My Driveway & The Real Estate Market

Dear Friends,

Now, if that title didn't get your attention I simply don't know what will. My driveway is as steep as the face of Mt. Kilimanjaro and in many ways emulates today's real estate market. Heading down the driveway is often times slick with no bottom in sight (except for the forest below) and depending upon the weather I never know when I may get back up it.

By this point you are thinking, oh my goodness, when will Andy get to the top of his driveway again so we can see his smiling face? Well folks, the spring market is upon us and astonishingly enough we have seen a solid pick up in activity from buyers and the listings that are garnering the most attention are the one's, now get this, that are priced correctly. Yes, I know it sounds incredible, but homes positioned on the market that are aligned appropriately with local depreciation rates are indeed seeing buyer activity and OFFERS.

Taking into consideration today's economic turmoil I am pleased with the early spring action we are experiencing. So folks if you are in the market to purchase a home you will certainly get great value for you dollar. If you happen to be selling or thinking of selling, being realistic is the key.

That’s all for now,

Andy

Learn Something New and Prosper!

Hello All,

I am supporting a new initiative with a colleague of mine who is speaking October 15th at the worldwide headquarters of SUBWAY on behalf of the Women’s Franchise Committee. (The Presentation is not just for women, men are welcome as well) Mr. Brian Miller, President of The Entrepreneurs Source, will be speaking about the "E-Myth"

For more than 30 years, E-Myth Worldwide has coached small business owners
to succeed using the business development model created by E-Myth founder and
bestselling author Michael Gerber.

The E-Myth programs and services provide business owners with the
powerful tools and insight to implement the systems essential to
success.

Learn how to work on your business...not just in it. Please RSVP by
calling 203-405-2162 or email us at

If you are starting your own business, manage others, looking to expand your horizons or are simply interested in a new way of thinking this is a wonderful opportunity to learn something new. Taking into consideration the current state of union it may not be such a bad idea to learn a new system of thought and operation.

Please RSVP by calling 203-405-2162 or email us at info@womensfranchisenetworkct.org

325 Bic Drive, Milford, CT 06461

Good Reading

Hello Friends & Neighbors,

I was recently interviewed by Cyberhomes.com about how home "flipping" television shows portray the process to its viewers. Check out this link for the article: http://www.cyberhomes.com/readingroom.aspx?article=flippinghouses

All the best,

Andy

Go Ahead and Say It...You know You Want To: DEPRESSION!

Wow, doesn't that feel better. No I'm not referring to my current mental status. I think that would be classified more as "crazed"! We are currently experiencing the worst economic disaster since the "Great Depression" of the 1920's. The sooner we realize this the sooner we can find a way to first survive and then eventually thrive again.

So what's been going on in the wonderful world of Real Estate and the Economy in the last few weeks? Will Congress swoop down out of the sky and snatch up $700 billion worth of bad debt? Or more importantly, can they get their acts together enough to reach across the isle and agree on a plan to help the American people? My answer: To Be Determined!

-RANDOM MOMENT ALERT-

PLEASE GOD, ANYONE BUT THIS WHACK-A-DO!!

Ok, back to Blogging:

What I do know is that Real Estate continues to tumble downwards riding the coat-tails of America's "fear factor". Lets be honest, fear is what drives all of us to sit on our hands and assume the "wait and see" position. We put hope in our leaders to guide us out of this mess and often times do nothing to serve and secure our own well being. I have assumed an aggressive approach to this market and refuse to be manipulated by fear from recent housing reports like this one from the NY-Times:

The Commerce Department said Thursday that new homes sales fell by 11.5 percent
in August to a seasonally adjusted annual sales rate of 460,000 units, the
slowest sales pace since January 1991.

It was a much bigger sales
decline than the small 1 percent drop that economists had been expecting. The
average price of a new home sold in August dropped by a record amount of 11.8
percent to $263,900, compared to the July average of $299,100. The median price
was also down, falling 5.5 percent to $221,900.

If that's not a Depression I simply don't know what is. So I know by this point your saying: "But Andy what can we do?" My answer: do the best you can, don't panic, and find that good 'Ole American Ingenuity that built this country into a super-power following the "Great Depression".

Keep in mind: "This too shall pass".

SPECIAL REPORT

Government Takes Control of Fannie Mae and Freddie Mac

What happened this weekend? Oh, nothing special. Football season is in full swing, the leaves are starting to change, and oh yeah in case you missed it, the Government has stepped in and taken control of the two flagship GSEs: Fannie Mae and Freddie Mac.

On September 7th (after the markets were closed) they made the historical announcement. Here are the major players and what has happened.Major Players:Henry Paulson, Treasury SecretaryJames Lockhart, Director of the newly created and independent regulator Federal Housing Finance Agency (FHFA)Ben Bernanke, Chairman Federal Reserve.

What Happened:Over the past week, all three of the above and many others have summarized that with current market conditions Fannie Mae and Freddie Mac could no longer fulfill their mission of providing stability and liquidity to the residential mortgage market. The two GSEs have been placed under “Conservatorship” and are now under the direct control of FHFA effective September 7, 2008. They are not part of the Federal Government, they are still independent publicly traded corporations.

What this means:FHFA now controls both boards of Fannie and Freddie. Both of the CEOs have been released and FHFA has appointed two new CEOs. The majority of the remaining management will remain. Both GSE’s will continue to operate as usual but will now have much stronger financial backing. Don’t worry, government employees (think DMV) are not in charge and are not making underwriting decisions. Fannie and Freddie have already tightened their credit and income standards. The loans that have been made under the new stricter guidelines are very sound.

As a result of this take over, the government (aka the tax payers) now have a special preferred stock in these companies which are guaranteed repayment before the current preferred and common stock holders are paid. All dividends are suspended and all political and lobbying efforts by these companies have halted. In return, the government guarantees that these companies will never have a negative net value and will have access to much needed capital. The three main goals of this takeover are: Market Stability, Mortgage Availability, and Tax Payer Protection. To this end, the Treasury will be able to provide capital to these companies as well as purchase some mortgage backed securities (MBSs) issued by Fannie and Freddie that are based on the new, tougher underwriting guidelines. (They will not be buying all of the outstanding mortgages nor will they be bailing out any mortgage companies).

In a nutshell, major investors have been sitting on the fence waiting for something to happen between the GSEs and the government. This “waiting” created major problems for the housing market as foreign investment in our MBSs was very light. This action took all of the uncertainty out of the market and major foreign investors are no longer worried about the solvency of these companies. This opens the door for a flood of new capital into our residential mortgage system which should help with mortgage rates.

What this action does not do:The tax payers are not “bailing” anyone out. You and I are not buying a bunch of bad loans back from Fannie and Freddie. There is nothing that will stop any foreclosure proceedings and the government will not be reviewing any mortgage applications prior to loan approval. The government action simply stops the market fear by providing a “back stop” and some extra capital to purchase mortgage backed securities so that more funds are available for borrowers that meet the new stricter guidelines.
All in all this is a positive step and not a permanent one. Jim Lockhart, Director of FHFA states “Conservatorship is the statutory process designed to stabilize a troubled institution with the objective of returning these entities to normal operations”. He also stated “we will continue until the GSEs have stabilized”. So this is not a permanent solution. Treasury Secretary Paulson calls it “a financial time-out”.

What does this mean to your local real estate market and your average home buyer?Basically, nothing much. The whole idea of this action is to make sure that mortgage companies can continue to provide low cost mortgages to the credit-worthy. And with interest rates in the low sixes, we need to remember that money is very cheap right now.

The Next Generation of Real Estate: The Real Estate Consultant

As we approach the end of Summer and the immanent arrival of a Crisp New England Fall I can't help but think about the changes we are experiencing in the Real Estate Market and how we do business on a daily basis.

Real Estate is no longer an industry for the part-timer or individual looking to make a quick buck. In fact, their is a sincere need for professional, experienced and educated entrepreneurs in this business who will utilize a more business and consultative approach. You may have noticed that I do not call my self an Agent, Realtor, or other common titles. I am by licence and membership both an Agent and Realtor but by approach and service I am a "Real Estate Consultant".

Given the Country's current economic and real estate predicament I find it only fitting that we begin to treat our real estate sales and acquisitions with the same sensitivity we do our financial investments. Real Estate is a commodity. Its value is dictated in great part by market indicators that we do not have direct control of. Just as you would hire a financial advisor to invest your child's college savings fund you should do the same for your often times largest financial investment; your home!

I am honored to be on the forefront of this fundamental shift in how Real Estate is sold and acquired and can't wait to see how it all shakes out over the next few years.