Monthly Archives: November 2018

Home Buying and Rabid Raccoons – Transcript


Tom, here.

This is where we talk a lot about real estate and a little about life.

Read the transcript version of this podcast if you want to learn more about the topics discussed.

Thinking of buying a home in Europe? How about Spain? This New York Times article is a great place to start. Why not? As there has only been an 8% increase in values since the post 2008 thirty plus percent drop. Learn what the “Golden Visa” program is and why, if you are a foreign buyer, it is important to you.

There is a housing shortage in many areas around the world but do you know in what Country the Public Housing shortage is expected to last decades? According to an AHURI Report, it is Australia. Of course, if you knew AHURI stands for Australian Housing and Urban Research Institute, you knew the answer was Australia.

Where in the world might the next real estate gold rush be? Although inflation is at 19.9%, Argentina is the correct answer,

What percentage of homes in your city are worth a million or more? In Honolulu it is 19.8%. What City has four times that percentage? Seattle and San Diego are in the 13% range. If you guessed San Jose, you are close as it is at 70%. It is also close to its’ neighbor, San Francisco who sits at 81%. Even in Portland Oregon, 1 in every 40 homes is worth a million dollars or more.

The World’s Most Expensive Homes. We are not talking about millions, or even tens of millions, but rather multiples of hundreds of millions. How about half a billion dollars? If you want to spend between $400 & $500 million dollars you can choose from one of three homes located in France, Hong Kong, or the U.S.

In the U.S. foreign investors account for about 5% of purchases however in one particular state it was 15% last year and slipped to 13% this year. Can you guess the state? Florida it is!

In the last quarter of 2017 almost 1 in 4 people surveyed by the National Association of Home Builders expected to buy a home in the next twelve months. Of those responding in the 3rd quarter of 2018, it dropped from 24% to just 13%. Just half as many people are planning on buying a home in the next twelve months. Of those looking in the third quarter of 2018, 54%, over half have already been looking for 3 months or more.

So, if price reduced is becoming more common, but interest rates are climbing, how does that affect the number of loan applications? Purchase applications are the lowest since February of 2017. Maybe not so bad, right? Less than 2 years ago. What about this statistic: The number of refinance applications is at its lowest level is about 18 years.

If you are thinking of retiring and want to know where to move to, US News took the 100 largest metropolitan areas and ranked them in order. Six of the top ten were located in either Florida or Texas with number one being Pittsburgh, Pennsylvania.

The Real Estate Market is heating up in these U.S. cities according to Redfin. Speaking of retiring to Pennsylvania, Philadelphia was the second hottest market with inventory declining by 22.9% and prices increasing by 8.3% for the four weeks ending October 14th compared to the same period last year. Maybe the affordability of the $195,000. median sales price is a small part of the why.

Creative Way to make Housing More Affordable. With all the talk about rising housing prices and increasing interest rates, can anything be done to make housing more affordable? According to an article in the Sierra Sun, 1,300. Truckee and North Tahoe families would be able to afford housing that is currently beyond their reach if they would only do what? Shop at their local Grocery Outlet store. Sometimes the question of affordability is not so obvious. I wonder what other local businesses could help do the same?

Let’s look at another segment of the population who are thinking about moving. Or maybe not. 85% of the baby boomers (age 58-72) in this survey said they do not plan to move in the next year. It is interesting to see the cities where the percentage of baby boomer home ownership is increasing and where it is decreasing. Seattle Washington has the biggest increase between 2010 and 2017 whereas between 2016 & 2017 it is Atlanta Georgia. What cities are baby boomers leaving?  Salt Lake City Utah and Buffalo New York.

Modular Housing variations may be the Disrupter in the housing industry. It comes in many forms: prefab off site building components, cargo container housing, and 3D house printers. Cross Laminated Timber or CLT, is becoming the building product of choice.

What new technology may be the answer to wire fraud and other aspects of a real estate transaction? Learn why the biggest impact of this technology may be on the escrow and title portion of the real estate transaction. Forbes has a great article on expected changes to be brought about by “Blockchains” and if you want to get a basic overview of what Blockchain Technology is, BlockGeek has it for you. They also have a great 2 plus minute video that that does a good job of explaining Blockchain Technology.

What other areas of the real estate industry might be impacted? Imagine that thirty to forty five day loan process shrinking down to 10 minutes. Impossible! Not according to this article.

How far into the future is it until we are using Blockchain Technology? Already being used by China and Russia for Digitally issued mortgages and Japan and Saudi Arabia are heading that direction.

Residential Real Estate won’t be the only segment to be impacted. Blockchain may allow investors to buy and sell small pieces of Commercial Real Estate thus upending an entire segment of the real estate industry.

As you filter through information always remember that what at first appears to be the case, may, in fact, not be so. The perfect example? Those raccoons in West Virginia first thought to pose a big threat because they had rabies turned out to be curious critters drunk on crabapples.

So, when you hear something like this “Did you know that our neighbor John told me he sold his house for half a million dollars?”  Or “Jill said I should ask three hundred thousand dollars for my home because it is much nicer than the house down the street that just sold for $250,000.” and “I wouldn’t offer a penny over $400,000. because my friend just bought a house like this one and that’s all they paid”. You might consider the following….

That half million dollar house might have sold at that price because the seller carried the financing for a higher risk buyer who was willing to pay more than market value because they couldn’t qualify for their loan. Or maybe they sold six months ago and home values have declined five percent since. The house down the street may not be as nice as yours, but it could be bigger, have a three car garage instead of two or a larger lot. That house your friend just bought was the same floor plan but in a different neighborhood backing up to the freeway where prices are less. Don’t get drunk on crabapples.


I have always been intrigued by what happens to people who “win big”.

In an article on, you can read the story of seven lottery winners. Jack Whittaker was worth 17 million dollars before he won but said “I wish I’d torn that ticket up”. His granddaughter and her boyfriend died as well as his daughter. Some of them under suspicious circumstances. William Post III had three dollars to his name when he won 16.2 million dollars. He ended up having to declare bankruptcy and thirteen years after hitting the jackpot, he died penniless. Others committed suicide or were murdered.

Like much of the news today, little is said of those who win the lottery and are thankful and responsible with their winnings. Not a lot of sensationalism in being a responsible adult who quietly goes about their life.

But to be fair, the same website and author did publish an article entitled “7 Lottery Success Stories That Will Inspire You to Buy a Ticket.

So, what is the difference between “The Lotto Curse” and “The Lotto Gift”?

There is a book by Don McNay entitled “Life Lessons From the Lottery”. You can also read an article he wrote or listen to him speak on a youtube video.

I think there are several parallels between the lotto, real estate, and life. Whether it is your time, your money, or your real estate transaction, it should have a purpose. Purpose narrows your focus and keeps you moving in the right direction. Purpose give you perspective so you don’t get lost amidst the little stuff. You will also avoid that thing called “greed”, which blinds you by limiting your purpose and perspective to self.

May you look out at the opportunities this week holds and win the attitude lottery, where your purpose and direction encourages all whom you come in contact with.

Thank you for listening to and always remember, financially speaking, “When it comes to real estate, the best time to buy or sell, is when you don’t have to.”

Real Estates Biggest Game Changer – Transcript


Tom, here.

This is where we talk a lot about real estate and a little about life.

Want to dig deeper? Find helpful and interesting links by reading the transcript version of this podcast.

What technology might be the biggest disrupter for change in the real estate industry? The internet along with cell phones show you 3D tours, photos, and aerial videos of homes. What could impact real estate more than that? Probably self driving cars! There are several articles that give an interesting perspective on this. What if you had to sell your home due to a disability that limited your freedom to drive to the store, hospital, or even work? You might not have that same challenge in the near future. You could even live out in the country knowing you can sleep or work on your way to the office. Imagine all of the parking spaces that can be turned into building lots if there was a public self driving transportation that kept moving people around without having to stay parked all day.

If you think self driving cars and the benefits they offer are still out into the future, Forbes put a panel of experts together about their “Near-Future Real Estate Predictions.” If you live in Dallas Texas, be prepared to face off with cars marked as a “Driverless Vehicle”.

You will also enjoy watching this video about a Tesla owner who remotely moves his car every two hours to avoid a parking ticket!

Want an interactive graph comparing real estate values between your choice of two of forty four comparable cities across the globe?  Pick any quarter back as far as 1990 and compare it to one as recent as the first quarter of 2018.  You can compare housing prices to disposable income for those time periods. You can choose from twenty of the largest U.S. cities plus see house prices against rents as well.  Who ever knew that learning could be so much fun!

The New York times has a great article on real estate in France and particularly Normandy. Imagine a two bedroom cottage for $125,000. or how about a 17th Century Estate on 10 acres for $1.58 million. With a dip in values the number of interested buyers is increasing as reflected by a 15% increase in number of sale in 2017 over 2016.

In what City have prices reduced by 2.9% through September yet had a 12.5% increase in prospective buyers enter the market in the third quarter of this year compared to last? Can you guess?  London it is! Although Brexit might have something to do with what is happening in real estate, would this pattern still apply to other cities around the world as prices settle downward?

When it comes to Luxury Real Estate, do you know what city in the world had the biggest percentage drop? It was Vancouver B.C. where values dropped 11% and the number of sales down by 36%. Contrast that with Singapore where values increased by 13% end of September compared to the same time one year earlier.

As you or your friends consider buying or selling a home what should your timing be? Now? Or six months from now. If the agent you are talking to says you should buy now before rates go up, is that a “Pressure Tactic” or “Fiscal Responsibility”.

Interest rates are a funny thing. We call a lender and ask what the rate is today, as if one rate fits all. What could possibly affect the response we hear? Type of loan or financing, amount we have for a down payment, credit score, assets, length of the loan and even the financial institution itself.

With the recent interest rate increases you might feel like you missed the boat and rates are pricing you out of the market. If you feel that way, only because you don’t want to pay more for your loan, you may find that historically speaking, borrowing money at today’s rates is still a good thing. View this chart and move your cursor along various data points to see what U.S. mortgage rates have done over the last forty seven years. It is really only the last ten years we saw rates around 5% and below.

Let’s take more of a world picture and see if we are among the more fortunate of home buyers. Numbeo has a chart reflecting 20 year fixed rate mortgage interest rates in countries around the world. The top rate is in Argentina at 27.68%. That probably takes any thought of borrowing money for a home out of your mind. China is in the 5% range, New Zealand, Australia and the US in the fours, Romania, the United Kingdom and Canada in the threes, Hong Kong and Italy in the twos, and  Germany, France, Switzerland and Japan in the ones. Over ninety cities are included.

If you borrowed $300,000. your principal and interest payment with the 20 year example would be $1,380. at 1.0%, $1,980. at 5%, $2,895. at 10%, and $5,096. at 20%.

What happens when California has prices so high, that the median price of $600,000. is affordable to only 25% of the population? They move to places like Boise Idaho where 29% of those viewing a home there on are from California.

Are you a numbers cruncher? Do you want to know the difference between a seasonal slump and a more pronounced downturn? Real Estate agents may sense a market change before it is confirmed by the numbers, but if you want to know what the numbers mean, and what they don’t mean, it is always fun talk to an appraiser. They are the number crunchers in the real estate industry and one appraiser whose insights and data presentations I find fascinating is Ryan Lundquist in Sacramento. Here are two articles worth reading. One is entitled “How would you know if the market was starting to tank?” and the second more recent one “Slumping volume & rising inventory.

If you prefer watching or listening to a video rather than read an article, Ryan has a recent video entitled “What’s The Market Doing.” Even though he is talking about the Sacramento real estate market, if you listen to what he says and how he interprets the data, you will be able to apply what you learn to your local market.


Buying or selling a home involves a large number of calls, meetings, and pages of paperwork.

The question is, how accurate is your memory?

Let’s look at your memory from another perspective for a moment.

You are in a park enjoying yourself and decide to watch a street performer doing card tricks. You watch the cards move around and are asked to choose a specific card. While you are engaged with the card trick, you look up and see there is some arguing going on and one of those people gets robbed.

How good is your memory? As an eye witness, someone who was there, can you accurately recall what happened? If you have the time, watch this video produced by “Brain Games” and as you interact, you will find out just how accurate your memory is.

In an article entitled “The science of why eyewitness testimony is often wrong” you will learn a few reasons why, when DNA evidence helped overturn a conviction, eye witness testimony was wrong 70% of the time. Does just recalling an event alter what you recall? Learn about how we fill in blank spots so that what we saw makes sense.

Was that book shelf in the house you just saw free standing or bolted to the wall? The answer may make a difference between it being included in your home purchase and having to go out and find another one just like it because it was exactly what you wanted.

How about that beautiful exquisite mirror in the bathroom? Staying or disappearing?

That is why the real estate process and agreed to terms need to be in writing. Less room for misunderstanding. When you go through the house or discuss terms, it is kind of like a doctors appointment, it always makes sense to have someone besides yourself there. Bring a friend or relative along so you have a more in depth understanding of what you saw, or what was said and then reduce that to writing.

In real estate, as in life, if you are the only eye witness, how accurate is your memory going to be?

Thank you for listening to and always remember, financially speaking, “When it comes to real estate, the best time to buy or sell, is when you don’t have to.”