Seasons Greetings

This is a painting I did after returning from New Orleans. My lovely wife crafted the words. Our wish is that each and everyone of you enjoy the season!

Pogo said it all..............

"We have seen the enemy and it is us."

Not too long ago, the media was proclaiming that home sales were sizzling. Folks read the paper and joined the buying frenzy. Last fall, the media proclaimed that we were on the verge of popping the real estate bubble and sales activity came to a screeching halt. Now the media is letting us know that interest rates have not been lower in the past year.

Sound bite driven decisions rarely make sense. We have become our own worst enemy. I know that your cousin Ralph told you that you should wait out the price drops before you buy. I know that your aunt Alice said that prices still have room to fall and God forbid you pay too much for your home.

I do this stuff for a living. I don't sit in a cubicle writing articles attempting to sensationalize every wind that blows in the economic market. I don't have to make this glamorous. I live in the real world, where people have been buying and selling homes every day, every week, every month of the year. People have bought and sold when the interest rates were around 20%. People bought and sold when they actually had to have money for a down payment. If we only go back 25 years, there are some interesting facts about real estate in the DC market area that don't grab headlines.

Let me share.

The surge in prices over the last few years was the result of reduced inventory and historically low interest rates coupled with the introduction of interest only loans.
Real estate has always been the king of increasing personal net worth through the use of OPM (that's other peoples money). You don't even need a down payment with some of the programs available.

For example purposes, let us assume that you will put 10% down. If you purchase a $400,000 home, you will only need to put down $40,000. Over the last 25 years in the DC area, homes have appreciated 6.9%. The $400,000 homes value would increase to $564,240 over a period of 5 years. I am not a wizard but that is about a 22% return on the investment.

Can prices remain level or go down? Sure, that could happen. Prices in the past have gone down briefly, but the fact remains that over the last 25 years, they have averaged the 6.9% annual increase I have stated. No glamour, just facts based on verifiable information.

It gets better.

Rates can not remain low. They will have to go up, based on all sorts of fancy formulas that include stuff like M-1, the bond market and the cost of the war. We are at the bottom of this interest cycle. If you take advantage of these rates, you will be pleasantly surprised at the impact that decision will have on you. Prior to this cycle, the lowest they had been in forever was 8.31% back in April of 1997.

Back to the $400,000 house with 10% down.

A $360,000 loan at 6.25% = $2,216 monthly vs. 8.31% = $2,720. That is a savings of $504 per month and $181,440 over life of loan.

If you are in a 30% tax bracket that is a $7,000 tax deduction in year one and a $33,600 tax deduction over five years.

And now there is inventory. Of course, the level of inventory could change quickly. I don't really care how the scribe choose to share the information. I think you have the right to understand, there has never been a better time to buy.

Of course, you could just listen to the media or relatives. This is fair warning. If you fail to act now, you will see Pogo in the mirror with you and the words floating through the air will be............We have seen the enemy and it is us.

The wonderful world of forums

We Realtors are a group like any other. We have our boards where we share information with one another. We also pontificate about the world at large. Sometimes this sharing turns ugly. Toes are stepped on, posts are volleyed back and forth and often someone removes themself from the fray, vowing to never visit that particular forum again.

We Realtors are a group like any other. After some recent acrimony between members of two boards, I thought, there must be others such as this. There are probably folks across this broad interweb that are dipping their toes into the water and reaching out to communicate with other like minded folks.

If you happen to frequent any message boards or forums, I would like you to consider the following.

Everyone has to live within the confines of their own shoes. There are many people that happen to cross our paths on a regular basis and we judge them for the fraction of time they spend in our awareness. It is unfortunate, that often, we base our decisions on the "tip of the iceberg".

There are agents that have very close friends suffering from incurable diseases. As with anyone else, the stress of watching someone you care for deeply die a slow and painful death occasionally causes folks to act out. It is very hard to maintain control of all aspects of your life when you are losing one of the reasons you live that life.

There are agents that have great professional success and go through personal changes that challenge their ability to present a fair and balanced image to others all of the time. Regardless of market, there are agents that are moving through the maturation process that everyone struggles with when they go through the transition from 20 something to early thirties.

I don't know if there is a medical term to describe a condition in which a person falters and flounders when attempting to share on a forum. I have heard of a stroke in which speech and the ability to write is temporarily lost. I do believe there are many that sit before a keyboard and know what they are trying to say and it just doesn't come out that way.

There are many possible reasons that the online personna of agents is nowhere near the person behind the keyboard. Often a phone call and a ten minute conversation will ferret out the truth.

It is only my opinion, but the last thing I believe anyone should do is take it to heart that those on any forum are as good, bad or indifferent as they may appear.

These are just people. Some have internet experience, some don't. Some have the ability to express themselves fluently and some don't. There is value in what is shared by anyone.

I am not without blame. I too have judged and castigated and irritated. I have fallen short of my own standards. I will continue to attempt to become the person I can be. Hopefully I will avoid the piling on that occurs when others stumble in their journey.