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Real Estate Agent with BPO Homes DRE# 01350020
I am in my mid thirties and was born and raised in the Bay Area. I have to say that I have never experienced a market like this before. In 2001, when I got my real estate license, the market was stagnant and I was able to learn about short sales and bank owned properties. I figured that this was the norm. The market consisted of about 80% traditional sales and 20% short sales and bank owned properties. At that time the dot com companies were going under with the exception of a few companies like Google and EBay. People were just starting to feel the crunch of a market with less available credit. Fast forward 3 years to 2004 and we find ourselves in a sellers market, sellers could almost name a price and 10 buyers would outbid each other paying the seller $50,000 or more over asking. What brought this about? Easy credit; to get loan prospective buyers would simply state income and assets sign a loan application and buy any home they wish. It seemed as if most of these applications were never even reviewed. If one bank said “no”, there were 30 more that would say “yes” not to mention the multitude of online lenders springing up everywhere that would also lend. A lot of realtors, flippers, mortgage lenders and brokers got used to this as the new norm; however at that time never would I have imagined what was on the horizon. As we approached 2005 and 2006 a market slow down appeared as I sold my newly renovated condo and bought another home. I noticed that when we put the condo on the market, unlike a month or two before, calls, showings and activity started to slow slightly. With my busy schedule, I just kept doing what I had been, while ignoring the signs. Then came the summer of 2007 and lenders really started looking at the loan applications and saying can you verify this or that. I again thought this was an upcoming blip and we’d be back to normal, but this was not the case. While in escrow with a highly qualified buyer the bank suddenly said they were out of money and couldn’t fund his loan. In shock we searched and search for a lender & none would give us a loan. Now looking back this was the mark of the beginning of the upcoming recession. How do we explain or decipher the times we are in now and how long will they last? Are the bailouts and new restrictions helping or hurting? I looked up the definition of “recession” and it is defined as follows in the American Heritage Dictionary: “the act of withdrawing, an extended, moderate decline in general business activity, a ceremonial exit”. I then looked it up in Wikipedia; “business cycle contraction, a general slowdown in economic activity over a period of time.[1][2] During recessions, many macroeconomic indicators vary in a similar way. Production as measured by Gross Domestic Product (GDP), employment, investment spending, capacity utilization, household incomes, business profits and inflation all fall during recessions; while bankruptcies and the unemployment rate rise”. According to Blacks Law Dictionary; “recession” is defined as “a period characterized by a sharp slowdown in economic activity, declining employment, and a decrease in investment and consumer spending “. Now my definition; “a recession is a time where everyone should “recess” their income and adjust their expenses in accordance with the current economic times, with an emphasis on ridding unnecessary expenses. Since the downturn I’ve began listening to alternative media and reading a lot & I wouldn’t consider myself as someone who loves to read. I even hear phases and terms that never made any sense to me suddenly making sense and in places I never imagined seeing them. Last week my wife and I went to see the Book of Eli. I have to say I loved it. A statement made by Eli about the times prior to the apocalyptic world in which the film takes place, resonated with me. While sitting around a fire, Eli pointed out this profound and simple fact that “People had much more than they needed.” With the economic policies that are being passed, many of which being pro banks and large corporations, we are headed for a depression, inflation or possibly hyper inflation; just chart candy, bread, milk and gas when you are out shopping are they going up or down? It is time for us all to look at our expenses and “recess”. Saving and nest eggs are what we should be building and if more astute buy precious metals, commodities or things you can touch. Watch & listen to what other governments like China and India are recommending their citizens to do, its ok to save in dollars, but also buy a few metals & commodities (this will protect some of your assets if inflation hits) and keep some rainy day cash out of the banks in case of a bank holiday when you’ll have no access to your cash in the banks. Lastly, when this market truly hits bottom sell those metals & commodities and use them to be in a position to buy a few cash flowing assets that will support you in a downturn or possibly in retirement. I will end with this quote from former President Thomas Jefferson from 1802: In regards to this quote, I would also apply it to large pharmaceutical companies and multinational corporations like Wal-Mart & Mc Donald’s. 'I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around the banks will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered..' Recommended readings & videos: The Secrets of Oz by Bill Still Rich Dad's Advisors: Guide to Investing In Gold and Silver: Protect Your Financial Future by Robert T Kiyosaki The Trends Journal by Gerald Celente
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"Deus te amat and so do I"


Redmond Realty Group
Peter Redmond, Realtor
Real Estate & Loan Consultants
Dre# 01350020
Direct: 408-313-5128
Fax: 408-493-4705
Email: Peter@PeterRedmond.com
Web: www.PeterRedmond.com

P.S. We are never too busy for any of your referrals!
Joan Congilose
New Jersey Properties - Manalapan, NJ

I've been a realtor for over 21 years & when  I entered interest rates were in the double digits & we were busier than ever. It is a cycle new agents enter the market when it is hot & drop like flys when things get a little tough. In order to survive in any market it is our job to turn lemons into lemonade. If it is a bad market for some consumers, it is a good market for others. Go out & find that niche & you will do fine in any market. Have a prosperous 2010!

Jan 27, 2010 01:11 AM