Copy for Real Estate Guide Column for 3-28-08

REAL ESTATE PATTERNS
By Ken DuVall

“FUGGEDABOUT IT!”

Now Kiplinger says we ARE in a recession after all with a mild contraction expected until year-end. Consumer confidence hit a new low. The dollar’s fall is not a reason to panic even as our budget deficit swelled to $400 billion. It now costs the Gov’t nearly 2 cents to make a penny! The Iraq war costs $9 billion a month that we borrow from China to fund! A heart bypass operation in India costs only $10,000 vs. $130,000 here. Last week in Walnut Creek they renamed the Easter Bunny the “Spring Bunny.” Home sales nationally enjoyed a 2.9% uptick last month, the result of falling prices, but try and get a new loan today. This constant drumbeat of downbeat news is giving me a headache so let’s take a breather this week.

Instead let’s visit some of the homes of the “Rich & Famous”. At least that’s not negative! Liz Taylor’s Palm Springs 10,000 SF home on 1.5 acres hit the market this week for $9.2 mil. Warren Buffett, 77, despite his $62 bil fortune, still lives in the humble home in Omaha he bought for $31,500 in 1958. Computer mogul Michael Dell’s 33,000 SF manse sits on 20 acres, a stone’s throw from Dell Headquarters in Austin, TX.

Oracle CEO Larry Ellison spent $100 mil for a 10-building villa on 23 acres in Woodside, plus another $20 mil snapping up a dozen properties in Malibu. Russian-Israeli diamond magnate Lev Leviev bought a 17,000 SF London manor for $65 mil which includes a bullet proof front door, gold plated pool, indoor cinema and hair salon. Steel magnate Lakshmi Mittal’s $120 mil 12 BR London spread includes Turkish baths and a 20-car garage. He sure won’t have to look for a parking place!

Microsoft’s Bill Gates 66,000 SF compound near Seattle has 84 steps leading up to the entrance or you can take the elevator instead. Star Wars director George Lucas’ Skywalker Ranch in Marin sits on 5156 acres and boasts its own fire brigade. Movie stars get in but not the public. “The Donald” occupies the penthouse triplex of his Manhattan Trump Tower. The $50 mil residence is a monument to gold and marble. His 5th child Little Barron, by his 3rd wife, Melania, has an entire floor to himself. Trump has only to hop on the elevator to get to his office, no matter how his hair is combed!

Finally, a marvelous election year anecdote: John the farmer was in the fertilized egg business. He had several hundred laying hens, called "pullets", and ten roosters whose job it was to fertilize the eggs. The farmer kept records. Any rooster that didn't perform went into the soup pot and was replaced. That took an awful lot of his time, so he bought a set of tiny bells and attached them to his roosters. Each bell had a different tone so John could tell from a distance which rooster was performing. Now he could just sit on his porch and fill out the efficiency report simply by listening to the bells.

The farmer's favorite rooster was old Butch, a very fine specimen. One morning John noticed old Butch's bell hadn't rung at all! John went to investigate. The other roosters were chasing pullets, bells-a-ringing. The pullets, hearing the roosters coming would run for cover. But to Farmer John's amazement, old Butch was cleverly holding his bell in his beak so it couldn't ring. He'd sneak up on a pullet, do his job, and walk on to the next one. John was so proud of old Butch he entered him in the County Fair. The judges were amazed. They not only awarded old Butch the No Bell Piece Prize but the Pullet Surprise as well.

Clearly, old Butch was a politician in the making: who else but a politician could figure out how to win two of the most highly coveted awards on the planet by being the best at sneaking up on the populace and doing you know what when they weren't paying attention! The moral: Vote carefully this year...the bells are not always audible.

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.

Copy for Real Estate Guide Column for 3-21-08

REAL ESTATE PATTERNS
By Ken DuVall

NO RECESSION?

The ultra-moderate UCLA Anderson Forecast released last week says they are sticking to their “no recession” prediction. Their reasoning: the housing market and mortgage lending industries, weak as they are, are simply too small in relation to the overall economy to cause a recession. Surprisingly, UCLA’s predictions are usually the worst doom and gloom we ever hear. May it go from their lips to God’s ears!

Though the economy is clearly slowing, a recession traditionally occurs within a year of a slowdown in housing. This time, though, housing has been in a slump for 2 years and there’s still no clear recession, a sign the nation may squeak by. Despite the hard-hit housing market, falling home prices, rising foreclosures, the subprime meltdown and credit crunch, avoiding a recession has always been based on a correlation between housing and the labor market. Hard to believe but we’ve seen the economy in much worse shape in the past. Perception sometimes becomes reality.

Presently the ongoing housing collapse has come without major job market problems. People are walking away from their homes- not because they lost their jobs- but because declining home prices have turned their net worth negative. When you owe more than the house is worth, many simply decide to give it back to the bank. It sounds like we’re going to have sluggish growth for awhile but maybe not a full-blown recession. And the $200 billion the Fed kicked in last week may help. On top of this week’s funds rate cut, more could come.

This is the scary stuff: the foreclosure crisis has resulted in a drop in municipal tax revenues, a spike in the crime rate, homelessness, and an increase in vacant properties. When no one’s watching the store, the critters creep in and take over. There’s urban looting, crime is on the rise, and no money for more cops. But as Kiplinger says, “There’s little reason to fear a collapse. The economy remains structurally sound, though slowed. In fact, a healthy rebound is certain, although not until year-end. Bottom line: the fall isn’t over, but there’s no need to panic.”

The notorious Rancho del Rio is again available for $22.5 million. Situated on 187 chaparral-covered acres, the 1930’s era Spanish hacienda has numerous guest rooms, a vineyard, lake, and a dozen scattered buildings including stables, caretakers’ quarters and barns. It’s peaceful, serene and gorgeous, a little piece of the 1800’s just 7 miles inland from San Juan Capistrano, the largest piece of residential acreage in Orange County.

It was once owned by the infamous Harvard University psychology Prof. Timothy Leary, who preached “Turn on, tune in, drop out” in the 60’s-70’s. It was initially used as his huge dope depot. There was a subterranean vault accessed through a hidden trapdoor in the barn where the tons of illegal drugs were stored. Later the Girl Scout Council bought it for $2.38 mil and used it as a Scout camp until 2000. The current caretaker believes there’s a satchel of money buried down in the vault somewhere. He says, “I’m still looking for 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.