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WINTER 2010 NEWSLETTER
Mother Nature's Beauty at Kirkwood
HAPPY NEW YEAR TO ALL!
As usual, "how is the market?" Remember the real question is: How is pricing? Not so bad. This response
comes mainly from my own practice. We service all levels and at a pretty good volume.
There has been a Bay Area-wide improvement in the housing market, especially on the Mid-Peninsula. The
recession has created a pent-up demand for housing. The improvement is both in number of sales and PRICING.
By that, I mean we are no longer going downhill. The market is close to finding its legs, yet by no means is it a
hot market. Median pricing, depending upon whose numbers you look at, is at about 70% of the peak reached in
August of 2007.
Earlier in the year, the general balance of the market was way off with most of the activity being at the low end,
meaning lots of short sales and foreclosed properties, as much as 50% of the volume. The high end has come
back in the number of units. Our business enjoyed a very strong 2009 in the 3.5 plus million dollar price range.
The reasons: number one, clients need a home; number two, high end pricing in real dollars is way off; and
number three, the equities market has recovered somewhat. This bodes well for 2010.
Kirkwood Skiing
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Tahoe Cycling
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All in all, my practice has been and continues to be balanced across the board. The affordable end has been
greatly helped with tax credits and will continue to improve. We have been very busy with the first-time
buyer market due to low interest rates, modest pricing and the tax credits. The high end will keep on ticking
as noted, with lots of step-ups. The 2-3 million dollar end is waking up. Remember that the limiting factor is the
lack of financing at large loan amounts. A borrower still has to qualify mainly on income. Having said that, the
relationship banks are back in the market as they keep loans in their portfolios.
New home construction is at its lowest point since 1960. The inventory of unsold homes is getting slimmer. The
homebuyers credit has been extended. Interest rates are still ridiculously low. Home pricing is a good value. Are
stimulus dollars helping? Is there a sizable upturn in store? NOT REALLY.
What we need is a number of months of consistent activity. There has been a complete reset as production,
payrolls and investments have been slashed. Households have lost 24% of their wealth as the equities market and
home prices are both way down. This is exacerbated by salary reductions and an underemployed workforce. Thus
purchasing is way off, spending habits have been curtailed and savings increased, especially for those soon to
retire. Interest rates are already so low that there is little room for additional assistance from the Federal Reserve.
Any withdrawal of fiscal or monetary help at the moment would have a very negative impact. Add to that, the
number of bank loans available to consumers continues to fall and only government-backed mortgage agencies can
and will expand credit. Remembering the above, we have fewer willing borrowers. Household spending habits have
changed overnight. This is here to stay. We are all being more mindful of what we spend and save.
There is a laundry list of roadblocks to the recovery of the real estate market. Mortgage delinquencies and
foreclosures are still in the picture. We will see interest rates go up. Real estate inventory will increase and there is
no sense of urgency on the buy side; a buyer's market remains.
Continued credit constraints and big time unemployment or underemployment are the main reasons for my opinion
that the strengthening in the real estate market will be very gradual. Again, this is what I see every day with our
clients. The market is beginning a slow road back to solid ground, with the emphasis on slow. After 3 years of
falling prices, stabilization is showing itself. My opinion is that we are currently skipping along the bottom. One
sign of this is that the cost of renting is almost equal to the cost of owning. We have not seen this balance for two
decades.
My practice is still busy, busy. This is because all levels have interest. If you are selling a home, you do not have to
give it away. With a good location, condition and price, it sells. On the buy side, wouldn't you have wanted to buy
back into the equities market when the Dow was at 6500? This is a good analogy of the current opportunities in the
real estate market.
Italian Wildflowers
JAIME'S BIG NEWS
We have a lot to be thankful for this past year. 2009 was a great year filled with family, friends, and some big
news.
In October, Greg and I headed to Buenos Aires, Argentina. We spent eight nights in an apartment in the Palermo
Hollywood district of the city, where we took in the sites, shopping and museums. Highlights included the tour of the
stadium where the Boca Juniors play soccer, a stop to the balcony where Eva Peron gave her famous speeches, the
Recoleta Cemetery and of course, the Argentinean steaks. It's true: the steaks there are truly amazing. I highly
recommend a trip to BA if you are looking for European flair without spending a fortune and I'm happy to share my
itinerary and travel tips.
The biggest news of the year came when we learned we were pregnant with our first child! At just over six months
along now, the pregnancy has been quite smooth thus far. I feel great and we are busily preparing for "our lives to
change," which is the phrase we hear most frequently when we share our news. And in case you are wondering, we
are having a boy! He is due on May 1st and we couldn't be more excited!
On the business side, I will be a little worried for Brendan while I'm on maternity leave as a large portion of my job is
"the care and feeding of RBL." In 5 years of working together, we've gotten our dance steps down, so I'm hoping we
can find a replacement who will take good care of him. Somehow I'm sure I'll still be in the mix one way or another,
as it'll take me awhile to break my Blackberry addiction.
We look forward to the many adventures that 2010 will bring, especially the arrival of our son! Happy New Year to all!
-Jaime
Thanksgiving 2009
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Jaime at 22 Weeks
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Buenos Aires
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Hiking to Glove Rock in the Sierra
HOME
Now the fun stuff. Life has been very good, busy and fulfilling. Jean and I had many anniversary dates to
recognize during the latter part of 2009. First we celebrated our 18th wedding anniversary with an amazing trip
exploring the Redwood Coast of California for a week, half camping and half B&B. We found an undiscovered
treasure of a campground at Big Lagoon County Park near Arcata. The highlight was watching an osprey dive into the
lagoon and come out with a huge fish.
My birthday was next, #58! We spent two nights at Cavallo Point, which is an historic property at restored Fort Baker.
Located at the base of the Golden Gate Bridge on the Marin side, the views are amazing with beautiful rooms and a
wonderful pool and spa area. Our room was soooo nice that on night two we foraged for dinner in Sausalito and feasted
in our room. Hiking at the Marin Headlands was fantastic. The new Marine Mammal Center is recommended to all.
We had two trips back to Missouri this fall, the 2nd for the college graduation of my niece. I truly love my in-laws and
feel blessed to be part of the family. Everyone is healthy and happy, a good thing. I must rub off, as my sister-in-law
has signed up to do St. Anthony's triathlon in Florida this spring. Of course, regular trips to Kirkwood have been on the
calendar. The Christmas ski conditions were just plain out of this world.
My world has expanded from wife, bike and work with the addition of photography and all of the electronic bells and
whistles that are attached. Photo shoots with my friends, who are all on my cycling team, are really a change from the
wars found in competitive cycling. Yes, I am racing my bike this year. I balance this with my veggie garden. The winter
brussel sprouts and fava beans are growing with vigor and I am already dreaming of the harvest.
Cancer is ever present is our minds. The most significant celebration this year was November 20th. This date
represents 2 years of staying cancer-free. Wow. I am more and more involved in helping people who have cancer. It is
a responsibility. I have a story and a major success. It is an ugly disease, so please stay involved if you can. We are big
fans of U.C.S.F. Head and Neck Cancer Center, and the Lance Armstrong Foundation is the real deal. And last but not
least, Providence Cancer Center in Portland. Most importantly, I am grateful to Brad Hinrichs at the Palo Alto Medical
Foundation for his expertise and compassionate care.
Business, well, I'm back at it. I still have a fantastic job. We continue to work in collaboration with Diana Sumner
and Owen Halliday. The big news is that Jaime is having a baby. Although our current financial environment has many
challenges, it is always satisfying to meet the needs of my clients.
Thanks to all of you, the stars in my galaxy, for your faith and support of me. 2010 here we go!!!
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