I’ve been selling Southern Oregon real estate now for nearly 30 years. Over that span of time I’ve been asked to list and sell many businesses and companies here in the Grants Pass and Medford areas. The first question I inevitably ask is “Are you making money?”

If a company is for sale and it is not turning a profit the next questions are always “Then what are we selling and why should anyone buy it?” Consider the obvious —-everyone wants to sell their business when it’s not profitable. That’s a lot easier choice than staying in it and restructuring to get it in the black. I always tell my clients that If you have a business enterprise that is not turning a profit or if it is making a profit that is about what you would be paid if you had a job doing the same thing then forget about selling it —- Liquidate it! That’s tough advice but the truth is a lot easier than giving someone the false hope of an entitlement to money that they’re never going to receive.

No matter where you live, if you ever find yourself in such a situation then you’ll have the same easy choice to liquidate, take your losses and go do something else, or the more difficult choice of staying in and restructuring. That may mean borrowing some money and then reinventing your company to make it profitable. I’ve seen the previous scenario play itself out dozens of times over the years in my Grants Pass real estate business, and with my social conscience I find it a lot easier to tell someone that their business is really no more than a pool of assets costing them money to run every month.

I always recommend that they go back to the basics and get their flawed business model repaired and made profitable. It then becomes very simple to sell a business that’s making money. At that point most don’t want to sell except for retirement. I want to draw a comparison here between unsuccessful businesses with flawed or outdated business models and our current economic situation here in America.

Not so long ago, we were the economic engine of the world. We were the envy of all other countries for our modern business practices, our progressive labor laws, and our tax structure. In short, we did almost everything right and as a result Continue reading Selling Southern Oregon, Restructering America, and a Return to Economic Prosperity, Part I

It wasn’t that long ago that first-time home buyers figured they’d never be able to afford to buy a home in the Southern Oregon real estate market. That was back in May of 2005 when prices were at their highest, but no one knew that at the time. Fast forward to today.

Now, according to statistics, the first time home buyers with good credit are the most likely group to find a home they can afford with financing that suits them. The situation has completely reversed itself within 4 years, thanks to a financial meltdown and a housing inventory swollen with foreclosures. Which takes us to the National Association of Realtors Housing Affordability Index which shows the month of December, 2008, at an all-time high.

Admittedly, many real estate experts have been calling for a housing rebound for the last two years only to watch from the sidelines as prices dropped and inventory surged. But this time there may be a real reason to believe that a shift in the market is forthcoming. Continue reading Housing Affordability and the Southern Oregon Real Estate Market

Here’s an update on home sales, foreclosures, and short sales in Grants Pass, Medford, and the Southern Oregon real estate market. The real estate market in Southern Oregon is traditionally slow during the winter months and this winter was no exception. After a brief flurry of sales in December and January when the 30 year mortgage rates dipped for a time to the low 4% range, sales in Grants Pass and Southern Oregon slowed to a rate seen in past recessions which is about half the amount seen during the housing bubble. Overall, prices have dropped an average of 25% or more since the peak year of 2005. Sales in the Southern Oregon real estate market are slow in all price ranges and types of properties. The two bright spots in sales numbers are short sales and foreclosures and statistics bear that out.

Of all the homes sold in Josephine County between December 1, 2008, through Feb. 27, 2009, 131 of the closed sales were single-family homes. Of these, 66 were either short sales or foreclosures. This number represents 50% of all sales and is actually a lower percentage of sales than we have seen of late. Some of the factors behind the drop in foreclosures and short sales may be because of the moratorium that was placed on foreclosures and evictions by Fannie Mae and Freddie Mac, Countrywide, Bank of America, and Citibank. This moratorium on foreclosures and evictions Continue reading Home Sales, Foreclosures, and Short Sales for Grants Pass, Medford, and the Southern Oregon Real Estate Market

In my last blog, we defined toxic assets of banks. This blog will focus on derivatives. Simply defined, derivatives are financial instruments comprised of mortgages that have been bundled together and typically sold Over-The-Counter to customers worldwide, from Southern Oregon to Europe to the Middle East. During the height of the real estate feeding frenzy, derivatives where bought and sold with little or no regulation to banks, hedge funds and other sophisticated entities. Behind the policy of “no regulation” was the belief that the buyers of derivatives were sophisticated investors aware of the risks and complications inherent to a financial instrument of this caliber. Billions in bundled mortgages circulated the globe as investors chased supposedly secure investments in the rising real estate markets of California, Nevada, Arizona, Florida, and yes, Southern Oregon, including Grants Pass. And throughout this period, you can bet there were some Wall Street traders making a bundle over the bundling, knowing that their tracks would be covered by complexity. When the party came to an end and the real estate market began to fall, the derivates took a nose dive. Since then, derivatives have becoming perhaps the most perplexing challenge for economic recovery. And that is because no one knows whether these bundled mortgages represent a beautiful new home Grants Pass or a boarded up shanty in flood damaged New Orleans. Continue reading DERIVATIVES, TOXIC ASSETS, AND THE SOUTHERN OREGON REAL ESTATE MARKET, Part 2