Another trend I have noticed more and more as I speak and listen to agents, is that some turn down unrealistic sellers listings.  After all, agents invest a lot of money in homes to be advertised, merchandised, etc., why accept a listing that is too high, lose time and money over months?  Why accept to give more to the buying agent who only has to search and show when a listing agents invests a lot of money.  This is the situation I see unfolding here.  Again, soon or later, there will need to be a balance in between.

It’s an interesting trend I noticed back in September, to be fair only one person did it but more now.  Agents really know the market, sellers must learn to trust them.  You cannot judge a whole industry by a few black sheep.  At least, at Robert Weil Associates, we are fortunate enough to have an outstanding reputation and equally outstanding bunch of highly ethical agents. 

After all, the buyer and his agent have a symbiotic relationship.  Sellers need qualified professionals to invest money in their homes to advertise it in the best manner and guide them through the entangled paperwork in the most efficient way possible.  In other words, you need a good merchandiser and someone who really understands your neighborhood and the paperwork involved in selling your home.

We are probably at the tipping point of a balanced market between buyers and sellers, if only we would not look at the gloomy and speculative headlines.  But I fear it is becoming more and more a buyers market and intelligent sellers will act quickly upon it.

Quoting residential investment falling by 7-1/2 percent year-to-date, and in the third quarter it shaved 1.1 percentage points off of GDP growth.   I always enjoy reading what the Fed have to say.  Not so much as a prediction tool but as a mood setting tool.  He also found that home prices rising more slowly and by some measures have even declined.  This is an interesting point that he does not really develop which confirms my belief that according to many surveys, the median price has gone up but the asking price has comedown to more realistic levels. 

Remember what I wrote a while back that since the 60s, homes capital in the U.S. has grown about 3 percent per year on average.  So again, if you are in it for the long term, you will reap some incredible benefits.  Obviously the flipping days are over, at least yet so far.

The rest of the Calculated Risk post is of great quality as usual.

The Lafayette complex in Downtown Long Beach celebrated 80 years of history.

Here is a bit of history.  Constructed in 1928 as luxury getaway, the Mediterranean Renaissance-style complex by Campbell Apartments was the first build, part of the three-phase.  The second phase was the Lafayette Hotel, with its classic Art Deco architecture, its stylized male and female figures and winged ram’s head.  The Broadway Building opened in 1948, and was operated as part of the Lafayette.

The Lafayette Historical Preservation Group is active and tries to involve locals in discovering our past in in order to preserve the future.

From 1952 to 1967, the Lafayette thrived under Conrad Hilton, who ultimately combined the buildings into one, adding the International Ballroom, which became home to the annual Miss Universe Pageant.  The Lafayette was declared a city landmark in 1987, as it faced potential demolition. Owners avoided this downfall, however, with a considerable renovation that included restoration of the lobby and hallways, structural repairs and seismic upgrades.

It is nice to see locals getting involved in preserving our fast deteriorating past glory.  With modern projects being presented, looking like anything you would find anywhere country-wide, we desperately need to conserve the buildings that have made our city.

The Treasury Dept.’s Financial Crimes Enforcement Network recently announced that "suspected mortgage loan fraud in the United States continues to rise, and has risen 35 percent in the past year."

Not great news but makes you wonder why people get into these situations in this type of market.

Here is Business Week’s article.

On another note, Credit Suisse has re-estimated the inventory of new home sales based on cancellations.

"… cancellations are rising, and they aren’t being captured in the aggregate statistics because of the way the survey is designed. Hence, sales are being overstated and inventories understated."

This is interesting as it points out how numbers can be arranged to read anything we really want.  Though, I can’s suspect wrongdoing, it just should make us think twice before believing every line we read.  Uh, except me, right?

Credit Suisse reported that inventory in the system is higher than announced.  The Census reported that the September new home inventory (excluding not-started units)  17% higher than the prior year.  However, this figure excludes cancellations, which have been a major issue for the market.  With cancellations taken in, new home inventory would be closer to up 52% or 8.0 months’ supply, the highest level since January 1991.

A great post again from Calculated Risk.

Some companies have looked into helping citizens by cleaning substances on public roads but some are turning their attention to cleaning up the air.

ACTI developed the Advanced Maritime Emissions Control System (AMECS) to remove pollutants from ship exhaust at berth or anchored offshore.

A great initiative you can read about at the Long Beach Business Journal.

What are you doing reading this today when you should be cooking a Turkey or Tofurkey?

OK, still here, then I guess…

The president of the Federal Reserve Bank of Dallas finds because of faulty inflation data, the Fed kept interest rates too low for too long earlier this decade, effecting speculative housing activity.

Some are finger-pointing at former chairman Alan Greenspan to have kept monetary policy too lax from 2003 to 2004.  In a nutshell, Mr. Fisher said from 2002 to early 2003, inflation, as measured by the price index of personal consumption expenditures (PCE) excluding food and energy, was running below 1%.  It could have shocked the economy from inflation to deflation.  To reduce the risk of deflation, the Fed lowered target for the Fed funds rate.

Does this completely explain the real estate maddening pace we have witnessed the last few years?  Probably not but it could have helped it.  The again, hindsight is always 20/20.

Click here for the Real Estate Journal article.

Indeed, Happy Thanksgiving!

Thankful for a healthy life, a wonderful wife, a great city to live in, an amazing workplace at Robert Weil Associates, a great friend and mentor in Gary, and the list goes on, and on, and on…

Are the plans enough to reduce air pollution in the harbor?  There is much talk in either direction as some say it will be a greater burden on tax payers then admitted.

People in Long Beach have good reasons to worry about pollution, congestion and the effect the harbor has on their health.  Some studies have shown higher risk levels for cancer and asthma in communities surrounding the ports while activity is expected to more than double by 2020, something must be done.

The biggest offenders are container ships.  Locomotives and cargo-handling equipment of some companies will be converted and tweaked.  Heavy-duty trucks are another significant source of diesel emissions.  But they are not part of an organization, so they hard to control.

The “five-year” plan stretches longer than five years as it evolves even after the vote.  This raises already a slew of questions, such as a need to be more specific, to be more detailed, to have some actual measurements.

It is a step in the right direction but it needs to be fully addressed.

You can read the Long Beach Business Journal article here.

With asking prices dropping and pro-industry trade groups predicting further declines has buyers backing away from deals they would dive into over a year ago.  Contract-cancellation rates for big builders were around 40%, twice as high as last year, which eventually effects existing-home sales.

The point worthwhile mentioning is that some of the cancellations are by people who signed new-home contracts at one price months ago, they have not closed.  These people have a hard time seeing builders cutting prices on identical properties.  This is having a snow ball effect.  Strange as it seems, losing a deposit that typically ranges from 1% to 5% of the purchase price makes it a better alternative.  Even though, this does not effect us to directly in Long Beach it does have trickling effects on the rest of the industry.

Agents are also reporting sales falling apart before closing as buyers back out, up from 10% last year.  Sellers understanding they can buy a similar property for less makes for a time to seriously rethink the normal selling strategies.  Rising interest rates are also to blame.

Many buyers are playing the field and asking for upgrades they could not have over a year ago.

Click here to read the Real Estate Journal article.