2011 Predictions and Perscriptions on Life and Real Estate!

I must confess that I was happy to take down my 2010 calendar and start a new year. Everything looks good at the starting line to paraphrase an old song.

2010 was no exception. I started the first two months of 2010 building a nice inventory of properties, and in March and April I had sold more homes than I had sold for all of the previous year. Then on the first weekend of May storm clouds gathered, the flood came, the tax credit disappeared and pending sales dropped each of the next eight months from the previous year. A drop of approximately 30% from 2009's pitiful sales figures created a lot of pain and stress for home owners, the real estate industry, and banks. My year in real estate was parallel with the Tennessee Titans season, which started great, collapsed, and ended with a terrible finish.

So what is the forecast for the real estate market at the starting line of this brand new year. Well it looks like we still have continuing problems that will make this race uphill and difficult. Foreclosures, unemployment, high inventories, deflated prices, and a lack of consumer confidence did not magically disappear with the new year. But with that being said I do see some signs of improvement for the coming year. I am seeing fewer foreclosures coming on the market especially in the higher price ranges. The lack of competition from foreclosures and short sales should drive prices higher in the coming year. It is projected that the national economy will grow and improve in 2011. The improved economy plus excellent interest rates should bolster consumer confidence and bring more buyers back into the market. I believe we will start seeing the real estate market turn around this year, however it will most likely be a slow process.

The start of a new year is both a time to look forward and to reflect on the past. I was thinking back to 10 years ago. The year 2000 started off great with a Millennium celebration in New Orleans, the best year in real estate sales that my wife and I had ever had and great fun and accomplishments of family and friends, and a final 2000 Titans Victory on Christmas night. Life seemed too perfect.

Then in the first week of January 2001 we found out that my wife had cancer which was terminal by July, then followed by 9/11, the endless wars and fear and decline in our entire nation. The lesson learned is that the performance of the housing market and economy are of little importance as compared to your family and your health. So regardless of how the real estate market is doing focus on the most important things in life and everyone have a great 2011.

The Bad News, Bad News, Good News!

What a week for Real Estate news.

Here are just a few of the headlines.

1. July existing home sales tumble by 27.2%
(Remember that's 27% below July 09's miserable #'s.)

2. New home sales reach lowest levels on record.
(Statistics for new home sales were first recorded in 1963.)

3. Tennessee ranks #2 nationally in bankruptcies.
(Nevada is #1)

4. Inventory of unsold homes reaches record highs.
(This is a major problem in the recovery of home values.)

5. Home ownership rates are lowest since the early 60's.
("The American dream" is out of grasp to so many.)

None of these headlines were news to me. I'm living it, and August figures will not be better. After a terrific March and April the market shut down, but I've seen this pattern of roller coaster recovery before.

After the 1986 tax change laws, the market went south. Savings and loan institutions were going under daily. Developers and builders were bankrupting. The inventory soared. Well it took years to come back, but one day the inventory was absorbed, and suddenly if you put your sign in the yard a contract would beat you back to the office. Although it took four years to recover during this period, we saw brief surges in sales. Like a wave rolling into the beach, sales would briefly peak only to crash on the shore and dissipate.

So whats' a seller to do. First stay in the market. Sales happen even in the slowest economic times, and when we do hit these brief spikes in sales you can be in a position to ride them to a successful conclusion where low interest rates, great prices, and selection await a qualified buyer.

The second suggestion to a seller is to be competitive in price. Values have dropped, and a seller is competing with short sales, foreclosures, and other distress sales. You have to find the price that will sell the property, and remember your home value has nothing to do with what you paid for it, or what you "have to get out of it."

The third suggestion is, you must have your home updated and in it's best condition. The buyers do not want to choose their own wall colors and carpets or remodel your kitchen. They do want a pristine home that's move in ready. With high inventories in a competitive market one negative feature can mean the difference of your home losing out to a competitor.

One day our inventory will balance, and we will be back to a sellers market. But until then, you must do everything right to be ready to catch that next sales spike and take advantage of this fabulous buyers market with 50 year lows in interest rates. And that's the good news...

Stressed To Kill!

Our state legislators have made sure that the Tennessee "militia to secure the free state" can now take our guns with us most everywhere we go. It is now within the law to take your gun to bars, parks, and churches.

Believe me, with few exceptions our second amendment rights are not under threat in Tennessee. But if the wise leaders in our legislative chambers start encouraging Buyers and Sellers to bring their guns to real estate closings, then it may be time for me to retire my real estate license and get a job as a Walmart greeter. (I wonder if they are packing heat.)

As Realtors, buyers, or sellers you know some version of this story. Mary, your Sunday school teacher, and her husband John listed their home with you and today is closing day at 5:00PM. John has been living in Atlanta for three months working at his new stressful job and has signed power of attorney for the closing. Mary is home with the three children and is leaving her job, friends, and family, and her children needed to be in the right Atlanta Schools two weeks ago. The movers are at the home and almost ready to pull out when you get the call from the closing attorney. "The home can't close today."

There are a thousand reasons a home does not close as scheduled, but whether the paperwork is not ready or the earth has just been hit by a giant meteor the results are the same. It's out of your control and you are going to hear words come out of your Sunday school teacher's mouth that could make a sailor blush, and you hope that her gun has been packed up by the movers.

Realtors at this time, it's good to drink a big glass of empathy juice. Never forget that the sale of purchase or real estate is a very stressful event for our buyers and sellers and it often coincides with another very stressful event in our customer's and client's lives.

Some homes have happy closings where the buyer is moving to a nicer home. Even then people are stressed about spending the most amount of money they have ever spent in their lifetime. But most home closings are coupled with some other stressful life event.

Job relocation, loss of a spouse, a new child on the way, health issues and loss of income are just a few examples of other major stressful events that accompany the sale and purchase of a home. That is why some seemingly small problem during the transaction is the proverbial straw that breaks the camel's back.

Real estate transactions have become more and more complicated. To nurture a transaction through selling, financing and inspections to the closing is complicated, and things will go wrong. Today's economy has made the process even more stressful with loss of values, appraisal problems, and banking that has taken a 180 degree turn from the days of free flowing money.

The stresses that our clients face in every transaction are real. Never forget it..

We Are Just Animals Running With The Herd!

It is a miracle that we all have survived to walk the face of the earth. Our survival was dependent on the survival of our parents to the age of procreation. And our existence was dependent on the survival of our grandparents, their parents and the survival of our relatives for scores of generations over thousands of years.

At some point in ancient history our most distant relatives crawled down from the tree tops. They out witted the saber tooth tigers, discovered fire, learned to make stone and iron tools, learned how to raise high caloric crops, and domesticated animals to survive.

In the process some of human survival skills were hardwired in the brain as part of our DNA in the evolutionary process. These ancient brain connections, like fear of snakes, we call instincts.

Our instincts are outdated and shaped for a lost primitive world. Some instincts, like the desire to gorge on high caloric foods, served us well when we were foraging for nuts and berries, but in today's world of super sized meals our instincts to consume large quantities of high caloric foods actually has a negative affect on our survival.

Another instinct that does not serve us well in the modern world is running with the herd. In prehistoric times running with the herd may have offered protection from wild animals and tribal enemies. But in today's world it can be questioned that individuals following logical independent thought serves us better than hanging with the herd.

A good example is in the purchase of real estate. In 2005 and 2006 the herd was buying homes in large quantities. Lot prices were at an all time high. Labor costs were at an all time high. And as you would expect prices were at an all time high. Logically a thoughtful individual, banker, or investor, could see that this was not a great time to buy, but the herds ran straight toward the cliffs ahead, and we know what happened in the stampede.

Well now we find ourselves in a period where inventories are at record highs, interest rates are at record lows, and prices are at close out sale prices and no one much is buying, because the herd is not buying.

Wake up humans! Rise above your instincts. Does "buy low and sell high" mean anything to you. Separate from the herd and try to create new brain paths of instincts to pass on to future branches of your hereditary tree.

Now is the best time to buy real estate so stop cowering with the herd and give me a call...

Reply Real Estate "When Will I Ever Learn"

Is it ever too late to learn? I hope not but a lesson that I have learned and forgot more than once is NEVER BUY ANYTHING FROM A PHONE SOLICITATION.

I may have learned my lesson this time for good after answering a call from REPLY REAL ESTATE, INC. At a time recently when I was rushed and stressed about business I got a call asking if I would like more business. "Yes" I answered, then the solution was presented to me by Reply Real Estate, Inc. For only $55 a lead I could greatly increase my business. Well I obviously did not listen or understand the program.

The leads started coming in large numbers. Oddly they always came from areas that I would not drive my car through, from people wanting homes in the affluent community of Hendersonville. I still followed up on a few, but after misinformation, slammed receivers, and bewildered prospects that I wondered why I waste my time. How do they capture these leads? I can only imagine that they must offer a promotional crack or gun give away.

Well I tried to stop the program yet the useless leads continued to come (CH CHING CH CHING). After dozens of e-mails and a big bill to pay as settlement I have finally learned my lesson.

If you are a Realtor and this story doesn't teach you not to make the same mistake as I did, I have a proposition for you. Send me money, or better, let me bank draft your account like Reply Real Estate. For only $35 a lead I will send all the leads you can stand. I will blindfold myself and put my finger down on name in the phone book. And for only $25 per lead I guarantee you will get a better quality lead from me than from Reply Real Estate.

The Power Of Illogical Thinking!

I live and do business in the rather affluent communities of Hendersonville and Gallatin, TN a suburb of Nashville. As you might expect I do business with a lot of smart and well educated people: Medical Doctors, P.H.D.'s and financially savvy business people. So at times I can not believe the illogical thought process that I hear on many of my listing appointments.

Here are just a few examples:

We have just reached the point in the listing presentation where it is time to talk price. I've done my home work; I have active homes that compete with the seller's home, all comparable sold homes from the last 12 months, tax records on all sold homes to compare with the subject property, and a break down of all adjustments that show why the seller's property is worth more or less than the other sold homes. Then the tense moment " I think the price should be XXX dollars ." The next statement that comes from the client is often, "that's interesting but I need to price it for XXX dollars because I need XXX dollars out of it." Please explain to me logically how what someone needs out of the property has to do with the value. I haven't tried out this logic for myself but I think I will go march down to the Mercedes dealer and ask to buy a new 320 model for $8,000 because that's the price I need it to be.

Value is best predicted by past comparable sales, and the selling public must think at times that a customer looks at only one home before making a purchase. Believe me you can take a couple off the boat from Bangladesh and show them 10 homes, and they can tell you which ones are over priced.

This is example number two of illogical thinking at the listing presentation:

As a Realtor you have just walked through the home. It's located in a good school district in a well cared for neighborhood. There's just a few problems ; the wall colors are mauve and sea foam green, the sculptured carpets are peach, the dining room area has a duck wall paper border that perfectly matches the floral kitchen wallpaper. Sad looking deer heads stare down at the worlds largest collection of pig salt and pepper shakers. And the cat box in the corner, well it smells like ... let's put this politely... SHIT. I am informed with great pride that the home has a new roof and water heater.

I delicately bring up the need for changes and with sad faces am told of the paint and carpet " I'm sure the new owners would rather pick out what they want, the husband is proud of the deer heads, and they can't even smell Fluffy's litter box." I understand that they don't want to make changes, and anyway maybe buyers will line up and and take numbers since it has a new water heater. RIGHT!

The last illogical approach to selling and buying a home is the emphasis on "dollar per square ft."

When I started my career many years ago dollar per square ft. had meaning. Of course 90% of the homes were ranch style boxes that had 4/12 pitch roofs, and the other 10% were two story boxes.

In today's world talking about dollar per square foot is as logical as asking how much is the cost of a bag of groceries. So many homes today have so many factors that affect cost. How complicated is the plan, what amenities are in the home, is there 2 story volume areas and what's outside; like covered porches, fireplaces, and pools. Also one level homes are more expensive to construct per square foot than two stories, and the smaller the house, usually the higher dollar per square foot. And half the time one of the two homes being compared has incorrect square footage. While size matters, dollar per square foot is of little use in pricing homes in today's market.

Well I could make this blog into a book about the illogical thoughts that people express about their homes. But the truth is that we all bring so much emotion to the table when it comes to the thoughts and feelings about our home, "our castle."

When I first got into Real Estate I listed farms, log homes, acreage properties, and contemporary homes. I was more successful at listing than selling my inventory, so I went to my broker and asked what I was doing wrong. He said have you ever thought about listing the type of homes that are easy to sell. Well that got my attention! I became much more objective and logical about my business and less illogical and subjective.

What I liked wasn't necessarily and in most cases the opposite of what the public liked. So just remember illogical thinking most often leads to inappropriate actions. That's the power of illogical thinking...

I'll Be Living That Good Life In Hendersonville TN!

Living the good life has a different meaning for many of the residents in our community. For some it's a round of golf on one of our many five courses, or a day on Old Hickory Lake boating or fishing. For others it may be spending time with family at the many parks and church events. You may think of this as 60 tweets but this is a description of a day in my perfect life in the Hendersonville/Nashville TN. community.

Alice and I sleep in until 6:30 after attending a record release party at the Station Inn with Elizabeth Cook. There is not enough time to make it to the gym but we do have time for a 3 mile walk down our still rural road that is only a mile and a half from a Starbucks and 18 miles from downtown Nashville.

The first thing I notice is that the male half of the Mallards couple that live in the creek across the street is missing. I look for feathers on the road but seeing no evidence of accident or "foul play" the male has unexplainably "flown the coupe." We spot a flock of wild turkeys along our walk a rather common event and the two Canadian Geese that have frequented the Frazier's. Have for the 3 springs now. The Timmons' iris beds that have exploded to a point of domination their entire front yard are looking great and I spot a few clusters where I can get future cuttings.


After arriving home I decide to delay my work day and head up to the gardens. I pick fresh asparagus and transplant from seedbed the eggplant, red peppers, and Romaine lettuce before the predicted morning rains arrive.

Afterward a quick clean up and a third cup of coffee I am off to put in my eight hours of real estate work. The market took a major upturn in March and it's keeping me busy preparing for seven closings during the next three weeks. Have inspections, appraisals, coordinating closing details, getting loan pay offs, etc consume the day. It has become a complicated maze in today's world to guide a sale from contract to closing. I could complain, but if it was all easy there would not be a need for Realtors.

I end the work day at 5pm and prepare for a date with my lovely wife Alice. First stop will be at our new favorite restaurant the Silly Goose. - The Silly Goose in East Nashville is so small that they do not have the seating capacity to get a liquor license so we select a bottle from our wine cabinet and we are soon off the Nashville.


The restaurant is so unique. Their entire kitchen consists of a George Foreman grill, a panini grill, and a hot plate. The menu breaks down to four categories, snacks, sandwiches, couscous dishes and deserts. It all sounds so simple and it is, but the combinations of specialty cheeses, Italian pork, apple wood bacon, fruits etc. makes for a most memorable dining experience.

I get a call before dinner and its word that our counter offer on the Twin Cove lake home has been accepted, which means the new home my clients want to buy will be a reality. News of two sales, calls for a special toast and a splurge on the beet ice cream.

After splitting dishes we are pleasantly full and head off to our second stop, the Cannery Ball Room to see Sharon Jones and the Dap-Kings. Sharon Jones and Dap-Kings are definitely old school. They channel all the best of funk, R & B and Soul from the Stax record era and James Brown.

If I can diverge a bit, I think James Brown will go down as the most influential musician of the last 50 years. I grew up in a small Tennessee town on the Alabama border in the 50's, a time when all my peers were into Elvis and early rock and roll. Somehow I encompased a broader interest in music with James Brown as my musical hero. Throughout my public school education schools were segregated, but I got my fix on "Colored Music" from listening to the Randy Record Shop late show on 50,000 watt WSM on a transistor radio after my parents were in bed and asleep.

Before listening to the Randy Record Store broadcast, I think my musical interest was influenced by a show at the country fair called "Club Ebony." Club Ebony was a way to bring the black music found in the Juke Joints and Chittlin Circuit of the Old South. The shows had comedians, dancing girls, and great blues and R & B music. It was risque, and exciting for a 12 year old and I went back every year during the Fair and was influenced forever.

When I turned 16 and got my drivers license my first road trip was the 100 miles to Nashville in 1966 to see James Brown and the Famous Flames at the Nashville race tracks grand stands. I have seen hundreds of concerts since, but that concert experience to this day is still one of the top three concerts events of my life.

Back to my day. Sharon Jones and the Dap-Kings do not disappoint. The Dap - Kings do back up and recording for the like of Amy Winehouse and they could not be better driven by the vocal power and original music of Sharon Jones.

Well its 12 and this perfect day in the life of a Realtor is not over. But the thought occurs to me that there is no better location to pursue many of my life's passions: Wife and family, gardening and the rural life, my profession as a realtor, food, wine, arts and entertainment and urban life than in my home town Hendersonville TN. home of Johnny Cash 20 minutes from downtown Nashville.

HAVE A PERFECT DAY!