TomsREBlog

Am I falling into their trap?

Tom Schieber — Sun, 18 May 2008 06:03:12 +0000

When Zillow burst onto the scene some two years ago, I was, like many in the real estate business, skeptical about the website. Now, as the dust begins to settle, I’m finding that I kinda like the site.

The initial reaction of many Realtors, myself included, was very fearful towards Zillow for a couple of reasons.

1. The obvious concern was that their Zestimates were going to provide unrealistic expectations for consumers who believe that everything they read on the web is true.

And the truth is yes, I’ve dealt with both buyers and sellers who were more inclined to trust the mechanical valuation process of the website than they were my professional advice. Of course, they only lean that way when the Zestimate is in their favor (nobody ever says, “Tom, let’s lower our asking price. I saw it on Zillow.”)

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Now That Takes Some Guts…

Tom Schieber — Tue, 13 May 2008 22:28:47 +0000

The Wall Street Journal ran an article yesterday procaliming that The Housing Crisis is Over.

Now that takes some guts.

Back in October of 2005 I had a client (a referral from a good friend of mine) who wanted to list and sell his house up in Dublin Ranch because his soon-to-be Fater-in-Law, a financial planner from the Rocky Mountain region, was convinced that the California real estate market had topped out and it was time to diversify. Smart guy. Really, the only one I know who was calling the top right as it was approaching (and no, I’m not counting the ogres at UCLA or anyone else who predicted the bubble would burst for three years before it actually did).

The basis of the latest WSJ prediction on the real estate market has some merit in my opinion.

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.

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Reasons for Optimism: Be Positive!

Tom Schieber — Fri, 09 May 2008 18:44:31 +0000

I need to get up a post about how positive I’m beginning to feel about the real estate market and the summer that’s to come. Now I’m not going to over-do it - I’m not going to call for a full-blown recovery or bang on the GTTB drum just for the sake of being positive. But with the way the first part of the year has gone, I’m glad to share some encouraging news.

(GTTB: new web-moniker for overly-optimistic NAR types - “Great Time To Buy” - get it?)

1. The secondary market has finally figured out pricing for the new Jumbo-Conforming loans we were so excited about a couple of months ago when the economic stimulus bill was passed. Check with Brian at greenmortgagegroup.com for the current rate, but I understand they came down yesterday at 6% for a 30 year fixed. This is great news in jumbo markets like Pleasanton and Dublin, where it’s just opened up the market for a whole group of buyers that were forced out by the mortgage meltdown last summer. (more…)

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Bricks and Mortar

Tom Schieber — Mon, 05 May 2008 17:03:17 +0000

It’s been almost three weeks now since we officially moved-out of our Pleasanton office on Hacienda Drive. Makes me wonder what I’m going to do when the mail stops getting forwarded in another week? It also explains why I haven’t done anything productive in almost six weeks. Moving is a big job.

More than five years ago, when my Dad/Broker/Boss inked the deal on the seven thousand square foot office space in Pleasanton, it seemed a perfectly logical thing to do. But the way the business has changed (driven primarily by the Internet), today such a huge brick-and-mortar investment would strike me as pure foolishness.

Agents just don’t use the office like they used to.

Five years ago we depended on the office for access to our business telephone and messages. We went in for access to the MLS. We found out about new listings through face-to-face communication with co-workers. Company policies and events were promoted through memos and fliers that we would pick-up in our mail slots. The whole thing was just so physical.

Now, most of that communication can be done through email. The MLS is at our fingertips via the Internet. Forms are all electronic. Files are stored on-line. We have user names and passwords to access DRE resources, tax record data and the latest industry-related news. Everything’s on line. If I’ve got an Internet connection, I’m in business. (more…)

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3106 Ascot Court, Pleasanton $780,000

Tom Schieber — Tue, 25 Mar 2008 18:33:52 +0000

Tom,
I don’t know how to say thank you enough for all of your help. I hope you know we appreciate it and wish the best to you and your family. I can’t say we have ever made it really easy for you…but I hope in the end this worked out ok for you.
Jana

It’s my pleasure Jana.

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I Think it’s Good News

Tom Schieber — Wed, 19 Mar 2008 17:48:00 +0000

My optimistic side has taken over the blog for the moment, and wants to convince the rest of me that we’re on the downhill side of the mortgage meltdown mountain that the real estate market and the US economy have had to climb.

A couple of things have happened in the last week that have convinced me that we are really in the second half of this market.

First, Standard and Poor’s came out and said that the end of the write-downs is in sight. I’m choosing to hang my hat on this prediction, although I know it’s certainly a subjective analysis. But when I compare it to my calendar, which says we’re at least a year and a half into this mess, it makes sense. In another eighteen months we’ll be three years removed from the blind lending that created the problem, and the banks should have a handle on what’s left to come down the pike.

And the Fed has finally stepped in in a meaningful way.They’ve opened the discount window to investment banks, they’ve financed JP Morgan’s bailout of Bear Stearns and essentially indicated to the market that they’re going to be the safety net that insures (buys) these garbage loans. Is there a price to pay for that? Sure there is (they’re printing money and lowering interest rates in order to facilitate this increased liquidity - creating serious inflation concerns, but that’s a post for the economics blogs).

Add to the recent news the simple fact that buyers are back, financing is coming back, and the prices of these foreclosed properties are getting low enough to make sense again - and I think I can see a light at the end of the tunnel. As the saying goes, I just hope it’s not the oncoming train.

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Out of State Investing Comes Back to California

Tom Schieber — Wed, 05 Mar 2008 19:41:03 +0000

Sure, the softening real estate market is driving prices way down in some areas, but the fact is it cuts both ways. There are some markets, and some investors, that are going to benefit significantly from the current environment.

I have buried my head in the sand for a long time in regard to prices in my hometown of Brentwood. Working primarily in the Tri-Valley, it was (for a time) a luxury I could afford. But then I met Rick and Paige, buyers referred by a good friend, who had already set their sites on Brentwood, and I got the opportunity to take a look at my neighborhood through my Realtor eyes.

First of all, I can’t even begin to describe how fun it was to “sell” my town. The neighborhoods, the schools, the development plans - I realized how much a part of the community I am, and that I should be doing much more business here.

But then it hit me: these prices make sense again! Sure, my equity has evaporated, but that’s OK ’cause I’m not going anywhere.

On the other hand, for those investors who were going out of state to Arizona and Nevada, even New Mexico and Georgia looking for investment opportunities, your trip has just been cancelled! Follow me here… (more…)

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Another Piece of the Puzzle

Tom Schieber — Thu, 28 Feb 2008 21:37:40 +0000

We all want to understand how we got into this current real estate market, and there’s no single easy explanation.

However, I read a great piece about “cash back at closing” that goes a long way towards answering that question. And it’s not the obvious piece about predatory lending or misleading consumers or folks who simply overbought. It’s not that conspicuous. And yet it’s really at the core of how the “frothy” markets of the early 2000’s did us in. And it points back to the question of ethics, or how you do business (or live your life for that matter).

Click on this link to read the piece. Let me know if this makes sense to you.

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7624 Canterbury Lane, Dublin $540,000

Tom Schieber — Mon, 25 Feb 2008 18:55:27 +0000

Handling foreclosure properties is always tricky. Marketing this beauty on Canterbury Lane in Dublin required strategy, imagination and hard work. Check out the website at http://www.7624canterbutylane.com

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Less Than Stimulating Conversations

Tom Schieber — Mon, 18 Feb 2008 19:06:05 +0000

I’m beginning to have my doubts about the new economic stimulus package. On the surface it would seem that the new higher loan limits should help Bay Area families to afford to buy a house. But there’s so much more to it, that I’m beginning to wonder how much help it’s going to be.

On the one hand, yes, we’ll have conforming loans up to $730,000. Take the average $900,000 house in Pleasanton, put 10% down, and you’ll get a conforming 80% first mortgage and a reasonable 10% second to go behind it - something that’s not very easy to do at the present moment (pre-stimulus/post subprime-jumbo meltdown).

And I’m not saying that I don’t want my $300. Or is it $1200 because I’ve got kids? Or do I not qualify because I made more than $42,000 last year? But my kids would qualify? Oh forget it, the loan-limits thing is way less confusing.

But wait a second, those new jumbo-sized conforming loans are going to have their limitations. It looks like you’ll have your choice of 30 or 15-year fixed products, fully amortized of course. That means no interest-only payments, no adjustable rates.

Along with the higher loan amount will come a higher interest rates (risk and return are indeed correlated, no bill is going to change that). We’re already seeing that effect in the market, rates seemed to go up for no reason at all last week.

I heard this bill referred to as “Economic Cialis” - it may help us out for a period of time, but when it wears off we’re still left with the same underlying problem, be that a slowing economy, a correction in housing, or a full-blown recession.

It’s an interesting discussion, for a while. But I’m really unsure how it’s going to play out. If it works and gets the market moving, and they’re really going to cut-it-off on December 31st, I can only imagine what the last two months of the year are going to be like.

So is this the jumpstart that we need? Is it a band-aid? Does it get us throught the toughest part of the market? What do YOU think? Leave a comment, and keep the discussion going…

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