Copy for Real Estate Guide Column for 12-19-08

REAL ESTATE PATTERNS
By Ken DuVall

The Tablecloth

A little heartwarming story for your Seasonal pleasure this week.

It was October of 1975 when the new pastor and his wife, assigned their first ministry, were asked to re-open an old dilapidated church. It was very run down and needed a lot of work. They planned their first service for Christmas Eve. They had to repair the pews, plaster the walls, repaint nearly everything, on and on. By December 20th they were finished. But the very next day, a rainstorm hit. Afterwards, the pastor’s heart sank when he saw that a roof leak had caused a huge chunk of plaster to fall off the wall right behind the pulpit. He knew it couldn’t be repaired in time for Christmas Eve so he would have to cancel the service. As he sadly headed home, he happened to stop into a nearby business having a charity flea market sale.

He noticed an exquisite handmade tablecloth with a cross embroidered in the center of it. It looked like it was large enough to cover up the hole in the church wall. He bought it and headed back to the church. As he neared it he noticed an older woman trying to catch a bus but she missed it. He knew it would be 45 minutes until the next bus. Since it was a freezing cold day he invited her to wait inside the warm church. She sat in a pew as he climbed a ladder to hang the tablecloth like a tapestry over the hole. He could hardly believe how beautiful it looked there. And, it covered the entire hole just perfectly! Now they could have the Christmas Eve service after all!

The woman walked towards him, her face white as a sheet. “Pastor,” she asked, “where did you get that tablecloth?” The pastor explained. She asked him to look in the lower right corner of it to see if the initials RBG were crocheted into it. They were! Those were her initials! She had made this very tablecloth some 35 years before! The woman told him that before WWII she and her husband lived in Austria. When the Nazis invaded, they decided to get out. She left first, headed to a friend’s house. Her husband was to meet here there later that day. But on the way she was arrested by the Germans and sent to the Buchenwald concentration camp. She said she never saw her husband again. The pastor wanted to give her back her tablecloth but she asked him to keep it for the church as a blessing. The pastor insisted on driving her home as the least he could do.

What a wonderful service the new pastor had on Christmas Eve. The church was full. Afterwards, he noticed an older man still sitting there in a pew just staring up at the tablecloth. The pastor approached him and the man said it was identical to one his wife had made years ago. He explained that during WWII when the Nazis overran Austria, his wife fled for a friend’s home. He left later, but on the way the Germans arrested him and sent him to the Auschwitz concentration camp. With tears in his eyes, he said, “I never saw my wife again.”

The pastor asked him to take a little ride with him. They drove across town to where he’d taken the woman earlier and knocked on the door. When the couple saw each other, it was like the most incredible and miraculous Christmas present imaginable.

I wish you all a Very Merry Christmas and a Prosperous New Year.

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 12-12-08

REAL ESTATE PATTERNS
By Ken DuVall

THEATER OF THE MIND

It’s in, out, up, down, or back and forth. You pick it. The finger pointing blame game is in full bloom. But America is and always has been a work in progress. We’re continually on the comeback trail one way or another. Even though it’s still gloomy, I’m beginning to see light at the end of the tunnel. If you don’t look for it, you won’t be able to see where we’re going.

The California Assn. of Realtors reports statewide sales now up an amazing 117% compared with a year ago. That’s an incredible stat. We don’t hear that from the bad news media. On balance, prices in the same period are down 40% due to the bulk of sales coming from foreclosure sales.

The equation is simple: good deals are out there and buyers are snapping them up. On an annualized basis, California will close 552,750 homes this year, up from 353,300 last year. Not too shabby in today’s market. We’re still doing a gang of deals. Chico’s slow, figuring the seasonal factor in too, but otherwise we’re doing just fine.

The 30-year fixed loan rate plummeted to 5.5%, the biggest weekly drop in 27 years. And still dropping. Each 1 percent decrease in interest rates translates roughly into a 10 percent increase in home buyer purchasing power, which can generate 500,000 additional home sales. Amen to that.

From the Wall Street Journal: Nationwide, home prices are down only 6.5% from their peak in 2007 in 241 of the 330 metropolitan areas. Compared with their long-term values, U.S. homes are now 3.8% undervalued. Loan applications last week jumped 117%, the biggest increase in 18 years.

Unfortunately, we’ve got yet another crisis looming in the commercial real estate market involving malls, hotels, storefronts, etc., all across the country. Those owners have loans too, and their default rate is expected to triple over the next year.

When businesses go dark (think Mervyn’s, Linen N’ Things, Blue Shield, McMahon’s, etc) not only are jobs lost, the rent they were paying stops- which was the mortgage payment money. Unlike 30-year home mortgages, commercial loans are written for a 5 or 10 year term with big balloon payments at the end. About $20 billion of those come due next year, higher yet in 2010-11.

Refinancing used to be an option but no more. Credit markets have seized up. Banks are reluctant to write new loans to those facing foreclosure. There’s going to be lot of pain and it’s not going to be pretty. But will savvy investors be out there jumping on bargain priced malls? You bet they will.

On the political light side: From “B.C.” in the comics: Q: What’s the difference between a monarchy and a democracy? A: In a monarchy you only have one liar to deal with. From “Get Fuzzy”: Q: How many Republicans does it take to change a light bulb? A: No one knows. They won’t release that information. How many Democrats does it take? First, they have to establish funding. But they never change anything. They just sit around and cry about the poor light bulb!

Maybe a benevolent dictator is what we need! But I’m sure we can still count on the “Big Repairman in the Sky” to fix things up. Keep the Faith.

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 12-5-08

REAL ESTATE PATTERNS
By Ken DuVall

LIKE IT IS

A recent Letter to the Editor worth repeating quoted Sir Winston Churchill on his view of capitalism: “The vice of capitalism is that it stands for the unequal sharing of blessings; whereas the virtue of socialism is that it stands for the equal sharing of misery.” Profound. To those who are given great things, of them great things are expected. Again, best of luck to all our new leaders.

They’ll need it. We’re looking at the wreckage of the worst financial crisis in 80 years, with the parade of humiliating fiascoes on Wall Street, the bumbling extravagance in Congress- and the bailout parade continues through Washington. Hey, how come local builder Andy Meghdadi didn’t get a bailout?!

The number of housing starts- the lowest level in 49 years- continues to decline in response to slower demand. The good news: we’re reducing inventory, lowering prices, while affordability has doubled. Today, 53% of California households can afford the median priced home of $287,760 vs. only 24% last year. Remember: demand never stops. Housing overall is not nearly as bleak as the grim reaper media would have us believe.

Not nice: the DOW is off 40% from January. Equity losses are $9 trillion. Foreclosures are at all-time highs while unemployment is the highest in 26 years. Consumer debt is $2.5 trillion, the next area likely to experience a meltdown. The government just announced an $800 billion transfusion to unfreeze that market. There are 171 banks on the FDIC’s “troubled” list so far, up 50% in the last 3 months. Banks are folding like Thanksgiving flowers.

More not nice: we’re now officially in a recession. The federal deficit has hit a record $455 billion, more than double 2007’s. Some say it may even double again before this is all over. Bailouts now total a staggering $7 trillion. We’re into a full-blown, self-feeding downturn in an economy that’s already on life support. But don’t give up the ship just yet. It’s always the darkest before the dawn. Confidence will be restored in due course.

So, guess what? All this tells you it’s a great time to buy real estate! It’s immortal. There’s no good or bad time. There’s only good or bad deals. It’s a safe bet the economic picture will remain uncertain into 2009, yet there’s good reason to believe that housing has begun to stabilize. Just as it led us in, housing may very well lead us out of the economic downturn.

California home sales are up 64% from a year ago and up 5% in just the last month, because prices have come down 20% to 30% from a year ago. Sellers are motivated. Take advantage of great prices and the best loan deals in decades. True wealth is created from long-term ownership. It could be your salvation. Real estate seems to be the only show in town right now. Call your Realtor for the best seats!

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.