Naming the Right Price $$$

In real estate these days it really takes a good price and a unique property for a sale to procure quickly. This property was on the market and open to the public for 1 day. At the moment there are 4 offers on the table and 3 on the way.

The lesson learned here is that pricing something slightly under market, even in an economy where it seems like the sky is falling, will result in activity and competition. Agents and their clients flocked to this house like vultures last Sunday. I have never had an open house with that many people coming in and out. It was like a college party without the booze.

One thing is for sure...the beneficiary of this estate will be walking away with a smile like that of a Cheshire cat

See Saw...Dow Jones Down 500... Up 400...

My last post several days ago focused on the Dow Jones Industrial dropping 500+ points. Today, the Dow climbed 400 points on reports that the governments MIGHT create an entity to absorb banks' bad debts.

There is so much volatility these days that analysts are attributing to the nervousness of investors. Nervousness isn't the only word I would use...Confused, shocked, or freaked out would be other terms I would use to describe the current economic situation.

The Chicago Board Options Exchange has a volatility index known as VIX, which set a new high for this year in trading. This index is referred to as the "fear index," and today it reached levels not seen since 2002.

The bottom line is that investors are looking for safe haven's to park their money as opposed to playing stocks with the risks they currently present. For instance, on Wednesday the demand for a short term 3 month Treasury Bill was so great that the yield actually dipped into negative territory for the first time since 1940. That means that investors are willing to take very little if any return in exchange for parking their money in a safe place.

As a real estate agent, I am urging many of my clients to consider pulling some of their money out of the stock market and investing in multi-unit income property. With rent prices only on the rise here near the beach in Los Angeles, now may not be a bad time to diversify the portfolio by negotiating a good deal on a 2-4 unit property.

We will see what happens during tomorrow's session....One thing is for sure....We are all watching intently.

WOW

Was today one of those days that I will reflect upon 50 years from now? It certainly feels like it. All day I have heard and read about the stock market and the volatility of the economy. The Dow Jones plummeted 500 points today, the worst turn out since the days following the 911 attacks on the Twin Towers in New York City.

What's next?

Professional Coutesy & Real Estate

I had an experience while showing property this past weekend that made me as upset as this Tiger that I am featuring above. We agents have to go through several steps in order to arrange showings of various properties to our clients. This takes numerous phone calls, scheduling and juggling in order to make things run smoothly. Personally, when I am out showing property to clients, I want everything to go according to the game plan that I lay out during my preparation.

Last Saturday, I made arrangements to show clients of mine 5 properties in Palos Verdes Estates, ranging from $2.5-3.7 million in price. All but one of the listings were appointment only, meaning that I as an agent would need to make arrangements in advance with the listing agents.

Turns out, that one agent had all of the listings that I wanted to show. This agent is so successful, that he has 5 assistants that handle showing property as well as setting appointments. This same agent actually has several of Donald Trump's properties listed in the area near the golf course.

Long story short, the assistant that I was referred to failed to make the appointments. He said that he would be meeting us at 3:30 in the afternoon. When 3:30 rolled around, he was no where to be found. I began to phone him, and everything went straight to voice mail. Then at 3:45, he sends me a text message saying that he won't be making it and that he had an emergency...Meanwhile, I have clients who are very serious about buying, standing in the driveway of one of the houses that I wanted them to view. How embarrassed to you think I am at this point?

Rather than getting discouraged, I take the initiative and knock on the door of this home as well as the other which this young assistant was supposed to set up for my clients and I. Needless to say, the homeowners weren't jumping up and down about the fact that 6 people are standing in their driveway with no appointment made. I asked each homeowner whether this assistant had phoned them to alert them that we would be coming by on this date and time. Both owners said that the young man NEVER called.

Not only did this guy not make the appointments, but he lied about having a family emergency. There was no emergency...He FORGOT! How do you think Mr. Trump would feel if I told him that his listing agent's assistant dropped the ball on making an appointment and consequently I wasn't able to get my client in to see the house. I'll tell you what he would say...

"You're FIRED!"

Sometimes going with the real estate agent that has ALL of the listings in the area can backfire. This listing agent has so much business, that he is trusting his untrustworthy assistant to get things done. On top of dropping the ball, the guy didn't even own up to it.

Thank goodness I can tapdance and think quick on my feet.

Some Real Estate Executives are Diversifying : )

Hersch Klaff of Klaff Realty is making a bid for the rights to the Chicago Cubs. With all of the negative press that real estate has gotten in recent months, I am taking this bit of news as a breath of fresh air.

Klaff Realty is known for acquiring distressed retail / office space. Obviously, Mr. Klaff sees value in the Chicago Cubs, who haven't won the World Series since 1908. Although I am sure that Hersch is a sports fan, I think that he also sees value in this franchise. With bids expected to exceed $1 billion, it's apparent that each one of these investors wishes to be the one to bring a World Series Championship back to the Chicago Cubs who haven't won it all for 99 years.

9 other parties also see value in this opportunity and are competing with Mr. Klaff, so at this point the auction has just begun. According to reports, the Chicago Tribune, who currently own the rights to the team, will not finalize the deal until the conclusion of the 2008 season. Their goal is to have the deal close by the end of the calendar year, or the first part of 2009.

Only 5 of the 10 parties that are currently bidding will be honored to make it to the next round. Something tells me that Mr. Klaff is going to move forward. With Klaff Realty stationed in Chicago, I am sure that he is considering his investment group to be one of the front runners. His business is rehabilitating distressed properties and making them profitable. Not to say that the Chicago Cubs are a distressed organization, but the Tribune Company is restructuring it's portfolio and has decided to unload the historic organization.

What a chance to both make some money and get a little fame. If there are 10 groups in the running for the chance to take over the reigns, the juice must be worth the squeeze. If I had the money, I would be number 11...

GO FIGURE

This logo will no longer be used. The bank formerly know as Indymac bank will now be called Indymac federal bank. What do you know...this coming days after Indymac laid off 2400 employees. This is the latest in collapses due to questionable lending practices during the most recent real estate boom. When is the downward spiral going to stop?

Nobody knows for sure, but right now Americans need to strap in and brace for the financial storm. Things are getting hairy and they are only going to get hairier in the coming months.

Home Prices in Malibu..SF...Ahhhhemmmmmmm

Wow! This $65 million dollar listing that Steven Shapiro with WEA real estate has in Malibu could potentially set the all time record for price in the Malibu area for a single family residence. It's located at 21804 PACIFIC COAST HWY, MALIBU, CA 90265. The realtor.com mortgage calculator indicated that the estimated monthly expense for a mortgage would be over $352,000!!! Holy smokes...Who in the HE-double hockey sticks can afford that kind of nut every month.

The funny thing about this listing is that it's located right on Pacific Coast Highway...Granted, you have private sand on the highly desired Carbon Beach...but you are still on PCH. That amazes me!

In San Francisco, there is a listing at the same price of $65 million located in the famous Pacific Heights district. The address is 2845 Broadway St. San Francisco, CA 94115 and the property is listed by Warwick Properties.

There is such a small group of people in this World that will ever have the resources to purchase either of these homes. I mean, let's get serious...$65 million! What extravagance...Even if I did have the money for either one of these homes, I think I would feel a little strange living in the clouds like this when there are still people in the street begging for money and food. The homeless problem in both Los Angeles as well as San Francisco is literally out of control.

Areas like Pacific Heights in San Francisco and Malibu in Los Angeles are 2 examples of extremely posh living. Despite the headlines in the papers and online about the collapse in the real estate market, one wouldn't know it by evaluating either of the neighborhoods that I have featured in this entry.

Indymac on the Ropes

For those of you who haven't read the financial section of your local newspaper, Indymac cut roughly 24% of it's workforce or 2,400 jobs.

This is the only plan that Indymac sees in order to return the company to profitability according to Mike Perry (pictured) the company's CEO. Here is one more domino freshly fallen in a long series of disasters that is effecting our economy and specifically our real estate market. Indymac also forsees having to lay off an additional 500 to 1000 employees in the next six months to a year. Yikes :(

These are tough times that we are going through. Many people in this business don't have the corporate "Golden Parachute" where they will either receive a buyout package, or have their jobs spared. One thing is for sure...If I was working for Indymac, I wouldn't be calling in sick any time soon...

Goodbye Mozilo....Hello BofA

Talk about getting phased out of the business completely. Angelo Mozilo is done. His career is done. His career in court, however sounds like it could be a different story. There are many people in this country that say that Angelo's drive and determination to be #1 in the industry led to the dramatic, Enron-esque collapse of his empire at Countrywide Home Loans.

The thing that really chaps me is the word on the street that Mozilo single handedly manipulated the loan structure for some of his "high profile" clientele. By manipulate, I mean that he gave them the best deal in the country. Unreal, rates... and the appraisals...even more unreal. Some of these restructurings that he made happen included massive cash out refinancing with obscenely exorbanent appraisals in ridiculously short periods of time. One particular instance took place a mere 4 months after the initial financing. Only the appraiser declared the house to be worth several hundred thousand more dollars that the previous appraiser noted just 4 months after the purchase took place.

Something smells funny doesn't it? That's right...It's Mozilo...

What ticks me off personally as a consumer is that Angelo is giving the sweetheart deal to someone that probably doesn't need it. He just wanted to put his financing cape on and play superhero for someone. In the process, he pissed off Americans accross the country, in the nation's capital, and made a mess that it will probably take the rest of his life in order to clear it up...if at all.

Thanks for all the good times Angelo. I am glad to see that we are finally turning the page.

Americans are Riding on a Runaway Train

With a 20% decline in the stock market since it's peak last October, and with crude oil setting a new record each and every day, buying real estate doesn't have as much allure as it did several years ago. The reason being, plenty of buyers are waiting on the sidelines until the market nervousness of the market eases. The people that are buying these days, aren't being distracted by the headlines...Many of them have purchased before and are reading this as the time to jump in and negotiate a steal of a deal.

As an investor, this is a perfect market to buy. The most important thing is to have plenty of cash. As one of my client's so eloquently puts it, "Cash is King." Coming into a transaction with a heavy down payment, and solid terms can create flexibility in price. Especially with how slow the market is moving these days. The longer a property sits on the market, the more motivation one would think the seller has to unload. The vast majority of people do not have this kind of buying power which limits the choices they have. Another aspect of the market that is increasing with each day that passes is foreign investment. Foreign investors are parking their money in our country at a record pace because of the volatility of our economy and the dilution of our currency. Last year (2007) these international investors dumped $414 billion into securing stakes in American properties, companies, factories & stock. That number was up 90% from the year prior (2006). These investors accounted for over 25% of all announced deals.

For that small percentage of people who have almost infinitive cash reserves, there are opportunities to make money investing in real estate no matter what condition the market is in. These affluent investors know what a unique position they are in. While most Americans are riding their bikes to work, taking the bus, or buying motorcycles or mopeds to save on hefty gas prices, these savvy business men and women are finding ways to make more money. The term "the rich get richer" had to have come from somewhere...

Out of Water

Water is nature's candy. We all need it. Animals, plants, humans...H2O...

I have a property listed in an area that is zoned for horses...On that property, there are 4 horses that lived there, who are currently in the process of moving to Washington. The trailer was supposed to pick the horses up on Friday from what I understood from the owner of the horses and the house. Instead, here we are on a Sunday afternoon and the horses are still at the starting line, yet to even be loaded on the truck. These horses aren't racing horses like Big Brown, or my friend Gayego (I sold a property for his family)....but they are big horses....Big ones... When I showed up at my open house today, they were still at the property. Even though they were supposed to have left yesterday (Saturday). When I got there, their water tub (which is literally the size of a bath tub) was empty and knocked over on it's side. Obviously the horses were a little upset about the situation.

How can someone leave these horses without water in the heat of summer in LA? I am so ticked for these poor guys. They looked at me as if I was GOD when I started pouring the water for them...

Real Estate and Baseball - The Art of War

Tonight is the championship game for the 2008 College World Series. When watching the elimination game last night on ESPN, I started to realize many of the parallels between the game of baseball and the business of real estate.

The mental warfare that takes place on a baseball field reminds me of the viscous negotiations that take place during just about every real estate transaction. Almost as if the two sides are playing a game of chess. The world of real estate is very competitive. In fact, I think it is one of the most competitive industries in the World...Maybe just behind the oil business...And even then, someone owns the property that is being drilled...

The Art of War

1. Both sides are constantly looking for an advantage.


2. Neither side wants to lose.


3. Sometimes things get down right ugly.


4. One of Baseball's many great sayings is, "If ya' ain't cheatin', ya' ain't tryin'."


5. A lapse of concentration can cost you the game

Last night with their season on the line, the Fresno State Bulldogs stretched the series to the final game for a chance at the championship. Some of these players have already been drafted by major league teams in the draft which occurred not even a month ago. For them, they will soon become professionals and start earning a paycheck as well as getting a signing bonus. The other players who either aren't eligible because of their class status, or aren't good enough to make it to the next level will be playing in the game of their lives tonight. Nobody remembers who came in second place. It's all about winning the ring in Omaha.

These guys are learning life lessons as they go through this fantastic experience that we have grown to love called the College World Series. Seeing the expressions on their faces and watching the passion and drive they display with each passing moment makes me reflect on my experience playing college baseball. Many things that I learned on the field, I bring to the table during negotiations. Having a game face...calling somebody's bluff...

I love this game!

Both of Em'.

The Modern Day Gordon Gecko and Bud Fox

For anyone out there in the world that has seen the movie Wall Street staring Michael Douglas as Gordon Gecko, and Charlie Sheen who plays Bud Fox, this scene seems all too familiar. 2 extremely wealthy executives being dragged out of their buildings wearing handcuffs behind their backs. Their names are Matthew Tannin and Ralph Cioffi. These guys were falsifying information regarding the health of subprime mortgage hedge funds they were pitching to investors just before the real estate market went belly up.

One example is Cioffi extracting $2 million of his personal investment in The Enhanced Leverage Fund in March 2007, while still pitching a confident outlook to other investors to encourage them to come in with more money. If this Cioffi guy was so confident in this fund, why would he be lessening his exposure in his personal investment in the fund? The truth is, he and Tannin new that this fund was going south and they decided to save their own behinds rather than do the right thing. Now there are both getting burned.

It's up to their defense attorneys to attempt to bail them out of this mess that they have created for themselves, as well as the the industry in general. With the email paper trail that has been uncovered, it's not looking very good for either of them.

Oil, Oil, Oil - Realtors Do Some Serious Driving

The price of gasoline is pinching the pocket book of almost every American. Even the well heeled. Something needs to be done some time soon here (Ahhhhhhhhhhhhhhemmmmmmmmmmmm).

As if the real estate market needs another black eye...

People are resisting making purchases of property in areas where they will be forced to do more driving than they are already doing. The new trend that I am seeing with buyers is that they want to be closer to work. Especially in Los Angeles where one can easily spend 20% of their day in the little cubicle that us Angelenos call our cars. These days I am personally spending $4.65 /gallon here in the South Bay/Beach Cities area. I remember not too long ago paying under $2 / gallon. The new debate is now about drilling in some of these environmentally protected areas that have been under moratorium since 1981...We will see how that goes. I am not holding my breath.

Maybe in the year 2030 when gas is $9.95 / gallon and my kids are belly aching about fuel prices I can pull out the old, "I remember back in 08'..."

Escrows Crumbling Like a Game of Jenga

For the second time in as many months, I cancelled an escrow for a client. Many of the reasons that buyers bail out these days stem from the uncertainty in the market. People are scared of shooting themselves in the foot financially by purchasing now when values could very well dip further than they already have. That in addition to the tightening of the screws in the mortgage industry, has slowed the market to almost a stand-still.

Investing in Real Estate is a gamble...It always has been a dice-roll, even in an upswing market. If it was so easy to make money buying and selling property, everyone would do it. Now more than ever, buyers need to make calculated decisions on the property they purchase and the price that they pay...My clients think they will be able to purchase the same home in a year or two for 10-20% less than the dollar amount that was on the table when they decided to withdraw their bid. Time will tell...

The United Arab Emirates

Dubai is where all of the action is these days. If you are a builder and you want to play with the big boys, then take a trip to the United Arab Emirates. All the key players are leaving the states and moving international with their investments. This location is so hot, and so well located that most builders are calling this a sure thing. I have had first hand dialog with a developer that has quadrupled his investment in just six short months. All you have to do is have the courage, know how, and resources to make the dream become a reality.

How much do you think this house is worth?

This little green house is worth MILLIONS...It's just a matter of how many millions...All commenters are welcomed to guess... Pay particular attention to the lower right hand portion of the photo and note the sand...

IS THIS COMPANY ROLLING THE DICE? OR, ARE THEY AHEAD OF THE MARKET?

Is this a dice roll for the company that is so heavily invested in this current project in Palos Verdes Estates? Most people who are closely following today's real estate market would say that taking on a project of this magnitude could be career suicide...Here you see two homes side by side on one of the busiest thoroughfares in all of Palos Verdes, Via del Monte. The home on top is in early construction, and the one on the bottom just went on the market as a finished product. They owner/construction company wants $2.4 million for the one currently listed, and is thinking of asking $2.6 million for the house in early construction.

Time will tell as far as what they actually fetch in the open market, however it goes to show that there are investors out there that are still gambling on the market holding in a higher end area such as this. Many of the writers out there really sensationalize the instability of the market and make it seem as if the sky is falling. In reality, the numbers are holding much better in coastal and higher end areas. The inventory isn't there because most people aren't selling right now unless that have to...

The view will always be there

Coastal properties have a leg up on the rest of the country as far as desirability. People are always going to want to be close to the ocean. That being said, the real estate prices in Palos Verdes and the beach cities haven't plummeted like values in other areas of the country. The number of overall transactions is down, true, but that can be attributed to the nervousness of the market and the tightening that has taken place in the mortgage industry.

The property featured in this post is a tear-down/fixer upper. The owner plans to expand the house by 1000 square feet and give it a complete makeover...One thing is for sure...the view will not go anywhere...and neither will home values in this neighborhood.

1950 Miles Northeast of Los Angeles

The market is a bit different in Grand Forks, North Dakota, home of Engelstad arena and the University of North Dakota. I recently attended the graduation commencement for the class of 2008 and paid particular attention to the way of life out there in comparison to mine here in Los Angeles.

Let's start with prices! This is a $250,000 For Sale By Owner listing which is a rock throw away from the highly acclaimed Engelstad arena, home of the UND Fighting Sioux. So I am thinking that if I am a solid buyer, I might be able to grab this thing so something close to $200,000...

The point is, there aren't a ton of people that want to live way out in Grand Forks, North Dakota. Don't get me wrong...I thinking the town is great...I think the University is first class...But there isn't an ocean for almost 2,000 miles in either direction! Location, Location, Location!!!

The real estate market may be in the toilet in certain, if not many parts of the country...But, Palos Verdes and the Beach cities stretching from Malibu all the way to Laguna Beach and Dana Point aren't as affected. High end areas are holding up better in this market. Read through the BOLD PRINT of this real estate media blitz!

Or, How about this view?

Higher end areas are holding up much better in the soft market...Granted, there is a little haze out there. But other than that, what is wrong with this dreamy view?

For Instance...

How about waking up to this every morning?

But, even in a rough market...There are great opportunities

Buyers in this type of real estate market really need to wake up and smell the coffee...There are great opportunities everywhere.

Real Estate Is Rough These Days...:(

20 acres in Moorpark

Great Aerial Shot

Dirty Davis

Every Real Estate Agent needs a good dog like Dirty Davis.

Queen's Necklace

Dave Maffei: providing a unique level of real estate service to buyers and sellers in Palos Verdes and South Bay beach communities.
The Palos Verdes Peninsula is a collection of elegant homes in scenic settings, with four exclusive cities: Palos Verdes Estates, Rolling Hills, Rolling Hills Estates and Rancho Palos Verdes.
Nearby are the popular South Bay beach communities: affluent and charming Manhattan Beach, Hermosa Beach - with its casual beach atmosphere, and Redondo Beach - the largest of the beach cities featuring a wide mix of diverse environments