Real Estate "Brain Freeze"

"I scream - You scream - We all scream for ice cream!"

• My Dad taught me this little jingle when I was a kid - and I loved it. He didn't, however, tell me about the dreaded "brain freeze." As I recall, now that I think about it, he did mention: "There's such a thing as too much of a good thing." And something about "all things in moderation." Whatever...

If ever there was a phenomenon that was a mirror image of human nature, the "real estate market" is it. There are those that will tell you that "people are basically good." I don't buy that - not for a minute. I buy the biblical premise that we are imperfect. Case in point: Have you ever known of a child that had to be taught how to be greedy? The way I see it, 1999 to 2005 represents a huge ice cream sundae. We all grabbed spoons - no, shovels - and gorged ourselves. Palm Coast real estate was smokin' hot. Oceanfront homes sold quickly. Salt water canal homes and Intracoastal homes were soaring. Life was good. We thrilled at the deals we made and the wise investments we orchestrated.

We were at that great ice cream shop next to Starbucks on A1A in St. Augustine Beach recently. I had my "home made French vanilla with fresh raspberries" going down pretty good when it hit: Brain Freeze. It was awful. Everyone was laughing, as I suffered. Now you may think I'm making this part up for its story value, but as I was writhing in pain, I thought of the economy... and how it was like this brain freeze thing. One minute we were feasting on a savory delight... the next minute we had two chop sticks plunged into our eyes. (I was told not to use this imagery. "Too graphic... yucky.") But it works for me. And if you're trying to sell your house right now, I'll bet it works for you too.

• The good news? I got over my brain freeze. It took a while, but I recovered. Yeah, I got to finish my ice cream... and even went next door and got a latte for the road. As 2008 is coming this week, I see the early signs of modest recovery on the horizon... And the latte? Well, maybe 2009...

"Timing the Market"

In my last post (Sunday, 12/9/07) I warned against trying to "Time the Market."

Now why would I do that? If you timed it - and won - you could win big. It's just that real estate "speculation" is not the same thing as "investing wisely." What, then, is speculation? Ever been to Las Vegas? Same thing. Forever and always, the odds are stacked in favor of the house... (No, not the house down the street... the Casino)

So this is just clarification from Sunday's post. The market is similar to a trampoline. Up-Down... Up-Down... in seven year cycles, on average, since WWII. The trampoline's surface stores potential energy. When the market hits bottom, as it's likely to do next year, that restoring force will cause a rebound. The rate of speed at which it rebounds - the "acceleration" - is a function of "mass" (the accumulated conditions that caused the crash) and "force" (the pent up demand of the market)... The greater the force, the greater the acceleration of the rebound will be. And I believe there is tremendous pent up demand. Bottom line? If you try to time the "bottom," you'll be in the rebound phase before you can click your stopwatch. The smartest time to buy real estate? Yeah, you guessed it --- NOW.

Real Estate and Football"

What's the "Real Deal" going on in real estate today? Everywhere you look, the headlines, magazines, and news shows focus on "Gloom," "Doom," "Housing Slump," BUT... and it's a BIG BUT (no pun intended)...

... It's truly a "matter of perspective." Take football, for example. How are you enjoying the season? As a Patriots fan, at 12-0, things are sweet. However, if you're a Fin follower, at 0-12, well now that's a little different deal. The Sports Page headlines are wildly different in Boston than Miami, right? How about a root canal? Personally, I don't care for them all that much. But my neighborhood dentist? - He rather welcomes them. "Same - same" for a fender-bender. The drivers? No:-( The body shop? Yes:-) Then there's quadruple bypass surgery. The patient? No:-( The cardiologist? For sure:-) ... I'm guessing you see where I'm going with this. So along comes a recent edition of "Smart Money Magazine."

• Headline: How Bad Is Housing Slump?
• Gist of it: "It's official: The U.S. real real estate market has fallen into its worst slump in 16 years."
• More: Builders are hurting.
• A little more: Industry stocks are in trouble.
• Even more: Easy (Translation: "stupid") financing is gone. (Excuse me, but I'm having trouble seeing this as a "bad" thing)
• Finally: We haven't seen the bottom yet. (That would be the pricing bottom)

The perspective issue? In a nutshell: In most cases, it's not fun being a seller right now. (However, there are a few circumstances where selling could actually be a good thing in this market... but that's another Blog post...) But being a buyer? Where are the headlines: "For The Love Of God... Buy A House NOW... Before It's Too Late" ??? I know this much. When you try to "time the market," you usually lose. We may not be at the bottom, but we're getting close. Take an average house here in Palm Coast. I'd rather buy it today at $250,000, than take a chance at missing the potential bottom of $240,000... and end up buying it in a bidding war at $275,000 when the market starts a turn-around.

What's Coming In 2008?

"What," we gingerly ask, "is the economic outlook for 2008?" "We've been hammered for two solid years now... It's time for an upswing... right?" My crystal ball says that 2008 will be pretty much like 2007. Hey, don't get mad at me. I'm not like - you know - the media or anything like that. It won't be horrible, yet it won't be like the run from 1997 to 2005 either. I believe the end is in sight, but some things have to happen first. I suppose you could say I'm optimistically pessimistic (wait, or is it pessimistically optimistic?) We (real estate professionals) are supposed to smile and say things like, "What downturn?" and "Of course we'll take your listing at the peak 2005 price... we'll just run more ads." and "Everything would be better if the media would just write happier stuff." etc., etc. Well, here's the deal. It's like a four-legged table... with four wobbly legs:

1. The Housing Slump is very real in most areas of the US. Here in Palm Coast/Flagler Beach, we've got an easy two year inventory... closer to two and a half years. Don't even ask about condos. We are currently dominated by foreclosures, short sales, and builder give-aways. The good news?... Prices are nearing the bottom - and this should be a catalyst to some buying activity this year.
2. Credit is tighter now. That's bad - yet a good thing, overall. Sub-primes are a memory. But even as prices fall, remember that all the drywall guys are in Tennessee and North Carolina working now. Jobs are hard to come by, so even with six% loans, buyers are scarce.
3. The $dollar$ is weak on international markets. That's bad now, but as prices get to the bottom, we should see foreign investors (especially Canadians) come back to Florida with strong Euros and Loons.
4. Buy any gas lately?

So there you have it. 2008 should see the bottom of the market - and that's a good thing. The long-awaited "turn around" should start. But remember, you don't do a "180" on a nuclear carrier quickly. Throw in Iraq and political unrest, continued mortgage shakeout with more foreclosures and short sales... along with upcoming elections, etc., and you don't see much in the way of real recovery until 2009... Can't wait :-)

"Thanksgiving - 2007"

"Thank you, Lord... Thank you - Thank you - Thank you"

Why all the "thank yous?" Because we have been selling some houses, that's why. The market may be in an "overall slump," yet there are segments that are showing signs of life. I used to be amused by the saying, "When life gives you lemons - make lemonade." Well now I'm a big believer.

A couple of years ago, we'd list and sell wonderful waterfront homes... $500,000 and up. The professional fees earned were generous. And believe me when I say "earned." Duking it out in a market flush with discounters (both fees and services) was tough. Not to mention orchestrating the chaos of multiple offers. It was crazy, but the rewards were significant.

I remember in 2005, there were no homes available under $200,000 in Palm Coast or Flagler Beach. Zero. None. Nada. Well guess what? Now there's a bunch. And I've gotta' tell you it's so satisfying to see folks who couldn't do this before, get to become homeowners. This past week, we helped a daughter/father team with some health issues buy a bank owned home for $152,000... (1850 sq.ft., 3BR/2BA/2Car, built in 2004, fenced... SWEET). Two years ago it would have been $249,900-ish. A doctor/investor from New York has purchased four properties in the past two months from us... Get this: all between $135,000 - $185,000, brand new from builders. The most gratifying?... two young fellows, 23 and 20 respectively, each buying a home for $140,000. One fresh out of college in a new job and the other with a new business venture. Man, I thought I was cool when I bought my first house over in Tampa at age 26, but these guys are 23 and 20. I'm impressed.

Anyway, we're sure thankful for this segment of the market right now. I've still got my database of Saltwater Canal Homes, Intracoastal Waterway Chalets, Oceanfront Villas, and a host of other McMansions in Hammock Dunes, Island Estates, Hammock Beach, etc., yet that niche is very quiet at present. I'll gladly work the big ticket items (most of my 22 year career has been there)... Yet it's the "Under $200K" market that now keeps caviar in the fridge and gas in the Ferrari :-)

"Puzzling Real Estate Market? Not Really."

It all makes perfect sense. It may be making you talk to yourself... yet logical it is. Think about it for a minute. Here in Flagler County, Florida, properties in Palm Coast and Flagler Beach were appreciating at a rate which often went beyond 20% per year. Waterfront property went through the roof. New construction was other-worldly. That was cool - IF - you caught it just right. But what were the odds that your personal crystal ball allowed you to maximize the old "Buy low - Sell high?" Numbers don't lie... (well, sometimes they do, but you know what I mean here). If you took a house at the median of $225,000... you wanna' know what the value would have been in ten years, if things stayed as they were? Hold your breath - $1.4M - that's million. I know lots of Marondas that sold for under $100K in 2000 and 2001... that went for $249,900 in 2005. Personally, I had property that was purchased for $385K in 2001 and appraised for $910K in 2006. That's Pure Crazy... Using that median purchase price of $225K, the ten year increase would have been 622%. Let's compare that to income. If a guy was a $20/hour wage earner and made about $40,000/year, do you think his income would have gone up 622% - to $258,752 - in the same time period? We both know the answer:-( So, as hard as it is for me to say this... This market "correction" is actually a good thing. If the "status had remained quo" for ten years or so, the results would have led us to an economic implosion of historic proportions. Talk about an "affordable housing crunch." Ouch. The transfer of wealth to the rich would have been unprecedented and impossible to accept (unless, of course, you were one of the rich ones:-) Recent economic studies have shown that the top 20% (those with roughly over $100,000 per year income) have now come to control over 50% of America's wealth. That top quintile's wealth is still growing in 2007, while the other four quintiles are losing theirs. Last time I checked the history books, that's the kind of stuff that leads to revolutions and civil wars. Anyway, I'm not too happy on a local, micro scale, yet I see the need on the global, macro level. We sure took it for granted, didn't we? We preened and postured and pretended we were quite something. So here's how you can dazzle your friends... Speak with authority when you say: "This is why we are in the current mess:"

• The up trending market was much longer than the average cycle since WWII. Ten years is a long time for fairly steady growth.
• From 2003-2005, approximately 40% of all real estate sales in the US were to "investors." (I'm more fond of the term "speculators." They weren't buying blue chip real estate to hold. Lots of "flippers"... akin to day traders). They, in turn, have flooded the re-sale market with distress sales.
• Thanks for the easy money, dear, dear lenders. Now all those sub-prime loans are coming due... and the sellers are upside down... which leads to...
• Foreclosures and short sales are like Harleys in Daytona during Bike Week. They are everywhere.
• Builders, in order to stay in business, must continue to build. Also, they tend to have deeper pockets than Joe and Alice Homeowner. They can slash prices and go into survival mode to keep the doors open.
• Speaking of Joe and Alice - they are panicking. So are many real estate agents. It's like being shot at. In my first live firefight in Viet Nam, I started to hyper-ventilate. So much for feigned bravery. This market is like that. It takes a little exposure to reality to become seasoned. With the largest housing inventory in the past twenty-five years, we'll have plenty of chances to succeed.

(This blog post is a compilation of data from multiple sources. Some of the better ideas are reworked and came from Mike Ferry, a respected national real estate trainer)

Veteran's Day - 2007

The WWII guys are in their 80's... Korea, their 70's... Viet Nam, their 60's... The Gulf War, their 30's & 40's... Afghanistan and Iraq, their 20's & 30's.

I'm right on schedule, 62 years old and out of the Army for 21 years now, after having served for 20. I was no hero, yet I saw my share of action in Viet Nam, with the 196th Infantry Brigade. It's been nearly 40 years since then, but 1968-69 can seem very fresh from time to time.

My namesake, Uncle Frank Zedar, my Dad's oldest brother, was killed in WWII. He was a glider pilot in the Allied push into hostile Germany. He went down after having dropped troops from the 82nd Airborne Division. His Purple Heart and Bronze Star hung on the wall at my Gramma's house when I was a kid. Uncle Frank was revered for what he did. At 21, when Viet Nam hit the fan, there was no draft card burning or protesting in my blood. I followed Uncle Frank into the US Army.

We don't see too much of that any more. The draft is long gone. When I see a young man or woman join up, it makes my heart sing. You wanna' be "Army Strong?" How about one of "The few, The proud, The Marines?" Ship out with the best Navy on the planet? Serve in the most dominant Air Force imaginable? Protect our shores with our amazing Coast Guard? Check it out... kids are looking for exciting ways to spend their lives. If you know a young person, point them in the direction of service. They are friendly nations today, yet back then, if our military forces had cracked, we'd be speaking Japanese in California and German in New York.

Veteran's Day - is a day of "Thanks." It's been said that we Americans take our freedom for granted. Well, believe this: Those that have ever carried a ruck sack and slung a rifle over their shoulder don't. When you see a Soldier, Marine, Airman, Sailor, or Coast Guardsman... walk up to them. Look them in the eye. Shake their hand. Say "Thank you." Lay it on thick... Say "Thank you for your sacrifice - we really appreciate it."

1LT Terry Mc Dermott will never come home (my "Little Brother" in Officer Candidate School), nor will PFC Freddy Karaman, from my hometown of Endicott, NY. I still see them in their youth - I think of them often - and I sure miss them.

(P.S. Check out: http://www.realestateforheroes.com/ It's "Under Construction" now, with a "Philosophy" Home Page, but should be fleshed out and useable by 11/19/07. It's my way of saying "Thank you.")

Real Estate: A Good Time To Buy?

YES! It's a great time to buy. This is probably the best, pure "Buyer's Market" since WW ll. If you are a buyer in this current "market correction," the sun and stars and planets have aligned themselves... just for you! How so? Read on...

• You have choices. Lots and lots of inventory, from which to choose. In Flagler County, building lots shot up to the $80-90,000 range and are now available in the $30-40,000 range. Salt water canal lots peaked in the $400-500,000 range and are now in the $200-300,000 range. An "average" 3BR-2BA house was in the $250-300,000 range, but now is more like $150-200,000.
• No competition. Remember the craziness of 2000-2005? You will likely be the only one on the seller's schedule today.
• An "offer" is OK. Before, it was often multiple offers and the real question was "how high above the asking price will work?" Not today. Probing the seller with a low offer won't get you thrown out.
• Time lines are more relaxed. Look at a few homes and talk about your needs and wants. Proceed at a normal pace and leave the Valium at home.
• Due diligence is again part of the process. Get your inspections done. Get an appraisal (even if you are a cash buyer). At one point, these contingencies were sometimes ignored to get a leg up on the other bidders.
• Builders have lots of specs... and are competing. The builders are actually the re-seller's nightmare right now. They have deeper pockets and can weather the storm longer than Joe and Mary Seller. The builder's house at $195,000 today was what the speculator bought in 2006 for $249,000... and tried (unsuccessfully) to flip for $295,000.
• Sellers will fix stuff. Many purchasers in the crazy years would be forced to forgo repairs, in order to beat out a competitor. Even the bank-owned sales today have wiggle room. They will tell you it's an "As Is" sale, but when your inspection reveals repair issues, the bank will often come off the price a bit.
• Few investors to compete against. And no speculators at all. Lots of mortgage fraud there. They'd sign the bank's document to say it would be "owner occupied" (to get the better interest rate)... but then it would be put on the rental market.
• Financing is "real" again. I love what one agent, Paul Pastore from RE/MAX Achievers in Phoenix, AZ, said: "The wink, wink, zero down, no doc, adjustable, 3.5%, sub-prime, no payments first six months, hybrid" loans are gone. Fixed rates are back, as are VA/FHA and regional loans for military, police, fire, nurses, teachers, etc. Good stuff.
• Location-Location-Location is doable again. No more living in Georgia and working in Florida. Homes are once again more affordable... where you need them to be.
• Yeah... it's a great time to buy real estate:-)
• (Thank you to Paul Pastore, see above reference, for his original article on this same subject)

One Chance For A First Impression

Sellers: Assuming you have priced your property with your head, not your heart - "Image is Everything"

I had some serious buyers here in Palm Coast this week. They had sold their home in Massachusetts and had cash in hand. They took a big hit on their sale and were looking for a bargain on this end. They had done a lot of homework on the Internet and had really appreciated the website we gave them to do their searching: www.frankzedar.remax-florida.com. I'll put in a shameless plug here. When it comes to national websites, www.REMAX.com blows them all away. (A recent comparison showed that the RE/MAX sites were more productive than the sites of Century 21, Coldwell Banker, and Watson... combined!) I can only guess that comes from the brand recognition and national advertising campaign, where RE/MAX spends more than all the major brands combined - where it counts - on national prime time TV. That big red, white, and blue RE/MAX hot air balloon is powerful stuff.

• We did a more focused search when they got here and we found a whopping 80% of what fit their criteria was up for "short sale." (That % includes all the ridiculous efforts on agent's parts to "hide" the fact that it's a short sale property). Come on - it is what it is. Short sales are fine for investor buyers... or for those who have time on their hands, but these folks were living in a motel and needed a quick sale.
• Here was a great question they asked (pay attention, sellers): "Why are prices all over the board for basically the same type house?" (3 or 4 Bedrooms, 2 car garage, 1600-1900 sq. ft., built since 2002, no pool, no water frontage, shingle roof, no gated community... you know - just a nice, average smaller home in a nice Palm Coast area). "What does it mean to see a range of between $135,000 - $299,000 for very similar homes?" What I told them is this: There are really two MLS's... One is where sellers are living in a mid-2005 fantasy land, where they say things like, "We don't want to give our house away" and "If it's meant to be, it will happen" and "If you'd just run more ads, people would buy it" and "There's a buyer for every home" and "Our house is better than the rest because......" The other MLS is where the realists live - the ones who understand the market and have let reason replace their anger. (This MLS, by the way, is the one where homes actually sell).
• OK, so we get out there to look. Wow... Wow... And "wow" again. Every lawn needed to be cut. All the bushes needed trimming. Every bed needed weeding and mulching. Every palm tree needed the dead, brown fronds cut. Every carpet needed shampooing. And how do you effectively show a home with no lights? And sellers ("Bank owned" property included), is it really cost-effective to leave the A/C off in Florida, so mold and mildew can have a field day?
• Bottom line for today's Blog? As agents, we have a responsibility to our sellers. It's called "brutal honesty." If they really need to sell, tell them where to price it and how to present it to the buyer. Sellers are in shock and are looking for strong, experienced, confident agents to take them by the hand and lead them through this mess. If they don't need to sell, advise them to get off the market and wait a year or two.

"Things I've Learned From a Ferry"

Mike Ferry -

http://www.mikeferry.com/ An amazing real estate trainer with a consistent message. "Regardless of market conditions, or the latest technology trend" says Mike, "you've simply got to run your business on purpose." He knows that most agents "let the business happen to them." His mantra for years has been: 1. Run it like a business. 2. Set aggressive goals and write a plan to achieve them. 3. Work your plan and seek accountability to keep you on track. "After all," he asks, "if you don't know where you're going... How will you know when you get there?"

It was 1991... and most of the country was deep into a "real estate market correction," similar to the fun we are now experiencing... Sagging prices, soaring inventory, angry sellers, predatory buyers... and befuddled real estate agents. After twenty years in the Army, I had been enjoying a successful and prosperous "second career" as a real estate sales agent, since 1986. I was an agent with a RE/MAX office in Fairfax, VA, after mourning the bankruptcy of the company I had cut my teeth on (Mount Vernon Realty). Going back to sales, after two years as an office sales manager, was a freefall experience. What had happened to the market? Why wasn't I selling "lots of houses" like I had before the dip? It seemed that my "smile and magnetic personality" were no longer enough to get signatures on dotted lines. That's when my friend, Gary, suggested that we go to Atlanta to see a West Coast real estate trainer, named Mike Ferry (www.MikeFerry.com). "What the heck", I thought, "Atlanta has some great restaurants..."

So we get there - and on Day One - I get my mind expanded. Now I thought I was pretty good. I had sold fifty-two houses the year before... that's "one a week," for goodness sake. My income was quadruple what I had earned as an Army Major at the Pentagon. I thought I'd done OK. Then this fellow, Mike Ferry, in his irreverently humorous style... starts to unpeel the onion. There were about 150 of us there and most were "devotees" of Mike's training methods. A good percentage of the folks there had accomplished more sales than me. Way more. It was humbling... and energizing.

I've tried a lot of real estate ideas through the past 22 years. Gone to see a lot of trainers, too. Many of them are worth listening to and all have at least one "nugget" worth hanging on to. BUT, when things get tough and the market has me in a headlock, I always go back to Mike. Admittedly, he says nearly none of his ideas are original. His forte - his genious, really - is researching, reading, interviewing, testing, compiling, and sorting - the ideas of other successful people. His delivery is unique. Sort of a combination of Billy Graham and Don Rickles. Irreverent and unapologetic... yet truthful and uplifting. If you have thin skin, you'll not do well at one of his Superstar Retreats or Productivity Workshops. If, however, you can "stand the heat," you'll find yourself "in the right kitchen" ... with an Emeril-esque chef.

Here are some of the "things I've learned from a Ferry." 1. When market downturns happen, be glad. We can’t control the market, but we can control how we react to it. It’s a really skillful agent’s time to shine. Take advantage of the market chaos, by: · Sharpening your skills> These tough times require tough agents, who really know what they are doing. Polish your presentation and negotiation abilities. Take classes. Read… a lot! · Stick to a plan> “A sign, a lockbox, and an ad” simply won’t work. Be specific with customers and tell them how you work. Take them on a backstage tour of your business plan. · Help clients remain level-headed> (My motto from the start has been: “Be the calm… in the midst of the chaos.”)… Mike said this—and I have used it often—”Sellers and buyers… even the tough ones… really want a strong, experienced agent to take them by the hand and lead them through the minefield of the transaction.” · Adapt quickly> Stay ahead of the curve. Devour your market statistics and observe trends. Help customers make decisions before they get caught in an untenable situation. · Be flexible> Make sure to see the transaction through the eyes of all the principles and participants. Be adaptable to changing requirements. · Keep an open mind> The “hot technique” of today may evaporate tomorrow. Selling when the market is brisk is easy. But try satisfying a seller while a million foreclosures are flooding the market and driving prices down. Now that’s a challenge! 2. Work from a Business Plan. Realtors, as self-employed “independent contractors,” must embrace this discipline. Oh, and on that "independent contractor thing?" Fughedaboudit... Set quotas for yourself and enjoy the benefits of accountability. (Mike's organization, by the way, provides top-notch business coaching services.) 3. Establish Goals. Without them, everything else reduces to confusion. Ask critical questions: · What do I really want? · How badly do I want it? · What price am I willing to pay to get it?

4. Look for the benefits which emerge, as markets change. In this current dynamic, for example, builders want agents back... commissions are challenged less... unskilled agents leave the industry... AND seller's really need good agents to get them sold.

5. And last, but certainly not least, don't neglect the mental side of the business. A wise man wrote that "we become what we think about." Mike, in his glib way, will look at his audience and say, "Whether you think you can... or you can't... you're probably right." "So... what will you choose?" Good stuff, yes?

"Please Don't Shoot The Messenger"

OK, tough times call for tough measures. I've always believed that having the best information gives me what I need to make the best decision. It's the old "Hobson's Choice," where two choices are available, neither of which is very palatable. However, if your new job is waiting in Atlanta - and you've simply got to sell your home in the current Palm Coast / Flagler Beach market - then you might want to read this letter. I'm mailing it to my seller customers this week:

Hello, “Mr. & Mrs. Seller” Well, I wish this could be a message addressing the “upswing in the market and rising prices and increased sales,” etc. Yet, as you know, it’s not like that at all. As sellers, you read the papers and watch the news… and you are fully aware that this is the most severe real estate market “correction” we have experienced since WWII. Prices are way down… and still falling. Foreclosures are way up… and still rising. Mortgage lenders and title companies are closing their doors. Builders are hurting and real estate agents are letting their licenses expire. It’s a true “buyer’s market” and it’s no fun to be a seller. During the first 8.5 months of 2005, our Association of Realtors here in Flagler closed nearly 6,000 transactions (all types: homes, condos, land, commercial, etc.) During the same time frame this year, we closed 1,700 transactions. That’s a raw statistic which says our market is off about 70% from 2005! You know me… and I am an upbeat fellow. I’m not about “gloom and doom” and I know about “making lemonade when I get lemons.” However, I am not going to bury my head in the sand and pretend that everything is rosy. As a seller… if you are really serious about getting this done, you must look at these factors and lower your price. It’s not about hiring another “better agent” or another ad or a superficial incentive… It’s about price. If you are “moving up” to a more expensive home, you’ll get to be a buyer next! If you’ve just got to sell, for whatever reason, it’s time to significantly lower your expectations. Please don’t get mad at me. I’m the “good guy” and really want the best for you, under these difficult circumstances. Based upon what I see and read and hear, we haven’t hit bottom yet. Maybe it’s time to make a bold move and get it done? Frank Zedar & Maritssa Vazquez RE/MAX Oceanside // 386-931-1987 www.frankzedar.remax-florida.com www.RealEstateForHeroes.com

"Time to Pounce"

If you are trying to "time the market" so that you "buy at the right time,"... NOW is "the time to pounce." Come on... Let's dump the shack and score the mansion. This may be the best "Move Up" market in history.

They say that timing is everything... and that may or may not be true. Yet, if you fancy yourself as somewhat savvy about real estate, you know how frustrating this can be. It's no secret that in most parts of the US, it's a "buyer's market." Not just a "buyer's market," but a "BUYER'S MARKET." Definitely not a lot of fun if you're a seller. So Alan Greenspan goes on all the talk shows this past week to hawk his new book, "The Age of Turbulence," http://www.amazon.com/exec/obidos/ASIN/1594201315/interactiveda832-20 , and says what we already knew: Prices will drop more before they rebound. And... interest rates must rise to prevent rampant inflation. Tricky stuff, this macroeconomics...

Here are the main scenarios: 1. Buy an investment house. I'll give this only a "B-" right now. Prices are great and interest rates are great, BUT what do you do with it? Rent it, you say? Well, sure, except that the rental market is presently saturated with every "buy and flip" house that got caught in the downturn. To buy and hold and absorb the mortgage may negate the price and interest rate benefits... AND it may take some time to actually see some equity. (On the other hand, maybe we'll see a big increase in the number of renters, as foreclosures continue to soar? I'm sorry - bad joke)

2. Buy a second or vacation home. This gets an "A." If you've got the extra bucks, it's the right time. If it's for your family's use... and you don't want or need it to produce income, all will be well. Property on or near the ocean in Flagler Beach, Intracoastal, and Salt Water Canals in Palm Coast... are now at amazing prices. Even the slightly higher rates and down payments charged to investors are inviting. I know I'll sound like a dinosaur here, but get this: When I was a new agent in 1986 (pre-laptop days, for sure) they gave us plastic "mortgage calculator wheels" to help us estimate payments. The only mortgage rates around the outside of the wheel were "10% to 20%." Wow... I'm still aghast when I recall that I paid 16.75% for a VA mortgage in 1981. The seller had to pay 5 "points" on this loan for me. A little different, don't you think? I was freshly assigned at the Pentagon, following my tour of duty in Berlin. Yes, there were still two Germanys and The Wall was still standing.

3. "Move up" (sell your 1600 ft., $200,000 house and buy the 3,000 ft. house on the water for $600,000). This gets an "A +." The timing couldn't be better. Remember, as you're "giving your house away," the other guy (the one you buy) is "giving his away," too. The beauty here is that on a percentage basis, you really make out. Same goes for when the market turns around. Because of the price differential, you'll enjoy a terrific "net gain on equity." And, of course, interest rates are really, really low now.

Now here's what I believe. The market will wallow around for about a year, before it turns the corner. But when it does, interest rates will start to creep up with it. This will actually fuel recovery. When folks see 8% and 9%, they will scurry to get on the train before it leaves the station. Question: Will you make your move now... or wait till then?

Reflections on the 9-11 Attacks

The cowardly attacks on the US on September 11th, 2001 changed the course of history. We still have not grasped the magnitude of the hatred which spawned this demonic outpouring. Today, Sunday, September 9th, 2007... we remembered and honored those who died that day. Memorial Park on Palm Coast Parkway was the scene, where hundreds of military veterans, Red Knights, Blue Knights, Rolling Thunder bikers, and Freedom Walkers gathered. The Ancient City Bagpipers played and the FPC Junior ROTC posted the colors. It was a fitting memorial, as we continue to wrestle with the unthinkable. I was honored to have been asked to address the crowd with the following remarks:

Rolling Thunder – Red Knights – Blue Knights RE/MAX Freedom Walk – 9/11 Memorial Remarks – 09/09/2007 (Good morning everyone. My name is Frank Zedar. I’m a twenty year veteran of the U.S. Army. I fought with the 196th Infantry Brigade in Viet Nam in 1968-1969. Hello to you brothers here today from those years. It is a privilege to be asked to make these remarks here today.) Depending on our ages, there are dates that all of us remember. They are branded in our minds – Never to be forgotten. We recall with clarity such events as VE Day… VJ Day… Neil Armstrong’s walk on the moon… The assassinations of John and Robert Kennedy and Martin Luther King… But the dates which resonate from deep within us and arouse our most basic passions are: · December 7th, 1941: The day which will live in infamy… The day on which the sleeping giant was awakened… The day Pearl Harbor was attacked. And… · September 11th, 2001: The day on which the most cowardly act in modern history was executed against the United States. A day on which nearly 3,000 people lost their lives at the hands of a band of savage terrorists, hell-bent on spewing God-less hatred into the very heart of freedom. Yes, nearly 3,000 innocent Civilians, Soldiers, Sailors, Airmen, Marines, Firefighters, Law Enforcement Officers, Flight Crew Members and Passengers… All Gone. All of us here today remember where we were and what we were doing when someone told us that the World Trade Center had been hit by a plane. “How unfortunate,” we thought, “how could a pilot get in such a predicament?” Then we turned on the TV and watched… stunned… as the nightmare unraveled before our eyes. · Two huge aircraft slamming into the towers… on purpose… over and over in slow motion. · Terrified office workers plummeting from the inferno to the sidewalks below. · Panicked people running through the streets… away from the danger… And · Firefighters and Policemen running into the danger zone… putting themselves selflessly in harm’s way. · Another plane – this one flying low and burying itself into the Pentagon – just a mile or so from the White House… and The U.S. Capitol. How could this be happening? Was this the start of WWIII? · And yet another plane. This one crashing into a field in Pennsylvania, its evil mission of destruction having been thwarted by heroic passengers. So here we are – six years later. Still licking our wounds and living in a world forever changed. The Soviet Union and the nearly fifty years long Cold War are no more. However, now the specter of global terrorism looms large and ugly. We lash out against our enemy, yet he is stealthy and cowardly, often choosing women and children and the elderly as targets for his suicide bombs. “Dear God,” we ask ourselves, “Why?” “Why do they hate us so?” Those of you who are here today know that it’s a one word answer: Freedom! And freedom comes with a price. And it’s that price paid that we are here today to honor. To our men and women in military uniform who died that day… and to those who continue the fight. To our Firefighters and Law Enforcement Personnel who died that day. Thank you. We will never forget you. Thank you from deep down inside us. Thank you all for coming today. It’s important that we not forget. END (Frank Zedar – 09/09/2007)

"From Iraq... To Palm Coast"

Nothing can prepare you... Nothing... Not screaming drill sergeants: "You better pay attention, boy, because what I'm telling you may save your young a__ in a firefight in Baghdad." Or "live fire" exercises. Or actual combat videos. Or squad tactics drills at the Urban Warfare Training Center... Nothing.

When you grow up in America, even if it's in a tough inner city, you're just not prepared for Baghdad... or the A Shau Valley, or Khe Sanh, or the Chosin Reservoir, or Omaha Beach. They just can't teach this stuff at Fort Jackson or Parris Island or Lackland or Great Lakes. The sane mind cannot "prepare" for the insanity of war. The best you can hope for is that you are trained well enough to adapt to your new reality quickly.

It's almost the same when you're lucky enough to come home. For the past year or so, you've learned to survive. "Hyper-vigilance" is no longer a term in a training manual... it's become your way of life. At first, when you saw the carnage - on both body and soul - you couldn't believe your eyes. "No," you thought to yourself, "This can't be real... Surely this is a bad dream and I'll wake up soon..." But it wasn't a dream. And not that you wanted to, but you soon became hardened to this demonic dance. Not by choice, but by necessity. And now it's time to go home?

Please... Put away your political bias here. Love or Hate President Bush... Hawk or Dove... Republican or Democrat... Makes no difference. When the troops return to Palm Coast, wrap them up with love and thanks. Let them know how proud of them you are. Although you can't see it, I was wounded in 1969 in the San Francisco airport. I was in uniform and on my way home to Upstate New York, after a year and a half with the 196th Infantry in Viet Nam. A young girl spit on me... and I still have the scar. Let's show this generation of America's defenders something better.

This video will give you some ideas... http://www.youtube.com/v/ervaMPt4Ha0&autoplay=1

Also (edit date 8/28/07) this video was sent to me by "RoyalLD," who has a great Blog of his own. Check out "As I See It," at http://www.royalld.blogspot.com/. Here is what he sent me: http://www.youtube.com/watch?v=tKJzZXZKf8k

"Feel The Burn?"

Inspiration comes from places where we least expect it...

Last night I got hooked on a TV program called "The Biggest Loser." It's one of those "reality" shows (I don't know how "real" they can be, with cameras in their faces all the time)... and teams compete to lose the most weight. It was fascinating. After months of rigorous training and diet/lifestyle changes, these folks looked great. All of them were obese at the beginning and the transformations were stunning. The ones who lost the greatest % of their weight were awarded cash prizes of $25,000 - $50,000 - $100,000 - and $250,000. The top winner was a guy who started at 407 morbid pounds and ended up at a chiseled 193, nearly a year later. He lost 214 pounds... and gained $250K, not to mention the admiring look of approval from his wife and kids. Not a bad trip to the gym, right?

Now, I've always valued "being in shape," although it's "way harder" to do at 62, than it was at 22. In high school I played sports continuously... basketball, wrestling, cross-country. Then twenty years in the Army really puts a stamp on you. Always had to be ready to pass an "APFT Test" ("APFT" means Army Physical Fitness Test) twice a year. The military, for obvious reasons, is big on this. The Army focuses on push-ups, sit-ups, and a two mile run. Our brothers and sisters in the Marines are certified pull-up freaks. For their test, they add sit-ups (they call them crunches) and a three mile run. The Army and Marines are always poking at each other, regarding bragging rights in the fitness world. I always get a laugh at military fitness competitions, when some Navy or Air Force trooper (usually an Admin Specialist, like Radar O'Reily on M*A*S*H) crushes the contest, to the dismay of the Infantry GI's and Gyrenes. Oh, those tender egos...

So what about you? Stop looking around... I mean you. Are you where you'd like to be? I did a personal "be honest" this week... and I'm surely not where I'd like to be. I joined the great new gym in Flagler Beach this year. "Fitness One" is a full service gym (OK, I'll go ahead and say it... "Just like up North") on Old Kings Road, just South of Rt. 100. Check out this link for information: http://www.fitnessoneinc.com/ Now, I go to the gym on a fairly regular basis. The problem, however, is twofold: One- My routine at the gym has become stale. I'm hearing that old saying in my head, "If you continue to do what you've always done, you'll continue to get what you've always gotten." Message? It's time to shake things up with new and exciting routines. Want to see something "new and exciting"... actually closer to "insane?" Check out this link. Scroll down to the bottom of the page and watch the video: http://www.rosstraining.com/articles/budget.html Not for the faint of heart. Two- When you eat wrong too often, it's hard to stay lean... even when you are working out regularly. Message? It's time to pay more attention to "chicken, salmon, apples and broccoli," than to "sausages, burgers, cookies and ice cream."

So, here's the deal. If you're reading this, I'm asking you to accept a challenge. (If you are currently in superb shape and ready for your next marathon, then stop reading.) However, if you are like many of us, you could use a little boost. The challenge is simple: Lose 10% of your current weight by November 1st. That's about ten weeks from now. Include some exercise in your daily routine... and make better food choices. Sounds easy, right? Guys, if you're at 265 - get to 238. If you're at a pudgy 180 - get to 162. Ladies, if you're at 145 and a size 12, get to a leaner 130 and a size 8. The amazing thing that will happen is that you will gain some lean muscle... while you lose weight and fat. Your clothes will fit better. Sweet. Today, I'm at 207 lbs. By November 1st, I'm going to be at 185 lbs. Most of the nice pants in my closet are 34's and I can't get into them without looking like I'm trying way too hard. Truth be told, the newer 36's are starting to protest. Anyway, I'll re-visit this in November right here in the blog. I'll let you know how I did. Care to join me???

*** (My insurance company just called to say I need a disclaimer... something about seeing a doctor before starting a rigorous fitness program... Good luck:-)

"Ripple Effect"

"There is a Ripple Effect in all we do.

What you do touches me... and what I do touches you."

Last week, I suggested taking an early morning adventure over to the beach to experience one of God's simple gifts... a Sunrise. (See 8/1/07, "If You Think You Can... You're Probably Right") By the number of "Hey, thank you for that" responses, I'm guessing people liked the idea. What the heck, a sunrise is free... and it beats the current crop of summer movies, hands down (how many "Part 2" and "Part 3" and "Return of the..." can we stand?). I'm hoping it gets some steam - sort of like a local "Pay it Forward."

When I do these posts, I often wonder what people think. Sometimes I come off as very "Hawkish" (See Posts from 7/17/07, 7/4/07, 5/26/07, 5/25/07)... like an uber-patriot. Other times, however, I'm very "Dovish." That reminds me of a pub on Capital Hill in Washington, DC, called the "Hawk 'n' Dove." It's still there, but a very watered down version of the place that opened in 1967, in the political and social heat of the Viet Nam War. When I came back from Viet Nam in 1969, I was stationed in the DC area. Going in that pub back then was quite a scene... many arguments fueled by alcohol... between that era's hawks and doves.

Well, today we'll be with the doves. Take a look at the three pictures at the top... all of "ripples." The first is a generic ripple. The second, a ripple contained within a small bucket. The third portrays how the world might be affected by a big enough ripple. You get the picture. There truly is a ripple effect in all we do. What you do touches me... and what I do, touches you. Check this short video link: http://www.simpletruths.com/a.aspx?af=219&mo=stsr&t=2

Seems like Johnny the Bagger has something for us all...

"If You Think You Can - You're Probably Right"

Ever go over to the beach early in the morning and watch the sunrise? On purpose... to really soak it in? You know... get up while it's still dark - put some fresh coffee in a thermos - grab a bagel and a couple of chairs and head out in the pre-dawn quiet? If you haven't ever done it (or it's been way too long since the last time)... do it this week. Take someone with you, whom you really care about... sweetheart, friend, child. I mean no disrespect to the humanists among us, and I surely don't mean to preach, yet I just don't know how this can be done without experiencing the essence of... and the awesome comfort of... the power of God. And please don't tell me it's because of my innate weakness and inability to harness my human potential, etc. Blaise Pascal, the famous French mathematician and philosopher was to have said, "Inside every man is a God-shaped vacuum, waiting to be filled." Although, he did not say that exactly in his philosophical writings in Pensees, it is a great paraphrase of, "What else does this craving, and this helplessness, proclaim but that there was once in man a true happiness, of which all that now remains is the empty print and trace? This in vain he tries to fill with everything around him, seeking in things that are not there the help he cannot find in those that are, though none can help, since this infinite abyss can be filled only with an infinite and immutable object; in other words by God himself." Good stuff, indeed. Anyway, back to the sunrise... Go do it - and rather than "clearing your mind" and "relieving stress" and "communing with nature," etc... Go with an agenda. A simple one, but an agenda, nonetheless. Go with the knowledge and conviction that our attitude (about most anything) is most always a function of our choice. While the breeze is blowing and the surf is rolling in... and the sea birds are scavenging breakfast... and the salt air fills your lungs... and the sun finally breaks the horizon... think about the "One Thing" (kinda' like Jack Palance in City Slickers) that has been taxing you the most lately. It could be relational, financial, spiritual, professional... you know what it is better than I. Whatever it is, ask yourself how changing your attitude could improve the situation. Then, after the sun has risen, the coffee and bagel are gone, and the car is packed - "Flip the Switch" - Change and embrace the new attitude. Take it home with you. Click this link here and watch a short video: http://www.walkthetalk.com/the212movie.php?refsource=&campaign= Henry Ford said, "Whether you think you can, or you can't, you're probably right." Smart guy. This is simple and powerful. Try it.

"Selling? Know The Market!"

If you must sell your property in this market... You have got to know the numbers. You can be successful, yet you must play by the rules!

I poured my coffee this morning and it caught my eye. "Stock Market Suffers, Due to Poor Real Estate Performance." Aahhrrrggg! When you make your living helping people buy and sell real estate, this can be a challenge. Not because houses won't sell... but because these headlines reek of pessimism. The fact is that houses can and will sell. It helps if you've got equity - for sure - but smart sellers are, well, selling.

There are symptoms, however. If I was a real estate doctor, I'd be prescribing, "aspirin, lots of fluids and plenty of rest. Move if you must, but don't push it." Want a snapshot of "real world?" This month we watched an absolute auction of two lots (not houses, just lots) in a local "Premier ICW, Golf, Ocean" community. The seller had purchased these lots for $535,000 and $505,000 two years ago. Ready for this? They sold at auction for $235,000 and $185,000. Gulp... We had a house listed for $340,000 and an offer came in at $275,000. The seller didn't like it, but they knew the deal and worked it. Ten days later, we had an executed contract that both parties liked at $300,000. We also sold a couple of new-builds. They are dealing, because they know the numbers. An investor was able to purchase a great rental house for $162,000... not too bad from the $179,000 asking price. As the Realtors involved, we also earned a nice bonus on top of the normal professional fee.

So, if sell you must, know this: More than 430,000 foreclosures were confirmed from Jan-March, 2007. Whew - that's a bunch. And the prediction is for more than 1,000,000 more within a year. This drives inventory UP and prices DOWN. Florida has 4 of the Top 25 "Worst Markets." Palm Coast is small, but %-wise, we are being hit very hard by foreclosures. Investors buying on speculation are 30% more scarce than last year. Like the Swallows at Capistrano, we'll know the market is turning around, when they start to return. But don't be fooled by people saying things like, "I heard someone say it's getting better." It's not. And it probably won't for a year or more.