Something is Different

Hello all,

“Something is different”

Those of you who have been with me since I went into management have received my Monday Morning Coffee email entitled “Store Your Nuts” every year at this time since 2007. The email always pointed out that we could be in for a long winter without much business, so “Store Your Nuts”. Earlier in the fall one of my emails  suggested that may not be the case this year but I wanted to give it a little bit of time. I truly believe at this time we are set up for the best winter we have had in 5 years. December closings will be at an all time high, the activity in the office and on the street remain very strong. So I started thinking “Something is Different” but what is it? So I took a look back at previous years to see what hurt us going into the winter.

2007- I remember driving back from a managers meeting in August of that year thinking we were going to be ok. They had an economist from NAR talk to us about declining home values and he thought we were at or near the bottom. That night on the news it was announced that Alt-A Lenders Indymac and Greenpoint were shutting down or stopping all Lending. My new thought was “Uh Oh”. It ended up this was the beginning of the credit crisis, most lending virtually shut down and ALL Jumbo financing went bye bye… That winter consumers were scared and credit was hard to come by.

2008-Late summer and early fall the crisis hit the institutional level. Lehman Brothers, AIG, Morgan Stanley, Auto Companies... The stock market went from 13,000-8,000 in a 3 month period, TARP arrived. That winter consumers were scared, financing was still hard to get and they did not know where the bottom was.

2009- The first of the first time homebuyer credit came. However in order to receive the credit you needed to close by November 30^th. Mad rush in the late summer and early fall to get everything closed.  Business died after December 1 and there were not many transactions to go around that winter.

2010- Repeat of 2009, second first time homebuyer credit came. You needed to be under contract by June 30^th and close by August 30^th which was extended to September 30^th.  Transactions for that year were pulled forward again, not many transactions to go around last winter. 

2011- “Something is Different”   I believe it is a combination of 3 things that will make this winter season much better. We are no longer dealing with major financial crisis in the Country (few smaller ones), we did not have an artificial stimulus this year that adjusted seasonal buying trends and most important is that we are dealing with consumers who are now confident. Let’s take advantage of it and have a great winter!

Enjoy the coffee,

Joe 

INSPIRATION FOR TODAY:

"The hottest places in hell are reserved for those who, in time of great moral crisis, maintain their neutrality."

-Dante

STAND UP AND BE COUNTED!

Think there's any "moral crisis" going on in our country right now? What about in our city? Our schools? Our neighborhood? Where did it come from, and why are we facing these challenges?

We are a country - city - neighborhood - blessed with peace and prosperity. Our daily choices range from which SUV we will drive, to where we will dine next, to how we will redecorate our home this year. Our concerns include our child's upcoming soccer match, whether or not to refinance the house, making "Salesperson of the Year," and taking more time for golf or tennis.

With all the choices complemented by our affluence, we have also become compliant, accepting, and politically correct. We strive to please everyone, avoid "rocking the boat," and prefer the status quo. It's so much easier that way, isn't it?

In doing so, however, we may also abdicate responsibility for teaching our children the value of principle-centered living. What principles should we be teaching - and practicing? Why not adopt and teach the value of courage, diligence, faithfulness, generosity, cleanliness, honesty, encouragement, frugality, humility, industry, justice, moderation, order, resolution, silence, honesty, sincerity, temperance, and tranquility?

Imagine how the world around us would change if we taught and participated in more of these time-honored values. Remember that our country IS our cities, our neighborhoods, and our homes. What begins at the grass roots level - literally in our own backyards - can be spread throughout the world. Abandon neutrality and you can change the world!

Monday Morning Coffee

Hello all,

“One on Ones”

It has been great to see many of you meet with Mark lately to review your business plans. What a wonderful opportunity for all of you to make sure your energy and focus is in the right place heading into the holidays. For those of you who are new the conversation about your commission plan for next year has already been discussed. For those of you who have been with us for a while this is a reminder that December is the time to make the choice for your 2012 commission plan. As you know the plans benefits those who are willing to pay out of pocket on a monthly basis. We have several different options, if you feel your business is heading in a direction that this might be good for you the time to act is now. However in order to do this you need to schedule a One on One with your office. The purpose of the get together is to review your current  business, your 2012 business plan, run different scenarios and see if there is a better plan for you. For those of you in Germantown you get the pleasure of sitting down with me, the lucky Potomac agents get Mark or Teri. Please contact us to schedule the appointment.

Enjoy the coffee,

Joe

INSPIRATION FOR TODAY:

"The hottest places in hell are reserved for those who, in time of great moral crisis, maintain their neutrality."

-Dante

STAND UP AND BE COUNTED!

Think there's any "moral crisis" going on in our country right now? What about in our city? Our schools? Our neighborhood? Where did it come from, and why are we facing these challenges?

We are a country - city - neighborhood - blessed with peace and prosperity. Our daily choices range from which SUV we will drive, to where we will dine next, to how we will redecorate our home this year. Our concerns include our child's upcoming soccer match, whether or not to refinance the house, making "Salesperson of the Year," and taking more time for golf or tennis.

With all the choices complemented by our affluence, we have also become compliant, accepting, and politically correct. We strive to please everyone, avoid "rocking the boat," and prefer the status quo. It's so much easier that way, isn't it?

In doing so, however, we may also abdicate responsibility for teaching our children the value of principle-centered living. What principles should we be teaching - and practicing? Why not adopt and teach the value of courage, diligence, faithfulness, generosity, cleanliness, honesty, encouragement, frugality, humility, industry, justice, moderation, order, resolution, silence, honesty, sincerity, temperance, and tranquility?

Imagine how the world around us would change if we taught and participated in more of these time-honored values. Remember that our country IS our cities, our neighborhoods, and our homes. What begins at the grass roots level - literally in our own backyards - can be spread throughout the world. Abandon neutrality and you can change the world!

Monday Morning Coffee

Hello all,

“Shadow Inventory”

This has come up a couple of times in the office so I decided to look into a bit further to see where we stand. Shadow inventory are homes that the banks have already taken back plus homes where the mortgages are at least 90 days late. However they have not come to the market yet and are sitting in the shadows. The first lesson I learned is be careful what you read. I did a Google search on Shadow Inventory in Maryland, the first article I read made my mouth drop! My only thought was there was no way I could talk about this because it is SO depressing, then I looked at the date of the article and it was from October 2009, Phew. When I found more recent data the news got better but still not great. Seven states count for 60% of the shadow inventory in the country. Florida is the leader with 441,000 properties where Maryland has 44,000. Maryland was right in the middle of just about every category, the most discussed being the absorption rate of the shadow inventory. The rate is calculated by taking the number of properties considered to be shadow inventory divided by the number of distressed properties sold each month, short sales and foreclosures. In Maryland’s case we have 24 months of shadow inventory.  What does all this mean… Short sales and foreclosures count for around 30%-35% of our business (more in the winter months less in the spring) and the prediction is a 10% overall  increase in transactions next year. So while the transactions will increase the percentage of distressed properties will stay about the same. They are not going anywhere for a while so we need except it as part of the business.   

Enjoy the coffee,

Joe      

INSPIRATION FOR TODAY:

"We don't receive wisdom; we must discover it for ourselves after a journey that no one can take for us or spare us."

- Marcel Proust

ON MY HONOR . . . !

The Boy Scouts have long espoused the same set of principles. It goes like this: "A scout is trustworthy, loyal, helpful, friendly, courteous, kind, obedient, cheerful, thrifty, brave, clean and reverent." How simple life could be if we all practiced just that short list. Each in itself denotes a wonderful trait. When put into action, all can make the world a better place.

So, what happens between the age of scouting and age 30, 50, or 75? How is it that we turn from being a friendly 12-year-old to a suspicious, stand-offish adult? How do we turn the corner from being obedient to our elders to challenging the authority of our employers or government? Why won't we open the door for someone who can't? Did simple courtesy die with our youth?

Perhaps experience has taught us that others are not always friendly, courteous and kind. "Turn-about is fair play," we may respond. Why should we be thrifty, taking care to save for our future, when everyone around us has "maxed out" their credit cards? Reverence for all we know to be of value seems to have become the victim of political correctness. Why should we be any different?

The greatness of our country was built on the solid rock of "principles." The soft, easy life of an affluent society may be our undoing. Our forefathers had it tough. Most of us living today had a cake-walk, comparatively speaking. Our forbearers had to live their principles - or face the defeat of poverty, ill-health, and despair.

Our children can bring us back if only we will take the time to teach them those simple principles. More than teaching, we might help them practice those principles in their daily lives until habit makes them permanent. Begin while they are still playing in the sandbox. They will grow soon enough into men and women who live principle-centered lives!

Monday Morning Coffee

Hello all,

“Absorption Rates”

This is a timely subject that we need to visit every now and then. Absorption rates is a calculation to determine how much inventory is on the market and how many months of supply there are. A 6 month supply of inventory represents a equal balance between a buyers and sellers market. Mark mentioned that the spring market really starts in mid January, the main reasons is the buyers are getting geared up and the inventory is very low from the winter supply. Being able to calculate Adsorption rates will help you show your clients the need to get on the market before the spring rush. Normally you would calculate the rate for smaller areas but I will use two zip codes as an example.

20874:

Active listings = 260

Sold properties last 12 months = 709

Sold properties (709) divided by months (12) = 59

Take the active listings (260) divided by the number of sales per month (59) to get the months of inventory.

260 /59 = 4.4

So in this case if no further inventory came on the market we would be out of homes in 4.4 months, slight buyers market.

20854:

Active listings = 284

Sold Properties last 12 months = 512

Sales per month = 43

284/43 = 6.6

6.6 months of inventory, slight sellers market.

Enjoy the coffee,

Joe

INSPIRATION FOR TODAY:

"A man's reputation is the opinion people have of him; his character is what he really is."

- Jack Miner, conservationist (1865-1944)

HOW'S YOUR CREDIT?

Ever hear someone say, "I have good credit"?  They are probably referring to their credit "rating" - a score bestowed upon them by creditors, banks or rating agencies.  Simply stating, "I have good credit" changes nothing, nor does the statement merit the attention of creditors.  Credit can only be given by others for service to them, i.e. paying them on time.

So, credit is the result of serving others - in many ways.  You cannot claim education, victory, experience, success, reputation, or a suave demeanor.  Each of these is a gift from others, as a result of your service to them.  Friends recognize your courage as a result of your being cool under pressure.  Your success is recognized by others only once you have served them well.  Knowledge of your career field is recognized by others only after it's been applied to situations in the form of more service.

In the accounting world of income and expense, a debit is something paid out, while a credit is something received.  Thus all credits are received from others - not by our own making.  The debits - what we pay out - are our efforts, persistence, and service.  How they are rated is not under our control, but is determined by those served.

Without service, there are few rewards.  Yet, you've seen those who insist on getting more attention than they deserve.  They feel they're being short-changed, that they are not appreciated, that they are always the victim.  If you look more closely at their contributions, you are also likely to see the dearth of service they are offering.

With service, credit follows.  It may be subtle or quite visible - but it always follows.  Concentrate on what you have to offer and forget the rewards.  Those who are served will pick up the tab!