Saturday, December 20, 2008

Zero Percent Fed Funds Rate? You've Got To Be Kidding! What's Next?

There is no doubt that we are living in very interesting times. Earlier this week the Federal Reserve lowered the Fed Funds rate to zero, which means they are basically giving money away. Good grief! And that's not the end of it. The Fed also said they will buy up every crappy financial asset anyone wants to sell them. I guess they are also the financial junkyard of last resort as well.

What this means is that our government is doing everything possible to encourage Americans to run up even more debt than we have now. Is there anyone out there who can explain to me why this is a good idea? It seems that a major reason why we are in the economic mess we find ourselves in is a result of our borrowing from tomorrow to spend on today. How can even more borrowing solve the problem that too much borrowing caused? What am I missing? If you find yourself in a hole, isn't it better to put down the shovel and have someone get you a ladder, instead of getting a bigger shovel?

I know that our "leaders" are hoping this will stimulate economic activity, but why do I have a nagging feeling we will not get the result they are hoping for, but end up with someone much worse than recession, like massive inflation? I don't pretend to be a genius on economic matters, but I have a hard time figuring out how the bad habits that created a problem can be solved by more of the same bad habits. Will someone please explain it to me?

As a real estate broker I do see some upside to this in the short run. Interest rates on mortgages have come down and are around 5% and the rates on home equity loans are ridiculously low. There are already stories that the applications for refinances have gone through the roof. The downside of this is that the people who are in a position to refinance are, for the most part, the people who don't have their homes. Those people who have their homes for sale because they are upside down with their equity or are behind on their current mortgages can't refinance, so the lower rates will do them no good.

The government has been trying to figure out a way to support the real estate market to prevent further declines in real estate prices. So far, their efforts have failed. I suspect this latest move will fail also. No doubt that some buyers will come into the market to take advantage of the lower interest rates, but probably not enough to have an impact.

My experience over the years has taught me that people come into the market and buy houses when they feel secure and are optimistic about the future. There isn't a lot of that out there right now. If someone thinks they may lose their job, or if they are concerned about their future, they don't buy houses, even if the interest rates are very low.

And so the beat goes on. What can we likely expect over the next few months? The number of sales will likely be too low to firm up the prices, which means we will likely see prices continue to fall and with that will come a new crop of homeowners who will find themselves upside down with their equity.

Merry Christmas.

Saturday, December 6, 2008

Yes Virginia, There Is Still Mortgage Money Available

One of the misconceptions that has resulted from the current credit crisis is the perception that there are no mortgages available to people who need them to buy houses. Nothing could be farther from the truth. Mortgage money is abundant and lenders are willing to lend to qualified applicants.

What has changed is what the profile of a qualified applicant looks like. Gone are the no documentation loans and most of the sub prime loans. Those are the loans you may have read about that are partly responsible for the soup we find ourselves in. Today a qualified applicant is someone who can verify that they have a job, can verify how much income they earn, have at least 10% of their own money to put toward a down payment and can prove it's their money and have credit scores at least in the upper 600's. If you fit that profile, you are likely to be a qualified applicant and mortgage money is available to you.

We do have a problem with loans to people who own their own businesses and their income is hard to verify. In the case of a business owner who isn't on a salary, the lender will rely on the tax returns of the applicant. If the business owner doesn't report all their income, they will not get as much of a mortgage as was the case when the funny money loans were widely available.

What has happened is that we have returned to the lending standards that served us so well before this decade. It's true that those standards do take a number of would be buyers out of the market, but in the long run, we will probably be the better for it.

Saturday, November 29, 2008

Weakening Economy Takes It's Toll On The Real Estate Market

With the month of November at an end, the effects of the weakening economy on the already weak real estate market are becoming more evident, and the impact has been negative. For November, the closings of single family homes declined from 357 in 2007 to 232 this year. That is a decline of 35%. For the year, sales of single family homes around the county have been off by about 21% on a year to year basis, so the November numbers show a further weakening of the real estate market.

Closed sales are a trailing indicator of real estate activity because the closed numbers reflect deals that were actually struck 30, 60 or 90 days earlier. New contracts, called pending sales, is a more current indicator of sales activity, so let's take a look at those numbers. In November 2007 there were 352 pending sales reported in Monmouth County as compared to 245 for November 2008. That represents a decline of 31% year to year. That is not as bad as the closing figures, but still represents clear evidence that the weakening economy is having a negative effect on the local real estate market.

What does all this mean and what can we expect as we move into 2009. Sadly, there is no evidence that the real estate market is showing signs of improvement. The oversupply of housing, relative to demand, is the highest it's been this decade. Because of this, it is likely that prices will continue to decline well into 2009, at the very least. Will there be more buyers in the Spring? Yes there will. But those buyers will likely be buying at lower prices than we see today. What to do?

If you are a seller, time is of the essence. You find yourself in a race against time for every day that your house doesn't sell means you are likely to get less money when it does. We have many clients that tell us they "aren't in a hurry" or "we don't have to sell" or "we don't have a gun to our head". Those people will probably wish they had been in a hurry. If you are a seller and want to attract the next buyer for your type of house, make sure you offer the best value based on the asking price. You have to price your house to stand out from the competition. You must make your home a "no brainer" in the mind of a buyer. As we advise our clients, this is a market that requires a strong stomach and bold action. This is not a market for half hearted sellers.

If you are a buyer, you should only pursue those homes that meet your lifestyle needs and are absolutely the best value, based on the asking price. Since prices are likely to decline again next year, you should only buy if you plan to be in the home at least five years. If you only see yourself in the home for a period less than that, you should not buy! This is a market that does require a buyer have faith that prices will stabilize and once again go up. Though we don't have these markets often, they do test one's faith in the future.

Tuesday, November 18, 2008

Is There Anyone Who Will Represent Us?

Although this is a real estate blog, I feel compelled to comment and vent my anger at the Bailout Mania that is sweeping through our government. It seems that our "leaders", and I use that word very loosely, have completely lost their minds and can't move fast enough to bail out everyone, whether it be companies, individuals or governments who now find themselves between a rock and a hard place.

The more I listen to the "experts", the more I am convinced that nobody in a position of authority has a clue on how to get us out of the mess we are in. You need to look no further than our Treasury Secretary, who less than two months ago said the world would end if we didn't agree to buy toxic assets from troubled banks, now says we don't need to buy them at all! Think about this for a minute. Our habit of borrowing from tomorrow to pay for today has, in large measure, brought us to the point we are at. What is our government's plan to rescue us? Borrow even more money from tomorrow to pay for today! This is nuts!

You would think that once it is clear that nobody has the answers, caution would be the order of the day. But no, instead we throw caution to wind and race to spend money we don't have to bail out people who can't be rescued. We are bailing out banks, insurance companies, probably auto companies, those unfortunate individuals who are in trouble with their mortgages, and probably city and state governments as well. We are at the point where we are no longer talking tens or hundreds of billion of dollars, but are now talking in the trillions. And these trillions of dollars are dollars we don't actually have. This can't possibly end well.

But not everyone is in trouble. There are people in the country who have made it a habit to live within their means. IS THERE ANYONE IN OUR GOVERNMENT LOOKING OUT FOR THOSE OF US WHO HAVE USED OUR HOMES AS ATM MACHINES, WHO HAVE NOT MADE IT A LIFESTYLE TO BORROW FROM TOMORROW TO PAY FOR TODAY? It would appear not. Isn't anyone willing to stand up and be the voice of us that don't have massive credit card debt, that have gone without at times because we didn't have the money to pay for it, that have made a habit of saving some of what we earn because it is the right thing to do?

This whole economic situation is not only sad, it is downright maddening. What is most frustrating is that those of us that have lived our lives in an economically responsible way are going to get stuck with the tab for the disaster that our government seems intent on bringing upon us!

Wednesday, November 12, 2008

Mortgage Bailout Plan Is The Government Version of Predatory Lending

The mortgage bailout plan unveiled yesterday, designed to "help" homeowners in financial difficulty stay in their homes, is a perfect example why we should board up the windows and barricade the doors whenever the government attempts to come to our rescue.

What has been proposed is little more than a government version of predatory lending. Here are the basics as I understand them. Homeowners who are delinquent on the mortgages and have no equity in their homes can get a loan modification whereby the rate would be adjusted to 3% and the total housing payment for the homeowner would not be more than 38% of the monthly income. All this is based on a 40 year amortization schedule. So good so far.

Now here is the bad (predatory) part. Nothing is being done to change the mortgage balance. Let's say you bought the house for $300,000 and the mortgage was $280,000 and now the house is worth $200,000. That means your have negative equity in the home of $80,000. Let's also assume that the rate adjustment with the payment limit would equate to a $180,000 mortgage. If you stayed in the home for forty years, which is unlikely but possible, you would still owe the lender $100,000 at the end of the mortgage.

If you sold the house, which is more likely, you would have to pay off the full mortgage amount of $280,000. Since the average family moves every 7 years, what are the chances that the prices will stop falling and then appreciate enough to get the value back to around $300,000 before you move? Not likely.

The government thinks this workable based on the notion that housing prices inevitably go up. Isn't this the same assumption that got us into this mess in the first place? This program will do little more than postpone the day of reckoning that troubled homeowners are currently facing. It is very unlikely to solve their problems. Isn't it ironic that we listen to our elected officials to rail against the predatory mortgage companies, yet feel it is OK to offer the same kind of garbage in the name of "assistance"?

As a real estate broker, I want to see the market improve ASAP. I wish this sounded like a solution, but it doesn't. It sounds like another reason why government intrusion into the private sector is likely to make a bad situation even worse.

Wednesday, November 5, 2008

How to Hire the Right Agent if You Are Selling Your Home

If you are selling your home, hiring the right agent has never been more important. With prices declining, you are in a race against time. The longer it takes for you to sell your home, the less money you are likely to get. Over my 30 years of experience, it has become apparent that most homeowners really DON'T know what to look for or know what questions to ask when interviewing agents to represent them. So here is my attempt to give you some perspective as to what look for before hiring an agent to sell your home.

1. Look for an agent with experience. That has never been more important than now. If you can find one, get an agent who has worked through Buyers' Markets in the past. That won't be easy, the last one was back in the early 1990's and few agents have been in business that long. If you can find one, they often have a perspective on how to be successful in this market that agents who haven't been through it just don't have.

2. Look for an agent with a proven track record of production. Sounds pretty obvious, but the truth is that roughly 50% of the agents in our local Board of Realtors have gone the entire year with zero business transacted. If you get one of those, guess what, the chances of selling your house are remote. When you talk to any agent they will tell you they are productive, but make them prove it. Have them show you copies of the MLS sheets for every transaction they have been involved with over, lets say, the last three years and have it be a copy that shows that they were either the listing or selling agent.

3. Look for an agent who has success with sellers. We deal with buyers and sellers as real estate agents, and although the priorities are often similar, they are seldom the same. Many agents who are productive in a general sense, are not successful with sellers. In fact, it has been my experience that most agents prefer working with buyers, especially in a Buyer's Market. Make sure the agent you hire is at least as successful with sellers as with buyers.

4. Look for an agent who does business in your area. Knowledge of the local market is critical. Make sure the business an agent does is in your market. It is not critical that the agent has sold a house on your street in the last year or so, but is important that the agent is doing business in your area. I have encountered owners that think because an agent sold a house on their street in the last year, that somehow that makes them more qualified than one who hasn't. What if that sale was the agent's only sale in the last two years, or their only sale in the local market or has never successfully marketed a listing before? Clearly that agent is probably not the most qualified to handle your home.

5. Look for an agent you feel you can trust. If you don't feel you can trust a person, you shouldn't do business with them, simple as that. A good agent wants the client to get the most money they can for their house and will make recommendations to help the client reach that end. Sometimes those recommendations are not music to the client's ears. If you don't trust your agent, you are less likely to follow those recommendations. The truth is, there isn't much point to hiring a top flight agent if you are going to disregard their advice.

6. Look for an agent you can communicate with. Without the ability to communicate with one another things are not likely to go well, regardless of your motivation or the agent's track record. Be sure that the agent listens to your point of view and that you can understand the information and points the agent is trying to convey to you.

Did you notice what is not on the list of things to look for? How about the agent's opinion of the value of your home. The truth is, what the agent thinks your home is worth is not the most important criteria but is often the one that homeowners rely on most heavily. My experience has been that owners will very often hire the agent whose opinion of value is most close to the owners opinion of the value of their home. Guess what? Most owners have an inflated view of the value of their homes. If you hire an agent based on their opinion of value, you will likely overprice your home and it either won't sell or it will take longer to sell and you will get less money. It is quite likely that the best agent will have one of the more conservative estimates, if not the most conservative estimate, of your home's value.

There you have it. If you follow these guidelines you will have a much better chance of getting the right agent to market you home and will likely get the best price the market will bring you. If you don't follow these guidelines and get the wrong agent, you have only yourself to blame.

Monday, November 3, 2008

The Financial Crisis of October Seems to Have Had an Impact on Real Estate

And the impact hasn't been good. Needless to say the real estate market was in the doldrums before the you know what hit the fan in October. Now the question that is being asked is "What effect is the crisis having?"

It's too early to measure the impact on prices, but there seems to have been a measurable impact on new contracts. For the year, closed sales of single family homes in Monmouth County have been running about 22% below the levels of last year and the October closings seem in line with that figure.

The new contracts are another thing. The single family homes reported under contract around the county this October is about 32% below the number reported in October 2007. There will be some contracts that will be reported in early November that will be counted for October, so that figure will come down some, but most likley it will change the number by only a couple of percentage points.

Why are new contracts important? New contracts are the best indicators of current activity in the real estate market. The closed sales reflect the sales activity that occured 45-90 days ago. So as we go forward, the new contracts for October will be reflected in the closing numbers for November, December and January.

What does all this mean? The Buyers' Market we find ourselves coping with is likely to continue well into next year, at least. It is hard to come up with a scenario, regardless of who wins the election, that the excess inventory will dry up and prices will firm up within the next 6 months.

If you are a seller, it's a race against time. You aren't going to like today's prices but you will probably like them a lot better than next year's prices. If you are a buyer, more and more good buys are popping up on the market. Yes, everyone wants to buy at the bottom, but only hindsight will tell you where that was. For anyone with a 5-10 year time horizon, now is a great time to buy.

Thursday, October 16, 2008

Whatever Our Problems, Socialism is not the Answer

It's hard to believe that Americans will stand idly by and let a Socialist wave wash over America. There is not doubt we have problems in our country but Socialism is not the remedy. For those that doubt that Mr. Obama has a Socialist agenda, all you need to do is listen to his exchange with "Joe the Plumber".

Mr. Obama told Joe, "My attitude is that if the economy's good for folks from the bottom up, it's gonna be good for everybody. I think when you spread the wealth around, it's good for everybody." Spreading the wealth around will not move our economy forward, nor will it strengthen the soft real estate market.

What Mr. Obama proposes is akin to taking money out of one pocket to put it in another pocket. That's a zero sum game and doesn't result in more money. Oh it might help someone make a credit card payment, but it certainly isn't a long term solution to the problem of creating good paying jobs for American families. He proposes a band aid, not a solution.

We don't need to spread the wealth, we need to create and spread opportunity. By creating a climate where American business can flourish right here in the United States we can create opportunity which we can spread around.

There is no denying we all want change, but Socialism is not the answer. Socialism does not make countries stronger, it makes them weaker. If you doubt that, go check out Cuba.

Tuesday, October 7, 2008

Our Problem is a Demand, Not a Supply Problem

There has been a lot of discussion lately about what it will take to firm up the real estate market and put a bottom under the prices. Most of the discussion has been centered on the supply side of the market, with the talk centered on how to help people who are behind on their mortgages stay in their homes so those homes don't add to the supply in the market.

No doubt such an approach would take some homes off the market and prevent others from going on the market. However, foreclosed properties and those in pre-forclosure make up a relatively small precentage of all the homes currently for sale.

We do have too many homes for sale relative to the demand, but the fact remains that the number of single family homes listed for sale in Momouth County this year is about 10% less than last year for the same time period. In spite of this, the inventory levels are higher than last year.

Why is this the case? The number of homes being bought is declining at an even faster rate. Although the number of new listings has declined, the number of new sales has declined even more, resulting in an even greater oversupply in 2008.

What can we do to firm up the market? One is to let the market cycle run it's course. Ultimately prices will decline enough that "experts" who have the ability to influence large numbers of people will send out a "buy" signal which will bring people into the market. That approach will take care of things but will probably take a lot longer than most people wouldl like.

The other is to try to interrupt the normal business cycle. Helping people stay in their homes is an attempt to do that. So far, the results have been minimal. A better approach would be to stimulate demand. Right now, people are hesitant to purchase real estate because they see more risk than return. To stimulate demand, we would have to change that equation by creating an upside to purchasing where people don't currently see one.

How might that be done? The only thing that government can to stimulate demand is through incentives. What might they be? The only thing I can come up with are tax incentives for purchasing real estate. If the tax incentives were great enough, people would see enough upside to purchasing that the risk would be worth it. With sufficient incentives, demand would go up and the excess inventory would soon dry up and prices would find a floor. That is what everyone is says we need.

Monday, October 6, 2008

Will The Government Bailout Help the Real Estate Market?

After all the hoopla of last week, the government passed a record Wall Street bailout package with the hope of easing the credit crisis. Now the question that is being asked is "Will the government bailout help the real estate market?"

From what I know of it, I can't figure out how it will. Much of the talk of the bailout seemed to center on unlocking the credit markets which experts had said were "frozen". That all seems odd, because mortgage financing wasn't frozen. During the entire crisis, there was abundant mortgage money available to qualified buyers. In the current financing climate, a qualified buyer is one who has money for a 10 to 20% downpayment (depending how how they plan to use the property), a good credit profile and can verify both employment and income. Since mortgage money wasn't frozen, I don't see how the bailout can help us there.

Another theme that was voiced was the need to help people who are behind on their mortgages so that they can stay in their homes and avoid foreclosure. I guess the idea there is that with fewer foreclosures on the market the oversupply of housing will be less. In our area, there are foreclosed homes on the market but they represent a very small percentage of the total inventory. There are homes on the market where owners are behind on their mortgages and face foreclosure, but those too are a relatively small percentage of the homes currently for sale. To what extent the bailout will help these people I don't know. But even if it does, it will impact a small percentage of the total inventory.

So when it is all said and done, it's hard to see where the bailout will help firm up the real estate maket in any meaninful way. It looks like we can expect prices to decline further which means we will have more of the problem that led to the bailout in the first place. Does that mean we can look forward to another bailout? Only time will tell.

Friday, September 19, 2008

Turmoil on Wall Street Allows Obama To Get the Upper Hand

The recent turmoil has clearly blunted the momentum that John McCain developed from his selection of Sarah Palin and the Republican Convention. He had a nice run where he had Obama on the defensive and the polls were all going in his direction. He had the high ground and was shooting downhill.

That has all changed. McCain stumbled when the s**t hit the fan on Wall Street and Obama gained the advantage. Now the polls are all going his way. Is all lost for McCain.

Hardly. Despite the reversal in the polls, people are still uneasy about Obama and that makes him vulnerable. Poll after poll shows that people want a change in direction but are uneasy about Obama as the man to lead the way. McCain can get back on top by exploiting that fundamental weakness in his candicacy.

Obama has taken to mocking, belittling and otherwise demeaning his opponent. McCain can turn that around by hammering home the point that this behavior clearly demonstrates Mr. Obama's immaturity and lack of leadership in this troubling and challenging time.

He can also demonstrate, once again, Mr. Obama's poor judgment by highlighted the ecomonic advisers he has on his team. Two of his most trusted ecomonic advisers are former heads of Fannie Mae and were responsible for the policies at Fannie Mae that led it's collapse. Since Mr. Obama's resume has nothing on it that could be call an accomplishment, judgement is all he has. Time and time again, Mr. Obama gives us proof, through his associations and policy positions that his judgment is seriously flawed and makes him a dangerous person to put in the White House.

No doubt McCain finds himself shooting uphill, but the situation is reversable. He needs to keep hammering home that point that most Americans already know and makes them very uneasy. Mr. Obama lacks the judgment, experience and the policies to make him the person to lead us at this time.

Friday, September 12, 2008

Reflections on the Sarah Palin Interview

Although this is a real estate blog, I must admit the election that lies ahead has captured my imagination. First off, let me make it clear that I am excited by the selection of Sarah Palin by John McCain, a selection that has made me a strong supporter of that ticket.

That said, I would judge Sarah Palin's performance, especially when dealing with the area of foreign affairs as OK. She didn't blow herself up and she didn't hit it out of the park. I suspect that those people who supported her going in still support her, those that thought her unqualified still hold that view and the undecided are still undecided.

I do think she made a mistake when answering questions in the area of foreign policy. She struck me as wanting to answer all the questions, when there were times she would have been better off questioning the validity of some questions or the premise of the question. It appeared to me that she was trying to demonstrate a complete understanding in an area that it is impossible for her to have a complete understanding, and that was a mistake. To even attempt to answer what she would do in a hypothetical situation created by Charlie Gibson is a no win situation.

She would have been far better off, in my opinion, to state the obvious. As a governor she has no responsibility for foreign policy, so it is completely unrealistic for any reasonable person to expect her to be fully versed in that area, especially after being thrust into the campaign just two weeks ago. She should state that she is confident, should she need to assume the Presidency, that with the outstanding team John McCain will have assembled that she will have the judgement to conduct a foreign policy that will protect American interests abroad.

At times the tone Charlie Gibson's questioning was almost as if she was the one running for President and she would be making decisions on day one. That I think was unfair, but her mistate was to answer the question with that as the premise. She would have been far better off pointing out that she is running for Vice President and should she find herself in the Presidency she would have the benefit of the John McCain team in place to supply her with the information and options that would enable her to make decisions that would protect the interests of the American people.

As for the hypothetical questions, like those regarding Israel and Russia, she should have answered in only the broadest terms. She should have pointed out that she can't possibly say what she would do without all the facts at her disposal. At this point, it is not possible for her to have all the facts, none of the four candidates do. The only person who does is the sitting President. In my opinion, it would have been better to question the validity of the question or simply state it is unwise to answer hypothetical answers with specifics because they are only that, not actual circumstances.

I think her interest would have been better served to state what we all know, that she does not have all the facts in areas of foreign policy or understand all the nuances of our current foreign policy because, as Governor of Alaska, that is not part of her job description. She should state that she is confident that will a quality team around her and good information on which to make decisions she has the head and backbone to make decisions that will protect the interests of the United States.

No doubt she will practice more and perform better in the next interview. The Democrats are still confronted with the same problem. If they and their minnions in the press are unable to destroy her, John McCain will be the next President

Thursday, September 11, 2008

It's Not Just Change Americans Want, It's Reform!

Although this is a real estate blog dealing with my local market, I can't help but make some observations about the upcoming election and how the selection of Sarah Palin has completely transformed the campaign. What was shaping up as another humdrum campaign, has overnight been turned into the most exciting in recent history.

For almost two years now we have heard the Democrats call for "change, change and more change" in an effort to tap the growing discontent Americans are feeling toward the government. This is a discontent we all feel. There is no doubt our government does not represent the interests of Main Street. We all want things to change and that is a desire that runs deep.

Despite this desire, Americans have been reluctant to buy into the change that the Democrats have proposed. When you cut through the lofty oratory, the bottom line is that they are proposing higher taxes on our society, more government spending and bigger deficits. These are not new ideas. We have tried them before, remember Jimmy Carter, and then finally discarded them when Bill Clinton became President and the Republicans took control of Congress. Deep down inside most Americans know that bigger government is not the best way to solve the problems that confront us.

The Democrats selected Barack Obama as their messenger and have tried to package him as a transformational political figure. But there is a problem with the choice. Mr. Obama's story is one that many, if not most Americans do not relate to. There is no doubt he is a very talented man who loves his country, but there is still something about him that does not resonate with enough Americans. Maybe it's his personal story, maybe it's professorial tone, perhaps it's his questionable past associations or perhaps it's his frighteningly thin resume. Whatever it is, he hasn't been able to seal the deal.

In the other camp we have John McCain and there are things to like about him. His personal story is compelling. Have we ever had a presidential candidate that knows from personal experience what torture is all about? He does have a reputation for attempting reform, often costing him support within his party. But he has his limitations as well. His age is a problem and he does seem to have a hard time relating to the day to day struggles of Main Street, America. Throw in the fact that his passion is foreign policy and, by his own admission, thoughts of the economic woes of Americans do not capture his imagination, and you have another candidate with a lot to like but one that also leaves to many people unenthusiastic.

It was shaping up as trench warfare campaign, which each side throwing bombs across enemy lines with the hopes of picking up a vote here and there. Then something remarkable happened. Some how, some way, John McCain came up with Sarah Palin as his running mate and the whole campaign has been turned upside down. How he did it really doesn't matter. Almost instantly, a new energy swept across the country, some for her, some against her, but all stood up and took notice.

How could a 44 year old woman, a first term governor from the hinterlands of America transform the campaign and make this election one of the most exciting in modern American history? I believe it is because she taps into and represents what Americans have desperately been searching for. The Democrats were correct in that we are seeking change, but it is more than that. We are seeking reform and she represents reform. Has there ever been a leader that successfully took on his/her own party before throwing stones across the isle? Has there ever been a leader that successfully took on the interests of the powerful in such a way where there was something in the solution for both the powerful and the people as she did with her tackling of Big Oil in Alaska? Has there ever been a leader who, when confronted with a budgetary surplus, decided to return the money to the people rather than figure out ways to spend it? Has there been a leader with a better record of reaching across the isle to effect change that will benefit all of her constituents, as she did when reaching across to Democrats to get the long stalled natural gas pipeline approved? There is something in her thinking that resonates with Americans. She understands that government can't solve all our problems. She understands that governments needs to be fiscally responsible, just as households need to be. Her theme of putting government back on the side of the people is one that gets people excited.

Not only does she have the message Americans have been hungering for, she is the perfect messenger to fit the message. There is something in her personal story that almost every American can relate to. Whatever your background or your beliefs, there is something in Sarah Palin that we can all relate to. He life story is the quintessenial American story.

John McCain, unwittingly or not, has unleashed a force that will be hard to stop. There is talk that this is just a bounce or wave and will dissipate. Something tells me that this is not a wave or a bounce, but there is a tide building that will sweep over America. The Democrats have no choice but to try to destroy her. If they can't, they will lose the election, it's that simple. Something tells me they won't succeed. Something tells me that before this is over, John McCain will be swept into office. Not because the voters wanted John McCain, but because they want Sarah Palin.

In the past I have voted both Democratic and Republican, but usually made my choice based on who I didn't want as opposed to who I did want. I can't remember that last time I was enthusiastic about a candidte. This year I was going to vote for John McCain, not so much because I was excited about him, but because I was convinced that Barach Obama does not have the right answers to our problems. Now I am voting for McCain, again not so much because I am excited about him, but because I am excited about Sarah Palin, what she represents and the belief that she is tranformational leader that the Democrats thought they had in Barack Obama.

Ronald Reagan campaigned on the slogan "Morning in America". The sun is rising on America again, in the form of Sarah Palin. What an exciting time to be alive in America!

Wednesday, September 10, 2008

Condo Options in Monmouth Beach

Clients come to us and ask "What are the condo options in Monmouth Beach?" Although a town just one mile square, Monmouth Beach offers a blend that range from high rise condominiums on the beach and river to townhouses within walking distance to the beach and condo conversions, those condos that started their lives as garden complexes, which appear to owners on the lower end of the price scale.

The three high rise condominiums are the Admiralty, Shores and Channel Club. The Admiralty and Shores are located on the beach, while the Channel Club is located right by the Shrewsbury River. All three are full service condominiums and range in size from 120 apartments to over 200 apartments for the Channel Club. The views can are great and there are plenty of services, however, they don't allow dogs and seasonal rentals are not allowed.

Looking for something more affordable and still within walking distance to the beach? Try Wharfside, Breakwater Cove, Monmouth Commons or Sands Point South. Wharfside was once a garden complex and is a block from the beach and located on the Shrewsbury River. Prices start in the lower $200,000's for a one bedroom apartment. These two are pet restricted, but they do allow shorter term rentals, as long as they area at least three months.

Breakwater Cove and Monmouth Commons offer townhouse living (multiple levels in each unit) and are also a short walk to the beach. Prices for a one bedroom in Breakwater Cove start in the lower $300,000's, while prices for a townhouse in Monmouth Commons are generally in the $500,000's

That brings us to Sands Point South. Yes, there is also a Sands Point North, but we will get to that one shortly. Sands Point South offers one and two bedroom apartment style condominiums and is located on the Shrewsbury River about a quarter of a mile from the beach. Price for a one bedroom start in the upper $200,000's.

Last but not least is Sands Point North. This is a townhouse community, equally divided between one and two bedroom townhouses. Built in the 1970's, it was one of the first townhouse communities in the area. Not considered walking distance to the beach, a one bedroom here will start in the low $300,000's.

Got a question about the local real estate market? Feel free to ask. My 30 years of productive experience can help you make the right choice.

Thursday, September 4, 2008

Full Service vs. Limited Service Condominiums, What's the Difference

In the Monmouth Beach and Long Branch beachfront market we have two two types of high rise condominiums, full service and limted service buildings. Very often when talking to clients exploring their options the question often comes up, "Full service vs. limited service condominiums, what's the difference?

Full service condominiums are generally larger building with more apartment and offer more services to the owners. They often have an onsite management office, a concierge desk manned 24 hours a day, 7 days a week, valet parking, pool, tennis, social rooms and fitness rooms. There is also a social component to living there, with a wider range of social activities available to residents. Because of the additional services they offer, they generally have higher association fees.

Limited service condominums have fewer apartments, no concierge desk and no valet parking. Although some have pools, tennis courts are rare and, if there are fitness rooms they are generally more modest than those in the full service buildings. Because of the fewer number of apartments in the building, 24 apartments is a common number, they don't have the social aspect the full service buildings offer. Although there is no concierge, access to the building are restricted with electronically locked lobby doors. Because they don't offer the full range of services found in the full service buildings, the monthly association fees are lower than in the full service buildings.

Which is better for you? That's a personal decision. We suggest you look at both, compare the upside and downside of both so you can make an informed decision.

Tuesday, September 2, 2008

Are Prices Going Down on the Beachfront Properties

As we all know, we are in a Buyer's Market and real estate prices have come down from their highs of 2005-2006. But a question I still get is "Are prices going down on the beachfront properties?" The short answer is "yes", but there is more to it than that.

When prices are going down, no class of real estate gets exempted from the market conditions, but that doesn't mean that all types of homes are impacted to the same degree. As a general rule, those properties that perform best, regardless of whether prices are going up or down, are those with locational advantages and those that are the most modern. If a home has both of those advantages, it will hold it's value the best in a Buyer's Market.

All of the properties along the beachfront automatically have a locational advantage. Beachfront properties are the ones in shortest supply so there is an advantage there. Some of beachfront homes also have the advantage of being modern when compared other options in the market. Although all the prices of all properties feel the impact of the current market, beachfront properties generally hold their value better than non-beachfront homes.

The two complexes that seem to have been impacted the least are Grand Resorts and The Bluffs in Long Branch, both of which are on the beachfront and both are the newest options out there, being only about two years old. Based on the sales, the impact on prices has been minor.

Got a question, feel free to ask. Hopefully I can help you benefit from my 30 years of productive experience right here in the Monmouth County Shore market.

Monday, September 1, 2008

What's Ahead as We Move to Fall

With the month of August concluded, it's good to take a look at the current market and to take a look at what's ahead as we move to the fall. Despite a number of hopeful predictions that we are reaching a market bottom, the sales and inventory figures for single family homes in Monmouth county indicate that is not the case. Statistics from the Monmouth MLS indicate that, as off today, reported closed sales in August were off by more than 30% when compared to August of 2007 and new contracts for August were about 20% figures for the same period last year. Couple the declining sales figures with about 5% more homes for sale than a year ago, and it is clear that we are still in a full blown Buyer's Market.

What does that mean for the Fall? There is going to be continued pressure for lower prices. By the turn of the year, no doubt the prices in the market will be lower than today. If you are a seller, you will get a better price for your house if you find a buyer today than at some point later this year, regardless of how you may feel about that price. If you are a buyer, the opportunity for outstanding value is the best it has been in the past five years.

Got a question? Feel free to write. Hopefully my 30 years of productive experience in the real estate business will help you make the right decisions when it comes to your real estate needs.

Sunday, August 31, 2008

Long Branch and Monmouth Beach NJ Real Estate

Welcome to my blog. If you want to be informed of developments in the Long Branch and Monmouth Beach NJ real estate market, this is the place to be. You will be able to keep on top of real estate market trends and sales for condos and single family homes on the beachfront and waterfront.