The tale of the Trojan Horse recounts the story of a huge wooden horse constructed by the Greeks in order to lull the Trojans into a false sense of security. Inside this wooden horse were hidden Greek warriors, and as the Greek army pretended to sail away from the city of Troy after a ten-year war, the supposedly victorious Trojans pulled the Horse into their city to celebrate their victory. But that night, the soldiers inside the Horse crept out of hiding, opened the gates to the city of Troy allowing the Greek army to enter and destroy the city. Guess what. The Trojan Horse is back, only this time it comes disguised as the real estate short sale.

Short Sales are the trojan horse threatening the destruction of the housing market. I never thought that I would come to that conclusion but a look at the statistics are both shocking and revealing regarding short sales and what they’ve done to the housing market here in my home town of Grants Pass. Our local market area has currently a total of 1240 properties that were listed in the month of June, 2010. During that 30 day period we sold 84 properties, we had another 84 go pending, and 34 more became contingent sales. That’s not bad but by no means good. The amazing part is that short sales represented 10% of the total inventory for sale and yet out of over 100 properties that were listed as short sales, there were only 4 that actually sold. That’s a mere 3/10 of 1% of the total activity in the market. Sadly, short sales are influencing the price of all the other properties in the market, contaminating everything around them because short sellers have no stake in the outcome of the sale.

Let me explain. Continue reading Short Sales and the Trojan Horse

Over the past year, I’ve written many blogs about the state of going green in the Southern Oregon real estate market. With the coming of 2010, it is time to revisit the green movement to see where it is going. At its most fundamental definition, going green simply means that you care about the environment and the last year has seen a great surge in the sheer numbers of people, businesses, and organizations that have expressed their concern for the environment by joining the green movement.

These numbers also tell another story; the story of a growing consciousness of caring. This growing consciousness is a consciousness that has spread not just across our great country, but around the world. This consciousness can be categorized as enlightened, for it seeks to join others in a quest to create a better world by going green.

I am often asked if this mass transcendence to a higher level of consciousness spurred by the green movement can be applied to business principles that lead to success. In today’s world we are all well aware of the polarization that occurs between ideologies and how ideologies can become counter productive, freezing progress along the way. The pointing finger of blame presents the greatest resistance of all to achieving meaningful change and the Great Recession is living proof that individual and corporate profits driven by greed and corruption lead to disaster. But there is now a transcendence underway that will lead to a new belief structure in the power of enlightened consciousness and enhanced business practices. Transcendence to enlightened consciousness is a journey that can be taken by anyone courageous enough believe that there is a better way, that doing the right thing is an inherent part of our DNA, and that the journey toward understanding and practice of enhanced business principles will lead to un-compromised success.

2010 holds the promise of a new beginning for those who believe in going green and are ready to begin a transcendence to the business principles of success attainable through enlightened consciousness.

The question is… are you ready?

Michael Masters

A Socially Conscious Real Estate Consultant

I think for many of us, the journey into a new calendar year celebrates the passing of 2009 as much as it welcomes 2010. Let’s face it, 2009 was a tough real for just about everything economic. Back in 2006 when Southern Oregon real estate prices began their downward slide, we had no idea that market corrections would lead to a global financial meltdown. In hindsight (which for most of us is 20-20) we now realize that the high-water mark for real estate prices in the Southern Oregon real estate market was in the summer of 2005. That high-point for prices was nationwide, and unknown to many of us, the price pendulum had already begun to swing the other way. Of course, devaluation of property led to the financial disaster for many home owners as foreclosures and short sales dominated the Southern Oregon real estate landscape.

But one thing we know for sure. When prices hit their high-mark and the market begins to make corrections in the opposite direction, the high-mark always reaches a price that is higher that it ever should have been. These market corrections are driven by the laws of supply and demand and they work in both directions, up and down. Likewise, when prices plummet downward, they will sink lower than they should before the laws of supply and demand begin to send prices back the other way. This is where I believe we are right now. Prices have more than just hit the bottom… they’ve dipped well below where they should be. There are many homes on the market that could not be rebuilt for the listing price. In fact, there are some homes that are priced so remarkably low, it is amazing that they are still on the market.

Indeed, prices are now lower than they should be, just as they were higher than they should have been in 2005. So prepare yourself for the real estate recovery that will become fully recognized in 2010. It’s about time.

Michael Masters

A Socially Conscious Real Estate Consultant

It’s often been said that the only thing holding us back is our own individual fear of success. Fear can catch us in our own trap. Fear can hold back Buyers and Sellers in the Southern Oregon real estate market from making the right decisions. Fear is our own worst enemy. But control over our fears can establish confidence in those around us and in the long run, help to jump-start the real estate recovery.

As a Socially Conscious real estate consultant, I often counsel real estate agents in the Southern Oregon real estate market about Continue reading Fear of the Future and the Southern Oregon Real Estate Market

2009 will undoubtedly be remembered for the global economic meltdown, financial crisis, real estate collapse, and governmental bailouts. And as the Southern Oregon real estate market passes through this treacherous fiscal gauntlet, at times it becomes tough for homeowners, buyers, and sellers to hang on to a positive attitude. Yet recent studies show that the tougher the times, the more we need an optimistic attitude. Research now shows that a positive attitude not only leads to Continue reading Optimism and the Southern Oregon Real Estate Market

How do you put this tactfully? 2009 was a tough year for the global economy and for the Southern Oregon real estate market. Fortunately for the market, the housing sector is today in a stronger position at the end of the year than it was at the beginning. 2009 will no doubt be remembered as a year of transition; as a year that signaled the beginning of the recovery for national real estate markets and for the Southern Oregon real estate market. And none too late.

2009 saw foreclosures and short sales dominating the landscape, and taking with them in their wake Continue reading Farewell 2009 from The Southern Oregon Real Estate Market

The Southern Oregon real estate market here is definitely getting better, and that’s good news, but the truth is it couldn’t have gotten any worse. At the peak of our market in 2005, we were averaging about 135-140 home sales a month compared with the bottom of the market when we were selling around 55 to 65 homes per month. In today’s market, we are now averaging about 80 to 85 sales per month. The median price at the market’s peak in 2005 averaged about $260,000 per month while today the median price is now in the $170K range.

Fortunately, amid all of highs and lows in the Southern Oregon real estate market, prices have finally stabilized, and in a recent conversation with an Appraiser, I was informed that prices have been holding steady since the end of the second quarter of this year with some slight price improvement. Both the Appraiser and myself expect that statistical improvement to disappear as we enter our seasonal slow down. We usually see sales off by as much as 50% in the month of December but we expect an early pick up in the spring as buyers take advantage of the homebuyer’s tax credits that expires in March.

Now the bad news: Continue reading End-of-the year Report for the Grants Pass and Southern Oregon Real Estate

Homeowners distressed by the housing sector meltdown in the Southern Oregon real estate market can look forward to help from the U.S. Treasury Department in the upcoming months. Last week the Treasury Department unveiled new rules for homeowners nationwide who need to sell but are “underwater” and unable to get a price for their home that would cover the amount owed to their lender. The Treasury Department plan has been created to help those who either don’t have enough income or whose debt levels are too high to allow them to qualify for a loan modification under the multi-billion dollar program known as Making Home Affordable.

When a home in the Southern Oregon real estate market is listed for a price below what is owed to the lender, it falls into the category of a Short Sale, but make no mistakes about it, there is nothing short about it, except for the funds necessary to pay off the loan. However, there are advantages to a short sale; in addition to saving the seller’s credit, short sales save the banks the expense of foreclosure. Short sales also help to solidify neighborhood property valuations because a short sale price is most likely a higher price than what the house will sell for through foreclosure. It is estimated that in 2009, one out of every ten home sales was a short sale, and in some distressed areas like Las Vegas and Sacrament, the ratio is much higher.

Following are the guidelines for qualification for the new Treasury Department assistance: Continue reading Treasury Department Assistance for Short Sales in the Southern Oregon Real Estate Market

On a previous blog I addressed the impending issues regarding commercial real estate and foreclosure proceedings in both the Southern Oregon real estate market as well as the national commercial real estate market. The global economic meltdown resulted in consumers collectively tightening their belts and spending less. This reduction in spending had a profound effect on the Southern Oregon real estate market and we soon saw “For Rent or Lease” signs hanging in the windows of vacant commercial buildings. With reduced consumer spending, businesses in mini malls, downtown areas, larger malls, and strip malls began to close their doors, unable to pay their rents due to the slowdown in spending. Now another calamity appears perched to effect commercial real estate in Southern Oregon and elsewhere.

It seems that between 2005 and 2008, billions of dollars of commercial real estate was either sold to a new buyer or refinanced to grab equity. The most popular terms used during this refinancing phase in commercial real estate called for payment schedules based on a 20 year amortization and fully due and payable within 5 years, making the first round of loans initiated in 2005 due to be paid off next year in 2010. For the following three years, loans will continue to come due and payable through 2013 as required by the terms of the contract and agreed to by the borrowers. Unfortunately for the banks, this potentially means 3 years of painful commercial foreclosures as borrowers struggle to come up with the funds necessary to comply with their contractual payoffs. Looking ahead to the next three years, commercial lenders must begin to aggressively address this issue or they will join residential real estate lenders in the challenge of unloading foreclosed property. Ultimately, this could mean steep bank losses, tighter money, and continued challenges for a recovering economy.

But are their solutions to this impending problem? Most certainly, but as the personal trainers say to their clients, “No pain, no gain.” A Federal bailout for commercial lenders seems unlikely, so creative options like mortgage modifications seems the likely first step, and we all know how much fun that can be.

More to come on this pressing issue.

Michael Masters

A Socially Conscious Real Estate Consultant

In my last post, I mentioned that the economic meltdown currently referred to as the Great Recession was ignited by sub-prime loans and run-a-way foreclosures, and that recovery from this economic tsunami may well take as much time to heal as did the Great Depression. Today, the Great Recession is experiencing a slow recovery, which is painfully felt by those holding real estate in the Southern Oregon real estate market.

I also mentioned in the previous blog that in 1932, money was “sucked out” out of the system by Herbert Hoover’s Recovery Act that raised taxes and left the masses even more penniless than before. In 2008, money was also “sucked out” of the system, but not by taxation. Instead, it was the price of gasoline which rose to over $4 per gallon in some geographic areas of the country that sucked billions of dollars out of the system and sent them to the oil producing countries of the world. Once gas prices began to decline in price due to decreased demand from people driving less, the economic system took a deep gasp… and crashed.

So here we are, nursing a recovery for the Southern Oregon real estate market and wary to announce that “Prosperity is just around the country.” But remember this — the Baby Boomers are still perched to retire to more comforting digs like Southern Oregon, ownership of real estate has always been the greatest protection from run-a-way inflation, and the buying incentives of tax credits for first-time home buyers and others are still engaged.

My prediction for 2010 — the Housing Sector will continue to recover and begin to make noticeable gains trackable through statistics. No, we’re not out of the woods yet, but there is light glimmering at the end of the tunnel. Stay tuned.

Michael Masters

A Socially Conscious Real Estate Consultant