"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.")