How did we find ourselves in such an economic mess? How could the powers that be not have the foresight to see what was right around the corner? We've been led to believe that the sub prime mortgage melt down was the cause, when the truth of the matter is - it's the derivatives, created by the repeal of the Glass-Steagall Act by a greedy Banking industry. The Glass-Steagall Act, passed in 1933, mandated the separation of commercial and investment banking in order to protect depositors from the the hazards of risky investment and speculation - the cause of the 1929 Stock Market crash. It worked fine for 50 years until the banking industry began lobbying for its repeal during the 1980s. The main cheerleader for the repeal was Phil Gramm, but there is plenty of blame to go around here. Both Republican and Democratic Senators and Congressmen supported this disgraceful bow to the banking industry which was eagerly signed into law by Bill Clinton in 1999. According to Wikipedia, many economist have criticized the repeal of the Glass-Steagal Act as contributing to the current economic volatility in the Stock Market. The banking industy laid out more the 200 million dollars for lobbying in 1998 according to the Center for Responsive Politics. The banking industry succeeded in their two decades long effort to repeal the act. This lust for banking largesse is as wanton among Democrats as Republicans - right up to the current campaign, according to the Phoenix Business Journal. Both McCain and Obama have accepted substantial amounts of money from Wall Street bankers, investment and securities firms, and their executives during this campaign cycle.
Personally, I believe the Glass-Steagall Act needs to be re-enacted. Before we bail out the banking industry, insurance firms, and Wall Street some reforms and regulations need to be put into place or the game will just continue. The American International Group - AIG - upon receiving $85 Billion Dollars from the government recently sent executives to a $440,000 retreat at a posh California resort? Where's the oversight? How many times can the taxpayer's trust be betrayed before someone steps in and does something? Congress seems to only act in times of crisis... is anyone listening?! Late in the game our government realized what had to be saved was not the housing market or the dollar, but the financial derivitives industry: and the precepice from which it had to be saved was an "event of default" that could collapse a quadrillion dollar derivatives bubble, a bubble that could take the entire global banking system down with it. Right now derivatives represent the biggest financial market in the world. Derivitives are financial instruments that have no intrinsic value, basically they're just bets. "The point everyone misses" wrote economist Robert Chapman a decade ago,"is that buying derivatives is not investing. It's gambling, insurance and high stakes bookmaking. Derivatives create nothing and they serve to enrich non producers at the expense of the people who do create real goods and services." As bets, you can hedge your bet that something will go up by placing a side bet that it will go down. Hedge funds hedge bets in the derivatives market. Bets can be placed on anything, from the price of tea in China to the movements of specific markets. What to do? Re-enact the Glass-Steagall Act for starters. Separate commercial banking from the stock market. Then, have Congress focus on the Dirivatives Bubble and articulate a solution, simply and clearly. Steve Krofts on 60 Minutes last week did a great job of explaining what's happening. Where's the political discourse? Just my opinion.
The current issue of the San Francisco Business Times has a special supplement "Luxury Living" that features the top 4 Zip Codes in the Bay Area where property values continue to go up despite the general downturn of the real estate market. One of those Zip Codes is 94920 (Tiburon and Belvedere) here in Marin County. A brief excerpt from the article: Yes, residents cite the excellent public schools, the burgeoning sense of community, and the Tiburon International Film Festival as reasons for moving to tony Tiburon or Belvedere, but really, in Marin's highest earning Zip Code it all comes down to the views. You'd be hard pressed to find a house on Belvedere at any price that doesn't have a glimpse of water. At an average sales price last year of almost $3.9 million dollars, a view may not be too much to ask. "One of the economic factors that increases desirability is there's very little land, if any to build on," said Mark Lomas , a realtor with Frank Howard Allen and a Tiburon/Belvedere resident since 1976. " To build, people usually have to buy a property, and gut it." Mark Lomas with fellow realtor Kirsten Wolfe preview an unlisted property on Belvedere Island that is being offered for over 8 million dollars. For more information about this spectacular property located on Belvedere Avenue (Not on MLS) contact Mark Lomas at: 415-789-7777 or Kirsten Wolfe 415-789-7724. For the whole story from the San Francisco Buisness Times click: San Francisco Business Times Article
For a lot of people, when considering moving to or within Marin County, the three most important things in real estate are schools, schools, schools. A lot of home buyers factor in the school where they are moving when they consider making a puchase. And, for those buyers without children, it is also an important factor when looking down the line for resale purposes. As the most significant investment people will make in their lifetime, when purchasing a home, schools are a very important consideraton.
Recently, the Marin Independent Journal ran an article about how the Marin County schools excelled in the 2007 to 2008 school year as measured by the federal No Child Left Behind Act with 81 percent of all students meeting requirements for academic progress.
"But seven Marin schools - nearly twice as many as last year failed to meet their mandates, according to a report by the California Department of Education. Educators say the increase is largely due to higher state and federal standards for English language learners." For the whole article, and a chart with the Academic Performances Index Test Scores for Marin Public Schools, click on: Marin Independent Journal Article September 4, 2008 Marin Schools
And, check out my web site with the Marin Independent Journal at: Marin History
For a second year Community Action Marin, a San Rafael-based nonprofit, is offering a raffle to help fund its programs for the poor by offering raffle ticket buyers the chance to win a San Rafael "dream home" priced at $2 million. Last year's winner chose the cash over the house that was priced at $2.1 million. At the bottom of this post is all the information you'll need to participate in this event. Community Action Marin - which operates 15 programs that focus on mental health services, early childhood development, HIV/AIDS, food programs, the homeless and more. "The fact that the local anti-poverty agency is raffling off a $2.1 million house is a little ironic," said Gail Theller, the agency's exective director. But cuts in funding by the Marin Community Foundation, the federal government and the state government left Community Action Marin with little choice, Theller said. The nonprofit lost about $200,000 a year in funding from the Marin Community Foundation recently when the foundation's trustees decided to take money away from ongoing programs so they could finance new initiatives. In addition, Gov. Arnold Schwarzenegger eliminated funding for a homeless program that served the mentally ill when he sliced $703 million in health spending from the budget. That move cut $500,000 a year from Community Action Marin's budget, Theller said. Stacy Swor, a Mill Valley lawyer who has been on the agency's board for 18 years, said, "The truth of the matter is we're being bled to death. Believe me, we've tried everything. Bake sales and car washes just don't do it these days. "People are willing to support a charity if they can see something for their money," Swor said. "What we're faced with is ongoing operational expenses, and those are expenses that are just about to get contributions for." Although last year was the first time that a nonprofit in Northern California has used such a raffle to generate revenue, the practice has gained popularity in Southern California, where it has been used by St. Jude Medical Center, school districts and cultural organizations, Theller said. A law passed by the California Legislature in 2001 made it legal for nonprofits to conduct such raffles. Still, the agency took no chances, Theller said. It checked with the state attorney general's office and the Marin County district attorney before proceeding with the raffle. Last year Community Action Marin hired Neal Martin, a former high school school teacher who oversaw a similar raffle for a college prepatory school in Watsonville, to manage the raffle. Mount Madonna School sold 19,000 raffle tickets costing $150 each and raised about $1 million for the school while paying out a grand prize of about $1 million, Martin said. Community Action Marin expects to do better than that. "We are convinced we are going to net $2.2 million," Theller said last year. This year, the same house, is offered in the raffle. (Last year the winner chose the cash option)
Because Community Action Marin is also charging $150 per raffle ticket, it needs to sell 35,000 tickets to meet their goals. The prizes will be paid for with proceeds from ticket sales. If fewer tickets are sold than expected, Community Action Marin has reserved the right to reduce the size of the grand prize - to an even split of the raffle's total profits. The grand prize winner also has the option of a $1.6 million cash prize in lieu of the "dream house." Theller said she found the house at 204 Southern Heights Blvd. in San Rafael by mailing letters to 100 people who were trying to sell homes in Marin. If the grand prize winner does opt for the cash, the owner of the house will be paid for holding the house out of the market for six months, Theller said. She declined to say how much. Theller said she thought it would be difficult finding a homeowner willing to take their house off the market for so long, but half of the people contacted expressed interest. The owner of the San Rafael house had priced the home at $2 million, and will be paid that amount if the prize winner chooses the house. People who buy the raffle tickets will know that they're giving to a worthy cause, Martin said. "It's not a mystery - unlike the state lottery where the funds from the state lottery are going to end up being budgeted in the next fiscal year," Martin said. Nevertheless, raffle winners will get no special treatment from the Internal Revenue Service. Like any raffle or lottery, prizes over $5,000 are subject to a 25 percent government tax, Martin said.
COMMUNITY ACTION MARIN'S 'DREAM HOME' RAFFLE ADDRESS: 204 Southern Heights Blvd., San Rafael SIZE: 4,400 square feet, 4 bedrooms, 4.5 bathrooms; quarter-acre lot DESCRIPTION: Bay views, chef's kitchen, lush landscaping, library suite, all-new appliances, infinity pool, gated entry COST OF RAFFLE TICKET: $150 HOW TO ENTER: By phone, 800-431-5166; by mail, CAM Dream House Raffle, 29 Mary St., San Rafael, CA 91949; or by fax at 415-738-7664. For More information click: Marin County Dream House Raffle
A couple of days ago I received a phone call from the San Francisco Chronicle. The Chronicle is preparing an article that will come out on September 5th regarding some of the high end neighborhoods in the Bay Area, and how those neighborhoods have been affected by the current real estate market. The Chronicle also wanted to know why people move to Tiburon and Belvedere? I shared that I believed that there are certain mico-communities in the Bay Area that have actually appeciated during the downturn in today's real estate market. And, Tiburon and Belvedere are just such markets. Homes here in Tiburon and Belvedere continue to appreciate because of macro economic factors unique to this area such as high desirability, natural geographical beauty, climate, lifestyle, lack of available land for new building, proximity to San Francisco and Silicon Valley (that are experiencing strong job markets), a stellar school system supported by the tax base, and being one of the most gorgeous waterfront communities in the world!
For the comedically challenged and humor impaired this post is not recommended. But for those of you a little more daring... here we go with a little real estate humor: * Sign next to FSBO (For Sale By Owner): We shoot every third agent, and the 2nd one just left! * This house has every new convienence, except low payments! * By the time you pay for a house in the suburbs, it isn't. * If you think no one cares that you're alive, try missing a couple of mortgage payments! * I just listed a maintenence free house, in the last 25 years there hasn't been any maintenence!
It never hurts to be careful in this crazy world we live in. Here are 8 tips for Realtors to consider so they can protect themselves. We work in a very unusual work environment, where occassionally we are meeting strangers. Recently, in a Mill Valley, California Real Estate office, a well dressed couple walked in, and robbed the floor agent. Another couple with a similar profile has been also robbing houses throughout the Bay Area. If you feel this information is helpful, please pass it on to someone you know.
1. (Tip from Tae Kwon Do) The elbow is the strongest point on your body. If your close enough to use it, do! 2. From a tourist guide in New Orleans. If a robber asks for your wallet or purse, Do Not Hand It To Him! Toss it away from you...chances are he's more interested in your wallet or purse than you, and he will go for the wallet or purse. Run like mad in the other direction! 3. If you are ever thrown in the trunk of a car, kick out the back tail lights and stick your arm out the hole and start waving like crazy. The driver won't see you, but everybody else will. This has saved lives. 4. Women have a tendency to get into their cars after shopping, eating, working, ect. and just sit (doing their checkbook, or making a list, ect. Don't Do This! The predator will be watching you, and this is the perfect opportunity for him to get in on the passenger side, put a gun to your head, and tell you where to go. As soon as you get into your car, lock the doors and leave! If someone is in the car with a gun to your head...Do Not Drive Off, repeat Do Not Drive Off! Instead gun the engine and speed into anything, wrecking the car. Your air bag will save you! If the person is in the back seat they will get the worst of it. As soon as the car crashes bail out and run. It is better than having them find your body in a remote location. 5. A few notes about getting into your car in a parking lot, or parking garage: A. Be aware: look around you, look into your car, at the passenger side floor, and in the back seat. B. If you are parked next to a big van, enter your car from the passenger door. Most serial killers attack their victims by pulling them into their vans while the women are attempting to get into their cars. C. Look at the car parked on the driver's side of your vehicled, and the passenger side. If a male is sitting alone in the seat nearest your car, you may want to walk back into the mall, or work, and get a guard or policeman to walk you back out It is always better to be safe than sorry (and better paranoid then dead) 6. Always take the elevator instead of the stairs (stairwells are horrible places to be alone and the perfect crime spot. This is especially true at night. 7. If the predator has a gun and you are not under his control, Always Run! The predator will only hit you (a running target) 4 in 100 times: and even then, it most likely will not be a vital organ. Run, preferably, in a zig zag pattern! 8. Women try to be sympathetic: STOP. It may get you raped or killed. Ted Bundy the serial killer, was a good looking, well educated man, who always played on the sympathies of unsuspecting women. He walked with a cane or a limp, and often asked for help into his vehicle or with his vehicle which is when he abducted his victims. Not too long ago I was leaving a Broker's Open House with a friend who'd used his lockbox for us to gain access to the property. As we were leaving, a very good looking young couple pulled up in a brand new BMW and pretended they were agents also out on the Wednesday's Broker's tour for Southern Marin County. They said they were agents, and could we leave the door open so that they wouldn't have to use their lock box key. My friend trusted them and let them in, and the next day he was called by the listing agent (Marin County lock boxes code who was in the house, and at what time) to find out they had robbed the house. Fellow realtors, please be careful, and all the best.
On August 9, 2008 the Associated Press reported: Fannie Mae Cutbacks Chill Mortgage Market! Right now Fannie Mae is making bold cutbacks that according to the Associated Press will send shock waves through the mortgage market, especially after posting a quarterly loss Friday that was three times larger than Wall Street expected. To slow it's financial decline, Fannie Mae slashed its dividend to 5 cents a share from 35 cents a share and said it will eliminate loans for borrowers with solid credit scores, but little proof of income - or small or no down payments. Fannie Mae is also raising fees that will passed along to borrowers as higher interest rates or closing points. The fear is that mortgage rates will keep climbing, making it harder for people to afford a mortgage or refinance their homes, and spur more foreclosures. Earlier in the week the New York Times reported that Richard Syron, a chief executive at Freddie Mac, a sibling company of Fannie Mae, ignored warnings that could have protected the company from some of the financial crises now engulfing it. In 2004 Richard Syron received a memo from Freddie Mac's cheif risk officer warning him that the firm was facing questionable loans that threatened it's financial health and Richard Syron ignored these warnings. Now the Federal Government has readied a taxpayer bailout that could cost billions of dollars. So, has any of this affected Marin County? On August 8, 2008 the Marin Independent Journal reported that Redwood Trust of Mill Valley shares slide 14 percent amid report of $46 million dollar loss in the second quarter. Martin Hughes, Redwood's founder and chief financial officer said, "I can tell you we're not in a panic here. We're sitting with a lot of cash. We just put a bunch of money to work this quarter." Joan Thayer, the Marin County Assessor-Recorder noted that, "Marin, so far, has remained relatively, but not totally, unaffected by the housing crisis. The reason for Marin's comparative good fortune is the lack of new development projects, limited new construction, and its continuing allure as one of the most desirable areas in the country in which to live. Demand is high and the supply is limited. Nevertheless, there are indicators the economic downturn has impacted this county and will continue to do so in the months ahead. Since January 2007, we have experienced a significant slowdown in the number of real property sales in all categories: single family residences, multi-family, and commerical properties." Recently on the evening news a video clip of President Bush caught off camera talking about the economy after a news conference had the President accusing Wall Street of "getting drunk" and then asked, "when are they going to sober up?" Did someone forget to tell the President he was the bartender? Oh well...
Office Phone: (415) 789-7777
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The most definitive blog about the Marin County Real Estate market! Information about Schools, Neighborhoods, Statistics, Articles, Opinions/Editorials,access to the MLS without having to register your personal information. and much more!
Mark Lomas
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