The other day a seller client told me that she showed her home to strangers off the street who knocked on her door and expressed interest in seeing the place without an appointment. She accommodated them. We don’t know who they are, or even if they were qualified to buy. She just hoped they might be the ones. I told her to never do this again. Call me a suspicious New Yorker, but the risks outweigh the opportunity when you show you home to strangers with no appointment.  

Prior to scheduling a showing, we verify the credentials of showing agents, their contact information, and their licensure. Nobody gets an appointment without verification. If it is our own buyer, we verify their identity and their financial qualifications. Otherwise, I might as well have a hitchhiker in my car. To not take these measures I expose my firm to severe liability and clients to undue risk. 

What can go wrong by letting strangers into your home without a proper appointment? Plenty.

• Theft
• Violence
• Vandalism
• “Staking the place out” for future theft
• Identity theft

I was one of the attendees that the Raincamp in New York this past Tuesday in Manhattan.

I wanted to leave at noon.  

Did it suck? No, I wanted to start implementing this stuff right away. 

If you’ve never been to RainCamp and are wondering if it is worthwhile, I’ll say this: If you’ve ever wished that someone who is actually doing this would just take and day and walk you through the nuts and bolts of selling real estate in 2010, then you would have had your head explode at this event. I’m a tough sell; moreover, I’m totally ADD and many of the seminars and educational events I’ve attended have either bored, disappointed, or both. This thing had me engaged the whole time. I’m literally exhausted 2 days later, and all I did was sit for 8 hours! 

Did I catch up with people I already know and done business with? Yes. 

Did I meet people for the first time in person? Absolutely. And that means a great deal. Being 6 chairs down from C-Tann Starr and watching her accept my Facebook friend request in real time was a trip. Hearing Sheldon Neal’s British accent while shaking his hand was great. Seeing the Somers Team sit directly in front of me was a hoot. I could name drop for quite a while, but you get the point. 

But I didn’t get into real estate to hug C-Tann Starr or kibitz with Sheldon about fatherhood. I got into this business to make money. So here’s the bottom line: Ben Kinney, the main presenter, is walking the talk. He sells real estate right now, and showed us how he does it. 

• Ever wonder how to make money on Facebook? That was here.
• Ever wonder how to make money on Twitter? That was covered. 
• Interested in getting to the top of Google? Covered. 
• Wonder what to blog about and how to blog? Check. 
• Is there a website to help with one thing or another? Brother, my bookmarks are now bulging with gold nuggets. 
• Are you getting the picture? 

I have written about this previously, but pre-approval letter “games” are not worth playing. Here is what I mean: If you are interested in a listing priced at $500,000 and you want to make an offer of $450,000, you are shooting yourself in the foot if your pre approval letter only says you are approved for the 450k. If you are approved for 525k, your pre approval letter should at least say you are approved for asking price. Otherwise, you’ll appear to be barely qualified for a low price. That might fly in other markets, but not in Westchester County. 

In the game of negotiation, seller confidence in the buyer’s ability to perform is leverage; you’ll do better getting your price coming from a position of strength that you will if your pre approval has you qualified by an eyelash for a lowball amount. That makes an otherwise well qualified buyer look like an unrealistic pipe dreamer

Don’t be afraid of getting a counter offer for the amount that your are approved. Counter offers are fine. Counter back.  “No,” on the other hand is not good. Show your strength! It will benefit you in the end, because without confidence in your approval, the seller will be harder to bargain with. I have been second-guessed on this by some loan officers, but I tell them to stick with the approval and leave the real estate brokerage to me. 

Again, it might be different with pre approvals in other markets, but in Westchester County, a stronger pre approval ensures the buyer a better deal than a low pre approval. 

Search for Westchester Homes like an agent and get a free Listing Book Account here. 

Marie Graham, in addition to being a friend, is the founder of the Refreshed Home. Her specialties include interior design and killer staging for getting your home sold. On Saturday, January 30th at 10 am, she’ll be putting on a workshop on how to stage a home for sale optimally, and I will be in attendance. I am encouraging my seller clients to check it out. The event will be in the conference room of the Ossining Public Library at 53 Croton Ave.

What sellers need to understand is that buyers in this market are very choosy and the competition for their attention is brutal. A home that is not attractive or set up to it’s full potential can have it’s chances hurt for selling in a timely fashion for the most the market can bear. People buy with their eyes in many cases. 

If you are for sale or are considering it, you should make this event. 

Gregory turned 5 this past December, and the bulk of his words are parroting what he might hear rather than sourcing his own communication. To us, an actual conversation with him has been elusive. Lately, we’ve been having some breakthroughs. Today was his best day ever, and in a world where progress is measured in inches, Gregory ran a mile. 

I’ve been prompting Gregory to say “I love you Daddy.” He’ll parrot it, but never say it when it would fit. 

Until today. 

This morning, as I luxuriated in a few free hours prior to my Sunday appointments, G-man walked right up to me, put his hands up for a hug, looked me in the eye, and said “I Love You Daddy!” There was nothing unconscious or robotic about it- total presence. He did it several times during the day as well, in equally appropriate ways. This was on the shoulders of him saying “I’ll come” the other morning when I woke him up and he wanted me to know he didn’t need to be carried. Later in the day, he played catch with his sister, which was another first. I had to work a chunk of the day, but Ann saw progress as well, and she chronicled it here.

Big stuff. We are grateful that in the midst of the hard stuff that we’ve had such a burst of progress.   

All agents have stories of a first time home buyer who brings a relative to see the property, only to have the them kill the sale via skepticism, negativity or just sowing the seeds of doubt. It is part of the business. I’ve never enjoyed it, obviously, but today something happened that made me smile in spite of myself. 

A nice young lady looking for her first co op asked me to schedule a 2nd showing on a unit in the same complex where her friend bought. The place needed work, but we thought it might be worth it for the right price. When we met up this morning, she told me her father would be along soon. I didn’t give it much thought one way or the other. 

When he arrived, we shook hands and she started to show him around. 

He hated the place. 

But here’s the thing: he wasn’t a jerk about it. As a matter of fact, the guy struck me as as incredibly sincere and authentic. He actually made me think of how I’d see a place my own daughter might consider buying, and how I’d evaluate it myself. He was concerned for her safety, first and foremost, with a sliders to a patio facing a busy street on the ground level. He was also concerned about her experience of ownership with the layout and repairs needed.

I couldn’t find fault with anything he said. He doesn’t owe me a fast commission, he owes his daughter his best judgment. We chatted a bit about his 5 children, all grown, 3 of whom are daughters. There was no pretense about this man. The job was to watch out for his kid, period. 

When we were done, she asked me about another complex. Nothing was really lost, and as a matter of fact I’m richer for the experience. I hope she brings him the next time.  

Wow.  All I can say is that the new Droid is going to make me money. My office is now at my fingertips. I can check my email far more easily, access the MLS, check Google maps, use Google documents, and surf the web effortlessly on this thing from anywhere at any time. Typically, my days are spent calling Ann from the field, having her check my calender, pull listings, read messages to me, and other things just to get my job done. It works for me but interrupts her day a dozen times, taking her away from important things on her end.

Today, we barely talked. I could do it all myself. A client wanted to know how far the train station was- we knew in 30 seconds from the Google Map application. I needed to reach a listing agent, and instead of calling home I looked the guy up on Active Rain. 

For me, this is a game changer. My right hand admin just had a bunch of distractions taken off her plate so she can focus on more productive things, and I can literally blog or check the company intranet at a diner over coffee. This means that people can get a response from me in real time instead of having Ann tell them I’ll get back to them when I return. 

Technology is pretty amazing when you can make money in the supermarket checkout line. 

Lester Kravitz is a broker based in Pelham, NY and a respected colleague. He’s also an attorney, but I don’t hold it against him. Ann likes him because they are both Stuyvesant High alums. This is a video of a brief talk Lester gave on the home buyer tax credit that I feel is informative and worthwhile. This NOT centered on the $8,000 first time buyer credit, but rather the $6500 move up credit for people who already own. This part of the law stimulus is under discussed in my view. In both cases, I am seeing buyers clearly motivated by the finite window of time they have to take advantage. Just yesterday, a co op buyer shared with me that the tax credit was a large part of her motivation to find and close on something as soon as possible. 

This is a crucial distinction in my view; skeptics say that buyers will buy anyway. It isn’t about them buying eventually, it is about getting them to buy NOW, to get the market going again this year. 

Lat night was the installation party at the Whitby Castle in Rye for the Westchester Putnam Association of Realtors and the WPMLS officers and directors. I was installed as Vice President for North Westchester.

This means that Ann and I had a “date.” Consecutive children and business-free hours of food and dancing. 

It was black tie optional, so I rented a tux and we arranged for a babysitter. My jacket was not ready when I picked the tuxedo up, so it would have to be picked up on the way. Without that jacket, I looked like a waiter. When I walked out with it on, I looked like a waiter with a jacket better. Ann approved. 

We needed one small thing at another store across the street and then we were off. The clerk in the store was not used to a guy in a tux with a lady in a full length evening gown to be sure, and did his best not to stare. It was a slow night, and we just walk in dressed to the nines. I’ll bet that doesn’t happen very often. 

I told him we were spies.   

A few photos:

I had never been to Whitby Castle and it was very elegant. It took an hour just to decompress and get out of work mode. Ann even overlooked the few times I checked my email. The food was good, and the band was better. The rug was cut- we danced quite a bit, and the band mercifully played some slow stuff toward the end. I am in pain this morning  but I don’t care. 

So we got dressed up, ate and danced the night away, and spent a few carefree hours together for the first time in who knows how long. We had fun. With consecutive weeks and months in the pressure cooker of running our own brokerage, 4 small children and oh, I don’t know, a few issues in the industry, it was long overdue, and did us well. We spend much of our time diffusing client stress. You absorb that over the long haul. Things like this rejuvenate. We won’t wait so long next time. To a large degree, we are the product, and we need to keep making these capital investments in our own selves. 

We still clean up pretty well, so why not? 

An economist is saying that we need more compassion. When those who individually need aid, they ought not be vilified when they seek help, nor should they fear retribution. It isn’t fair to the 7 million people who have lost their jobs. 

Refreshing sentiments! How true! But you won’t believe who John Connaughton of UNC Charlotte is referring to. He’s not talking about you or me. He’s talking about the banks! While Connaughton offers the “olive leaf” of not justifying the bad things lenders have done, he says that if a lender, individually, finds itself in a tight spot, it ought not fear retribution should it need to go to the Fed to borrow more. 

Is he afraid we are going to storm the Bastille? Because other than a few editors and politicians wagging their fingers, more people went to jail for Enron’s collapse than the economy’s. 

We need to be nice to the banks. They are having a rough time. Their feelings are hurt. If we vilify them they might not do what they are supposed to do. Never mind the poor guy who lost his job and spent Christmas at the Motel 6 with his wife and kids because the sensitive, vulnerable lender foreclosed on his home. The banks can’t do their job if we hurt their feelings. 

How times have changed. In 1945’s “It’s a Wonderful Life,” George Bailey fears scandal and ruin when his uncle misplaces $5000. Now, you can gamble trillions of collective wealth down the tubes and what you really need is a hug. 

Hogwash. 

I’ve indulged myself a bit, but here’s the bottom line. Any suggestion that a bank will not do what it needs to do to ameliorate a capitalization issue because of PR concerns is beyond dubious. Just a few weeks ago, when the “name and shame” debate arose, it was pretty clear that banks don’t care what you and I think. They never have. Anyone who has done a short sale, let alone dispute a mistaken fee on their checking account statement, knows this all too well. 

Since my Giants stunk up the joint yesterday, the only think left to do was accompany friends to Molly Spillane’s in Mamaroneck to watch the Jets beat the Bengals. Another guy we were with apologized to bring up work but had a real estate question (I actually don’t mind. I bring the stuff up myself). He was relocating to Manhattan, and had found an apartment he liked, but was afraid that his rental application would be denied due to his low credit score. He had a guarantor, but their credit was good, not great, and he asked me if there was anything he could do to strengthen his case with this apartment or make a stronger case if he had to apply elsewhere.  

I’m no expert in Manhattan rentals, but I am a landlord. I think most landlords agree with me when I say that a vacant unit is not good, but is better than a bad tenant. I asked him what his rental application included, and it was the application form, bank statements, and either his credit report or an authorization to run it. His agent suggested that he offer to pay extra rent in advance, but he wasn’t sure if that was a good idea. Lots of questions. 

Here is what I told him:

• Cash is king. Extra rent in advance would be a good thing, because it showed that he had money and he offered good faith. If you could pay 3 months rent in advance, it might be a huge compensating factor. I would not, however, put more than 2 months rent as a security deposit. 
• When I was active in mortgages a letter of explanation was often required with files where credit was dinged. A good letter of explanation can show the landlord that you aren’t an irresponsible deadbeat, but a good person who had some bad circumstances. If anything, just being conscious enough to acknowledge the lower score and be smart enough to try and explain it might do the trick. 
• The application did not ask for his current landlord as a reference. This perplexed him. I explained that current landlords are not always good references. I’ve seen spiteful landlords lie about good tenants because they were angry that they did not renew their lease; I have seen landlords eager to get rid of crummy tenants give them glowing reviews. 12 months of cancelled checks are a far better thing to include. Cancelled checks are hard to argue with. 
• If his application is denied before he can submit these things, the world wouldn’t end if he re-applied with that documentation included, with a humble request for them to reconsider. 

Paul Krugman is a columnist at the New York Times who is known for his academic laurels and his liberal politics. He’s also a lightning rod for controversy, because he extrapolates his economist credentials to other subjects, drawing the ire of conservative critics and creating a cottage industry of Internet rebuttals. I’m no fan of Dr Krugman, but with Obama in office he has, predictably, refrained from politicizing everything. The net result is that Paul Krugman, economist, has actually begun to devote his column to economics, and the results border on the refreshing. 

His latest column warns of a repeat of 1937, when FDR thought that the Depression had ended, with the results that the economy took a nosedive. Whether you agree with Krugman or not, at the very least the column talks about something he knows about, economics, and his reasoning therefore is not hard to follow. In considering the problems with the market, it seems to me that the problem has reached Rubik’s Cube proportions, and it is hard to figure out exactly what policy should be taken. There are pros and cons to both the liberal and conservative approaches. 

I wrote the following comment:

While sitting on a short sale panel of the Westchester Putnam Board of Realtors at our annual meeting 2 months ago, we were asked if we saw an increase or decrease in short sales for 2010. Bucking the “yes” answer trend from my colleagues, a Bank of America official on the panel said “No.” At first we were shocked at what appeared to be optimism from a bank executive, until he explained why.

To paraphrase what he said: There will be fewer short sales in 2010 because they will be surpassed by bank foreclosures. Lots of them. B of A, he explained, currently owned 100,000 repossessed homes. In 18 months, that figure projected to be 300,000. That amount of REO properties flooding the inventory will have a terrible domino effect on the market. This is especially so when considering that most other major lenders (Chase, Wells, Citi etc) having similar numbers.

ANY blip up should be considered a “dead cat bounce” by those in leadership, and caution should be the rule of the decade. In post Great Depression America, we have never had 3 negative years in real estate in a row; 2010 will be the 5th consecutive down year, and the foreclosure rate promises more problems. It is so bad that pinning down a policy for recovery is virtually a Rubik’s cube. We are almost damned if we do and damned if we don’t. God help us if the government takes their eye off the ball.

It makes no broker any money to say this, but any ownership of real estate that is projected to be under 5 years is highly ill advised, especially if the property is highly leveraged (ie, low down payment). Is now still a good time to buy? Of course, but only for the long term. Since there is no appreciation curve to erase mistakes, buy and hold, because we still have a storm to endure for the next few years.

I wish I knew the answers. The recession that Bill Clinton inherited in 1993 was born of similar circumstances- the Savings and Loan failures of the late 1980s, a real estate crash, and a stock market crash all precipitated the Bush I recession. By and large, we grew out of that decline without massive government manipulation or spending. 

We have not grown out of this by a long shot, and as I said, the decline in real estate is unprecedented since the Depression. We all need to keep our eye on the ball, because this isn’t going to fix itself. Krugman doesn’t have the answer either, but he makes the problem far more understandable when he’s not grinding a partisan axe. 

This post is inspired by Carla Muss-Jacobs outstanding reply to what appeared to be smartypants buyers sending her an “interview email” a while back that made a senate confirmation hearing look like a walk in the park. You really should read the post. I’m all for interviewing agents prior to hiring them; more people should do that, and I have argued in the past that people spend more time choosing a blue tooth or refrigerator than their agent. Carla’s people were over the top, however, and speak to a catch-22 that exists in real estate all too often between licensees and prospective clients. 

Here’s the catch-22: Some buyers don’t want to be committed to a lame agent and agents don’t want to work with disloyal buyers. The buyers “play the field” with  different agents, and agents are reticent to jump headfirst for a buyer who may be two (or three) timing them and have all that effort gone to waste. It’s like a staring contest, or a game of chicken- who’ll break first? And will they break bad or break good and stick as a loyal client? 

There is no easy answer except for being excellent. We’ll always get screwed once in a while, but overall, if a buyer sees that you are a cut above, they’ll stick with you. It helps to educate them about how we are paid, the importance of loyalty, and the benefits of a buyer brokerage agreement if need be, but that falls on deaf ears if you aren’t good. Like the adage that says “dance like no one is watching and love like you’ve never been hurt”, I’d add “Treat the client like they never knew another agent.”

Briarcliff Manor, about 30 miles north of New York City on the Metro North Hudson line (Scarborough stop if you are keeping score) is a village of stately, bucolic neighborhoods. It boasts one of the most charming main streets you’ll see on Pleasantville Road, and if you wander a bit you’ll find Pace University on the old Briarcliff College campus, Trump National Golf Course, and Holly Hill, the late Brooke Astor’s estate (on sale now for $10.5 million). It has an award winning school district, wonderful amenities, and a quality of life that is top shelf. Ann and I moved our family here in 2007 from the next neighborhood over in Ossining, and we love it here. I consider it one of the most underrated places in Westchester County.

Howard Stern got his start here at a small radio station (WRNW) which, as I recall, was operating out of a small house in the 70’s. My office on North State Road is walking distance from that place. 

46 single family homes were sold in the village in 2009, and the median price was just over $654,000. 

At the peak of the market in 2005, the median price was 865,000. That puts the correction at just under 25%, which basically wipes out the inflated spike from 2004-2005.  

There are 38 homes for sale currently, ranging in price from $419,000 to $4.65 million, excluding the Astor Estate. This means that there is just under a year’s worth of available inventory. 13 homes are priced below $700,000, and there is no telling how many more will be listed for sale in the coming weeks as the holidays get small in  the rear view mirror. If you do come to Briarcliff, park downtown on Pleasantville road and do a little window shopping. You’ll like what you see, and you’ll understand why we who live here love it. 

What do George Pataki and Mel Gibson have in common? Peekskill, NY. Gibson was born here, and Pataki was once the mayor. 

I have blogged about Peekskill’s market activity previously. We are talking about a historic river town with a lot of charm for those who dig pre war architecture. The place is teeming with activity and forward movement. Many of the old buildings have been restored, and the once dreary downtown is an eclectic mix of Bohemia and commerce. One thing that struck me when I was taking photos the other day was how many people and cars got in the way of my getting a clear snapshot. Then it struck me. That is the picture. 

The history goes back to the pre colonial era when the place was a valuable riverfront trading spot. Named for Jan Peeck’s Creek, (“kil” is dutch for stream), Both Washington and Lincoln spent time here. While the colonial army was here before moving to West Point, Lincoln’s time was brief; just a short train stop which was memorialized by a half-forgotten statue about a block from the current train station. I only mean half- it is maintained, but fenced off and hard to get a good look without a zoom lens.  

Being a river town, the view of the river is breathtaking whether you are up the hill or down by the station. It was an apt setting for the 9-11 memorial. That day did not leave the city unscathed.  

The architecture of the place is especially attractive if you like classic old buildings. I happen to love them. 

OK- so I guess you sort of get that I like the photos I took of the place.

Here’s the snapshot of 2009 market activity.

In all, 65 single family homes sold in the city this past year. The median price was $305,000, down from the peak of $368,000 in 2005. That year, 137 homes were sold. That represents an 18% decline in prices from the height of the market, which is in line with the region. This makes Peekskill, on top of everything else I’ve gushed about, something else- affordable. 

In June of 2008, prior to the Fannie Mae/Freddie Mac crisis, I wrote this blog posting asserting that the president who would most impact progress in the housing market was not the winner of the 2008 election, but the winner of the 1932 election. I began as follows:

With the problems facing the real estate and mortgage industries, I look to the Oval Office to be the catalyst in the recovery of the nation going forward. I am not referring to President Bush, nor am I referring to the hypothetical Presidents McCain, Obama, or Clinton.

The president who will make the biggest difference in solving the current crisis is Franklin Delano Roosevelt.

It is hard to conceive that a free market, right leaning capitalist who abhors government bureaucracy like myself would invoke FDR. However, a realist with a rudimentary understanding of what makes our industry work will understand.

If you haven’t guessed already, I would go on to refer to the FHA mortgage, which languished in obscurity in my market during the housing boom, only to be a lifesaver for countless deals after the crash. If you’ve done an FHA deal in 2009, or 20 FHA deals, you shouldn’t thank Obama, Bernanke, or the mortgage goddess. You should thank FDR. The FHA was his baby, and it saw the country through the depression in the 30’s and every decade until the last one, when the idiots who should have been the guardians of the money markets decided to play poker with our money. In other words, the lending industry decided to re invent the wheel with sub prime. I guess 70 years of success was boring.

I closed more FHA deals in 2009 than any year since 1999, when I was in another market. FHA used to be as rare as a hen tooth in Westchester. Now people breathe a sigh of relief when they hear those 3 letters. Not only is it back in vogue, it is the belle of the mortgage ball. And rightly so. Many of us had our bacon saved by the program the past 18 months. 

There are those who disagree, but that is a discussion for another day. I’m with Tom Kelly, who said that the FHA rescued us in 2009. I expect more of the same in 2010, which is a good thing. We don’t need to reinvent the mortgage wheel, we had the answer all along. Thanks to Mr. Roosevelt. 

Happy New Year.

Late last year I posted my 2 Goals and 5 Resolutions for 2009.  I am going to review how I did then state my 2010 goals and resolutions. 

The goals were pretty simple:

• Make more money;
• Work less.

Quite frankly, I reached neither. I worked really hard in 2009, perhaps as hard as I ever worked, and for pretty much the same money. Here is the silver lining of the cloud, however: we cut expenses by almost 30%, and in the last 90 days I have become far better at entrusting things to my agents that I used to be a control freak about. Many of these things were done better than I would have done them, because I didn’t have the time or inclination.

This was actually the best lesson I learned in  2009 going forward: empower my people if I want to build my company. I can’t do everything myself, and I need to be better at team building to be truly successful. Thanks to Elayna Fernandez for getting me to reflect on this lesson. I will use it well in 2010. 

On to my 5 resolutions:

1. Take one day off per week no matter what. F. I failed miserably. I took more days off, but that’s not saying much. 
2. Create specific goals. C-. Too much working in my business and not enough working on my business. 
3. Plan my work. D. See #2
4. Blog more. A+. Over 330 blog postings in various places changed how I do business. My blog got me found by some news producers who put my clients on CNBC 4 times,  and landed me on ABC World News, AP, and other print media. This was enormous in helping with credibility, recruiting and sales. Magical and unpredictable.  
5. Laugh more. B.  

1. Double my income. 
2. Have 25 licensees with the company by Thanksgiving 2010. 
3. Make Magic Occur Regularly.

I’m not going to be hung up on how much I work, but I will make sure I have fun at work or play. And I mean to double that income. I now have 14 licensees with 3 good new ones joining in January. I want to grow the team with quality producers.  Regarding magic: I consider the opportunities that came about from blogging to be beyond my wildest dreams. Utterly unpredictable and inspiring. I will make more of that, and leave it up to God as to how it manifests itself. 

5 Resolutions:

1. Blog as consistently in 2010 as I did in 2009, and get better at it.
2. Create a Cyber Empire. I have some ideas for pursuing niches that I will implement the first quarter of 2010 with new and better web marketing. 
3. Stand on the shoulders of the best lesson of 2009 and empower my growing team more as a coach and mentor and less like a guy who does everything himself and gets burned out in the process. 
4. Plan and set goals more consistently and systematically.  I am going to focus more on listing more properties and giving more buyers to the team to service. I can adhere to this if I empower the team with things I am inclined to handle myself, but ought not, like buyers.  
5. Appreciate and support Ann more in 2010. This is more rooted in attitude and consciousness than just doing things differently. Simply put, It shouldn’t be about me laughing more. I want Ann to laugh more. 

Here’s to a magical 2010. 

Some of the comments in this story prompted me to write one of my own. The jist of the piece is that all real estate appreciation from the past 10 years is nullified by inflation. Now, I don’t know if I should go outside, stand in the street and scream 

DUH

at the top of my lungs, or just put my face in a pillow, and scream

DUH

at the top of my lungs in the privacy of my living room. 

Stories like this bring out the haters, and several commenters lamented at how a $200,000 house actually costs three times that much in total payments (wrapping it up with a lament about the failure of capitalism) and another said that the stock market is a better investment than real estate. 

There is a really really large fallacy some people fall into with when they start comparing buying a home with buying a stock, and here it is: 

You can’t live in your 401k. It gets drafty.

I really don’t care if the stock market outperforms real estate or if it doesn’t. It is an apple and orange comparison. I don’t care how many charts, graphs and algorythms you show me about how much more money you’ll have in 30 years if you took the money you would have put into a house and bought Berkshire Hathaway instead, and here’s why: Where ya gonna live Einstein. 

To take advantage of the so called “better investments” than real estate, you either have to live in a box, or be a HUGE camping enthusiast, because I haven’t figured out how to invest my housing money elsewhere and avoid eviction. A dollar can only go one place.

If you pay 2000 per month rent for 30 years, you’ve laid out $720,000 to someone else and accomplished two things: avoided being homeless and paid the maximum in taxes possible. If you pay a mortgage over 30 years, you’ve paid tens of thousands less in taxes and you have an asset of considerable value that you own, even if it hasn’t appreciated a dime. 

So, here is my question for all the bar graph guys who think they’ll have more money in 30 years playing the market while avoiding the pox of home ownership: where will you live while you’re being an investment genius? In a pile of stock certificates with no plumbing or cable? A box? Your car? 

Ann has started her own blog, focusing on Gregory, who is on the spectrum for autism. G-man is, thank God, extremely communicative and affectionate, and as this video shows, he loves to be tickled. This is one of Ann’s favorite videos, and she figured out how to put it on her sidebar.  The “Dugga Dugga” game, as Gregory calls it, sends him into hysterics, and has been used to transition him from frustration elsewhere a number of times.

Given our schedule, especially with the time I spend in the field, times like this are special. Our children do inspire us, and they make the challenges the business sometimes pose more bearable. There are things I never would have done as a single guy that I embrace as a dad. But embracing Gregory tops it all.

This article in the Real Deal caught my attention. According to the NY Times, foreclosure filings in New York State for 2009 are up 17 percent from the prior year, with just over 48,000 cases. Not all filings automatically become bank repossessions, but the number of those spiked enormously. Earlier this year I worked quite a bit in Queens and I was shocked at the high percentage of the places I was showing that were short sales and bank owned properties.  

Many of those filings will become short sales, loan modifications or get pulled back by the homeowners through other means (like paying the arrearage if at all possible). But even if that happens, the sheer raw volume of filings will end up with more REO properties hitting the market, as I first noticed earlier this year. Not surprisingly, the recession has caused other reasons for the courts to be busy- evictions, domestic violence, divorce and business disputes are all signs of an economy that is buckling from enormous stress. 

Stress is the operative word. It describes the people and the conditions.