What an interesting, challenging and fun time to be a Realtor®! Fun? That’s correct. Remember, those of us who love this business got into it for one reason and one reason only. That reason is to help people. Now, that may sound like complete BS but, sorry, it’s true. We are at a point in real estate when there are a lot of people who need our help. Anyone who got their real estate license to make lots of quick cash, work a little and only when you want to, or for of the wrong reasons, must be very disappointed. Actually, most of those types are no longer in the business or are planning their exit from the business as I write this. As a matter of fact, California Association of Realtors has lost about 11% of its membership from 6/30/2007 to 6/30/2008, while nationally there has been a loss of about 6.1%” and there will be many more to follow.

These days we have to be friend, foe and psychoanalyst to our clients”  and it’s great. It’s such a pleasure when you can advise people in ways they haven’t yet heard and give them some relief from their worries. There is so much stress, anger, disappointment and confusion amongst home sellers and buyers that it’s a great feeling to give helpful counseling and to have a positive impact on them.

As they say, every cloud has a silver lining“  and our silver lining in this cloudy real estate market is the great satisfaction we derive from helping our clients.

“ In my last entry I said I believe Marin has seen the bottom of the housing slump and is starting its slow climb back to a healthy market. It’s interesting what we think a healthy real estate market is. After the blazing last five years of real estate sales we tend to lose a bit of perspective as to what exactly is a healthy market. Historically, in most parts of the country a 6 – 8 month stock of housing inventory indicates a healthy market. Currently Marin has just over 5 months inventory of single family homes, making our current housing market stronger than most areas at their strongest. One thing areas like Phoenix and Las Vegas do not have is intrinsic value. They have miles and miles of cheap dirt where thousands upon thousands of homes can be built, subdivision by subdivision, with no intrinsic value at all. Each new subdivision squashing the home prices of the subdivisions that came before. Certainly not the story in Marin.

Unfortunately, with the year’s 2^nd quarter reports the recent news has been pretty negative, the latest being the closing of IndyMac, the nation’s second largest wholesale lender, and the concerns with Fannie Mae and Freddie Mac .

Rest assured that we’ll be hearing negative news for the balance of the year but remember that “real estate is a local business” and, as I said in my last entry, our local market is definitely on the mend.

Wall Street Indexes continue to be volatile based on bull
market trends in commodities but the S & P index has officially
entered a “bear market” (declining values). Today
trading has continued its swings with the DOW up one
minute and down the next. Mortgage rates today are improved
from yesterday and are fairly flat so far this month.

Bernanke stated that the Fed will be issuing new rules
next week with several important changes to mortgage
lending. According to the new rules pre-payment penalty
loans will cease to be made. He also says that stated
income loans will be removed from the market entirely…
and this is cause for concern in California because one
reason our property prices have appreciated so well is because
stated income loans made it possible for many self
employed borrowers to get the homes they wanted using
these loans. This will make it essential to have borrowers
pre qualified by loan agents who are can truly pre-underwrite
loans in order for these folks to get mortgages.

Bernanke also announced that the Fed will continue to
lend to Wall Street investment banks into 2009. This is an
unprecedented move that has drawn criticism from many
who believe that tax dollars should not be used to shore
up failing investment houses, many of whom helped to
create the current credit crisis. Indy Mac, the 2nd largest
wholesale lender in the US closed its wholesale division
yesterday, sad news for mortgage brokers.

California home sales in May were up 6% from April!
Pending home sales nationwide fell 4.7% in May, a larger
than expected drop that signals that the housing market is
still not as stable as we’d like nationally. In Marin and the
Bay Area however, While volume is still down in Marin,
square foot median prices were up in almost every zip
code in Marin!

Local pending sales seem to be gathering momentum. Using
the information above to help sellers price their homes
reasonably may be helpful. To help your sales be sure
to get your buyers pre-qualified according to “full doc”
guidelines. Financial strategy becomes ever more crucial
to getting sales finalized. But the good news is that there
are still winning loan strategies available for most buyers.