Archive for May, 2008

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Luxury Dog Home – Complete with a Woof

May 30, 2008

I’m not making this up…it’s a DOG HOUSE…a luxury dog house and you can find it here.

The request for luxury dog digs has increased and people want separate bedrooms, dining rooms and bathrooms. I couldn’t make this stuff up. But for the owner who has everything and for the husband who wants to stay out of the dog house with his wife…this is a new and tremendous opportunity to impress, family, friends and PETA.

For the owner who has everything and wants his dog to have it too…this is for you.

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There’s NO down time in a down market!

May 30, 2008

Down time is not something today’s luxury real estate agent should think about…there is NO down time. I read countless articles and all of them try to tell us they have the “secret” or the “magic pill” for solving our real estate woes. Well news flash: it’s a tough market but there is a cure! It’s just that the cure is a little hard to swallow…

LOWER YOUR LIST PRICE. In the immortal words of my mentor, Roger Soderstrom, “Price solves everything” and you know what…he’s right! It’s time to wake up and realize we aren’t in real estate from years past…this is real estate NOW and FUTURE. It’s not bad. Heck, it’s not really that tough. It’s just a true market correction and time for people to position their homes for sale by pricing them properly.

Tough times no! Tough price breaks, maybe. But there is still a world of opportunity for buyers AND SELLERS in today’s market.

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Suze Orman says…

May 21, 2008

I have just returned from attending the Sotheby’s Realty Global Networking meeting in Boca Raton, Florida. It was fantastic. I work for the best “brand” in the world and I am proud to be a Sotheby’s sales executive.

The keynote speaker for this event was Suze Orman and her presentation was polished, inspiring and interesting. One of the highlights was the fact that Suze is BUYING A HOME. Why is this important? Because she said now is the time to buy. The market is bottomed out and it is the best time to buy. Apparently, rumor has it that Jim Cramer is also buying (a HUGE house) although he is not disclosing this to the general public as yet. Why? Because they don’t want prices to go up until they are finished purchasing their estate homes.

So here’s the scoop. BUY – BUY –  BUY. You won’t see these prices again and the market is at a low. If two of the world’s leading economic guru’s are buying, I think it’s a safe bet that this really is the perfect time for home ownership. Won’t you join them?

Thanks Suze for your honesty, candor and inspiring presentation. Bravo.

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Housing Crisis Over – interesting read…

May 14, 2008

The Housing Crisis Is Over

By CYRIL MOULLE-BERTEAUX

May 6, 2008; Page A23

 

The dire headlines coming fast and furious in the financial and popular press suggest that the housing crisis is intensifying. Yet it is very likely that April 2008 will mark the bottom of the U.S. housing market. Yes, the housing market is bottoming right now.

 

How can this be? For starters, a bottom does not mean that prices are about to return to the heady days of 2005. That probably won’t happen for another 15 years. It just means that the trend is no longer getting worse, which is the critical factor.

 

Most people forget that the current housing bust is nearly three years old. Home sales peaked in July 2005. New home sales are down a staggering 63% from peak levels of 1.4 million. Housing starts have fallen more than 50% and, adjusted for population growth, are back to the trough levels of 1982.

 

Furthermore, residential construction is close to 15-year lows at 3.8% of GDP; by the fourth quarter of this year, it will probably hit the lowest level ever. So what’s going to stop the housing decline? Very simply, the same thing that caused the bust: affordability.

 

The boom made housing unaffordable for many American families, especially first-time home buyers. During the 1990s and early 2000s, it took 19% of average monthly income to service a conforming mortgage on the average home purchased. By 2005 and 2006, it was absorbing 25% of monthly income. For first time buyers, it went from 29% of income to 37%. That just proved to be too much.

 

Prices got so high that people who intended to actually live in the houses they purchased (as opposed to speculators) stopped buying. This caused the bubble to burst.

Since then, house prices have fallen 10%-15%, while incomes have kept growing (albeit more slowly recently) and mortgage rates have come down 70 basis points from their highs. As a result, it now takes 19% of monthly income for the average home buyer, and 31% of monthly income for the first-time home buyer, to purchase a house. In other words, homes on average are back to being as affordable as during the best of times in the 1990s. Numerous households that had been priced out of the market can now afford to get in.

 

The next question is: Even if home sales pick up, how can home prices stop falling with so many houses vacant and unsold? The flip but true answer: because they always do.

 

In the past five major housing market corrections (and there were some big ones, such as in the early 1980s when home sales also fell by 50%-60% and prices fell 12%-15% in real terms), every time home sales bottomed, the pace of house-price declines halved within one or two months.

 

The explanation is that by the time home sales stop declining, inventories of unsold homes have usually already started falling in absolute terms and begin to peak out in “months of supply” terms. That’s the case right now: New home inventories peaked at 598,000 homes in July 2006, and stand at 482,000 homes as of the end of March. This inventory is equivalent to 11 months of supply, a 25-year high – but it is similar to 1974, 1982 and 1991 levels, which saw a subsequent slowing in home-price declines within the next six months.

 

Inventories are declining because construction activity has been falling for such a long time that home completions are now just about undershooting new home sales. In a few months, completions of new homes for sale could be undershooting new home sales by 50,000-100,000 annually.

 

Inventories will drop even faster to 400,000 – or seven months of supply – by the end of 2008. This shift in inventories will have a significant impact on prices, although house prices won’t stop falling entirely until inventories reach five months of supply sometime in 2009. A five-month supply has historically signaled tightness in the housing market.

 

Many pundits claim that house prices need to fall another 30% to bring them back in line with where they’ve been historically. This is usually based on an analysis of house prices adjusted for inflation: Real house prices are 30% above their 40-year, inflation-adjusted average, so they must fall 30%. This simplistic analysis is appealing on the surface, but is flawed for a variety of reasons.

 

Most importantly, it neglects the fact that a great majority of Americans buy their houses with mortgages. And if one buys a house with a mortgage, the most important factor in deciding what to pay for the house is how much of one’s income is required to be able to make the mortgage payments on the house. Today the rate on a 30-year, fixed-rate mortgage is 5.7%. Back in 1981, the rate hit 18.5%. Comparing today’s house prices to the 1970s or 1980s, when mortgage rates were stratospheric, is misguided and misleading.

 

This is all good news for the broader economy. The housing bust has been subtracting a full percentage point from GDP for almost two years now, which is very large for a sector that represents less than 5% of economic activity.

 

When the rate of house-price declines halves, there will be a wholesale shift in markets’ perceptions. All of a sudden, the expected value of the collateral (i.e. houses) for much of the lending that went on for the past decade will change. Right now, when valuing the collateral, market participants including banks are extrapolating the current pace of house price declines for another two to three years; this has a significant impact on the amount of delinquencies, foreclosures and credit losses that lenders are expected to face.

 

More home sales and smaller price declines means fewer homeowners will be underwater on their mortgages. They will thus have less incentive to walk away and opt for foreclosure.

 

A milder house-price decline scenario could lead to increases in the market value of a lot of the securitized mortgages that have been responsible for $300 billion of write-downs in the past year. Even if write-backs do not occur, stabilizing collateral values will have a huge impact on the markets’ perception of risk related to housing, the financial system, and the economy.

 

We are of course experiencing a serious housing bust, with serious economic consequences that are still unfolding. The odds are that the reverberations will lead to subtrend growth for a couple of years. Nonetheless, housing led us into this credit crisis and this recession. It is likely to lead us out. And that process is underway, right now.

 

Mr. Moulle-Berteaux is managing partner of Traxis Partners LP, a hedge fund firm based in New York.

 

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Mother’s Day

May 11, 2008

The most luxurious and wonderful thing on this earth is the gift of a good Mother. I wish you all a happy Mother’s Day!

Cheers,
Linda

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Motivating Magic

May 10, 2008

People who are unable to motivate themselves must be content with mediocrity, no matter how impressive their other talents.
Andrew Carnegie

Motivation is a funny thing…it can either be your greatest journey to success or lack of it will result in your ruin.

In real estate, there are so many things that make us successful. But the number ONE thing is motivation. We need motivated agents, motivated sellers and motivated buyers. We need motivated banks, motivated title companies…etc. We are all motivated to make someone happy and to make dreams come true. It’s the best kind of motivation. It comes from the heart.

I hope you find your inner mojo…I hope you are motivated to achieve success in your life whether it be through the purchase of a new home or the magic of marriage or the fulfilling job as a parent. We are all motivated by something! What motivates you?

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Summertime Sales

May 8, 2008

Hot time…summer in the City. Oh yeah, things are looking a lot better for the Central Florida and Orlando real estate markets this summer. What is the change? Jumbo loan are FINALLY going through a transformation and rates will be attractive. FHA, the savior of the mortgage industry, returns to give those with good credit but no savings a chance at home ownership and people in general are tired of being tired.

I think the election issues are winding down (is it over yet?), people realize the world is still spinning around and the end is not yet in sight. Somewhere over everyone’s rainbow remains the dream of owning a home and that dream still shines in the hearts of the American public.

It’s a good time to buy and summer sales will sizzle!