A Silver Lining?

It’s getting harder and harder to watch the news, don’t you think?  The talking heads have got to have a drum to beat on, and they hit it hard and often.  Remember OJ, Lacy Peterson, Iraq?  The media killed us with that stuff, until it was time to move on to the crisis du-jour.

Today’s crisis is hitting us all where it hurts though.  Our 401K’s are now 201K’s. (I didn’t make that up, so kudos to whoever did).  Our home’s are worth a whole lot less than they were.  No doubt, it’s dog-gone tough out there.  I’m an eternal optimist.  I think what goes down, is soon to come up.  This is just a cycle, not the first, not the last.  But a bad one, and one that’s sure to get worse in the near term.  I feel the pain.  My house is for sale.  I don’t know when I’m gonna get paid again.  I sell homes, and as it turns out, homes aren’t easy to sell today.  But here’s the good I see from this:

Homes are way more affordable than than they were 3 or even 5 years ago.  That doesn’t help much if you bought in the middle, and I’m right there with you.  But it does help if you’re a young buyer with hopes and dreams and aspirations.  At least in Truckee, if you weren’t staring down the barrel of a nice inheritance, you weren’t gonna get in as a “first-time” buyer 3 years ago.  That’s changed.  Then, there’s been the little reality check, that maybe our home’s weren’t meant to be an ATM card.  My home equity has kept my family afloat thank God, but it was never meant to be a go to source for ski boats, or luxury vacations or whatever.  Then there’s just the general purpose re-tooling of family.  Financial hardships can be tough on the family, or marriage.  But, they can also draw us closer, forcing us to focus on what’s really important.  That’s what’s happened in my home.  We’re not sure where the Good Lord is gonna take us, but we’re gonna keep on keeping on, knowing that in the end, this is going to work out.

We could lose everything from a material sense, sure.  Can’t take my soul, won’t squash my spirit, can’t keep my dog from thinking that I’m the best friend ever…

We’re gonna get through this!

3rd Quarter 2008 Single Family Residential Sales

Take Door Number ???

Real estate is a funny endeavor.  There’s a real collective subconscious to it.  Many times, I have seen a property which festered on the market for many months receive multiple offers the same day.  No rhyme or reason, it just happens that way.  The phenomena is similar in regard to overall market activity.  The whole thing just kind-of churns along , and then BAM!  It’s like someone turns on a big faucet, and the entire market heats up at once.

Today, I got to consult with three different clients who are in various stages of making some real difficult decisions.  (Collective subconscious?)  Maybe.  Big faucet?  Lets hope not!

If you’re a homeowner, it’s pretty certain that you’ve lost some value in the last couple of years.  In some cases, you’ve lost a bundle.  If you’ve only owned for a couple of years, you may owe a heck of a lot more on your little love shack than you could sell it for.  What to do…What to do?

1) Keep making your payments and stick it out.  This assumes that you haven’t lost your job, health, ability to rent it out for a reasonable return or something along those lines.  Plus, when you signed on the bottom line, you meant it.  Don’t hate me, but a signature used to mean more than a handshake, and a handshake meant everything.

2) Modify your loan.  Some lenders are actually paying attention to the current climate.  Turns out they don’t want your house either.  Rather than take it from you, they just might renegotiate your terms.  They’re not just gonna roll over and offer it up, but if you’re willing to work at it, it’s a viable option with some lenders.

3) Short Sell. This is where the bank (or banks if you tapped your equity) agree to let you sell your property for less than you owe.  It’s a sticky process, and typically lengthy, but more and more lenders are seeing this as a better way out for them than foreclosing.  They don’t need another home on their books.

4) Deed In-Lieu of Foreclosure.  Basically, a foreclosure where you voluntarily send the lender your keys.  If you’re unable or unwilling to continue making payments on your loan(s), this is a bit more tidy than foreclosure.

5) Foreclosure.  Formally rare, and now common place.  My understanding, is that the process used to take 4-6 months, and now many deed-holders are delaying that to twice as long.  The deed-holder loses more here, as they generally have to do some repairs, and some other semantical junk prior to listing the property for sale below market rate to get it sold and off their books.

My knowledge is limited here!  This is just a little info if times are tough. If you’re getting ready to make one of these decisions call your accountant and call an attorney.  Make sure you understand all of the ramifications of what you choose.  A big tax bill could be coming, even if you sell short.

Be careful.  When looking out for number one, you’ll want to avoid stepping in number two. This to will pass.  Make sure if you’re contributing to the “Big Faucet”, that you’re doing it for the right reasons. Real estate has always been the best and safest vehicle to creating wealth.  And now with the equities markets being so unstable, even the media is starting to come back around to espousing the virtues of home ownership.  If you like to buy things when they’re on sale, you ought to be out shopping!

There Ought to be a Law

After 5 years as Broker/Owner of Pine Ridge Properties, I’m closing the doors.  I’ve been given a great opportunity to go work with some long-time friends at Pacific Crest Properties, here in Truckee.  We get to share some things, and help each other get to the “other side”.  I don’t think it’s a surprise that the last 3 years have been a real challenge for most of us in the real estate field, so a change like this will be good for all of us involved.

Which brings me to the point of this little post.  I’ve been in my current locale for exactly 5 years this month.  As my wife and kids helped me pack up some of my affairs today, it was a little daunting at just how much nonsense I had compiled here over this short time.  When we last moved our home, we had been in that house for exactly 5 years.  Again…the amount of stuff was overwhelming.  Maybe I’m kind of a pack-rat, but I don’t think so.  I come from the “disposable” generation.  I’ve honestly been more of a, “use it until something better comes along, and then throw the old one way type.” Where did all this crap come from?

My folks…they kept everything.  There’s a fiberglass boat on a trailer in my Dad’s yard that hasn’t ran in 25 years.  That’s not me.  I throw stuff away!  So how did I accumulate all this junk I forgot I had?

Now  I’m not super keen on government spending our money to tell us what we can and can’t do.  But here’s an idea.  What if there was a law that made every cell phone use the same battery and the same car charger.  I wouldn’t have had to throw three sets of them away, or look for a place to recycle them.  My industry is very wasteful.  I think it would be a great we didn’t have to generate literal mountains of paperwork for every transaction, just so we could try to mitigate our exposure by disclosing the obvious because somebody sued somebody else for something ridiculous.  If we ever meet in a transaction, I’ll have to make sure that you sign a ten page disclosure in where paragraph 16 advises that if the trees grow, you might lose your view.  Paragraph 18 informs that if you live near a golf course, there is a possibility that golf balls may damage your home, you or your pets.  LOOKOUT RUFUS!

Anyway, there at least ought to be a law the Bret Churchman has to act like he’s moving every two years.  That way I could throw away stuff that I forgot I had, and hopefully be a tad more cognisant about the nonsense I seem to collect.  For me, awareness is the first step.

Thanks for reading.  I’m sorry if you or your pets have been hit by an errant golf ball.  That probably hurt.

Second Quarter 2008 Land Sales