Is Madison, Wisconsin Leading the Way for Us?

As most of you know by now, I belong to a group of large independent real estate companies around the country. Some are in big cities, but most are in smaller cities (although bigger than New Haven or Hartford). For some reason, Madison, Wisconsin seems to be the most like our region. Dave Stark, the owner of Stark Real Estate there, and I have discussed this, and it's likely to have a lot to do with the employment base. They have both the state capitol in Madison, and the University of Wisconsin, and those are the two biggest employers. If you didn't know that before, you weren't watching the state workers picketing the Madison capitol!

Having a lot of non-profit and government workers in a region usually makes the employment situation steadier, as well as the use of commercial space. Universities and governmental bodies think in terms of decades, not months. Also, you don't often have the boom times that you would find in Silicon Valley, say, or Wall Street, or even a smaller place where a large manufacturer might open or expand a facility.

Therefore, I thought it was very good news last week when I received Stark's quarterly mailing. While they had the same horrible first quarter that seemed to prevail everywhere, the recent signs have been encouraging. They see lots of pending activity, and increased interest in real estate. I hope it gets here as fast as a big storm seems to do!

More Reasons to Buy Now

The Wall Street Journal this morning had one of the most positive articles about the current real estate market that I've seen in a long time. They said that, if you take out foreclosures, the real estate prices are really off less than 1 percent from a year ago, suggesting that we are at the bottom of the market. In addition, mortgage rates are near a 50-year low, and the ratio of housing prices to income is over 20 percent better than the fifteen-year average. Although household formation rates have fallen recently, the aging of the baby boomers portends an uptick in home purchases and second home acquisitions over the next number of years. They even went on to say that most people still want to own homes, even discounting or ignoring the investment value, because of control over their environment and access to schools and other amenities. They predict that prices will start to climb soon.

All of this seems to indicate that now is the time to buy. It never pays to try to find the low point at its exact nadir. All indications say that we are now close to that point, and therefore buyers should be rushing out to buy. The article does talk about the new difficulties in qualifying for and obtaining mortgages, but there are many other people who simply aren't buying because they are worried about the future value of their investment. Do those people not worry about the stock market? The bond market? The value of art and antiques? In fact, do they sleep at all?

It seems clear that we need to continue to convince buyers that the time to act is soon. If not today, then later this week or month!

Memorial Day Memories

Because it's Memorial Day, I've been thinking about my parents. Although my father wasn't a veteran (because he was in management at a defense plant), my mother was in the Women's Army Corps as a nurse. I've gotten a lot of requests for copies of the eulogy I gave for my father last month, which is subtitled "Nine and a Half Decades in Nine and a Half Minutes". Here it is:

I remember two things about my father’s term as President of the CT Association of Realtors. The first was that he brought the President of the United States to speak at the state convention (which almost didn’t happen because, when the advance team called our house, my sister thought it was a joke and hung up on them). The second memory is of his stump speech at Realtor dinners around the state. It spelled out REALTOR, beginning with R is for resilience, and going on to E for enthusiasm and A for attitude. In his typical double-time style, he raced to the end, leaving out a different letter each time. My mother would say, “Herb, I’m not going to drive around the state to listen to you misspell Realtor.” And he would reply “But you’re the only one who notices.” I used to think that was because they were partying and not listening, but I now realize that, if you knew my father, resilience, enthusiasm, and attitude said it all—the rest was unnecessary. I’ve spent much of this week reflecting upon what made him so special, and why everyone here has a Herb story, and I think it comes down to three gifts: a gift for life; a gift for friendship; and the power of positive thinking.

His gift for life began at birth in NYC, though the family moved to New Haven when he was a baby. His father came to work on the Yale Bowl, then started his own construction company. My father, living in North Haven, rode the streetcar to the nearest school in New Haven, stopping at the pool hall or the movie theater too often to have been a scholar. His favorite childhood memories were of driving his parents’ car through the corner of Church and Chapel when he was 14 and they were away for the weekend, and of saving up all year to go to Savin Rock for an evening. His father lost his business during the Depression, so my father went to work for A.C. Gilbert, whose paper boy he had been, for .25 cents an hour ($10 a week). He rose quickly through the ranks, and was deemed crucial to the war effort when they converted to a defense plant, having 2000 people reporting to him when he was 27. After the war, he had a very active social life before his marriage at 37—he was engaged three times, or, as he put it, three women thought they were engaged to him. One was a star in the Ice Capades, but he skated quickly away. He got a form of polio in the early 50s,and met my mother during his lengthy hospitalization. He decided to start his own business when I was a toddler and my sister was a newborn, using his severance pay to buy my mother a mink stole. He worked all the time in those early years. My sister and I remember helping him to clean the office on Saturdays and riding around in the trunk with the open house signs on Sunday. He was a whirlwind of activity—sales, charitable boards, a brief run for Congress, state delegations, and more. The best story I’ve heard in the last week was a call he made with a friend to a big company for the United Way. The man told him that everyone was human, and that we all put our pants on in the morning one leg at a time. My father said “Not me. I put both legs in at once, pull them up, and get going.” There was no time to waste. He rented a bike on his first trip to Europe rather than tour the tulip gardens, as he remarked that, if you’ve seen one tulip, you’ve seen them all. This applied to our family as well. When I graduated from law school and business school, he declined to come to graduation, stating that if you’ve seen one Harvard graduation, you’ve seen them all. This lack of sentimentality carried over into other realms. My sister’s horse was named Prince, and he painted her horse trailer “The Prince and the Pauper”. He told me that Norm and I couldn’t get married before 4 PM, since “there’s no sense in ruining a perfectly good golf day.” (note the time of this service). The only word of Spanish he learned in all their travels to their house in Spain was manana, and he didn’t like it. But he enjoyed every day to the fullest—every hamburger was the best one he ever ate, every occasion was a party (and he was the guest of honor), and there were wonderful opportunities everywhere.

He never had regrets, and he rarely looked back. One of the few times was when he told me that he’d like to find his Uncle Frank, who had emigrated to Canada. This was a few years ago, and I asked him when he had last heard from Uncle Frank. He said that it thought it was about 1920! He had every faith that we could track him down. Needless to say, Uncle Frank had died, but we found his son—my father’s first cousin—in Saskatoon. He was also forward-looking about change of all kinds. He was proud of being the first in the real estate industry to run billboards, full-page ads, radio and TV commercials. He had a car phone in 1968, when you had to go through the marine operator to place your call—totally impractical with a five-minute commute, but so typical. At the end of his life, he had a Facebook page and an IPOD shuffle (although he called it his “music box”).

Part of his exuberance was because of his gift for friendship. He loved his friends of all ages, old and new. His strong handshakes, big kisses, the spring in his step, and the twinkle in his eye will all be remembered as hallmarks of his entrances. The phrase “comfortable in his own skin” probably wasn’t around for his first 75 years, but boy, did it describe him. He never felt superior or inferior to anyone. Think of the self-confidence it took for a high school graduate who didn’t go to war to marry an Army nurse with two graduate degrees. He had friends who were professors and friends who were laborers, friends in their 20s and friends in their 90s, and he treated them all the same way.

He delighted in doing things for his friends. My mother said that, if she ever came back, she’d want to come back as one of Herb’s friends. He loved to plan presents, parties, and pranks, as well as serious endeavors. He was born before women could vote, yet was asked to nominate Jean Handley as the first woman at the Quinnipiack Club. He waged two campaigns to integrate the New Haven Country Club, succeeding the second time. He made everything possible, and everything more fun.

And that was due to his third gift—the power of positive thinking. Buck has mentioned his optimism, and he had that in spades, but that’s a disposition. Attitude is a willed trait. He believed that there wasn’t much that couldn’t be changed with a change in attitude. He applied that to his personal life first. When my mother died, we were worried about him, after finding him sitting in his office crying. A few months later, he told my sister and me that he was 81, and he could curl up and die, or he could decide to love again. He then met Martha, and had 12 and ½ happy years with her.

He applied it to his community work as well. He loved to raise money for non-profit causes, and he didn’t mind asking, nor did he waste time doing it. He planned and executed ambitious campaigns, and took great pride in the good that they did.

He used to say that some people had MBAs, and he had RLC—rat like cunning. But he also thought big, and lived that way. When he was in his late 60s, he and Don Lippincott developed Exit 9, building a bridge and road and selling them to the town against future tax revenues. At that age, he risked everything—putting up his house, his insurance, and signing personally on the notes. How many of you would do that? And he turned around and did it again in his 70s with Whitney Grove Square. When his partners went bankrupt, along with the contractor, he put in millions of his own money to finish the project, losing all of it. When it was sold years later to Yale, he sold the garage to Simon Konover in probably the largest deal in the region ever done on a handshake. Accountants called WG a failure, but he never did. He would have said that he changed the landscape of New Haven, cemented it as a residential city, paved the way for the Audubon Arts District, and arguably moved the center of commerce up from the Green. He was very proud of it, and proved it by moving there.

He always said that, if all else failed, he could be a bartender. He carried that attitude through everything he did, and it was infectious. The next time you are in a tough situation, think of him and try a little harder. Dig a little deeper. Improve your outlook. Make lemons into lemonade. You’ll be channeling Herb, and ensuring his legacy.

It’s ironic that he died on the day of the Boston Marathon. His life was a marathon, spanning almost a century, and it was surely a race that he won. He would have received a gold medal for the number of times he showed up on the short list of life influences for those who knew him. So many of you have described him as the embodiment of the greatest generation, and as a giant—a funny description for someone who weighed 120 pounds, but he was. He was also eminently lovable. In his case, the whole was greater than the sum of the parts—something about the almost magical combination of personality, character, and presence allowed him to leave an indelible imprint on more lives than almost anyone I’ve ever known. All the sayings are true—an edition of one, he came one to a box, they broke the mold. We will not see his like again.

The marathon that he ran for the last two years was one that he knew he couldn’t win. And like an athlete with a serious injury, he didn’t try to fool himself. He fought while he could, confounding his doctors with his staying power, and Martha kept him alive for a long time, by guarding him ferociously and loving him so deeply. He went out as he wanted to—calling a family meeting on Saturday night to plan this service (when he didn’t appear to be sick), kissing all the Hospice nurses by Sunday night, and dying on Monday night. It may surprise you that the man who never said die died peacefully, with grace, and gratitude for the life he lived and the people he touched and who touched him along the way. He wrung the very most out of that tired old body, but his indomitable spirit lives on in all of us, in the company he founded, and in the people and places he made better. He wanted us to celebrate, not grieve, so there’s a rousing recessional hymn and birthday cake at the Lawn Club (he would have said that 3 days til his 95th was close enough for government work), as well as hundreds of balloons emblazoned with the names of organizations he supported, students who received his scholarships, and his favorite Winston Churchill saying: “We make a living by what we get; we make a life by what we give.” Please take one as you leave the reception, and release it somewhere in Greater New Haven. It’s hard to imagine him resting, let alone in peace; it’s easier to think of him as being on to the next great adventure. If you close your eyes, you may be able to imagine him bounding into heaven, booming “I LOVE IT!” And, if you do, just whisper back, “No more than we loved you.”

Financing Woes

There has been plenty of discussion about what's wrong with the real estate market. We've been through a few years where the focus was on what was wrong with the banks, and the government put in a lot of money to make sure that the problem got fixed. Somehow, the banks are now rolling along with big profits. It would be too much to say, however, that they are rolling along just as they did before. There are numerous new rules and regulations, intended to prevent the same thing that happened before from happening again. This time, though, it is the same taxpayers who paid the bill for the last fiasco who are being harmed. The banks are passing the consequences of those new rules along to the consumers. I'm not saying that this is necessarily wrong, but what's happening is that real estate is suffering, perhaps disproportionately, for what went on with the banks in 2008 and 2009. Where before people could, and did, finance 97% of the purchase price of a home (yes, that was the median financing amount in the boom years), now they have to put down 20% in many cases. So, of course, real estate sales have slowed.

The answer is not that we should all go back to financing the whole cost of a real estate purchase. However, our economy will clearly not recover until people have jobs and until real estate, which represents the biggest asset class most people own, bounces back to normal. Not where it was before, but to normal--that's all we're asking. In order for that to happen, we cannot spend all of our time trying to fix the last problem, and we may have to put in some money and effort to boost sales through this period. It's not enough for banks to make money again. The whole system is bogged down, and it has to be jump-started. Now.

Will It Ever Stop Raining??

You must wonder what IS good for real estate, if we complain about snow and we complain about rain and we complain about heat and we complain about sunshine, but the truth is that people look at real estate when the weather is good but not too good. There is a human aversion to getting wet (although my dog seems to share it...) that keeps people indoors when it's pouring. There is also a natural tendency to want to go somewhere outdoors when the weather is beautiful. That leaves in between days to shop for property. Rain may be better than snow, because it doesn't fill up your driveway, and both are probably preferable to ice, but nothing that causes gray skies is ideal for showing property. Not too much looks good in gloomy light.

So we know that we're not the only ones wishing that the sun would come out, but we have our reasons. And they just add to all the other reasons that we--and you--are ready for spring!

Real Estate Around the Country

I just returned from my semi-annual meeting with other large independent brokers from around the country. This time, we met at Lake Lanier in North Georgia. The weather was great, but the real estate climate is, in some respects, sobering. National experts are saying that equal supply and demand and a "normal" market may come as late as 2015. Sales for the first quarter were down around the country, in double digits. Some of that was weather-related, but the rest is still about jobs and financing issues.

There is a silver lining, though, and it's a big one. The interesting news was that prices of sold properties were up by a fraction, 1% or so. This is counterintuitive, if you think about the effect of foreclosed properties and short sales on the value of homes. What it seems to suggest is that it is the best homes (not the most expensive, but the most desirable homes in every price category) that are moving. What that means for sellers is that homes must be put on the market at levels that seem to be good values.

What it means for buyers is even more important. There aren't great bargains out there, at least on homes that are well priced and well maintained. Putting in a lowball offer isn't going to result in a purchase. It goes back to the old saying "You get what you pay for". If you want it, you're going to have to buy it at its value, and not at a fraction.

We just had an offer on a commercial property with a listing price of $2.1 million. Someone submitted an offer of $700,000. That's just wasting everyone's time. The statistics seem to indicate that the short sales and foreclosures aren't yet changing prices on regular properties, and given what we are experiencing in delays on such sales, we can vouch for that. Those things are backed up in the pipeline. What's moving through are the good deals, but they are good deals at good prices, not bargain basement fire sales. Buyers should assume that they won't get what they want if they insist on bottom fishing. It may be a sport, but it's not a strategy.

Listings Flying Off the Shelf

After a long, long, long winter, we're seeing signs of spring! And that includes the spring market. I'm starting to get lots of calls from people connected to Yale, who've gotten their job offers and are beginning to look for housing here. We are entering lots of new listings into the system--several dozen in New Haven alone last month. And, at long last, some of the suburban inventory is moving. I heard last week that a spate of sales in Pine Orchard has reduced the available inventory drastically. Even things that have been for sale for a very long time have gone on deposit. That's good news for sellers, who have been consoling themselves with the thought that nothing was selling, while they sat with their houses unsold. If they aren't going now, it's time to re-examine the price, because we're experiencing a boost that should help everyone. And it's about time!

Double Dip Fears

Lately the papers have been full of talk about the possibility of a "double dip" in real estate sales. What some experts worry about is that current economic conditions will cause real estate sales, which had started to creep up, and values, which had not fallen as far as had been feared, to go down once again. The curve would then look a little like a W (although the anemic recovery would suggest that it might be more like a U, bumping along the bottom). The worst case scenario would be a V, with two downward slopes before any rise. Should those fears affect what consumers do this spring? I'm going to argue that those worries should not determine short-term behavior. In fact, if consumers step up to the plate and buy, they will actually cause the real estate market to improve and avoid the second drop. Even if units do go down again, however, we need to look at the facts in our region. Prices didn't go way up here, and they shouldn't dive downward, either. In addition, our non-profit engines are still strong, and should keep sales from plunging. Even if there isn't call for wild optimism, normal buyers should be fine, as long as they don't plan to flip their properties too quickly. The market seems to be taking care of that possibility, as more people rent until they are secure in their jobs and locations. To make a comparison, suppose that your car was old and needed replacement. Even if you thought that prices might come down for cars in another year or two, would you wait? Really? Or would you move ahead with your life, and enjoy the peace and security of owning something you valued, knowing that giving up a little in resale value is worth it in the overall scheme of things? I would bet on the latter course. I'm hoping buyers agree this spring.

Waiting for Spring

While I am snowed (or iced) in tonight--again!--I am thinking once again about how happy I am that real estate is not as time sensitive as some other industries. If you had a restaurant this week, or a theater, or an airline, you would be losing revenue that wouldn't be replaced, in many cases. With real estate, it's different. I was looking at Google Analytics tonight, which tells us how many people look at http://www.hpearce.com/, and from what sites those people reach us, and it was amazing. Every snowstorm for the past month had a huge spike upward, showing us that prospective buyers and sellers are using the downtime we've all experienced when there just isn't anything to do in all this snow, and they are using it to look for real estate on the Web. They can't get out to look at property (we didn't even officially open our offices today, preferring to leave the roads to those who absolutely need to get to work), but they certainly are thinking about it.

That's great news for us. We already know that a bad, snowy winter is usually devoid of sales, but that it is generally followed by a robust spring market. All that searching on the internet, and all that time cooped up inside, leads to a frenzy of springtime real estate activity. If that's the normal pattern, what on earth will we see this spring? Real estate flying off the MLS in April and May, we hope! So, if you are a potential seller, use this indoor time to de-clutter your home and do all those fix-it projects. If you are a potential buyer, keep surfing the net--we'll be waiting for you when the sun shines!

Not the Usual Pattern

It's not just the weather that's unusual these days. The state of the real estate market is abnormal as well. Generally speaking, real estate leads into a recession and out of a recession, with commercial real estate following residential trends nine months to a year later.

This time, we did lead into the recession, with the peak of prices and demand coming in about 2005, and falling every year since then. The big dip in the financial markets didn't happen for another three years, and, while the banks look as though they've come roaring out of the doldrums, real estate has not recovered. In fact, many economists say that only real estate has not begun to recover.

Why was this cycle different? For one thing, it was in many ways the perfect storm. One thing after another conspired to keep real estate from improving. More importantly, the one thing the government did do--the homebuyer tax credit--didn't work enough, and sent things crashing back down. Think of a ball that rolls uphill, but not quite to the top, and the speed with which it then comes back down, and replace that image with real estate. The most important factor, in my opinion, is that the government did help everybody else with actual cash--the banks, the insurance companies, and the automakers--leaving us essentially to fend for ourselves. As a result, we suffered even more than we otherwise would have, since the pain was not spread evenly.

If I sound as though I think that it was all a little unfair, that's true. And I'm more than a little tired of this market, as are all of my coworkers and industry compatriots. Instead of leading the country out of recession, we're still lagging. It looks as though we're in for another year of glacially-paced improvement, and maybe a couple of more years of slow progress before we really see good, or at least normal, times. The spring buying season will tell us a lot more, and, this time, I hope I'm wrong about the pace of recovery!

Independent Contractors

Yesterday I explained to a client that real estate agents are independent contractors. I know that most people realize that real estate agents, and companies, only get paid when someone buys or sells a piece of property. But sometimes I doubt whether they know the full extent of what that means. It means that agents don't get paid for their time. Or their gas. Or the lunch that they might buy you when you spend a long day looking at houses. Or their cell phone. Or their car, car insurance, and repairs. Or their real estate license, continuing education, Board fees, and MLS fees. Or the extra advertising and marketing that they may do on your property (while our firm pays for postage, advertising, and training, many firms charge agents for those services). It's expensive to be a real estate agent, and even more expensive to be a real professional, with all the tools.

Indpendent contractors, who don't get salaries or benefits, deduct their business expenses themselves. In effect, they run their own small businesses. They affiliate with brokers, and use the branding and offices of those brokers, but they don't work set hours. We aren't even allowed to carry worker's comp insurance on them. They assume the costs of working, and, as I often say, they "eat what they kill" in terms of compensation. They get paid for what they do, when it goes well. When it doesn't, they bear the risks.

Why, you may ask, did I decide to blog about this now? The simple answer is that, when I was told by this client that he understood that an agent only got paid when he bought, and that those were the breaks, I'm not sure he really got what he was saying. I guess it gets down to the Golden Rule, as most things do. How much time would you spend doing work for someone and not getting paid, before you felt that it was unfair?

Clients didn't create our compensation system in the real estate industry, and I'm not asking them to be responsible for changing it (although I would certainly love to change it!). I just want them to understand that, if they aren't serious, or they aren't willing to stay with someone until the transaction is completed, then they are really asking for services for free. And the way you treat someone who is doing you a favor may be different than the way you behave if you think it's someone's paid job to help you. It's that simple, and that complicated.

Snowed In

When my children were little, and excited at the prospect of a snow day, I taught them that the sound of the phone was the sound of people cancelling their real estate appointments, thereby dampening slightly the joy of the day. Now that they are grown and gone, a snow day is entirely different. Today was a non-stop round of phone calls, lasting at least ten hours, preceded and followed by emails and paperwork. Since we're still not plowed out, it's been 24 hours since I've put more than a foot out the door; and yet, work went on all day. It began in the wee hours of the morning, when I left my warm bed to check the radar maps, to see whether I needed to cancel everything in our offices. I did. But most of us were busier than usual, handling crises and referrals, tied by Blackberrys and cell phones to our home offices.

It made me nostalgic for the "olden days" of my early years in real estate, where, once you had checked the daily mail, you knew that nothing much would happen until the next day's delivery. That was followed by the Fed Ex age, after which ensued the fax stage. Voice mail came next, and then everything changed with the arrival of email. Even though I realize that many of our clients are in different time zones and countries, where snow may never fall, it still seems surprising that I didn't even have time to read the morning paper (which I didn't even go down the driveway to look for, since I don't have boots that high!).

I know it's good that activity is picking up, and I was certainly grateful for the peace and quiet that allowed me to take my time doing things that had been put off earlier in the week for meetings. Now, however, I'm ready for an old-fashioned snow day!

Update from Arizona

It's 37 degrees here in Scottsdale as I write this, so it doesn't seem all that much warmer than at home, but it will get up to 60 by the time I finish my run. My daily path takes me past lots of For Sale signs, and the morning paper gives me news about the real estate market in Arizona.

The good news here is that the number of pre-foreclosures is down from what it used to be last year. That's sort of the silver lining on the cloud, since the total sales went down from 2009 to 2010 in Scottsdale, and the average price declined as well. The experts who were surveyed in the year-end wrap-up in the newspaper expressed a consensus that the big news was their surprise at a lack of improvement in the real estate market. Our driver when we landed said that there are still several thousand bankruptcies a month in the county. Commercial vacancies are sky high, and there are no new buildings planned or under construction.

The surprise at the anemic sales and loss of gains made during the tax credit months is true across the country. None of us expected that the second half of 2010 would be as bad as it turned out to be. The good news, however, for those of us in the snowy Northeast is that we never saw the boom that Arizona did in building. That means that we never got the spike that is now causing the abrupt fall out here. We had steady gains, and some inflated prices, but it was small potatoes compared to sun country.

Even here, there are signs of hope. On my daily running route, I see half as many For Sale signs as I did last year. And it's heartening for me to note that they are almost all local independent companies--another harbinger for us in Connecticut, I hope!

Blizzard

We were closed yesterday. I was supposed to be leaving town, but that obviously didn't happen. When I woke up, I couldn't tell how much snow there was, because it had blown around so much. There is no school this week, so I couldn't use the school closings as a guide. It was Monday after a holiday, so I didn't have yesterday's news to go by. Since we'd already cancelled the paper and Comcast was knocked out by the storm, I didn't have today's news to go by! So how did I decide to close?

Well, real estate is almost always a delayable purchase. Many buyers, as well as agents, don't want to drive if they don't need to do so. Those warnings and pleas from the Governor's office, to stay home if you can? They generally apply to us. In addition, most people don't want their properties shown in bad weather, because they don't want to take the risk that a prospective buyer would fall or get hurt trying to get in. Most inspections, closings, negotiations, and other business can be delayed for a day. Everything else, including anything that can be done with a computer and email, will proceed as usual. It's one of the benefits of the change in real estate, away from bricks and mortar and toward clicks.

Of course, we always worry that we will inconvenience someone who expects us to be open. That's why it matters whether everything else is up and running. As far as I could tell yesterday, not much was. So why make employees struggle to come in, only to sit around without any calls or visitors?

Finally, I think a lot of people hoped that the Christmas spirit would linger one more day, if we all took a deep breath and relaxed. And, at least for us, it did!

Is the Tide Turning?

Yesterday was the busiest day for property sales that we've had in a long time. I spent the morning today trying to track down the reasons, and there are several possible causes. Two sales came about because the owners brought down their prices. In at least one instance, that produced multiple offers, so clearly buyers are motivated also. They aren't closing before the end of the year, so I don't think it's for tax purposes on the seller's part. It could, however, be due to the cold weather and the arrival of heating bills.

Two of the buyers are coming from Manhattan, so we're wondering whether the bonuses came early this year. There have been some news articles that make that claim, so it could be true. One buyer is about to start a new job, and was in a hurry (although, in the past, those people could have--and probably would have--rented in the short term). One renter turned into a buyer, and that could be an outgrowth of interest rates rising, with the prospect of higher rates next year.

We've had walk-ins as well, which means that people have gotten the message that the time to buy is now. Or maybe it's our Christmas present as agents! Either way, we'll take it.

Rate Rise Alert

We've been talking about this for months, but it's finally happening. Interest rates are going up. The latest rates are almost half a percent higher than they were a couple of months ago. What does this mean?

First of all, the cost of owning a home with a mortgage goes up when the interest rates rise, meaning that fewer people can afford to purchase a home. It also indicates that, in most cases, buyers can afford to pay less for the same home, since they will qualify for a lower mortgage amount. In a buyers' market, which we are in now, that burden falls on the seller in large part. So, if you are selling, you will almost always receive less for your home when interest rates are higher.

In the larger sense, it could also mean that we are past the bottom of the market. Mortgage rates generally start to rise when things are starting to improve. Some of that is a signal from the stock and bond market that inflation could be a worry, and part is that the government will stop holding rates down if demand increases.

So, just as people often try to time buying an airline ticket to wait as long as possible to buy a non-refundable ticket at the lowest price, and frequently hesitate just a little too long (as I recently did....), you may already have waited past the point where you should have bought that property. Just don't wait any longer. Once things start to turn around, prices can move quickly. Consider this your warning!

Fenway Park South

We went to my brother-in-law's house in New Jersey for Thanksgiving. He lives outside of Princeton, in a nice residential neighborhood with very large homes (dare I say McMansions?). We hadn't been in many months, and, in the interim, he had undertaken a large renovation of their basement. He has recreated Fenway Park, from the Citgo sign and the Jimmy Fund emblem to the concession stand. He even bought seats when the Red Sox got new ones, and they are lined up in front of his 100-inch television screeen. He has the Green Monster painted on tin underneath the TV, done by a woman who travels by trailer from renovation to renovation around the country. (Who knew this was a business?)

But there's more! There is a concession stand in one corner, complete with official Red Sox peanuts and other snacks. The family has outfits identical to those worn by real Fenway Park workers. They have a pool table on one end, inlaid with the correct insignia. I'm impressed, and I don't watch baseball.

So here's the real estate question: What does it do for the value of their home? You can be the judge. There is one nod to the Yankees fans who come--they have Yankees toilet paper.