where are all the buyers now? Clearly the interest rates have increased making homeownership more expensive, but that can’t account for the current market pull back we’re experiencing. Certainly some buyers are playing a game of wait-and-see with the home values and others the same game with interest rates.

Smart investors usually buy and sell when no one else is. We’ve devoted a lot of time to discussing "When is the Best Time to Sell a Home" for seller’s wishing to try and time the cycles within a given year. For buyers, we feel an opportunity exists for the next year to acquire sound real estate investments. Housing price stabilization in the Bay Area and foreseeable job and economic growth all spell an environment rich for investment. If you are a buyer who never made it into the housing market now’s an opportune time to take advantage of less competition and softer pricing. If you are waiting for interest rates to go down further, that’s a fool’s bet since you can always refinance if they do and you can do nothing about it if they don’t. If you are waiting for home prices to plunge the same trap awaits-when will you know if you are at the bottom of a market?  When you see prices start to go back up.

For sellers wishing to sell and buy a more expensive home, now’s your opportunity too. In the superheated market we endured the past 10 years, purchasing a replacement home contingent upon the sale of your home-even when your knew your home would sell-was almost impossible due to the overwhelming competition of offers with no contingencies. With the current high inventories and less competition many sellers are now forced to entertain offers with contingencies which were unheard of just a year ago.

Was your home worth more earlier in the year? Perhaps, and it will certainly be worth more again in the future; but so will the replacement home you area purchasing. Remember. If home values dip 10% and you’re buying a more expensive home in real dollars you are coming out ahead.

If you are waiting to sell when you think the market is at its peak you already missed it. Do you wait for another appreciation cycle or move on with your life?

As we’ve always said, predicting the market is impossible to do with precision. Use real estate to enhance your life-not dictate it.

Drew & Christine Morgan-MorganHomes.com Belmont Real Estate

Visit our Blog at Beautiful Mountain Blog.org

Which end is up? or Understanding Our Housing Market

Which end is up? or Understanding Our Housing Market

Part 1 of a 2 part series

"Reports of my death are greatly exaggerated"– Mark Twain quotation after hearing that his obituary had been published in the

New York

Journal.

The same might be true for the real estate market in the Bay Area. While everyday there’s some piece of news about the Bay Area’s real Estate market, many of it is focused to capture your attention in a sensational way and does little to offer insight and discussion.

Since no two markets are identical it’s difficult to say where this one will end up. But the relentless news stories about the mortgage industry melt-down and sub-prime loan mess has got even the most bullish investors nervous.

Clearly there will be a shake out (which is already occurring). Many areas of the country experienced a run-up in home values which was unsustainable and are now feeling the pull back which invariably happens after a bull market run-it should come as no surprise (read The Writing Was on the Wall for an explanation of what set the stage for the current crises).

The last large down-turn in Bay Area housing prices was in 1989-1994 when Bay Area communities saw huge paper gains in real estate evaporate-fine if you didn’t have to sell, but there was also a recession and many people were forced to sell their homes due to a company relocation or the loss of a job altogether; which is precisely the main difference in this market cycle compared to 1989-we’re not in a recession-in fact more jobs are being created in the Bay Area than are not.

As in the last housing market adjustment, some states faired better than others and some cities faired better as well. One thing we currently know is inventory levels are up and sales down. These two opposing effects will eventually result in a decrease in home values; when inventory levels rise and sales don’t, inventory grows and homes generally sell for less. There are of course radical pundits on both sides of the debate-one side stating emphatically that values will drop 50% and the other side in denial that anything could affect our precious market. As in most cases, the truth will lie somewhere in between.

How will this affect the Bay Area? For the immediate future it boils down to confidence. If homeowners believe that the market may be headed for a protracted decline they will be inclined to sit back and wait out the market. This of course will have a self-fulfilling prophecy effect since more homes will sit on the market longer and sell for less. If however, interest rates go lower, many homeowners-previously pushed out of the market-may return and seek opportunities.

Part II

Opportunities in An Emerging Market

Drew & Christine Morgan MorganHomes.com Belmont Real Estate

Visit our Blog BeautifulMountainblog.org

Agent Exodus in Real Estate

This is an interesting article from the New York Times about agents getting out of the real estate business. Sorry, but I got in the business in 1990 when it was waning and made it through the tough times for the next five years. If these agents aren’t committed to making real estate a career and were only in it for the fast bucks–well, bye then.

I’ve seen plenty of new agents coming along without the commitment and drive necessary to take this industry and their business (and mine) seriously. In fact, they’ve dragged our existing business down with less than professional behavior. (Call first then key safe what does that mean?)

And this article quotes none other than the owner of that company in Seattle, He is quoted, "Some who want to stay in the business are taking a second look at working for commissions." As if to say traditional agents don’t? He goes on, "People who used to turn up their nose (sic) at working for us are now drilling holes to get into the building," said Mr. Kelman of Redfizzle, which pays a salary and a bonus based on customer satisfaction. "He said that during the first six months of 2007, Redfizzle received 2,000 résumés and hired 34 agents, bringing the total at Redfizzle to 40. Mr. Kelman says he expects to hire 35 to 50 more agents in the next year."

OK. Simple math tells me he had 6 employees in the beginning of the year! This was a company that you might remember was working with 60 minutes last year and was to represent the new model which would do away with ”traditional agents". Does ABC have an interest in his company? How can a guy with 6 "virtual employees" single handedly alter forever the "traditional" agents’ way of doing business on a comprehensible level? You know the one where agents actually show property?

Read my post on "traditional Agents" and the scam being propagated by "virtual agents" to differentiate themselves when the only difference is the service they provide (or lack thereof).

Drew & Christine Morgan, MorganHomes.com Belmont Real Estate