Real Life Real Estate Blog

…Rosario Marin, the former U.S. Treasurer (that’s her signature on a dollar bill!) and current Secretary of the California State and Consumer Services Agency, was the keynote speaker at last night’s Hispanic Chamber of Commerce Gala. I guess I should can any ideas I had about becoming the chamber’s booking agent (j/k). The gravity of her words were evident in the fact that hers was the only speech during which almost all of the dinner tables were completely silent. No paraphrasing would do justice to her oratory…truly moving. She described her journey to the office of Treasurer from immigrating to the United States at the age of fourteen, completing a degree while working full time, the struggles she encountered after giving up her career to care for her disabled son, and going from not wanting to wake up in the morning to reaching for the impossible and making it so. I’m no cry baby but I must admit, I did get a little misty eyed. It’s comforting to know that there are people who have had much worse days than when I miss my morning cup of coffee; who go on to excel beyond their wildest dreams and end up extremely happy.

Last night was the 36th annual Sacramento Hispanic Chamber of Commerce Gala. As it was the first event put on by the chamber that I experienced, it certainly surpassed any expectations I had going into it. When one is asked, “Do you want to go to a chamber of commerce party with us?” one can jump to the conclusion that there will be nothing but boredom and stuffiness about. On the contrary my friends. I think only James Bond himself could have put together a classier, more top-notch event. I will be posting some more pictures of the party as they become available on their website and as I try to hunt down people who didn’t forget to bring their camera’s last night. Until then, please to enjoy beautiful logo.

Fidel Castro has stepped down as Cuba’s leader early this morning. He is to be replaced by his brother Raul who has hinted at some reforms. I don’t think that this will be the end of socialism in Cuba, however it may be the beginning of the end. Perhaps Raul will be to Cuba what Gorbachev was to the USSR. Gorbachev introduced economic reforms called perestroika in 1987 and we all know what fell in 1989. Hopefully after a couple of years and some capitalist reforms, Havana and the rest of Cuba will enjoy prosperity once again as a vacation hot spot for Americans. I dream of the day that I can have real Cuban food, not just the stuff in Miami. Check out the details on MSNBC.com

It’s official. The conforming loan limit has been temporarily raised. While it won’t save the economy, it will definitely make it easier on those who are encountering difficulties when looking at their home finance options. Check out this article in the Seattle Times.

I feel as if there should be horns blaring from every mortgage office in America with the news of a bill that will raise the conforming loan amount from $417K to $625-$725K. Either number would add some much needed help. One of the main obstacles in doing a loan in California or New York or any area where the median home price is more than $150K is the conforming loan amount. Most people don’t know what the conforming loan amount is, so if you are not already privy to it, here it is. The conforming loan amount is the maximum total loan amount (includes fees, taxes, insurance,etc.) that either of the two government entities, Fannie Mae or Freddie Mac, will guarantee to buy on the secondary market. What does that mean? That means that under the current rules, if your bank does a loan for you for under $417K and they can’t sell it on the secondary market as a mortgage security, the government guarantees them that either Freddie Mac or Fannie Mae will buy them. Because loans over this amount are somewhat more risky because there is no guaranteed buyers for the banks, these loans cost more and are often prohibitively expensive to home buyers.

Originally made famouse in the song by the late great Johnny Cash, “Foslosm Prison Blues,” the city of Folsom has undergone some major changes. Although it retains some of it’s gold rush era rail stop old town charm, there are now brand new communty colleges, upscale subdivisions, and new resteraunts. Part of my early childhood was spent in Folsom around the time I was entering first grade. I have since returned to the greater Sacramento area and compared with the memories of my youth, it would seem that Folsom has a new lease on life. Several business parks make it a great locale for those who want to drive down the street to work. It’s freeway proximity also makes it a very close bedroom community for those who want a quite suburban lifestyle away from the hustle and bustle of the city. However, Folsom is an atypical suburb because someone in the planning commission got the right idea. They must have decided to bring some of the classy fare of the city, i.e. shops and eaterys, that most city dwellers love. There’s an idea, a suburb that actually has things to do.

If you’re like me and not like my dad, you don’t hit the mute button every time a commercial comes on TV. I understand his desire to shut out the onslaught of advertising that can sometimes make you want to apply a gun directly to your forehead, apply directly to the forehead just like Head On headache cream. However, being interested in both artistic pursuits and business, I find that some marketers can make an advertisement that is cute, funny, or, on rare occasions, awe inspiring. For example, in the commercial for Cadillac’s new CTS (Motor Trend’s 2008 car of the year) the actress, Kate Walsh, begs the question, “When you turn your car on, does it return the favor?” My friends, I now know the standard by which I will measure my next car purchase, however modest. Advertisements obviously influence all of as and they are also a sign of the times. This brings us back to the new National Association of Realtors commercial. You can check out the video for yourself on Youtube. The commercial is NAR’s attempt to address the current market. Kudos to them for actually talking about it. They have more gusto than some of the other major entities in the market. Being a Real Estate agent myself, I do agree with the facts of the commercial; interest rates are low, and it is a great time to buy… for a lot of people, but not for everyone. As soon as the commercial was over, I found myself wondering whether or not people would think that this was NAR’s way of gasping for air in a suffocating economy, or if the message would hit home that using a Realtor is the best way to navigate the often stormy and confusing seas of home buying, especially if it is your first time. Since I am an agent myself, I cannot be an objective observer. So, being the humble webmiester that I am, I invite you to voice your opinion.

Watch the commercial and tell us what you think in the comment section. Fellow real estate professionals, you can comment as well but I implore you to honor the honors system and let the other readers know in your comment.

P.S. No disrespect to NAR. I support their efforts, I am simply questioning their approach.

It’s been floating around news rooms all over the world that Bank of America bought Countrywide. This seems like a very smart move for B of A CEO Kenneth D. Lewis. He’s taking advantage of the markets downturn to buy out and absorb one of his company’s biggest competitors in the lending market. Having already invested some $2 billion in Countrywide in August, B of A purchased Countrywide for an additional $4 billion bringing the sticker price to $6 billion dollars including Countrywide CEO Angelo Mozilo’s estimated $36 million in walking money. While some critics say that it may not be a good idea for B of A to incur the risk inherent in Countrywide’s poorly qualified loans, I say nay. While it may seem like an odd decision right now, B of A is obviously playing for the long run; something Countrywide never payed attention to.

This is indicative of two things I see happening as a result of the “mortgage mess,” that will lead us into an economy where only the big banks are going to survive and get bigger. First, large banks are bulking up liquidity in order to participate in a buyer’s market by keeping consumer interest rates near the same level as before the cuts and they are closing their doors to the wholesale brokers who make loans from multiple banks. Second, CEO’s of failing financial firms who are packing their desks are also throwing sweet severance packages into their saddle bags as they ride off into the sunset. This gives CEOs who are sweating the current market some relief because they know at least they can take the money and run, regardless of shareholder interests or poor performance. So what does this all mean? It means that their is an incentive for CEOs of smaller financial firms to sell to big banks resulting in fewer banks which will completely eliminate the wholesale brokers and decrease competition. The era of big interest rates from a few big banks is coming back into vogue in the next decade and Bank of America is leading the way. Perhaps Kenneth D. Lewis is in the process of writing a theatrical masterpiece called, Death of a Wholesale Mortgage Broker.

The first time home buyer market (especially) just might be getting some good news soon, however it’s bittersweet for most I’ve connected with. It seems that even with the rate cut, most of my buyers cannot get a loan; so the rate cut seems futile to them.

Just yesterday a young buyer called because her loan will not be able to go through because of some new ruling that just came down from the banks for 2008. Her offer was presented and accepted in the last days of 2007, but now her former loan is no longer available. She must come up with another 5% down in order to attain her first home. Needless-to-say, my buyer is crushed!

Even though I understand the conservative stance of most banks, I wish there were a more personalized calculator for granting a loan. It now seems as though they are following one round rubric for everyone. I guess you are out of luck right now if you’re a square peg!

I don’t pretend to be an expert on the economy, however I am someone who pays attention to the market and those who report on it. Until recently, no one, except for a few individuals such as Mad Money’s Jim Cramer, have been reporting what’s really going on with our economy because the stock market is still performing relatively well. Finally, the powers at be are able to see what my colleagues and I have been talking about for months. Case in point is this article about how inflation is really starting to affect our economy on foxnews.com. Hopefully the fed and the other economic leaders will start implementing strategies that focus on the over all economic situation rather than just the individual consumer. My own personal forecast: 2007’s final quarter will not be the same Christmas shopping fueled year end rally that it has been in the past, and that adjustments will have to start in 2008’s first quarter.