Copy for Real Estate Guide Column for 4-27-07 (444 words)

REAL ESTATE PATTERNS
By Ken DuVall

WHAT’S YOUR DNA?


Here’s some excerpts from David Loreah’s new book “All Real Estate is Local”. David is our Nat’l Assn. of Realtor’s Chief Economist. The tendency of media analysts to lump real estate markets into one single entity has obscured the fact that each community- indeed each neighborhood- ebbs and flows on its own timetable based on the attributes that comprise every local market.

During the recent boom years, people lost sight of some basic fundamentals and started perceiving all real estate as a single market. The fact is that each market has its very own DNA: both tangible and inherent components. It has a combination of characteristics, just like human DNA, that influences people to want, or not want, to live in a particular place.

Seeing the uniqueness of each market is critical for consumers to start buying real estate again. More than anything else, today’s cooler conditions stem from a loss of overall confidence. Yet loan rates are low, the economy is not tanking, housing starts and consumer confidence are up, and jobs and incomes are gaining ground. But we keep hearing about falling prices in former boom markets and think the same thing is happening where they live. That depends.

The essential character of real estate DNA is natural: its proximity to water, picturesque mountains, mild weather, nice people, low crime rates, schools and shopping, etc. It is also the result of good community decisions made over the years. San Francisco, today an incredible city nearly destroyed in the 1906 quake, is a case in point, being both picturesque and vibrant. Atlanta, decimated by the Civil War is now a major hub of the South. There are many such examples.

There are DNA intangibles too. New York has Ellis Island, as the entry point for European immigrants led to the unprecedented concentration of talent in one place. People want to live there. Some of it is perception. Los Angeles has the aura of celebrities and glamour, and is a great metropolis. Word of mouth counts too. Consider the impact if Oprah suddenly declared Des Moines, Iowa as the best place in the country to live!

Everything counts all the time, especially right in your own backyard. Is your neighborhood DNA up to par? Is it well kept and maintained? Are your neighbor’s properties attractive? When we show a home for sale in your area, you can be sure you will never get a second chance at that all-critical first impression.

Our incredible boom years did not revoke the fundamental laws of real estate. It’s just that we’ve mistakenly lumped everything together. Ask yourself the question: Where would you rather live: L.A. or Chico?!

Ken owns Ken DuVall & Associates, REALTORS at 3rd Ave. & Mangrove in Chico. Ken was the 2001 President of the Chico Assn. of Realtors and the 1995 Chico Realtor of the Year. See Chico MLS listings at www.KenDuVall.com and call Ken at 345-3700 for all your real estate needs. Free consulting.

Theory of Evolution

Copy for Real Estate Guide Column for 4-20-07 (418 words)

REAL ESTATE PATTERNS
By Ken DuVall

Theory of Evolution

Developing “trends” happen almost daily depending on who’s doing the talking. You must evaluate all interpretations for the true picture. Facts are of the essence. Opinions are a point of view. But because housing is such a big deal in the economy, when things turn grim people understandably get nervous as we continue to see depressing reports of slowing sales and price decreases. Yet the U.S. will see some 7 million home sales involving $1.33 trillion this year. That’s still a ton of deals and dollars.

The real estate market’s downturn has not only shaken up buyers and sellers but has hammered industry employment as well. More than 21,000 jobs have disappeared already this year, Realtors, construction people, suppliers, etc., plus the two dozen subprime lenders who’ve already closed their doors or gone bankrupt. A foreclosure costs a lender 30% to 60% of the loan amount. It’s better for them to work things out with a delinquent borrower, and that’s happening.

Last week the nation’s largest financial institution, Citigroup, operating in 100 countries, announced a 17,000 employee layoff, 5% of their 327,000 workers. Citigroup has been under pressure to reduce costs, including from Saudi Prince Alwaleed bin Talal, their biggest individual shareholder. There’s no question the complexion of things are changing.

It may be a bumpy soft landing for housing and the economy. When the dust settles- barring another major Middle East crisis- we should come through relatively unscathed. The Fed figures to hold rates steady this year. The slowing economy is actually an antidote for their inflation concerns. The economy draws strength from consumer spending which remains on course for a decent 2.7% increase this year.

Baron Rothschild, the banker, once said the best time to buy is when there’s "Blood in the Streets." I agree, even if the blood is your own!. Just like the dot.com tech stock meltdown of 5-6-years ago, the market has come back to break all records. Those who bought Yahoo! stock when Wall Street ran red have made a 550% return. Timing is important, but in real estate, time alone cures a multitude of sins.

On a positive note, my colleagues all say local activity is definitely picking up lately. Chico will continue growing because of our inherent elements of relative affordability and being a great place to live. That equates to more buyers, constantly increasing demand, and inevitable price appreciation for our finite supply of properties. Every market in America is unique unto itself. More on that topic next week.

Ken owns Ken DuVall & Associates, REALTORS at 3rd Ave. & Mangrove in Chico. Ken was the 2001 President of the Chico Assn. of Realtors and the 1995 Chico Realtor of the Year. See Chico MLS listings at www.KenDuVall.com and call Ken at 345-3700 for all your real estate needs. Free consulting.

Season of Reckoning

Copy for Real Estate Guide Column for 4-13-07 (414 words)

REAL ESTATE PATTERNS
By Ken DuVall

Season of Reckoning

Despite housing market impacts of late, some areas are holding up remarkably well. A mid-priced home in So Cal just sold for a record high of $495,000 in February, a full 5% increase over February ‘06. Who cares dep’t: New York City sales are up 73%, average price per SF: $1000! Four BR flats there go for $9 million!

Statewide, California existing home median prices increased 5.7% in February as sales decreased compared to a year ago. But the pending sales index, deals in escrow, went up nearly 1% in February, a pleasant surprise. That says people are out getting mortgages, buying homes, enjoying good incomes, jobs, all of that. Again, sales are the bottom line in housing.

The good news is that well maintained homes, priced to reflect the realities of today’s market, are continuing to sell. The state median list price is now $564,700 vs. Chico’s $370,000. We’re still a bargain. This data suggests an underlying stabilization taking place in the housing market. It’ll take another month or two to clarify the trend.

Chico’s unsold inventory index is looking great. We only have a 6.3 month’s supply to sell all the current active listings at the present sales pace. Statewide, it’s 8.8 months. But our inventory is creeping up: 492 active home listings as of last week. On the bright side, we’ve closed 258 homes already in 2007.

There’s been worry that housing troubles would seep into the rest of the economy and hurt jobs. Not happening. The unemployment rate was down to 4.4% last week, a 5-year low. New job creation increased dramatically. The reports were much stronger than expected.

The subprime mortgage fiasco, while problematic, will not be catastrophic. Financial experts say it’s manageable within our $10 trillion economy. Making loans to people who couldn’t afford them was the single biggest error of recent years. Responsible lending practices are just what the doctor ordered, but not ones that would cause a credit crunch.

Lenders and regulators both need to be careful of overcorrection. Even so, some potential buyers will be taken out of the market. Many markets are exhibiting healthy economic activity enabling them to absorb the increased foreclosures. However, rents are going up as the result of the slowing market. Any market fluctuations have a built-in balance factor.

Consumers are optimistic about the future, and as we know, consumers drive the economy. The latest upbeat housing data may signal an unexpected spring comeback for us all. So be it.

Ken owns Ken DuVall & Associates, REALTORS at 3rd Ave. & Mangrove in Chico. Ken was the 2001 President of the Chico Assn. of Realtors and the 1995 Chico Realtor of the Year. See Chico MLS listings at www.KenDuVall.com and call Ken at 345-3700 for all your real estate needs. Free consulting.