Jay Emerson's Blog

Sacramento Real Estate Indicators & Commentary - 2009 08

Jay Emerson, Broker, e-PRO (The Galster Group) — Mon, 21 Sep 2009 13:43:06 -0500

Through July 2009

The magic "Swing indicator" numbers for May are 37-14-3. That means almost 69% of the 54 zip-codes and Counties tracked had a momentum "UP tick" in July. Going back to 1998, the only period that matched or exceeded this momentum turn was Spring/Summer of 2004. That's a mighty meaningful indicator.

Does it mean this is a bottom? It is A bottom. I'm not convinced it is THE bottom.
Can it turn and go down? Yes, in some zip-codes that is probable due to the supply still looming.
What do you mean "in some zip-codes"? You remember that real estate is a local commodity. That means, for example, that parts of 95864 are in higher demand than other parts of that same zip-code. Likewise, adjacent zip-codes can have a material difference in supply and demand. That's why you should not generalize and apply a National statistic (or even a State statistic) to your targeted area. Check out the Communities and see how a local perspective makes a difference in your understanding.

Indicator Chart Summaries: (See the charts at www.JayEmerson.com/Indicators.asp)

Resales (1 - Existing Home Sales) are increasing but are still understating the demand. My clients who are buying know that sometimes the competition wins. There is still competition and supply is sill low, relatively. The most telling indicator regarding resales is the "months inventory". Currently at 2.9 (normal between 4 and 6).
The number of bank-owned homes that sold (2 - REO Sales) during the month has decreased on an absolute scale. Relatively, however, REO sales are still over 30% of the sold inventory. That's an indicator of waning supply (and wanting buyers).
The median price for all of Sacramento County (3a - Median Price (Sac Cnty)) is unchanged and now equal to the median price back in February 2002.
The El Dorado County median price (3b - Median Price (ED Cnty)) is also unchanged and is equal to the median price back in June 2003.
The Placer County median price (3c - Median Price (PL Cnty)) is hard to comment on since Placer County hasn't published their numbers!
NODs, which depict the beginning of the foreclosure process for a home (4 - Notices of Default) are lower than recent history. Banks, in their infinite wisdom only bested by our government, have learned that they should wait as long as possible to foreclose on homes. Accounting regulations require they dispose of non-performing assets within a short timeframe. That means they need to be ready to sell a property when they foreclose on it. THAT is why the supply is taking some time to hit the market.
Builders are not clammering to get permits for construction of new homes (5 - New Home Permits). These developers and builders SHOULD guage the marketplace for demand and supply BEFORE starting a development. If there are plenty of homes for resale, a builder would have less demand for new homes and, hence, less motivation to get permits.
The cost of money for homes (6 - Mortgage Rate) is still historically low. Recent financial news also suggests that investors still desire U.S. investment vehicles. With this news, interest rates may see a longer life at this low range. Then again, leave it to the government (a 'Housing Czar') to corrupt naturally occuring corrections.
As a summarized and simple way of depicting "momentum", my proprietary Swing Indicator (7 - Momentum Swings) shows the remarkable cycles that are natural in real estate markets. And the statistics for July are at a relative peak going back many years.

There are no saviors except time and a functioning market. But a functioning market cannot be continually corrupted by short-sighted politicians. And now those lemmings have inserted things like HVCC (appraisal process) which is adding at least 2 weeks to the duration of every escrow (if a loan is involved). Worse yet is that those gun-shy appraisers are over-depreciating values. They don't want Congress to do any more stupid things. (I know that's a pipe dream.)

For all of you who think the process will get easier, I'm here to tell you that it's not likely. That's why you need an experienced real estate Broker on your side. The indicators are showing a change in the cycle but still not showing a true reversal.

There are points of resistance in certain areas of the region but much of it is artificially instigated by the all-knowing government. It will always be true that, all things remaining equal (e.g.,) Folsom will be priced higher than Florin.

Facts:

Inventory is "short", in more ways than one. The demand is waiting on the sidelines. The government keeps throwing band-aids at the symptoms. Homes are not on the market for long; the May NOD filings are down from April but you can see that they are not on the market; interest rates are at 40-year lows and staring to creep upward; median price momentum is mostly up (for 54 zip codes-see Swing Indicator); and new home permits are low but remained at the same number. When the inventory picks up, the choices will again be plentiful. No more band-aids, just Buyers. That's what we need.

The Swing indicator (#7; my newest indicator) is still showing a swing from "down " to "up ". Simple Ups and Downs depict the swings and gaps between Up ticks and Down ticks. I love it when simple truths are depicted in simple pictures.

What is YOUR NEXT ACTION?

Investors - Even cash buyers need to move quickly in this market.
- www.BuyHomesInSac.com - a proprietary and secured portal of information and listings.
Buyers - this is a market for you! Call me immediately
- I know some creative and resourceful lenders. Don't let fear win.
Distressed homeowners - Don't pay anyone to help you. You can get free help. Call me.
More information:

Bottom line: Call me to get started.

See the charts at www.JayEmerson.com/Indicators.asp

Sacramento No BS Market Commentary - 2009 04

Jay Emerson, Broker, e-PRO (The Galster Group) — Wed, 03 Jun 2009 00:34:27 -0500

No BS Market Commentary and Indicators

This page is dedicated to you if you are interested in market changes and an education in the "core metrics" that explain, in part, the market dynamics. These charts are the product of my proprietary method for tracking changes. The charts do not only depict the raw data but, better yet, show the momentum of changes in that data.

Indicators & Chart Education
-- Part 1 -- Part 2 -- Part 3 -- Part 4 -- Part 5 --

Through April 2009

The magic numbers for April are 23-20-11. That's how I will summarize the Swing Indicator. It means 23 price trends are Up, 20 trends are Unchanged, and 11 are Down. It's part of the cycle to see these numbers oscillate.

Banks are about to increase inventory. Is this a sign of things to come? Are we going to depend on the banks ("government") to supply our real estate products? Twenty years ago, the banks flooded the market with REOs and hurt themselves in the process. You see, as prices go down, so goes the banks' collective portfolio values. While a non-performing asset is much worse for a portfolio than is a low-priced asset, the latter tends to exist on their books for much longer.

So the banks are damned. They are taking losses and so are people. When it sells at a loss, it affects the values of every neighbor with a similar home. What to do...

There are no saviors except time and a functioning market. But a functioning market cannot be continually corrupted by short-sighted politicians. While Congress is plugging holes with rice-paper, banks are stunned by their new regulations and conditions. And buyers! Well, the buyers are sitting on the fence while the market is inundated with Short Sales (which quickly go Contingent).

One of the many pains in this market is Buyer Staying Power. While good listing agents are busting a nut to get banks to accept short offers, some buyers have no problem seeding an area with offers, quickly jumping ship when banks accept. Is it fair? No. Can I blame them? No. Does it chap my hide to hear a buyer's agent say "they've decided on another property"? YES! Can I force a buyer to stay singularly loyal to one offer? No.

For all of you who think the process will get easier, I'm here to tell you that it's not likely.

That's why you need an experienced real estate Broker on your side. The indicators are showing a change in the cycle but still not showing a true reversal. There are points of resistance in certain areas of the region but much of it is artificially instigated by the all-knowing government. It will always be true that, all things remaining equal (e.g.,) Folsom will be priced higher than Florin.

Facts:

Inventory is "short", in more ways than one. The demand is waiting on the sidelines. The government keeps throwing band-aids at the symptoms. Homes are not on the market for long; the April NOD filings are down from March but you can see that they are not on the market; interest rates are at 40-year lows; median price momentum is mostly up (for 54 zip codes-see Swing Indicator); and new home permits are down but inched upward in April. When the inventory picks up, the choices will again be plentiful. No more band-aids, just Buyers. That's what we need.

What is YOUR NEXT ACTION?

Investors - Even cash buyers need to move quickly in this market.
- www.BuyHomesInSac.com - a proprietary and secured portal of information and listings.
Buyers - this is a market for you! Call me immediately
- I know some creative and resourceful lenders. Don't let fear win.
Distressed homeowners - Don't pay anyone to help you. You can get free help. Call me.
More information:

Bottom line: Call me to get started.

Indicators & Chart Education

Momentum Indicators

Indicators & Chart Education -- Part 1 -- Part 2 -- Part 3 -- Part 4 -- Part 5

THE NEWEST INDICATOR -- The Swing Indicator

Indicators & Chart Education -- Part 1 -- Part 2 -- Part 3 -- Part 4 -- Part 5

These charts depict the momentum of changes in the underlying raw data to help forecast direction. These are not a guarantee of future direction but aid in the prediction of cause/affect in the various market forces. No single indicator tells the whole story. Also charted is the raw data itself. For an explanation or for a monthly subscription to this periodic report, call or email Jay Emerson (916-517-9606, Jay@JayEmerson.com). The data is deemed reliable but not guaranteed. Sources include DataQuick, CBIA, Sac MetroList, and public escrow information.

GOLD in Placerville! Acreage with History

Jay Emerson, Broker, e-PRO (The Galster Group) — Wed, 07 Jan 2009 01:08:55 -0600

This 6.88 acre parcel in Placerville has a well, power, various building sites/options, custom home plans, and a creek that the gold-diggers used back in the 1850's. Priced at only $399,900, the per acre price is a great deal.

Seller is motivated.

Marketed by REALTOR® Jay Emerson, CA License 01788488, 916-966-8700

Galster Real Estate Group

Sacramento Real Market Commentary - 2008 08

Jay Emerson, Broker, e-PRO (The Galster Group) — Tue, 02 Sep 2008 14:45:05 -0500

Through July 2008

You hear the old news about real estate statistics. You read headlines that could, by themselves, cause a panic. But where are the forecasts? Better yet, where are the forecasts that are relevant to YOU? Some pay thousands to get this information. My treat, to you!

This commentary is my opinion of Sacramento's real estate market using history, current conditions, and the market forces. This is not a crystal ball. If I knew of guarantees, I would not be writing this piece.

This ongoing analysis is similar to the concept used in foreign exchange (forex) currency trading (a commodity much like real estate). While this is most useful to an investor, understanding the market is necessary even when buying or selling your family's shelter, not an investment property. This type of analysis is a speculator's tool to predict the direction of the NEXT data point. And those can be billion-dollar guesses. Explaining history should be done but it's your NEXT action that makes a difference. Refer to this month's charts and note where the Momentum indicator crosses it's zero axis (red axis & typeface) - it has been a predictor of the change in actual volumes. Specifically:

Home Sales momentum crossed beneath zero at August 2005 coinciding with the marked decrease in Sales in January 2006. Momentum hit a bottom in December 2007 indicating the Sales spiking in March 2008. And momentum is still positive.
Permits momentum hit above zero first in April 2002, spiked with the last big builder push, and has stayed at or below zero since September 2004. The builders that have survived are not going to repeat the mistake.
NOD momentum went above zero in November 2005 which points to the increase in NOD volume in the first quarter of 2006. NOD momentum seems to have peaked in August 2007.
REO Sales momentum went above zero in January 2006 pointing to the marked rise in volume in April and May 2006. REO Sales momentum seems to have peaked in March 2007 and heading down (but still positive).
Mortgage Rate momentum went below zero in August 2007 pointing to relative drop in rates from October 2007 through May 2008. The momentum is still negative but it's meandering.
Median Price momentum peaked in February 2005 which points to Price peak in August 2005. Momentum crossed beneath zero in November 2006 and Prices really started to fall in March 2007. Momentum is still negative.

What does this mean when mixed together? That depends on YOUR NEXT ACTION.

If you are running for President - Don't increase taxes. Don't increase the size of government. Don't spend beyond your budget. Don't budget beyond your income. Don't leave the door unguarded.
If you are a Buyer - Rates are still low. I don't foresee a drastic move by the Fed but our election may have some impact and momentum could turn upward. Loan options are changing. There are still good homes for sale and more every day. Prices are at 2002 levels and could still decline more, especially in certain zip codes. Other areas are doing well. Be prepared for a multiple-offer situation if your target is $350K or less.
- ACTION PLAN: Hire me. Discuss market and decide on strategy. Put your cash in a bank account in order to prove you have it- increase your buying power. Talk to your lender or ask me for a suggested professional. Be prepared by understanding your housing/search requirements so I can build you a custom and private website for your search results - know your buying power first. Eliminate homes you won't consider. If you're considering a newly built home, I can get you more incentive or upgrades by representing you on your first (and every) visit. Come with me to tour the homes you desire. Make offer(s). Go into contract. Settle all disclosures, inspections, and conditions. Sign, buy, and move!
If you are a Seller - If you don't need to sell, wait another year and ask again. Otherwise, you need to know your immediate and general market competition and forces. There is a perception that a REO listing is a better deal. You will have to be very realistic about the price a buyer will offer. Check your emotions at the door. That's what your competition is doing.
- ACTION PLAN: Hire me. Discuss market and decide on strategy. Stage your home. Keep home clean and available. Market, market, market your home. Consider offer(s). Go into contract. Settle all disclosures, inspections, and conditions. Sign, sell, and move!

Whether you are buying, selling, or running for President, my service commitment to YOU is unequaled. If you know someone who is looking for a great Realtor and would appreciate the same service I would give you, please give me their name and number and I'll follow up. You know you can trust me.

Bottom line: Call me to get started.

See charts @ http://JayEmerson.com/Indicators.asp

Sacramento Real Market Commentary - 2008 07

Jay Emerson, Broker, e-PRO (The Galster Group) — Sat, 26 Jul 2008 12:50:30 -0500

Through June 2008

Here are June's market data and momentum. I've added the raw data to each chart to give you a better sense of where the data is coming from. My uncharted "pulse" indicator is a combination of all of these charts -- this is a great market. And since inventory has increased a small amount while the number of sales has increased, there are still choices and fewer multiple offer situations. The media is telling us there is a decrease in resales -- that is a national statistic. Real estate is a local commodity and national statistics cannot tell you how our 3 counties are doing.I have a new indicator called the "pulse" indicator. This is my reading on the activity and psychology of the market in this area including a summary of the momentum indicators shown in the charts below. Real estate is a local commodity and national statistics cannot tell you how our 3 counties are doing.

The pulse is currently rated as dark Amber. That means it is Red hot for those who are able to move quickly when a desired home hits the market. But it is only luke-warm (Yellow) for those who haven't been pre-qualified with a lender and are waiting for the bottom. And for sellers, the pulse is a light Yellow - there are buyers but they know you're competing with banks and short sellers.

Six of my clients are now in escrow. And you would be smart to let me represent you. Whether you're looking at an existing home or a newly constructed home, I can get you a great deal and help you throughout the process (and beyond).

The Market: The momentum indicators show another increase in resale activity, month-over-month. But inventory increased. However, the inventory increase was not equal to the number of sales so there is now only 4.5 months' inventory (length of time to sell all Active listings), down from 4.8 last month. Remember, my momentum indicators are no guarantee of how a market will change in the coming months but they are healthy in several aspects. The momentum of REO sales (indicator of bank-owned inventory) is still increasing which is indicative of the number of successful offers and the percentage of listings that are bank-owned. Notices of Defaults (indicator of new, possible foreclosures) are decreasing in numbers and, hence, momentum. The number of resales took another sharp leap upward contradicting the media's reports. County-wide median price decreased a small amount while the dollar value of closed escrows jumped again. Builders in this region are also going against the national "grain" and are building new homes.
The Media: The media are focused on rigging the election but have some time to inject their bias on the real estate market. If "speculation" didn't occur, prices would be erratic and the market would not have smooth corrections and cycles. I speculate every day. Don't you?
Congress: And speaking of speculators, Congress is losing their bets. I want to fire them. They work for us and are doing a horrible job. As Glenn Beck would say, "it's time for pitchforks". The housing bill didn't and won't do much for people other than the banks who sold the bad paper (subprime products to subprime borrowers).
My counsel to Buyers: Get pre-qualified -- I'm connected to some great lenders. Call me to get your FREE web site that can provide more detailed search requirements and daily updates to your inbox. Eliminate listings that work and call me when you have a short-list to view. And remember my FREE reports (http://JayEmerson.com/Publications.asp) on making this important buying decision.
My counsel to Sellers: Price your home at or below the comparable sales. Stage it well and make it available with little or no waiting. Low-ball offers are relative - if you price too high, all offers are low-balls. I have FREE reports (http://JayEmerson.com/Publications.asp) on selling in this buyer's market.
My counsel to Investors: Banks are not accepting blind offers but they are accepting reasonable offers. Do your homework and call me for an edge in getting access to some great deals. I'm here to help you. Call for any of my FREE reports (http://JayEmerson.com/Publications.asp) on investing in real estate.
Bottom line: Call me to get started. And I'm never too busy for your referrals!

See the indicator charts at my website: http://JayEmerson.com/Indicators.asp

Running for President

Jay Emerson, Broker, e-PRO (The Galster Group) — Thu, 10 Jul 2008 12:37:22 -0500

Sacramento Real Market Commentary - 2008 06

Jay Emerson, Broker, e-PRO (The Galster Group) — Tue, 01 Jul 2008 17:59:02 -0500

I have a new indicator called the "pulse" indicator. This is my reading on the activity and psychology of the market in this area including a summary of the momentum indicators. Real estate is a local commodity and national statistics cannot tell you how our 3 counties are doing.

See the rest of the story here... http://JayEmerson.com/Indicators.asp

By the way, if you know someone who is selling or buying and who would appreciate my level of service and expertise, send me their name and number and I'll be glad to follow up. I'm never too busy for your referrals.

814 T Street - Sacramento Historic Bungalow/Duplex

Jay Emerson, Broker, e-PRO (The Galster Group) — Mon, 02 Jun 2008 11:15:47 -0500

Jay Emerson | Jay Emerson, The Galster Group | 916-517-9606

814 T Street, Sacramento, CA

HISTORIC STRUCTURE!

4BR/3BA Multi-Family, 2 units

offered at $595,000

Year Built	1915
Sq Footage	2,100
Bedrooms	4
Bathrooms	3 full, 0 partial
Floors	2
Parking	2 Car garage
Lot Size	.15 acres
HOA/Maint	$0 per month

DESCRIPTION

HISTORIC STRUCTURE! Code benefits! Unique and beautiful mid-town bungalow/duplex on a large lot in the Southside Historic District. Nicely remodeled to keep 1915 charm. Great curb appeal - striking entrance above street with covered front porch. Upstairs is a 2/1; downstairs is a 2/2. Wait until you see the back yard. Short sale subject to lender approval. Commissions to be split 50/50.

see additional photos below

PROPERTY FEATURES

Central A/C	Central heat	Fireplace
Walk-in closet	Hardwood floor	Tile floor
Family room	Living room	Breakfast nook
Dishwasher	Stove/Oven	Granite countertop
Laundry area - garage	Balcony, Deck, or Patio	Yard

COMMUNITY FEATURES

Garage parking

Guest parking

Secured entry

OTHER SPECIAL FEATURES

Electronic gate to access from alley to garages

Historic structure brings benefits of building and modification code

Close to park, downtown, transportation and highways

Home and income possibilities

Separate outbuilding with individual laundry rooms

Separate garage structure with 2 single-car garages with openers

Charming home in historic district

Backyard is a paradise

ADDITIONAL PHOTOS

Seller contact info:

Jay Emerson

Jay Emerson, The Galster Group

916-517-9606

For sale by agent/broker

Equal Opportunity Housing

Posted: Jun 2

4406 Palm Avenue, Sacramento - Diamond In The Rough

Jay Emerson, Broker, e-PRO (The Galster Group) — Mon, 02 Jun 2008 11:02:33 -0500

Jay Emerson | Jay Emerson, The Galster Group | jay@jayemerson.com | 916-517-9606

4406 Palm Avenue, Sacramento, CA

Foothill Farms diamond!

2BR/3BA Single Family House

offered at $578,931

Year Built	1920
Sq Footage	2,324
Bedrooms	2
Bathrooms	3 full, 0 partial
Floors	3
Parking	2 Car garage
Lot Size	.39 acres
HOA/Maint	$0 per month

DESCRIPTION

You will love this diamond in the rough! Unique Foothill Farms property with two lots (vacant lot is MLS#80047038). Newer floors, kitchen, dp dual-hung windows, siding, HVAC, master bath, & many choice upgrades. Charming home with porch & large, fenced yard. Remote controlled electric gates at front and back. Video security system w/monitor. Full basement for storage or extra bedrooms. Loft has own bath. Buyer needs to validate - adjacent parcel could be split off and sold or developed.

see additional photos below

PROPERTY FEATURES

Central A/C	Central heat	Fireplace
Family room	Dining room	Dishwasher
Stove/Oven	Basement	Laundry area - inside
Balcony, Deck, or Patio	Yard

COMMUNITY FEATURES

Garage parking

Gated property

Secured entry

OTHER SPECIAL FEATURES

Two Lots included in price

Large Loft for 2+ bedrooms with full bath

Full basement for storage or more bedrooms

Charming porch on large front yard

Remote controlled electric gates; front and back

Updated floors, windows, and siding

Video surveillance and monitoring system

ADDITIONAL PHOTOS

Seller contact info:

Jay Emerson

Jay Emerson, The Galster Group

jay@jayemerson.com

916-517-9606

For sale by agent/broker

Equal Opportunity Housing

Posted: Jun 2, 2008

Sacramento Real Market Commentary - 2008 05

Jay Emerson, Broker, e-PRO (The Galster Group) — Mon, 02 Jun 2008 10:55:28 -0500

If you read the local newspaper, you may have seen that April's home sales made front page news. By itself, it's a sign that there were more buyers in the market than in March. But more enlightening, and not understood by the news writers, is that inventory indeed dropped by a more significant amount. Instead of 8.3 months of inventory (length of time to sell all Active listings, all things remaining equal), there is now only 5.9 months' inventory. That is a healthy number. If it's too high, supply is higher than demand. If it's too low, well, it's the opposite. Anywhere between 4 and 7 is a sweet-spot.

But stories about the trenches from someone in a cozy tent cannot depict the truth when compared to someone actually in the trenches. Read my trench story here... http://JayEmerson.com/Indicators.asp

Sacramento Real Market Commentary - 2008 04

Jay Emerson, Broker, e-PRO (The Galster Group) — Thu, 01 May 2008 12:53:00 -0500

Banks are aggressively trying to reduce their inventory and there are a lot of buyers submitting offers on these and other homes. My momentum indicators are no guarantee of how a market will change in the coming months but they are leveling off in many areas like REO sales (indicator of bank-owned inventory) and Notices of Default (indicator of new, possible foreclosures). Likewise, the number of resales is increasing at an increasing rate (momentum heading upward). County-wide median prices are low but some resilient zipcodes (Fair Oaks, Folsom, Granite Bay) are doing better.

Read the rest of the story here: http://JayEmerson.com/Indicators.asp

Sacramento Real Market Commentary - 2008 03

Jay Emerson, Broker, e-PRO (The Galster Group) — Fri, 11 Apr 2008 22:48:17 -0500

Forbes magazine agrees with my analysis that a lot of areas have stabilized. Some areas, on the other hand, are still experiencing a glut of bank-owned properties. My momentum indicators are showing a perfect buying opportunity. Transaction volume is increasing, median prices are inching upward, interest rates are still low, new permits are very low, and banks are pricing homes to move since auctions are either not successful or a Short Sale is their preferred strategy.

Read the rest of the story here: http://JayEmerson.com/Indicators.asp

Sacramento Real Market Commentary - 2008 02

Jay Emerson, Broker, e-PRO (The Galster Group) — Sat, 22 Mar 2008 12:56:41 -0500

In October, a pie-maker would say "it's time to buy pies". Mom always says "it's time to call your mother". And, lately, Realtors say "it's time to buy real estate". But the ones I watch and hear (other than my mother) are those who have made the right moves at the right times. Guess what. They are almost ALWAYS doing exactly the opposite of the crowd. They are wealthy but not out of sheer luck but because they pounce on opportunity when everyone else is considering it a risk (and they are not pessimists hiding behind the label of "realists"). I'm looking to invest my own money and am even working with local and remote investors to take our "pick of the litter". The litter is large and my momentum indicators show the perfect pattern of a "bottom".

The Market: Almost 250 homes went pending in the last 48 hours (Sac County). Banks are pricing correctly because they are not in the business of owning homes -- just the promises to pay for homes. Buyers are making reasonable offers (since pricing is already reasonable) and are motivated and pre-qualified. My charts indicate opportunity. All of my clients, friends, and family benefit from my analysis of the market. Forward this email or my contact information to anyone who is looking to buy. It's a great time and the "fish are biting".
The Media: It's so easy to disparage the media. They would NOT be invited to my birthday party. Does Debbie Downer ring a bell? The Sacramento Bee is starting to get neutral on the real estate market. They are experiencing a financial downturn and are realizing that they have to stop raining on everyone's attitudes.
Congress: Well, they did something. And it helps some good people who are in their homes and does not go too far as to helping speculators who should not be helped. I'm very happy for those who timed the real estate market badly but timed the election cycle perfectly! If you haven't read the full text of the bill passed by Congress, ask me.
My counsel to Buyers: Low-ball offers are getting rejected and even ignored. Mortgage rates are bobbing up and down like hungry bass in the morning. The upper limit on mortgages may not help Sacramento like they will the Bay area and L.A., but they might help folks in Granite Bay or other higher-end areas. Talk to your lender if you are looking to refinance or purchase a home priced at more than $417K. If you need a good lender, just ask me. Call for any of my FREE reports (http://JayEmerson.com/Publications.asp) on making this important buying decision. Naturally, if you need a GREAT Realtor, you know how to contact me.
My counsel to Sellers: Preparation, marketing, and resetting your expectations are key elements of selling in this market. If you don't have to sell, please wait. If you are relocating, call me. If you want to move up to a bigger home, this is the BEST time to do that. Call for any of my FREE reports (http://JayEmerson.com/Publications.asp) on selling in this buyer's market.
My counsel to Investors: I'm getting calls from renters who are looking for their first home. The folks who have to sell short or go through foreclosure have to rent. So the population of renters is not going to decrease very soon. And rental rates are increasing. Let me help you. Call for any of my FREE reports (http://JayEmerson.com/Publications.asp) on investing in real estate.
Bottom line: Don't be kicking yourself in 6 months when this opportunity fades from golden to bronze. Millionaires are made from OWNING real estate, not selling it. Let me help you build the asset side of your balance sheet.

Please remember, if you want to get a new home in a new development, don't register without me. The builder will not honor our relationship if you walk into their "den" by yourself. And it won't cost YOU anything. The builder/seller pays for my buyer agency fee. This is also true for bank-owned properties. Call me today to get started with your search.

Jay Emerson, Realtor®, 5006 Sunrise Blvd., Ste 202, Fair Oaks, CA 95628. (916-517-9606) All rights reserved. All statements or expressions of opinion, or any other matter herein, directly or indirectly, are only offers for real estate consultation and representation of buyers and sellers of residential homes or investment properties in California. While I believe the sources of information to be reliable, I in no way represent or guarantee the accuracy of the statements made herein. I, Jay Emerson, Realtor®, do not provide investment counseling nor act as an investment advisor and am not a registered investment advisor. Unauthorized reproduction of this newsletter or its contents by Xerography, facsimile, or any other means is illegal and punishable by law.

109 Cobble Ridge Drive - Stunning Folsom 3/2

Jay Emerson, Broker, e-PRO (The Galster Group) — Mon, 11 Feb 2008 14:02:33 -0600

Jay Emerson | Jay Emerson, The Galster Group | 916-517-9606

109 Cobble Ridge Drive, Folsom, CA

Stunning Folsom home in Great location

3 Bdrm Single Family House

offered at $363,000

Year Built	1999
Sq Footage	1,446
Bedrooms	3
Bathrooms	2 full, 0 partial
Floors	1
Parking	2 Car garage
Lot Size	4,863 sqft
HOA/Maint	$0 per month

DESCRIPTION

STUNNING newer home with convenient layout. Shows like a model. Great room with expanse of upgraded tile. Quiet, family neighborhood in walking distance of great schools, Lite Rail, parks, lakes, river, bike trails, shopping, Historic Old Folsom, Intel. Central location for easy commute. No HOA or Mello Roos!

see additional photos below

PROPERTY FEATURES

Central A/C	Central heat	Fireplace
High/Vaulted ceiling	Walk-in closet	Tile floor
Family room	Dishwasher	Refrigerator
Stove/Oven	Washer	Dryer
Laundry area - inside	Balcony, Deck, or Patio	Yard

OTHER SPECIAL FEATURES

No HOA or Mello Roos

ADDITIONAL PHOTOS

Seller contact info:

Jay Emerson

Jay Emerson, The Galster Group

916-517-9606

For sale by agent/broker

Equal Opportunity Housing

Posted: June 2, 2008

Sacramento Real Market Commentary - 2008 01

Jay Emerson, Broker, e-PRO (The Galster Group) — Thu, 07 Feb 2008 02:07:44 -0600

Are you waiting for the "rock bottom"? Did you know that the majority of this down cycle is behind us? According to smart economists, the press has been exaggerating the issues. Sure, there are some good people in a bad situation but the market is correcting itself and some areas are already on the increase.

The Market: Inventory is being snatched up by investors and buyers who know the bottom is nigh. The indicators below have been hinting that the bottom is forming. Unlike peaks in the market, the trough takes more time to develop. The momentum of the changes indicates opportunity. I study the market every day and offer this edge to all of my clients.
The Media: The speed of bad news still exceeds the speed of light. And good news... Well, it doesn't even find the light with our media. But I see a lot of activity with most [well-priced] listings getting multiple offers.
Congress: Help who? Now they want to fatten themselves with pet projects ("pork") which is delaying their actions. Don't bank on congress doing anything with efficiency or effectiveness.
My counsel to Buyers: With homes in the affordable range, rates so low and rents on the rise, this is a great time for 1st-time buyers and investors. I can help YOU find the home that meets your requirements. Two years ago, buyers had to settle for a home since the selection was small. Now there are some great properties just waiting for you. Let me help you weed through the noise and find the best home for you. Call for my FREE report on making this important buying decision.
My counsel to Sellers: Your competition is pretty high but buyers are making offers. If there are ways you can stage your home and make it more attractive than your competition, then you should consider the updates. Marketing is key. Data suggests that buyers use Realtors and my marketing targets Realtors. If you must sell, let me help you with preparation, staging, and marketing. When you get multiple offers, the negotiating strategies I use will help you tremendously. And if you are selling AND buying, the opportunity to recover the loss on the next sale is great! Call for my FREE report on selling in this buyer's market.
My counsel to Investors: If you wait too long, others with capital will take the best properties. Rents are on the rise which means your homework should include elasticity of that income. Let me help you. Call for my FREE report on investing in real estate.
Bottom line: If not now, when? Are you in a position to buy now? Do you know someone who has talked about acting on their desires but needs to find the right Realtor? Look no further.

If you are contemplating a purchase of a new home, be sure you know about all of the recurring costs; Private Transfer Taxes, Mello Roos, HOA Fees, and other "unspoken" costs could double your mortgage payment or make it difficult to sell when that time comes. More often than not, using a Realtor to purchase a new home will get you a BETTER deal than if you work only with the developer. If you register with a new development without me being with you, the builder does not have to honor our relationship -- and they won't. Landscaped backyards, upgraded kitchens, maybe even a pool are possible incentives but the builders will have the upper hand unless you know what to say and when. And it won't cost YOU anything. The builder/seller pays for my buyer agency fee. This is also true for bank-owned properties. Call me today to get started with your search.

You can get my privacy policy here.

Sacramento Real Market Commentary - 2007 12

Jay Emerson, Broker, e-PRO (The Galster Group) — Thu, 03 Jan 2008 13:38:03 -0600

It's all about cashflow! And it's important to know the difference between GROSS and NET cashflow. While some may think it's smart to take a loss to offset other profits in their portfolio, that's not how people get RICH from owning real estate. Get out of the rat race by getting NET passive cashflow to exceed your monthly expenses. Our portfolio is on the right path to accomplishing that goal. Let me help you find the best investment on Earth -- earth. And if you're a 1st-time buyer, let me help you find a great starter home in a solid neighborhood.

The Market: Inventory is declining because 1) sellers want to relax over the holidays, 2) the good properties are selling, 3) Short Sales are becoming bank-owned and the banks now have to take over, and 4) these are the slow months.
The Media: It's still gloom and doom, according to the papers.
Congress: Yes, they passed the mortgage "help" bill. In reality, it helps VERY few people and really means the tax payers eat the damage caused by speculative investors and fraudulent lenders. Thanks, Congress. Merry Christmas to you, too.
My counsel to Buyers: We are much closer to the bottom than the top. If you are renting, I have a litmus test to evaluate your buying position. Call or email me to request this informative examination of your goals. If you want to move up to a larger home and can be realistic about pricing your current property, there are some good properties now and serious buyers are actively looking. Call or email me for the buyer's questionnaire that will help us both understand and narrow your requirements. If you are looking for investment properties that you will hold for 2-7 years or more, be very enthused and call me for a free report on buying bank-owned properties.
My counsel to Sellers: If you want an honest opinion and analysis, call me. The bank-owned properties are selling which is impacting your comparables. The longer a bank-owned property is on the market, the lower your comparables are when it finally sells. Action begets results. Contemplating action begets ulcers and bed sores.
My counsel to Investors: Do your homework. Drive the neighborhoods. Crunch the numbers. There are deals that will pencil. Call me for a private web site.
Bottom line: The sub-prime issue is a fraction of 1% of the total mortgage market. And when someone says "but more is coming", keep your perspective because it will still only be a small portion of the $9.9 TRILLION mortgage market. If $80 BILLION is in default, banks will only be losing (maybe) 25%. That's $20 BILLION of the $9.9 TRILLION ( = .2%). But I don't want to be trite about it. There are some good people in bad situations. May God bless them.

Remember, new home builders WON'T deal with you UNLESS you have a Realtor representing you. Many have purchased a new home only to find that their "specials just ended yesterday". That does not have to be true but is highly probable unless I am with you to negotiate from day 1. If you register with a new development without me being with you, the builder does not have to honor our relationship -- and they won't. Landscaped backyards, upgraded kitchens, maybe even a pool are possible incentives but the builders will have the upper hand unless you know what to say and when. And it won't cost YOU anything. The builder/seller pays for my buyer agency fee. This is also true for bank-owned properties. Call me today to get started with your search.

You can get my privacy policy here.

http://www.jayemerson.com/, Realtor, e-PRO

Sacramento Market Commentary - August 2007

Jay Emerson, Broker, e-PRO (The Galster Group) — Sun, 30 Dec 2007 02:35:41 -0600

Goodbye August! Hello September! This heat is making me look forward to Fall. Thank goodness the nights have been cool. Frequently the heat at the State Fair is unbearable but we enjoyed it yesterday and actually started shivering in the evening. I'm sure the Dippin' Dots helped! Our Real Estate market is still mixed. Some zip codes and areas are doing much better than others. If you want specific information about your zip code, I'd be happy to get that for you. My Historical Housing Data chart below shows the Sacramento trend which, as you know, is made up of many zip codes. There is still an increase in mortgage defaults and bank-owned properties but the sales figures are still healthy. People are still selling and buying houses. I know because I've sold 2 just in the last 6 weeks. There is some impact being felt in the lending industry; offices closing, consolidations, and portfolio freezes. This, in turn, is making lending rules a little more restrictive. If the money had been tighter in the first 4 years of this century, our expectations wouldn't be so out of alignment with reality. But, in analyzing the numbers, this is a stabilizing market. It is correcting from the hyper appreciation and sellers/builders are adjusting their expectations. I have added several new charts that depict the momentum of change. Investors should use these types of trend figures to understand changes and to project changes in those trends. Remember, these don't depict raw data but, rather, the momentum behind changes in the raw data. For Investors "timing" is more important than "location", in real estate.

My counsel to Congress: Don't try to band-aid the situation because it's an election year. The band-aids don't last long and can do more harm than good. The market will take care of itself.

My counsel to Buyers: Time is still on your side. The inventory levels allow you to really find your dream home. And with some prices still declining, this is the BEST time to move up to a larger home. The logic is that the price of the larger home has declined in real dollars more than your current home. But, the longer you wait, the trend may switch and the logic reverses. Rates may increase or Congress may introduce something without projecting the consequences. If you have to sell low in order to buy low, remember it is no different than selling high to buy high. Let me help you find the right home for you.

My counsel to Sellers: There are alternatives to reducing your price. Rate buydowns or incentives (seller credits, etc.) can help you allure buyers and their agents without a commensurate reduction in your net proceeds. Buyers have time and choice. Be very careful about hiring a REALTOR® based on the highest listing price. This may be a sign of the least competent agent. I can help you sell your home and find a new one using unique and effective marketing. But I won't promise you last year's price. It's the market, not the seller, the agent, or the appraiser that dictates what a buyer will pay. Remember, the higher you list, the more you chase the downward slope.

Bottom line: The market requires different marketing and staging. Let me provide my services to help you find your dream home and/or get the highest net price for your home. P.S: If you know someone who needs a REALTOR®, please forward this email to them or send me their contact information and I'll follow up. I will provide excellent service.

Sacramento Market Commentary - 2007 11

Jay Emerson, Broker, e-PRO (The Galster Group) — Mon, 03 Dec 2007 17:42:27 -0600

Who woulda thunk it? Sacramento real estate is getting affordable for first-time buyers and investors again. Remember, following the crowd doesn't make you successful. And if you're hoping for a 100% loan with Cal HFA down-payment assistance, you better hurry; it's changing.

The Market: Bank-owned properties are abundant and banks don't want to own them.
The Media: Six months after the bottom, the media will declare "the bottom". Don't count on them to forecast it. My crystal ball is as good as the charts below. No single piece of the data tells the complete story.
Congress: Most of them have stumbled onto having multiple real assets and really don't understand the market.
My counsel to Buyers: If you are renting, have cash for a down payment, and plan to live in a new home for 3+ years, this is YOUR market. If you want to move up to a larger home and can be realistic about pricing your current property, this is YOUR market. There are some pre-built portals on my home page (http://jayemerson.com/).
My counsel to Sellers: Get creative about what you will do for a buyer (e.g., pre-pay HOA fees; carpet/flooring allowance; realistic pricing). If you want an honest opinion and analysis, call me.
Bottom line: Home sales are historically lower in the winter months so I don't foresee a strong upswing. We have already seen a decrease in inventory (except for REOs) as sellers want a peaceful Christmas time. Sacramento's median home price is down to $305,893 (October) while new escrows jumped by 34%. The people who are contrarians are entering the market and getting the best homes. Waiting means getting left-overs (yummy for turkey, not houses).

P.S.

http://www.jayemerson.com/

Put Skin In The Game, Please

Jay Emerson, Broker, e-PRO (The Galster Group) — Tue, 06 Nov 2007 17:42:05 -0600

Many people have asked me: "When are real estate prices going to hit the bottom?". The only answer I can give is: "I don't know but when we know, it will be 3-6 months ago".

One thing is true, though. The Sacramento Bee will always be late and usually wrong. If you follow the newspaper, you will be suffering from the crowd mentality and nobody gets ahead by acting with the crowd. Similar Wall Street knowledge: You can't beat the market by investing in the market.

Facts to keep in mind:

The crowd had a sense of urgency from 2001-2004. Many of them were so desperate to get in that they leveraged their purchase to the hilt (100% financing; zero-down; cash-out refinance). Now many of those who had banks willing to print money for them are giving their properties back to the bank.
- It follows that a contrarian approach (a millionaire's approach) would be to get in the game now. For the security and safety of your investment and for those around you who are affected by market valuations, PUT SOME SKIN IN THE GAME!
At the tail end of the upswing (2004-2005), even diligent investors could not see that their well-designed exit strategy(ies) would disappear. Namely, investors foresee refinancing or selling their highly-leveraged properties before rates adjust upward. Refinancing and selling are now more difficult to accomplish. But who would have thunk it?
- It follows that an experienced (read "bruised") investor would now consider unforeseen market shifts in their exit strategy. And PUT SOME SKIN IN THE GAME!
The markedly worst decade in California real estate was the 1990's. However, those who purchased their current home in that decade are still doing well.
- It follows that a long-term hold approach will rarely go wrong in California. It also follows that timing is as critical as location.

So if you want to move up to a larger home or invest where your returns get taxed at a lower rate, call me to start your search. The market is on your side and so am I. But I will most assuredly urge that you PUT SKIN IN THE GAME! The LAST thing I want is a client who has to fold and walk away from their home/investment.

And remember, "Freedom of the press is limited to those who own one." A.J. Liebling

6853 Mellodora Drive, Orangevale - A 3/2 Sanctuary

Jay Emerson, Broker, e-PRO (The Galster Group) — Sat, 03 Nov 2007 10:16:50 -0500

Jay Emerson | The Galster Group | jay@jayemerson.com | 916-517-9606

6853 Mellodora Drive, Orangevale, CA

Orangevale 3/2 Sanctuary! Priced to Sell!

3 Bdrm Single Family House

offered at $319,000

Year Built	1976
Sq Footage	1,296
Bedrooms	3
Bathrooms	2 full, 0 partial
Floors	1
Parking	2 Car garage
Lot Size	.160 acres
HOA/Maint	$0 per month

DESCRIPTION

Stunning, move-in ready 3 Bed, 2 Bath home. Clean with many recent updates & paint. Large lot in quiet area with good schools. Energy efficient solar tubes and ceiling fans. Entertain in front courtyard or rear patio. Nicely landscaped yards with auto sprinklers. Refrigerator, washer & dryer can be included. Roof is certified. There is value in this property. Make an offer today! MLS# 70060832. Realtor License # 01788488.

see additional photos below

PROPERTY FEATURES

Central A/C	Central heat	Fireplace
High/Vaulted ceiling	Family room	Living room
Breakfast nook	Dishwasher	Refrigerator
Stove/Oven	Microwave	Washer
Dryer	Laundry area - garage	Balcony, Deck, or Patio
Yard

OTHER SPECIAL FEATURES

Solar Tubes

Ceiling Fans

Courtyard w/Fountain

New Windows & Sliders

Newer Paint

Auto Sprinklers Front & Back

ADDITIONAL PHOTOS

Seller contact info:

Jay Emerson

Lic# 01788488

The Galster Group

jay@jayemerson.com

916-517-9606

For sale by agent/broker

Equal Opportunity Housing

Posted: Dec 29, 2007

Sacramento Market Commentary - October 2007

Jay Emerson, Broker, e-PRO (The Galster Group) — Fri, 02 Nov 2007 13:40:08 -0500

It's time again for my real estate update! I will keep it brief and in bullet form. ;-)

The Market: It's still a buyer's market. Inventory is high; rates are low; prices are down; sellers/banks are awake.
The Media: No change -- they are still negative ("it's Bush's fault").
Congress: They are hoping to get [re-]elected but some/most should be fired
My counsel to Buyers: Get pre-qualified and focus your requirements; call me for a private internet portal based on your search specs.
My counsel to Sellers: If you MUST sell, call me for a candid and thorough analysis of what the market may bear.
Bottom line: The downward momentum of all trends is starting to decrease. The winter months are historically the slowest but banks won't wait to list their assets and minimize their losses. Historically, housing downturns average 27 months. We are in the 25th month of the current downturn. The national median price of a resale home is ~3% higher than a year ago and the pending sales index is moving back up. There may just be some light beginning to shine at the end of this tunnel!

P.S. I'd love to compete for your business and appreciate any referral you send me.

Sacramento Market Commentary - July 2007

Jay Emerson, Broker, e-PRO (The Galster Group) — Wed, 25 Jul 2007 13:58:21 -0500

I'm sure you've noticed that the Real Estate market has been taking a lot of heat lately. Most of the heat is unwarranted because this is a normal, healthy market. It is correcting from the high and hyper-active market of 2001-04 but it is not under siege. Whether it's the unethical lenders who have forced many people into perilous situations or homeowners who expected their home value to continue its unabated increase, some adjustable mortgages are increasing and home prices are decreasing. It's a tragic situation for those who have to give up their homes. For the others who are able to hunker down and let the storm pass, be assured it will pass. My crystal ball is foggy on the future but this down-cycle, like all other real estate cycles, is expected to pass. But when will it pass? Ah, Grasshopper, that's the million-dollar question. For some unfortunate folks, they don't have the luxury to wait for that answer.

The tragedy for one can be an opportunity for another. I don't like to take advantage of people in peril. So I want to make it known that there are ways to help those who are in a bad situation. Owners can ask their lenders for some time to make payments. They can ask their lender to "take a smaller loss" (in banking, there's the philosophy that "the first loss is the best loss"). This is what's called a Short Sale and it's the option before Foreclosure. They can ask their lender to take the deed in lieu of Foreclosure. After a Foreclosure, and the unsuccessful auction of a foreclosed home, the property becomes "bank-owned" (REO stands for Real Estate Owned). There are currently many short-sales and REO properties in inventory and very few areas are immune. For example, by MLS count there are 1,656 properties being sold short and 1,440 REO properties in Sacramento County right now -- of the total 10,120 Active listings. In Placer County, there are 270 short-sales and 169 REOs in inventory -- of the total 2,991 Active listings. For El Dorado County: 57 short-sales and 67 REOs, of the 1,692 Active.

There are always some homes and people in this situation. There seem to be a large number in the current market and the local media is certainly dwelling on the 20% rather than the 80%. And that is the nature of our media -- bad news sells news.

The good news is that builders and sellers are reducing prices and giving BIG incentives and the market is correcting itself. That's what is supposed to happen in a market that is driven by supply and demand (rather than a bored Congress). If you want me to help you find some gems, they are certainly available and there are more and more sellers who are becoming motivated to take reasonable but lower offers.

My counsel to Buyers: The longer you wait, the riskier the situation. Rates may increase or the cycle may turn upward. If you wait for the local newspaper to signal the "upturn", it will probably be hidden within the negative tones and headlines AND you will be part of the crowd. You have the luxury to find a home that meets all of your requirements. If you have to sell low in order to buy low, remember it is no different than selling high to buy high. Let me help you find the right home for you.

My counsel to Sellers: Buyers have time and choice. Be reasonable about pricing and be aware of your competition. Certain price ranges are getting more activity and I have access to this proprietary data. I can help you sell your home and find a new one using unique and effective marketing.

Bottom line: A home is an important place. Let me provide my search, analysis, negotiation, pricing, packaging, and promotion services to help you in this event.

Jay's Juicy Picks - Ripe Listings in Sacramento, El Dorado

Jay Emerson, Broker, e-PRO (The Galster Group) — Thu, 12 Jul 2007 02:50:30 -0500

This is truly a buyer's market. The choice is great for buyers and sellers are starting to get really motivated. Here are the property listings that my research has brought to my attention. These are ripe for the right buyer. If you want to view them, get more details or would like to get a private portal that gets updated automatically, contact me. Let's go fishin'! (For deals, that is.) If you are not in the market to buy or sell, but know someone who is, please forward this to them. I'll thank you ten times over.

Quote for the month: "There's only one way to succeed in anything, and that is to give it everything." Vince Lombardi

Jay's Juicy Picks Volume 1, Issue 2 - July 2007

My Featured Listing

Mellodora Dr, Orangevale - 3bed 2 bath; Home SqFt: 1296, Lot SqFt: .160; Status: Active, $335,000; Original List Price: $349,700; Days on Market: 30 --- A SANCTUARY! MUST SEE! Listing #70060832 -- www.JayEmerson.com/6853-Mellodora.asp /// http://activerain.com/blogsview/142889/Orangevale-California-95662-A

Previous Picks - Updated

Archetto Drive, EDH - 4bed 2bath; Home SqFt: 2052, Lot SqFt: .177 ac; Status: Active, $464,900; Original List Price: $609,000; Days on Market: 263+

Brightstone Cir, Folsom - 2bed 2bath; Home SqFt: 1249, Lot SqFt: .088; Status: Pending, $359,995; Original List Price: $379,000; Days on Market: 299+

Rita Lou Way, CH - 2bed 2bath; Home SqFt: 1169, Lot SqFt: .160; Status: Active, $282,500; Original List Price: $312,375; Days on Market: 134+

Current Picks

Oak Arbor Ct, FO - 5bed 3bath; Home SqFt: 2775, Lot SqFt: .385; Status: Active, $748,000; Original List Price: $748,000; Days on Market: 58+ --- Sellers are Motivated!

Lafayette Dr, EDH - 5bed 3bath; Home SqFt: 2876, Lot SqFt: unkn; Status: Active, $599,000; Original List Price: $699,900; Days on Market: 248+ --- Bank-owned Property!

Darling Way, Folsom - 5bed 4bath; Home SqFt: 2774, Lot SqFt: .165; Status: Active, $480,000; Original List Price: $535,000; Days on Market: 137+ --- Bank-owned Property!

This information is reliable but not guaranteed. Property availabilities may change without notice.

The Fourth Awakening

Jay Emerson, Broker, e-PRO (The Galster Group) — Mon, 09 Jul 2007 03:53:51 -0500

The highly acclaimed book The E Myth Revisited by Michael Gerber is a great tool for people who think entrepreneurship is easy. In fact, it's a great book for anyone contemplating a self-employment endeavor. In the book, Mr. Gerber refers to "seizures" as the events that awaken individuals to the truths that are otherwise masked by difficulties or habits. Out of deference to people who suffer from unannounced and unplanned cerebral malfunctions, I call my events "awakenings". And I claim to have had many. I hope to have more so cannot give you, the reader, a total number as my telly-o tally-o count is still clicking.

This is the current tally and explanation of my/our awakenings, to date:

Our goals - My wife and I realized that each day at work for a corporation was a day we were striving to achieve someone else's goals. As time went on and the world got smaller and borders thinner, the goals handed to us became less aligned with our values.
Our legacy - Through education and association with people smarter than us, we were awakened to the truth about probate. We could work hard for many years only to see the government take a large share of what we were able to save for our children.
Our team - For my stubborn soul, it was difficult to finally admit that I needed help. There isn't enough time in a day to provide "feet on the ground", knowledge of tax laws, and other skills required to get out of the rat race.
Our investments - Our money rules have undergone a transformation. We realized that the stock market is not the only (nor always the best) place to pursue portfolio or passive wealth. Stock brokers will always disagree with real estate brokers about how historical data supports market versus real wealth. In fact, they are both right and both wrong. We are always striving to protect "our phoney baloney jobs" and, in as much, sometimes speak in half-truths.

This article is focused on this fourth awakening. The first three seem a bit obvious as to their truth and solution however I will indeed follow up with some information about each. And, God willing, we will have other awakenings that motivate us to continue our transformation.

Beyond the Market (footnote 1)

Pie makers favor their own pies, especially when a potential customer inquires. Investment advisors urge diversification but don't see outside of their offerings. That is, the pie maker only sees their filling. True diversification calls for expanding "beyond the market". We were convinced to seek a different pie maker and, in general, have amassed a handful of pie specialists to create our own bakery (portfolio).

These are summaries of our experiences with non-traditional investment vehicles that aren't found at the brokerage houses or at "the curb". We are not licensed to give advice with or in relation to any of these investment vehicles. As with any investment, your risk aversion cannot be determined except by you and although we are attempting to produce passive wealth, some of these endeavors take more time than others (with no warning). Please consult your own team of professional advisors to understand the fit and plan accordingly.

Sources

It all starts with capital. These are funds that would otherwise sit idle, collect mutual fund charges, or be a part of that equity which, for most, only exists on paper. There is risk involved in our strategy and cannot be suggested or recommended. Each person has to balance this risk for themselves. We were able to buy California real estate at the right time which gave us a tremendous advantage. The equity from this asset has helped us go beyond the market.

I cannot stress enough the enormity of the risk in this action. Believe it or not, the possible exit strategies for pulling equity from our primary residence are: 1) Sell the house and, 2) Pay off/down the mortgage. The former is not a desired action for a young family happy in their home. The latter is an action that, short of a required windfall, would put us back in the "paper equity" situation. This investment strategy really motivates only one action: Produce enough cashflow to cover the increased mortgage payment.

Another lesser-known source is a self-directed IRA. Once we left our corporate jobs, we took our hefty 401Ks and put them into individual retirement accounts that provide more flexibility (and risk).

Uses

Allocating the capital is never-ending. For each investment there needs to be an exit strategy followed by a plan for the funds that become available. Because each investment make take some time for maturity and return of cash, it is important to have enough reserves on hand to sustain your standard of living [which may require revisiting].

Restaurant

We eat. Therefore we invested in a start-up restaurant and its holding company (Z Square http://www.z-square.com/) is one of our favorite investments but is in an industry wrought with failures and "money pits". We have been lucky since the founder has structured the entities and investment vehicles in a way to mitigate some of the risk.

Specifically, we started with promissory notes which then converted to equity (riskier). We now enjoy monthly profit distributions. With startup restaurants, there are long lead-times.
The key success factors for this investment were 1) the team that is in charge and, 2) how the team is differentiating its service. Our founder has stuck to plan and provides supporting data on a regular basis. The team has a true belief in and commitment to vision.

Oil & Gas

We use oil and some of its derivatives. Therefore we have established a strategy for investing in oil and energy. In time this will generate a great deal of passive income while providing some of the tax advantages of real estate ownership. This is NOT an investment for the week of heart or those looking for quick cashflow.

Each well can be a private placement; most in partnership with big oil; well-head ownership
Funds are spread across many wells U.S Gulf area; long lead-times but getting shorter
Exploration expense is deductible from active income (Gen. Pner; see your CPA); hedging cost of gas

Real Estate

Dirt can't go offshore but, in some cases, our money can go offshore for dirt. Therefore we have invested in real estate for appreciation and cash flow. Our self-directed IRA capital has come in handy for these investments, except for the rental properties.

Notes in acquisition of raw or improved land; Pre-Construction notes; convertible
Rental properties; passive and distant landlord
Latin America investment properties; "green" retirement homes (footnote 2)

Lending

We have good credit and money. We have various notes and are leveraged by others.

Use of self-directed IRA dollars (kids too; approved investments; see your CPA)
Unsecured, slightly secured, and firmly secured; variety of rates
Flexibility in interest receipts
Entity startup and debt transfer

These pie charts show typical portfolio mixes and how they have changed for our situation. Some of these investments may not be suitable for risk-averse investors. If you want to learn more about any or all of them, please contact me.

(footnote 1) This information is solely the opinion of the author, Jay Emerson, and should not be construed as financial advice or a recommended strategy.

(footnote 2) WARNING: THE CALIFORNIA DEPARTMENT OF REAL ESTATE HAS NOT EXAMINED THESE OFFERINGS, INCLUDING, BUT NOT LIMITED TO, THE CONDITION OF TITLE, THE STATUS OF BLANKET LIENS ON ANY OF THE PROJECTS (IF ANY), ARRANGEMENTS TO ASSURE PROJECT COMPLETION, ESCROW PRACTICES, CONTROL OVER PROJECT MANAGEMENT, RACIALLY DISCRIMINATORY PRACTICES (IF ANY), TERMS, CONDITIONS, AND PRICE OF THE OFFER, CONTROL OVER ANNUAL ASSESSMENTS (IF ANY), OR THE AVAILABILITY OF WATER, SERVICES, UTILITIES, OR IMPROVEMENTS. IT MAY BE ADVISABLE FOR YOU TO CONSULT AN ATTORNEY OR OTHER KNOWLEDGEABLE PROFESSIONAL WHO IS FAMILIAR WITH REAL ESTATE AND DEVELOPMENT LAW IN THE COUNTRY WHERE THIS SUBDIVISION IS SITUATED.

Sacramento Market Commentary - June 2007

Jay Emerson, Broker, e-PRO (The Galster Group) — Mon, 09 Jul 2007 02:16:29 -0500

The local Real Estate market may be at the bottom. Recent research has shown that over 50% of the national markets have stabilized. Sellers and Builders are giving a lot back to buyers and mortgage rates, although creeping upward, are still at historic lows. The subprime mortgage issue is isolated to a small percentage of mortgages and recent borrowing activity shows Lenders and Buyers are opting for fixed rate loans and Private Mortgage Insurance rather than second loans. And now Lenders are being forced to validate income.

Remember that "you don't get rich by following the crowd". But you DO have to purchase for the right reason. If you're purchasing a home for your family as shelter, then location is tantamount. If you follow a 2 to 3 year cycle of moving up, then timing is more critical than location. And with the choices available, this is a great market.

I don't have a crystal ball to know if the "bottom" is behind us. However, waiting means you could forego many of the discounts and buy-down opportunities that Sellers and Builders are giving. Here are my vital signs: Mortgage rates are at historic lows and the slow upward movement means yesterday's mortgage payment would have been lower than today's; loan defaults and foreclosures are high but are proven to be isolated to rural areas where construction was high in recent years (the higher the supply, the lower the price); new home permits are low; existing home sales are low but have increased in recent months -- it is the buying season; inventory/choice is high; and the economy is strong. Most of these are depicted in the embedded chart below.

My counsel to Buyers: The vital signs for your area of interest need to be pulled out but there are local pockets that are showing improvement (downtown, Yolo, and others). The strength of the economy and increasing interest rates may signal an end to the decreasing market. If you're serious about moving up or down, there are some screaming deals to be had.

My counsel to Sellers: Buyers are expecting some compromises. They can buy a brand new home with deep discounts and cash back or they can buy your home at a 2004 price that you think is still reasonable. Your expectations may be out of alignment with reality.

Bottom line: My strategies as a professional Realtor® (search, analysis, negotiation, pricing, packaging, and promotion) are based on your requirements. I utilize the best tools and techniques for doing my job for you. Let me help you find the right opportunity and/or maximize your home's potential.

P.S: If you know someone who needs a Realtor®, please forward this email to them or send me their contact information and I'll follow up. I will provide excellent service.