The real estate blog.

Ok, I’ll admit it. My crystal ball isn’t very clear. At the end of February when the Dow dipped, I started to get nervous. Reading all these bearish articles on housing and stocks made me think, “Oh crap, these guys were right!” I’m old enough to remember the great stock crash of ‘87 and I also remember stocks rebounded then. After February, the Dow crashed hard before recently setting some new records.

Now, after three days of large sell-offs, the hesitancy could be returning. Not really. I sold my shares of PG on Tuesday, fortunately after they reached this year’s high. It was a year over year return over 20%. Since Tuesday, it has sunk. Oh well, it will come back. Yesterday’s 100 point loss brought me a $100 gain. I was hating it today.

Am I going to freak out this
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Some of you readers may have noticed I was mentioned briefly in a USA Today article on real estate and stocks that headlined yesterday’s money section.

I was pretty upset about some mis-characterizations in the story as it made it look like I dropped out of the real estate game in 2005. Of course those that know me, know different. Here’s what some of them said.

Byron Goates - my mortgage boss emailed me and said:

Dude,

You made it to the national news you are now big time!

I replied:

Getting media attention doesn’t mean anything.

Byron concluded:

That’s excellent. [referring to this] Maybe you can get your own article in USA Today! I have attached your title report.

A business associate I don’t even know very well emailed me with the following:
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One of the things I’ve tried to do with this blog is point out how the mainstream media often twists facts to create a story. My mantra is “Don’t believe the headlines, believe the facts.”

Today I was quoted in the USA Today on a story about real estate and stocks. Some people would be happy for the press. I am not. While my words weren’t twisted in the direct quote, my story was and I’m pretty upset about it. This is not a case of a hyperbolic headline, this is a case of an out and out lie.

The story said,

Others, like Nigel Swaby, a 36-year-old mortgage broker in Salt Lake City, are reluctant stock investors. Fearing the prices on two investment properties he owned in Salt Lake City could decline, he sold them in 2005 and invested the money in stocks.
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Despite increased housing inventories and declining prices across much of the country, there are still regions and cities that are doing well in real estate.

Granted these are first quarter numbers and I am eagerly awaiting 2nd quarter data, Salt Lake real estate is still looking good.

In an article pointing out anti-bubble cities, Salt Lake showed a 12.3% increase in sales prices during the first quarter. Other major cities showing gains include Seattle, Albuquerque and San Antonio.

Part of the reason these cities are defying the declining trends are some I’ve stated over and over; jobs and population growth.

The main ingredient is a set of positive fundamentals, including strong job and population growth, which then fuel demand for houses.
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I’ve been asked to provide some insight into the Salt Lake real estate market in the face of nation wide real estate trends. Here are a few anecdotal pieces that may help us see where the local market is headed.

From personal exposure, I’ve seen two failed sales on properties. One is a home I’m purchasing and the reason that sale failed was because the buyer’s sale failed. Due to the price, I’m guessing this was a step up and the failed sale at the end of the chain involved a first time home buyer. The particular home in question is in Holladay and was on the market for only a few days before going under contract. After the sale fell through it was on the market for 17 days before my offer came in. Total time on the market has been about two months.

Another home I’m aware
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Not that Jobs, work jobs. You know, the kind that pay you money.

All kidding aside, I had the opportunity to read some local market research put together by a major land developer in the Salt Lake Valley. Their research showed the demand for workers in SLC will not only continue to support real estate, it will attract people from other states…I’m looking at you California…where house prices are much higher.

In many instances people have come to Utah with their equity windfall after selling their home without even having a job to come to. I found all this pretty interesting. Though much of their data came from late 2006, the report I was reading had been compiled in late April, 2007.

This afternoon, an article appeared in the Salt Lake Tribune that continues
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Two years ago real estate investing in “hot” markets like Phoenix, Las Vegas and San Diego was the thing to do to make a load of money without much work. These “investors” were simply buying new houses with easy money and turning a profit when the home was completed. It was turnkey and anyone could do it.

Then the market shifted and things began to unravel. Casey Serin so mis-timed, mis-invested and mistook the market, he ended up holding eight houses in four different states. Foreclosure took most of those properties.

Critics claim Casey was stupid, but guys like Jeff from the SDCIA knew what they were doing and were successful. Then a few problems turned up on some Florida properties he owned and the market changed and now he’s facing foreclosure as well.

The
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The commercial property market REIT’s remain piping hot, even as housing shivers.

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Last year’s acquisition by The Blackstone Group (www.blackstone.com) of Equity Office Property Trust for USD 36 billion was the largest buy-out ever of an owner of office buildings. More importantly, it signaled that the commercial property market is healthy, now more than ever, and that is not afflicted by the same ailments so characteristic of the residential markets, much less by bubbles of any color, shape or form.

Albeit the biggest deal ever, Blackstone’s move was one of the many transactions leading to the privatization of the commercial property markets, a trend that since then has seen some USD
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A retrospective look at 2007 reveals that, contrary to many year-end predictions and a few economic forecasts, Real Estate still rolls, Canada is still in one piece, America has not drowned into the worst recession since the disappearance of the dinosaurs and the Twelfth Imam has not landed from the Moon yet. ____________________________________________________
Things seem to be moving in slow motion this year. We are all still alive and well, when in fact by now we should be all dead and buried - according to some prognostications I was reading all the way back in mid-December 2006, that is.

For the past few years the economies of North America have consistently defied the naysayers. Time and again the Cassandras who predicted trouble – whether a bubble explosion and the
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… and how it affects real estate consumers in North America. ______________________________
An exchange rate is the price at which the world demand for one currency equals the world supply of another currency. Foreign exchange rates are of particular concern to governments because changes in foreign exchange rates affect the value of products and financial instruments. As a result, unexpected or large changes can affect the health of nations’ markets and financial systems. Variations in exchange rates also impact international investment flows, as well as export and import prices. These factors, in turn, can influence inflation and economic growth.
Interest-rate differentials between countries are one of the main factors that influence exchange rates. Money tends to flow
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