Kenmore Undressed

Excessive Costs of the New Kenmore City Hall? Express Your Opinion to the City Council

In my November 6th post, I wrote that the development company for the future Kenmore Village  has asked for a one-year extension on the first phase of the project due to global financial pressures. It seems that these uncertain times have also focused attention on the New Kenmore City Hall. In today’s edition of the on-line Kenmore Reporter, a number of Kenmore residents expressed concerns regarding both the scope and cost of the project. Among these concerns are:

• Hire an independent, unbiased firm to determine which features could be eliminated that would reduce costs.

• Reduce the size of the building to 16,000 square feet, yet retaining sufficient space to accommodate city employees and permit citizens to conduct business in an efficient facility.

• Remove plans for an underground parking facility.

• Postpone the construction of city hall until funds become available without creating debt. There is no emergency in this project, a delay may be in the best interest of our citizens.

• Reject any proposal that requires funding by bond. In the event a bond is considered, submit it to a vote of the people.

You can review the complete letter to the editor by clicking on this link: http://www.pnwlocalnews.com/north_king/bkn/opinion/34612449.html

The authors of this letter to the editor are asking Kenmore residents to contact the City Council to express opinions or concerns regarding the negative financial exposure of this project. If you wish to contact the council simply click on the picture below. This will take you to the city directory:

Mr. Freeze the Financial Curmudgeon: Something for Everyone to Be Angry About!

Mr. Freeze the Financial Curmudgeon has been trying to avoid having an apoplectic seizure. Let Mr. Freeze tell you why…..I promise to be brief:

It was recently revealed that the Federal Reserve handed out $2 Trillion in emergency loans to a number of corporations. Gosh if it’s not one ”bailout, it’s another.” The problem is the Fed will not reveal which corporation received the loans or the terms under which the loans were given. This is in addition to the $700 Billion bailout (rescue) that was shoved  down the throat of Congress. Henry Paulson can’t seem to get his story straight on that money.

DO YOU TRUST THIS MAN?

Standard operating procedure for the current administration is to conceal facts from the American people. If it’s not energy policy, then it’s economic policy. What’s truly disturbing about this most recent lack of honesty by Henry Paulson and the Fed is that it all seems to be intended to help corporate interests without any accountability. At the same time there are a lot of hard working Americans wondering why a growing army of banks, car companies, insurance companies and many other institutions are asking for government money to bail them out. Simply put, it’s a travesty and it’s criminal.

Mr. Freeze the Financial Curmudgeon looks forward to the Obama administration. It will be nice to see adults in charge of things again.

Kenmore Village Update: Financial Markets Affect Construction

Global financial problems manifest themselves in many ways. Here in Kenmore, we are not immune to the current challenges. An important example is this week’s Kenmore City Council meeting on November 3rd.  Kenmoreblog.net reported on this meeting and wrote that Urban Partners, the development firm for the future Kenmore Village, asked the Kenmore City Council for a one year extension to close on the first phase of development. This extension could be as late as 2010.

According to Dan Rosenfeld, an Urban Partners Principal, there are two main reasons for the exension: 1) frozen credit markets and 2) the reluctance of specialty grocers to commit to new locations. Everyone is feeling the pressures of the fragile financial markets.It is reassuring to note that Mr. Rosenfeld reiterated his commitment to the project and that the project fundamentals were still in place.  The City Council directed the city staff to prepare a 90 day extension in order to allow time for a public hearing to consider Mr. Rosenfeld’s request.  

Avoid Public Embarassment: Set Up an RSS Reader and Stay Informed!

Sara Palin’s ill-fated interview with Katie Couric has been beaten to death by the pundits, comics and the press. One of the most embarrassing moments for Mrs. Palin was when she was asked about what publications she read to keep up with current events. As you know, she was unable to name any. Arguably, this was a disaster for her reputation. She seemed uninformed or, worse yet, apathetic.  In her defense, it’s obvious that her handlers failed to prepare her properly for the interview. What VP candidate would have allowed an interview with the press without reviewing the questions prior to the event? 

But my point here is not to belittle Sara Palin. My point is that she could have avoided this whole situation had she simply set up a Google RSS Reader! Yes, dear friends, she would have come across as a well-educated, thoughtful and “hip” Vice Presidential candidate had she simply said: ”Why Katie, I’m glad you asked me that. I happen to have an RSS Reader in Google and I keep up with 20 publications each day. The best thing is, I don’t have to spend hours doing it!” 

So, what is an RSS Reader and how do you set one up? Let me explain. On most Internet sites you will see this icon. Please click on it to watch a short explanation of RSS Readers:

RSS or REAL SIMPLE SYNDICATION refers to an Internet formatting technology that allows you to retrieve content from your favorite on-line publications, blogs or websites and to display them in your “reader.” This way you can create a dynamic “current events” platform to read about any or all of your interests. There are a several RSS feeders out there. I’m going to show you how to set up a Google Reader. Are you ready?

1) You need to create a Gmail email account. Just go to www.google.com and set up your address.

2) Next, select the “more” drop down menu and then select “reader:”

3) You’ll then click on the “add subscription” icon……….

Which opens up the address box and asks you for the address:

4) I like to use the Seattle Times website as an example because the RSS icon is easily found at the top of the page as depicted below. Now, click on the icon which will bring you to a page that displays RSS feeds for many different categories:

In our example, I’ve selected Food & Wine as one of my favorite subjects. Of course, as a Realtor (c) I’ve selected the RSS feed for real estate articles. The beauty of this system is that you can select any Internet publications (with feeds) to provide you with up-to-date information about virtually anything.

5) To acquire the address of the Food & Wine feed, simply right-click the subject. This will bring up a window with a URL address. Copy this address and then paste it into the reader:

Presto! You’ve now set up a direct feed from the Seattle Times which will place all the Food & Wine articles right into your reader. This is really cool! I do have some advice: Don’t put too many feeds in. I have about 20 publications in my reader. If I don’t purge articles for a couple of days, the reader may produce 700-800 articles.

I’ve met a few people who question the value of an RSS reader claiming that they don’t have enough time in the day as it is. My answer is that using an RSS feed allows one to stay informed in an increasingly complicated world by allowing the reader to select subjects in an orgainzed, concentrated way. You spend less time looking through magazines and websites and get right to the heart of the matter. Give it a try, what have you got to lose?

Picture courtesy of roque9

Delusion Comes in Many Forms: Facing Facts Can Be Difficult

I spoke with the Broker of a fairly large real estate brokerage the other day. She is one of those consumate optimists (don’t you just hate those people?), but even she has been shaken by the current real estate market. “The phones aren’t ringing,” she said. “It’s awfully quite out there. I’m worried.” 

The truth is, she should be worried. The deteriorating economy and upcoming election have had a chilling effect on home sales both here and nationwide. It has been rough for sellers and their agents. Buyers are also facing difficult lending challenges. What amazes me is that a lot of people out there have not come to terms with reality. Here are two perfect examples:

NUMBER 1: THE REALTOR WITHOUT A CLUE

I’m a contributor to a Real Estate Blog called Active Rain. Over 100,000 agents write blog posts on this site. Yesterday, I read a particularly interesting blog by an agent who was asking if she should take a listing knowing full-well that the seller was unrealistic about the price (way too high) and the seller didn’t even want a sign on the property. She rationalized that they might get lucky and sell the home (even though the home has been previously listed ), or that her virtual tour would attract the right buyer or this listing might generate residual business for her because “she’ll do a great job!”  The fun part was reading almost 70 comments telling her that it’s ridiculous to take an overpriced listing (no matter what the market conditions are). From her response to the comments, I have a strong sense that she’s going to take the listing knowing full-well that she is not doing her clients any favors. This is why our industry has earned such a bad reputation and why this downturn may very well be a good thing. It’s going to eliminate the non-professionals……but:

2) HOMEOWNERS ARE DELUDING THEMSELVES AS WELL

Zillow, one of the most popular Internet home value sites published some interesting findings regarding home owner expectations in the current market. Zillow indicated in their Homeowner Confidence Survey that there exists a perception-reality gap. Quote: “Despite the turbulent quarter, half of U.S homeowners do not think their home’s value has decreased. In reality, nearly three-quarters of homes lost value in the past 12 months.”

The bottom line is that we all need to step back and take a cold, hard look at reality. I recognize that every home transaction is unique but we all need to be guided by the core values of honesty, fair-play and professionalism in order to protect our clients.

The Central Bank Cuts the Federal Funds Rate: What does this mean?

The Federal Reserve again lowered a key interest rate by .5% to 1%. This interest rate is called the “federal funds rate” which is the interest banks charge each other on overnight loans. From an historical perspective, this rate has not been lower since 1958 and represents an aggressive move by the Fed to restore confidence in the market and stimulate banks to make loans.  

But here’s an important question: What impact does this interest rate cut have on the consumer’s mortgage rates, credit card interest or other loans? Does a reduction in this rate matter? Will home owners in Seattle, Kenmore or New York City be able to get a better rate on their mortgages? Well, the short answer is yes. In the long-term the theory is that lowering this interest rate exerts downward pressure on the whole economic system resulting in lower consumer interest rates.  I have a colleague who has a degree in economics to whom I posed this question. He confirmed that the overall strategy of the Fed lowering the rate is intended to stimulate lending. He said there’s a fancy economics term called the velocity of money that applies here. However, he believes the the Fed is lowering the rates because there is a total lack of confidence and trust between the large lending institutions. ”It’s really about psychology,” he said. My friend also said something I think is critical: “If a consumer has good credit and the right amount of cash, they can still buy a house even in the current economy!”

So what does this all mean? The Federal Reserve has a number of “tools” to help influence banks and stimulate lending. Today they sent a clear message that action is needed and they will be monitoring the results of the interest rate cut. Let’s see what happens.

A special note: I am not an economist.

A Schizophrenic Day: Home Prices Down, Stock Market Up, Confidence Way Down!

It was an amazingly confusing day today in the world of economics and real estate. The Seattle PI reported that Seattle-area house values continue to drop, falling 8.8% since last August. Nationally, the numbers are sobering: a 30.7% decline in Phoenix, 30.6% in Las Vegas, the LA, San Fransisco & San Diego markets down 25% and Miami & Tampa down 28.1 & 18.1% respectively.  

There were numerous reports of a huge decline in consumer confidence. Consumer Confidence is one of those economic indices that analysts watch carefully because the majority of our economy is driven by consumer spending. According to a report by marketwatch.com “the implosion of the housing bubble, the weak job market, the bailout of the banks, and the sell-off in the stock markets have put consumer in a sour mood.” This could a problem as we approach the Christmas shopping season. Already, many retailers are bracing for chilly sales.

Then, just when I was getting depressed, PricewaterhouseCoopers announced that among major metropolitan areas, Seattle’s real estate market is the best in the nation as a prospective investment.

THEN, the Stock Market closed up almost 900 points! Whew……….I am reminded of the old curse: May you live in interesting times!

Picture by MrJuggles

Localism: Is It Just Another Pseudo-Trend or Is It For Real?

Yesterday, the Seattle Times featured an interesting article entitled:  “The New Localism: saving Main Street” in which the author and futurist, Joel Kotkin,  expresses the idea that the current financial chaos facing the United States may, in fact, be a catalyst in strengthening family ties and local communities. Mr. Kotkin points out that localism isn’t really a new phenomena, in fact, there has been a push for more localized markets and businesses for many years.  The difference today is that we have greater access to technologies that can help communities localize in more creative ways.

Since the early 70’s  books such as Future Shock and A Nation of Strangers and more recently Bill McKibben’s Deep Economy and Robert Putnam’s Bowling Alone have pointed out that America is “falling apart at the seams” due to the huge changes taking place in the world.  Kotkin suggests that we are seeing a reversal of this trend:

1) More Americans are staying closer to home. He writes that Americans born today are more likely to reside near their place of birth than in the 19th century. This is driven by an aging population and more limited economic opportunities.

2) Higher fuel prices are forcing Americans to spend less time traveling. It is also fueling a resurgence of local markets and local manufacturing. Simply put, transporting food and other products has become very expensive. Purchasing these things more locally makes sense.

3) Technology has allowed millions of Americans to work from home either as telecommuters or private businesses.

What fascinates me as a realtor is how “localism” has recently become a common notion in the real estate industry as well. A growing number of real estate agents  are writing blogs that focus on hyper-local markets such as their own town, neighborhood or social group.  This blog is a perfect example of a blog that focuses on my hometown.  I believe a local approach will ultimately provide better service to buyers and sellers. I also believe that agents who blog their own communities are more focused on their area of expertise and can rightly call themselves “neighborhood experts.”

To answer the question, is localism relevant, yes. Is it a pseudo-trend, I don’t think so.

Market picture by natalie maynor

Can I Be a Economist Groupie? I Love Paul Krugman - Nobel Prize Dude!

Paul Krugman has done more to help ordinary people understand the complexities of our modern financial systems than any current economist. He has been the spokesman for liberal ideas regarding economics and his unabashed dislike of the conservative, supply-side economic theory is legend. I’ve been following his writings for years and it came as a pleasant surprise that he was awarded the Noble Prize for Economics yesterday. I love his column in the NY Times and one of my favorite non-fiction books written in 2002 is entitled “The Great Unraveling” in which he reprises many of his earlier newspaper columns. It’s almost a prophetic work with regard to the fallacy of trickle-down economics, Wall Street ponzi schemes and our current financial crisis.

From a real estateperspective, Krugman was always skeptical about the mortgage backed securities and the incredibly complex “products” being created by Wall Street financial gurus. One of my real estate brethren in Denver, CO had this to say about Krugman’s predictions back in August when he wrote about liquidity problems in the banking system:

“ And then this morning, sure enough, Paul Krugman posted a piece in the NYT saying exactly what I had been thinking.  And the title of the article is “Very Scary Things” (unfortunately if you’re not a member of Times Select you won’t be able to read the article). Krugman says the really scary part is that there’s nothing policy-makers can do to rectify the situation.  He talks about a similar meltdown in 1998, when a senior Federal Reserve official advised Krugman that the best strategy would be prayer.  Prayer?? ” Judith Clausen, Buyer’s Advantage Realty of Metro Denver, CO

I think it’s very important for us, as investors, home owners, workers and citizensto better inform ourselves about our economic system. I spent many years talking with high school students about the problems inherent in trying to get rich too quickly; purchasing everything on credit and being financially illiterate. Mine was a message of financial frugality. I can even admit to a healthy mistrust of the Stock Market. We need smart people such as Paul Krugman to sound the alarm in a clean, rational so as to avoid the “irrational exuberance” that has led us down this difficult path. I hope the next administration, no matter what party, taps Paul Krugman on the shoulder for some advice and wisdom to help us out of our current situation.

Mr. Freeze, The Financial Curmedgeon - Pointing His Big Fat Finger at the Wolves

Mr. Freeze and his minions have never believed that letting wolves tend the hen house was a good idea. Unfortunately, our financial system has been controlled by individuals who are only concerned with profit. There are a lot of  capitalists who have been preaching the virtues of the “unfettered” free market for decades. Here is the constant refrain: “If we would just get out of the way and let the free market operate without the intervention of regulation, then business will prosper and everyone benefits.” This is an expression of the Ronald Reagan “trickle down” baloney that so many Americans believe in. Mr. Freeze knows that in America if something is said over and over again, often enough, then it becomes true. Well, today Mr. Freeze takes great pleasure in pointing his big fat figure at all of the libertarian/conservative think tanks, investment “experts,” day traders, financial publications and CEO’s who have manufactured this get rich easy propaganda. It is a sort of money-idolatry of biblical proportions. The tragic thing is that this MYTH is now causing domestic and international markets to self-destruct. As a public service, Mr. Freeze has provided you, dear reader, with two important media clips: a video from 60 Minutes broadcast last night, and one audio article from National Public Radio. I hope you have a few moments to reflect on what these pieces reveal. Click on the picture below to watch the 60 Minutes piece:

Please click on the NPR piece below to hear one of the most articulate observers of the current market break-down, John C. Bogle, Founder of the Vanguard Mutual Funds.

The pieces above confirm one of Mr. Freeze’s economic formulas: capitalism + greed - governmental regulation = disaster. There must be a well-considered balance between government and business. One cannot exist successfully without the other. Mr. Freeze is tired of hearing about the virtues of the free market system. Mr. Freeze lives in the REAL WORLD where people go bankrupt, where families fall apart, where jobs and careers are outsourced,  and where ruinous things happen to people because a wealthy, elite financial class has been allowed to “make a profit” no matter the cost.  Mr. Freeze hopes you’re all doing OK. Really.