Kenmore Undressed

Kenmore, WA Home Sales - Final Statistics for November 2008

The November 2008 real estate sales statistics for Kenmore were to be expected given the chaos and uncertainty gripping the overall economy. As I’ve suggested in earlier posts, our financial system is paralyzed without two of the most important ingredients for success: CONFIDENCE & COMPETENCE. Until buyers and sellers feel that the market makes sense, it will remain extremely difficult to bring them to the table. Until lending institutions begin to loosen underwriting standards, even qualified buyers will hesitate to make offers. It’s ironic, because home prices are attractive right now. Here are the numbers:

KING COUNTY SINGLE FAMILY HOME SALES

Click on the picture below to see the details:

Sales of single family homes were down -58% in Kenmore from a year ago (8 in 2007 vs 19 last year). Year to date sales are down -44%. Prices have dropped 9% since the beginning of 2008.

I wish I had better news regarding real estate sales in our community. It’s been a pretty tough year.

The Anatomy of a Blog Post: I Think, Therefore I Blog

People laugh when I say that blogging makes you smarter. “You can’t be serious,” they say, “isn’t every Tom, Dick and Mary out there writing whatever comes into their minds and then blabbing it out to the world? Actually, this is a great question because it raises important issues such as:

• What about fact-checking: How does the reader know that the blogger is really researching a subject?
• What about journalistic integrity: Are bloggers utilizing legitimate sources and cross-checking them?
• What about plain old truth-telling? How can I know if a blogger is sincere?

Let me be clear: Whole books have been written about the problems with blogging. Probably one of the most thoughtful is Andrew Keen’s “The Cult of the Amateur.” His premise is that the internet is literally killing our culture! He calls into question the user-generated free content of amateurs which he claims is destroying our valued cultural institutions such as newspapers, magazines, movies, books, etc..

Well, it hasn’t taken long for part of his theory to come true. Many of the largest national newspapers are having serious financial problems due to the increasing number of on-line news services, blogs and websites. Recently, the Christian Science Monitor announced that it is going to cease publishing a daily paper in favor of its on-line self. Whether we like it or not, the internet has forever changed the face of news-gathering. It’s where most people will get their information.

I do believe that Mr. Keen is wrong about the value of blogging content. Let me give you an example of how I put together a blog post:

Pick the Subject

As a realtor I have a keen interest in my local market place. My goal in blogging is to provide my readers with informative and accurate information regarding home sales and values here in Kenmore, WA. Today, I wanted to address a post on a popular and provocative blog called Seattlebubble.com. In a recent post entitled “J. Lennox Scott & Dick Beeson Predictions vs. Reality the author basically “called out” the two regional industry gurus buy highlighting numerous incorrect predictions they’ve made about the market over the last year. Basically, he’s saying that they are dead-wrong. If you read the blog commentary, it’s obvious that the author, “The Tim,” hit a real raw nerve with real estate agents and consumers.

Fact Gathering

The author of Seattlebubble.com cites a number of reputiable sources for his statistics and quotes. Moreover, I have access to numerous sources of my own. In my last post, my sources back up the notion that we should all be a little skeptical of ”predictions” regarding real estate. The experts have been dead wrong recently. Let me also direct you to an incredibly sobering article in U.S.A. Today that puts the current housing market in perspective.

Writing the Blog Post

After doing the research and thinking about the best way to present the material, I then write the article. In order to help my readers understand the subject, I try to hyperlink to as many other reputiable sources as possible. The fun part for us bloggers is that we can often be a conduit for other important writers to educate us about the world. We don’t have to make things up. We have a world full of vetted, respected experts at our fingertips. In a nutshell: Blogging makes us smarter.

On final thing: I highly recommend you read this report.

Puget Sound Area Home Sales - Hitting Bottom….OUCH!

The end of 2008 is turning out to be one of the most challenging real estate markets in decades. A huge number of difficult factors have converged in a sort of “perfect storm” which has utterly destroyed confidence in the market. Even after the Fed provided capital to help stabilize the financial markets, consumers aren’t out there buying up homes, even though prices have softened. To illustrate how slow things are, please turn to the following charts which represent “absorption rates” for November:

PUGET SOUND ABSORPTION RATES

Absorption rates are based on the ratio between active listings and the net number of homes that are in the sale process. According to the charts above, only 8.2% of the listed homes were absorbed in November.

KING COUNTY ABSORPTION RATES

King County fared slightly better with 10.6% of the homes were absorbed in November.

SNOHOMISH COUNTY ABSORPTION RATES

Snohomish County absorbed 8.8% of the active inventory in November.

I’d like to say something light and positive at this point; however, I’m a big proponent of facing the brutal facts of the current reality: the market has gone into a coma for the time being. Also, home prices have fallen this year which is discouraging.  I would also like to say that homes ARE selling in spite of all the challenges. About the only wise thing to do for now is continue to monitor the housing market for signs of improvement. Now, more than ever, make sure you’re working with a real estate professional when searching for a home.

Picture by inju

The Northshore Fire Department, Part 1: Dedicated to Serving the Public Good

It’s the worst nightmare possible: You wake up in the middle of the night. The smoke and sharp burning smell is suffocating. The intense heat and flames are lashing at you like a hungry pack of predators. You realize your house is on fire. Your instincts tell you to flee but you’re transfixed by the fire and paralyzed with the fear that you’re not getting out alive………………………………..

Over the years, as a real estate agent, I’ve had numerous buyers express all sorts of fears about homes; the most common of which is: “Could this house burn down?” This comes up when we’re having a home inspected and the house has an ancient electrical system or a old dingy furnace. It is only natural that people get a little nervous. During one inspection my clients were being particularly paranoid and, half in jest, their inspector asked, “When was the last time you heard of a house burning down?” Do you know the answer?

Well, last week I had the pleasure to meet Fire Chief Tom Weathers at the Northshore Fire Department (Station 51) to talk about the world of emergency preparedness and to pose the same question to him. He answered it this way: “Not very often, but it’s interesting that during difficult economic times, the risk of fires rises.” He went on to explain that when money is tight, homeowners tend to neglect preventative maintenance (furnaces, fireplaces, etc.) or they try to economize by using the fireplace/wood burning stove or even space heaters which increases the possibility of a fire. One of the worst case scenarios is the use of a barbecue indoors during power outages. This was only one of the many subjects Chief Weathers and I talked about.

The residents of Kenmore are extremely fortunate to have Station 51 right here at the heart of our town. In 1977 Station 51 was opened on 73rd Ave NE, replacing the small, original station (opened on August 14, 1948 on 67th Ave NE, just off Bothell Way). The new station featured eight apparatus bays, meeting room, offices and living quarters plus outdoor training space and a training tower. Today, Chief Weathers and his team are designing a new fire station to be built across the street by the year 2010. He described this as an extremely complex project. “We’re trying to build the ‘perfect fire station’ that will maintain its utility until the year 2060.” He then explained how difficult it is to plan a building that will meet all the needs of a fire station in the 21st Century. “There are training and design facilities, fire truck bays, living quarters, public art and proactive considerations for future solar power.”

Chief Weathers is one of those executives who seems very comfortable in his own skin. He’s extremely knowledgeable about all the dimensions of his position and it was easy to see why he’s the kind of guy you want around in an emergency. When I spoke with a couple of his crew they expressed a high degree of respect for him. What amazed was his command of so many different disciplines. Think about it. Running a fire department requires a deep knowledge of emergency response. This alone is a subject one could spend a lifetime learning. Then add in facilities, personnel and labor relations, city/county issues, training, angry residents and, my favorite, shopping for fire engines!!!! 

After our chat, Chief Weathers let me take some pictures of their newest fire truck which is specially designed as a rescue vehicle. One of the firemen described it as a tool shop on wheels. This particular fire truck has a huge lighting system for evening rescues. The staff is very proud of this truck.

Being a fireman/woman is one of the most sought-after jobs in the world. Really! To become a fire fighter is another thing altogether. By its nature, it’s a dangerous job. Its a job that requires a huge number of  skill-sets and physical strength. It requires individuals who are selfless and effective during disasters and yet, slighty detached from some really ugly realities. To be effective, firefighters are in a perpetual state of training and preparation. The pictures below show a training session in which the staff is learning about a new system to stabilize an overturned vehicle to help with a rescue:

In the future, I hope to show you more of the interesting and important things going on at the Northshore Fire Department.

Mr. Freeze the Financial Curmudgeon: The Myth of the “Ownership Society”

I, Mr. Freeze the Financial Curmudgeon have been thinking a lot about the underlying philosophy that brought us to the current financial breakdown. When Mr. Freeze gets worked up about this stuff, he starts by looking way back in history. Basically, the more things change the more they stay the same. Well, Mr. Freeze actually found someone who looks grumpier than……well…I…Mr. Freeze:

This grumpy bust is that of the famous Roman Statesman/Orator, Cato the Elder (234BC-149BC). He’s grumpy because his legacy has been permanently tarnished by his modern namesake, the libertarian think tank: The Cato Institute. Mainly known for its skeptical view of government, a view widely embraced by the political right, the institute has been highly influential in the economic philosophy of the Bush Administration.

One of the most popular notions of conservatives is that of the “ownership society.” George Bush said in October of 2004, “We’re creating an ownership society in this country, where more Americans than ever will be able to open up their door where they live and say, welcome to my house, welcome to my piece of property.” Mr. Bush was hoping that this ownership society would be his greatest legacy. Yet, today the administration is conveniently leaving out any mention of this ridiculous concept. What is this concept? Wikipedia has a good definition:

Ownership society is a slogan for a model of society promoted by United States President George W. Bush. It takes as lead values personal responsibility, economic liberty, and the owning of property. The ownership society discussed by Bush also extends to certain proposals of specific models of health care and social security.

The first time I heard George Bush mention this concept, it sounded as if he was invoking some sort of magical capitalistic spell. “If only we were all OWNERS, life would be better.” It sounded like code for Ronald Reagan’s “tickle down” economics. In reality it was far more cynical, manipulative and downright dangerous than that. Naomi Klein, in her excellent article “Disowned by the Ownership Society” focuses like a laser on the heart of the idea:

“Well before the ownership society had a neat label, its creation was central to the success of the right-wing economic revolution around the world. The idea was simple: if working-class people owned a small piece of the market: a home mortgage, a stock portfolio, a private pension, they would cease to identify as workers and start to see themselves as owners, with the same interests as their bosses. It meant they would vote for politicians promising to improve stock performance rather than job conditions. Class consciousness would be a relic.”

Klein goes on to describe what we now know: All the promises of the ownership society have been broken. Our financial system has been compromised by the very “owners” who wanted to control an ever growing piece of the economic pie. Sub-prime mortgages, questionable securitization of debt, credit swaps and a huge number of other devices have essentially erased trillions of dollars of “ownership” from Americans. Today, those most responsible for the catastrophe are the very same corporations asking for bailouts from the (hated) government or threatening bankruptcy. Ironically, these are two options the conservative ideologues would condemn. “What about taking personal responsibility?” The answer: “Oh, we’re TOO BIG TO FAIL!” Pardon me for being so blunt, but that’s utter hogwash.

These four fellows are, to a great degree, the apologists and advocates for the “ownership society.” They are (l-r) Ed Crane, President of the Cato Institute; Carl Rove, Machiavelli’s step child; Grover Nordquist, patron saint of ”privitation” and finally, Ronald Reagan, looking as out-of-touch as ever.

I’d like to close with a question that cuts to the heart of the “ownership society.”

WHAT WOULD HAVE HAPPENED IF SOCIAL SECURITY HAD BEEN PRIVATIZED IN KEEPING WITH THE PHILOSOPHY OF THE BUSH ADMINISTRATION? (see http://www.whitehouse.gov/news/releases/2004/08/20040809-9.html)

Here’s what Ed Crane wrote to Karl Rove in a memorandum dated April 4, 2005 regarding the privatization of Social Security:

Finally, with regard to the “risky scheme” arguments of opponents, I think it is ironic that the very same people who appear so concerned over the growing wealth gap in America are the ones who refuse to allow low- and moderate-income Americans to accumulate wealth. The investment-risk argument was used in 1983 when the Greenspan Commission refused to even consider personal accounts. Yet, the DJIA is now ten times higher than it was at the peak in 1983 (adjusting for inflation and including dividends). How much longer are we going to deny lower-income Americans an opportunity to participate in the wealth creation engine known as the American economy?

What’s so disturbing about Mr. Crane’s idea is that his premises are all wrong. He, like many other shills of private enterprise and Wall Street, live in an alternative universe of perfect markets, high-stakes profiteering, unearned privilege and wealth. Who, indeed, is keeping low and middle class Americans from accumulating wealth? Who squandered trillions of dollars of market value and, more importantly destroyed international economic trust in the financial system?

Let me end by simply saying that Americans have been convinced that the “market” will save them. They believe that being consumers is patriotic. They have bought into 30 years of trickle down propaganda. There are no easy solutions to the big problems. We can become free if and only if we demand public policy that serves the general welfare and by embracing the common sense frugality of our grandparents.

November Statistical Report: Realty Bites the Northwest

As we near the end of 2007, real estate “experts” with some crazy predictions are sprouting up like so many weeds in the garden. Perhaps some of the newly unemployed are spending more time in front of the computer, perusing the statistics and attempting to draw conclusions from all the grim news coming out of the press. The truth is, the REAL experts don’t seem to have any better grasp of reality than the amateurs. Take the most recent Northwest Multiple Listing Service press release dated Dec. 4th:

• Prices down
• Pending sales down
• Inventory dropped 1.8% (still the largest inventory in years)
• Rising foreclosures and bankruptcies

What conclusions do the MLS experts draw from these facts? Housing activity reflects “microclimates!” This is just a fancy way of saying that real estate is local which everyone knows. The report then goes on to quote Pat Grimm, Dick Beeson and J. Lennox Scott (all owners of well-known local brokerages) who all basically avoid saying that the market will fall further in the coming months. About the only good news is the recent talk about lowering mortgage interest rates. According to the report, this may stimulate first time home buyers to enter the market.

The fact is, all of the economic data points to a gloomy Northwest economy in 2009. Certainly, it’s not the end of the world, but the real estate industry is suffering from a serious hangover. I hope sobriety comes soon…but I’m not holding my breath.

A Short Trip to Vancouver, BC - Part II

The last time we visited Vancouver, BC was well over ten years ago. At that time we spent most of the day in Chinatown during a festival with dancing dragons, thundering traditional drums and fire crackers.  We also managed to visit the ”uber-touristy” Gastown district (not my favorite place). Overall it was a magical day. The funny thing is, we weren’t able to conjure up a good reason to visit Vancouver since then. It was only after a good friend suggested we take our wives out-of-town for a shopping trip that Vancouver seemed like a good idea………So, here are some of my observations about Vancouver:

NOT A “CHARMING TOWN”

Vancouver lies in a beautiful, natural setting: water, mountains, forests…but don’t forget, it’s a big city with over 600,000 residents and its downtown is a noisy and crowded place. The picture above paints an accurate picture of the city: lots of non-descript, concrete buildings surrounded by LOTS of traffic. I have been to Vancouver 4 times, and I still feel that one has to look hard for the grand old buildings in between all the new structures….and there are more new buildings on the way, as the city is gearing up for the 2010 Olympics.

Lots of wonderful shops and restaurants

OK, since shopping was the objective, Vancouver scored a 100% rating! Suffice it to say that my feet still hurt from all the walking we did. Our wives were intent on visiting every shop in Pacific Centre, Vancouver Centre Mall and Granville Station. Oh, don’t let me forget Robson Street. This long avenue is lined with wonderful boutiques and restaurants. Our wives made sure we didn’t miss them either. Check out this cool website. Just click on the picture for details on all the shops:

Yesterday the sun came out and it was a gorgeous day. It was crisp and clear so we decided to take the Skytrain from downtown over to what is known as the Italian District east of the city.

Unfortunately, there is little Italian in Little Italy. There are very few Italian shops or restaurants there and those we visited were disappointing. There are some nice views of the city from this area (pic above) but I can’t recommend you spend time here if you’re looking for an Italian experience.

The Best and the Worst

First, let’s talk about the worst: Vancouver’s homeless people. There are an incredible number of indigents on the streets of downtown Vancouver. There are also a huge number of young people who are obviously involved in drugs. Seattle suffers from a similar problem. I believe this is a result of Vancouver and Seattle being very ”liveable” cities with relatively mild climates and kind-hearted citizens. On the flip side, the residents of Vancouver are as amicable and friendly as can be. Even when we were on a Skytrain returning to the city, packed together like sardines, everyone was polite and jolly.

The Best:  CinCin Ristorante Italiano. Located on Robson Street, this was an incredibly good restaurant. The dishes were elegant yet not overstated. The menu included a wide variety of excellent choices from a simple Spaghettini with Clams, Cured Fennel Sausage, Chive and Shallots to Sturgeon, Wood Oven Roasted, Black Trumpet Crust, Creamy Leek Local Baby Turnips, Beet and Red Wine Reduction. I’ve attached CinCin’s website so you can check out all of the wonderful offerings. Yummy!

Final Thoughts

I can’t possibly give you an “experts” perspective of Vancouver based on the limited time I’ve spent there over the years. All large cities are complicated places and the traveler must take the good with the bad. Vancouver is, in many ways, a 21st Century city: ethnically diverse and economically vibrant, it has adapted well to a changing world. It has an excellent public transportation system that Seattle only wishes it could build. It also has homelessness and some fairly grimy districts. But, don’t let this stop you from visiting Vancouver. It’s a great place.

Vancouver, British Columbia: A Short Trip Across the Border

Pictured above is Vancouver, British Columbia. Beautiful isn’t it? Most travelers to the Northwest know Seattle, WA and Portland, OR. In the not-so-distant future Vancouver, BC is going to be on the World’s radar in a big way. Host of the 2010 Winter Olympics, Vancouver is quintessentially “northwest” and yet, it is cosmopolitian, international and bursting with boutiques, restaurants and parks.

The Amtrak train station in Edmonds, WA.

My wife and I are spending this weekend in Vancouver with friends to do a little shopping and get away for some R&R (translate: the ladies are shopping). We took Amtrak from Edmonds, WA to Vancouver. The train trip takes a couple of hours and passes through some beautiful country. Along the way, the train travels right along Puget Sound, so there are some great views of the bay and islands.

You know, coming to British Columbia is fun, because even though we’re only a couple of hours away from Canada, it’s still a “foreign” country. You do need your passport and you have to pass through customs. You must use Canadian money (still prettier than ours……still worth less) and Vancouver is truly international. The popluation is a blend of Europeans, Asians, East Indians, American Indians and many other ethnic groups. In the two days we’ve been here, I’ve heard British English, French, Arabic, Farsi, Norwegian, Spanish and a few other languages I didn’t recognize.  

We have spent most of our time visiting shops and dining along Robson Street which lies in the heart of the city. Here are a few pictures:

One thing I must say about Vancouver, it’s a big place. There is a lot of traffic and there is a lot of construction going on which makes it noisy and congested. There are some nice old buildings sprinkled around the city center, but Vancouver has a more modern feel. Personally, I feel Seattle has more charisma even though Seattle is quite a bit smaller. I have more to say about our trip, but we still have one more day of adventure. Stay tuned!

The Economy is Taking Its Toll on Northwest Real Estate Agents

Many economic reports have suggested that the Northwest is not suffering the severe downturn experienced in many other parts of the country. Indeed, until recently Boeing, Microsoft, PACCAR Trucks and a number of other strong performers had been sheltering our area. The job market was still stable and the big players seemed to be doing well. Anyone who is paying attention knows that WA State is experiencing huge budget challenges and there will, in all likelihood, be more pain coming down the road.

The announcement on Monday of the shocking layoff of 3400 high level Washington Mutual employees and the virtual standstill in real estate sales are only two of the many signs that the easy times are over. Also, the “experts” finally acknowledged that we have been in a recession for almost a year now (aren’t the experts always the last to know?).

Real estate agents and brokerages are not doing well. No matter how optimistic one wants to be, things are not looking good. In a recent article by Kirsten Grind of the Puget Sound Business Journal entitled “In Washington, real estate agents switch to smaller firms, or quit,” she reports that:

• 2800 agents have abandoned the business since the beginning of 2008, a 9% drop
• The Department of Licensing reports that hundreds of others have put their licenses on hold
• There has been a huge migration of agents from the traditional full-service brokerages to smaller low-cost offices
• Sales were down 16% in September and 20% in October (based on last years sales)

My colleagues and I believe that Ms Grind’s numbers are optimistic at best as they are based on statistics compiled by the Northwest Multiple. We find it hard to believe that almost 27,000 agents are actively engaged in the business at this time. Even though there is a record-high inventory, only 11% of the inventory is turning over in the last several months. Those of us in the industry have seen, as the article suggests, many agents shift their licenses to less expensive brokerages or opening up small, independent shops.

So what does this mean to the consumer? There’s more going on here besides a decline in the number of agents. There is also a technology revolution that has totally transformed the relationship of consumers to the real estate industry. Already, there is a huge amount of data available on-line to sellers and buyers that empowers them to make better choices for both researching the market and for choosing the agents with whom they work.  

So what’s an agent to do? I highly recommend you all buy a copy of Jim Collins‘ “Good to Great” and read the chapter about the Stockdale paradox. In short: we all need to take a cold, hard look at our current reality while at the same time act as if we will prevail in the end. The challenge for agents willing to weather through this bleak economic landscape is this: embrace the changes taking place or go do something different for a living. Also know that some of the old “sacred” scripts such as “full-service” and “value-added” are taking on new meanings.

picture courtesy of jaredchapman

Your Money or Your Life? Personal Money Management on Steroids

Joe Dominguez, one of the authors of Your Money or Your Life, grew up poor in Spanish Harlem. Even as a boy he observed that the poor kids were just as happy as the rich kids. He realized that money wasn’t the magical cure to every ill. Many years later, he and his partner Vicki Robin were the force behind the Voluntary Simplicity movement that many Americans adopted in order to fend of the disease they called “Affluenza.” The amazing thing is that the principles of living simply would be instantly recognizable by people who grew up during the depression: live within your means, reuse, repair, recycle…..it’s not complicated stuff. Unfortunately, we’ve forgotten these simple skills. The problem lies in our cultural DNA. We are a nation of consumers. This character flaw was epitomized by George Bush when, in the midst of national chaos and impending war, he told us to enjoy life and go shopping.  

Today, more than ever, it’s time for Americans to take a cold hard look at their lives and choose between the prison of never-ending consumption and debt or common-sense frugality and financial freedom. Anyone wrestling with these issues should obain a copy of Your Money or Your Life (there are a lot of copies available free at the library!!!!) and transform their relationship with money. For more information just click on the picture below: