Arn Cenedella

Archive for the 'Real Estate' Category

The Sky isn’t falling ! (part 2)

The Federal Reserve Board’s recent actions to lower a key interest rate and pump additional liquidity into the financial markets has helped to stabilize the stock market.

I believe the current credit crunch will work itself out in the next month or so. People can still get mortgages. Companies can still borrow money.

Overall, the economy is in good shape.

Moving forward, real estate will continue to be a prudent investment on the Peninsula. Supply of residential property will continue to be limited as most land that could be developed has been already built on. Most local governments have low or no growth policies in place. Considering that population will continue to grow (in large part due to immigration to California), demand will continue to increase.

Baby boomers love real estate and many are now entering their prime investing years.

Ken Harney writes that Baby Boomers, Still Buying .

Baby Boomers like to own real estate. And one out of four boomers believe they will purchase additional real estate in the next year.

August has been a slow month for real estate, as it often is. This year the sub-prime issue has slowed the market even further. My sense is that after Labor Day weekend when families are done with summer vacations and the kids are back in school, listings and sales will both increase.

 Stay tuned – I will keep you posted.

MasterMind Summit

Hi everyone:

I just returned from the Brian Buffini MasterMind conference in San Diego.

The conference was held at the beautiful San Diego Convention Center located at the San Diego Marina next to the Gas Lamp District.

 Here is a list of the speakers:

Erik Wahl
	Erik Wahl is a recognized artist and speaker who inspires professionals to achieve greater levels of performance. His consulting firm, The Wahl Group, challenges organizations to implement breakthrough thinking techniques to accomplish extraordinary results.Erik’s unique understanding of vision traces back to his experience as an artist. Erik earned his bachelors degree in Business Communication before embarking on an eight year career as a partner in a corporate firm. After first working in the business world and playing with his art; Erik now PLAYS in the business world by WORKING with his art. Erik’s sought after artwork can be seen hanging in executive offices around the world. And as one of the country’s top platform speakers, Erik shares his powerful message with audiences from coast to coast.
Christopher Gardner
	Christopher Gardner is president and CEO of the Chicago-based brokerage firm Gardner Rich & Co., which he founded in 1987. Prior to launching his own firm, Mr. Gardner worked for several prestigious Wall Street Firms.Always hard working and tenacious, a series of circumstances in the early 1980’s left Gardner homeless in San Francisco and the sole guardian of his toddler son. Christopher Gardner’s accomplishments are extraordinary on their own merit, but are all the more astonishing because of the unimaginable obstacles he encountered on the road to success.
Alison Levine
	Alison Levine began climbing mountains in 1998, 18 months after her second heart surgery to repair a life threatening condition called Wolff Parkinson White Syndrome.In between starting business school and starting a career with a top Wall Street firm, Alison Levine “accidentally” climbed the highest peak on each of SIX continents. In the spring of 2002, she was invited to serve as the team captain of the first American Women’s Everest Expedition, an experience that would change her life forever.

Eric was fabulous in asking us – challenging us – to use more of the right side of our brains – to bring out creativity – that has long been dormant based on our own and society’s expectations about what is right and what is the norm. Eric asked the 5000 attendees, how many thought they were good at drawing? Only a few people raised their hands. He then asked: “If I asked the same question of a class of kindergardeners, how many would raise their hands and say they were good at drawing?”. Almost all kids would raise there hands and say Yes I am good at drawing. What happens as we grow older? Why do we often lose that innate curisosity and willpower to just go for it? – to try it? and not be afraid of looking foolish?

Eric pointed to Albert Einstein as an example of the greatest creative mind.

Chirs Gardner was fabulous in re-counting his life and how he refused to give up no matter what obstacles were placed in his way. He told us “there are no ceilings” and he would never go back as “there was nothing to go back to”. Not content to sit on his laurels as a multi-millionaire owner of a Chicago brokerage firm, Chris is now wokring with Nelson Mandela on a project is South Africa. I can’t wait to see what he comes up with this time.

Alison told us of her trip up Mt. Everest..the first American woman expidetion…..how when nearing the summit she had to take 5 to 10 breathes for every step she took. Alison also told us of how she changed centuries of tribal custom that prevented from women going up the mountains in Africa by leading 20 women up to the summit….sorry forgot the name of the mountain and the country…..getting old – will be 53 next week

Brian Buffini as always was both entertaining and truely motivational…..

You do not need to be in real estate to go – It is for everyone…..

Dream the big dream…..see your vision….and then go for it….and don’t let anything get in your way…..fear is normal but fear can’t hurt anyone…..

Cheers…..

Fractional Purchase of Vacation Resort property

I purchased a fractional interest in a beautiful townhouse at Old Greenwood near Truckee about 1.5 years ago.

Fractional interests are like time-shares but only better. You actually own a deeded piece of real estate. And I deduct interest and property taxes paid on this property just like my personal residence.

At Old Greenwood, owners get the use of their residences (beautiful townhomes or cabins ranging from 1200sf to over 3000sf) for three weeks per year. One week is fixed the other two are scheduled via a registration system.

I have had a great time with family and friends every time I have gone.

 Here is an analysis of the re-sale potential of fractionals compared to time shares.

 It’s a good life ! Cheers

The Sky isn’t falling !

I just got back from Hawaii this weekend – just in time to miss Hurricane Flossie !

But while I was away I missed the fact that some believe the sky is falling and the real esate market is about to collapse.

As I headed to the gym on Saturday morning, I put all the SF Chronicles that had accumulated in my driveway from August 3 through August 10 in my backpack so I could read them while doing my cardio.

I couldn’t believe my eyes – day after day there were headlines about the sub-prime mortgage crisis and the imminent collapse not only of our local real estate market but the US and world economy to boot.

The media needs to get a grip ! The media is blowing this issue way out of proportion and is not presenting a balanced picture of the reality.

The National Review Online recently published a great article which takes a statisical look at the sub-prime mortgage “crisis”.

To summarize the findings:

Currently there are about 44 million mortgages in the U.S., and less than 14 percent of them are sub-prime. And only about 13 percent of those are late on payments, with the majority of late payers working through their problems with the banks.So, all in all, when you work through the details and get down to the number that really matters, only about 0.6 percent of U.S. mortgages are currently in foreclosure. That’s up a hair from roughly 0.5 percent last year. That’s it.

If only 0.6 percent of the businesses in the Bay Area were losing money, would the media say the economy is falling apart? I don’t think so! If only 0.6 percent of California high school students failed to pass the exit exam, would the media say the school system is bankrupt? I don’t think so! In fact, if 99.4% of California high school students passed the exit, the media would write about the phenomenal job our school systems are doing.

I have been a real estate broker for 29 years on the San Francisco Peninsula and I can tell you the market is strong. I recently helped a young married couple purchase their first home in Suunyvale. I presented offers on SIX different properties for these clients before they finally received an acceptance. All of the offers I presented were no contingency “as is” offers $50,000 to $100,000 over the list price. On the 6th offer, their offer was finally the accepted offer. Does this sound like a market on the verge of collapse? It is true loans have been made to buyers who could not afford to pay them – TRUE!It is true some of these buyers now have lost or will lose their homes – TRUE!

It is also true most of these buyers purchased homes with NO money down – so what have they really lost?

I do not mean to discount the emotional upset that comes with losing a home but most of these buyers will be in no worse a financial situation now than if they hadn’t purchased a home in the first place.

And think about how many buyers (87% of the sub-prime total) are in their homes and are making their payments on time. Think about how these buyers would not have been able to buy a home without these sub-prime loans.

The facts are that only 1 out of 7 home loans are sub-prime and that the VAST MAJORITY (6 out of 7) of buyers who purchased homes with sub-prime mortgages are doing just fine. These sub-prime loan programs have enabled these folks the opportunity to own a piece of the American Dream.

So let’s relax – yes, some of the Wall Street investment firms are facing monetary losses due to their speculation in mortgages – I feel very sorry for those Walls Strret investment bankers – I don’t think they are losing their houses or missing any meals!

But let’s keep in mind 99.4% of American homeowners ARE NOT IN FORECLSOURE!The real estate market will survive – the lending business will adjust and in a few months – all will be back to normal and the media will need to find another reason to blast real estate ownership. Cheers !

Looking to live somewhere that is walking friendly?

Hello everyone:

just came across a really cool site….

www.walkscore.com

just type in an address and the site will calculate a “walkscore” on a scale from 0 to 100 which indicates how walking convenient any location is….

the site will show you where all the nearby stores, bars, restaurants, and transportation are located.

check it out – let me know what you think.

 Arn, the reyogi…..

Is the media biased against Real Estate?

I am continually amazed at how often and how consistently the print media paints a doom and gloom picture about the local real estate market but seems to give the stock market a free pass.

Today’s FRONT PAGE headline in the SF Chronicle read “Living the American Nightmare” tells the story of 4 homeowners who now face severe financial difficulties due to the financing they used to purchase their homes. 

3 of the homeowners purchased their homes with no money down.

2 of these homeowners had the same person act as their real estate agent and their loan agent. I consider the practice of acting as both a real estate agent and a mortgage broker in the same transaction to be highly questionable. More often than not, when I see an agent acting as both a real estate agent and as a loan agent, the interest rates on the loans used to purchase these properties is extremely high.  I believe the state legislature should look at this practice and determine whether the general public is best served by individuals who wear two hats in the same transaction.

In the past week, the stock market dropped about 4.3%. 

Did anyone see any front page articles about this? I didn’t!

The only article today about last week’s stock market woes was found at the bottom of the first page of the Business section titled “Market’s woes called ‘repricing risk’ as fears continue over mortgage defaults” and essentially laid the blame of this week’s stock market collapse on the sub-prime real estate financing problem.

I think we need to be careful and separate the problems caused by the sub-prime crisis and the generally very solid strength of the real estate market.

In the past 30 years,  the local real estate market has had no more than 2 or 3 years where property values dropped more than 4.3% in an entire year! During this same period, in most years we have seen property values go up at least 8 to 10% per year and in several years increase by nearly 20% or more.

Owning a home provides a place to live and is also a very good investment.

In my 29 years as a real estate broker, I have counseled my clients to purchase only what they can afford – that the only way people get hurt owning real estate is if they buy something they can’t afford. As long as people buy what they can afford, they can have faith that over the long term, owning their home will probably be the best investment they ever make.

The business practices of some loan agents and loan companies in the lending industry combined with the failure of individuals to take responsibility for their own financial decisions has led to the sub-prime mortgage crisis.

Let’s not throw the baby out with the bath water!

Real estate is a strong, safe and prudent investment.

 Arn