Archive for July, 2016

A house is worth no more than a buyer is willing to pay and no less than a seller is will to accept. Motivation of the Other Party Professional poker players spend hours studying people’s reactions to try to elucidate the cards their opponents are holding. In poker if players can determine what their opponents believe about the strength of their hands, they gain a significant advantage over the other players. If you know the motivations of the other party in a negotiation, you can respond by concealing your own motivation in hopes that the other party will either raise or lower their pricing to come to you. This is not deceitful; it is sound negotiating practice. The risk of…[READ MORE]

How much is a property worth? Is it whatever two parties agree to? Is value established by recent nearby comparable sales? Negotiating the sale of residential real estate is no more difficult that negotiating for any other product of service that doesn't have a fixed price; however, due to the colossal cost of houses, the process is more important financially than negotiating for other big-ticket items like automobiles. A mistake made while buying or selling a house could cost as much as a new car; sometimes such mistakes could pay for many cars. Skilled negotiators can obtain favorable pricing and terms without the assistance of a broker, but the novice who is inexperienced at this process often will not. Novice…[READ MORE]

Mortgage equity withdrawal is a bad idea that often leads to disaster. I have often wondered if I had made different decisions during the bubble if I would have been caught up in the frenzy. Although I don’t believe I could have fully ingested kool aid, I probably would have behaved like most of my cohorts and increased my loan balance. I consider those who did this with fixed rate financing and still managed to lower their payments as the sly ones. That is as far as I would have gone, but I probably would have taken some of the free money. The conditions that spawned the rally of The Great Housing Bubble are gone, and we will not see…[READ MORE]

Historically, properties in this market sell at a 9.5% discount. Today's discount is 16.0%. This market is 6.5% undervalued. Median home price is $534,900 with a rental parity value of $639,600. This market's discount is $104,700. Monthly payment affordability has been improving over the last 5 month(s). Momentum suggests improving affordability. Resale prices on a $/SF basis increased from $421/SF to $424/SF. Resale prices have been rising for 11 month(s). Over the last 12 months, resale prices rose 7.4% indicating a longer term upward price trend. Median rental rates increased $25 last month from $2,708 to $2,733. The current capitalization rate (rent/price) is 4.9%. Rents have been rising for 12 month(s). Price momentum signals rising rents over the next three…[READ MORE]

  Over the last few days, I wrote about my family history in Ancestral Call, my youth in Community of Elders, my teenage years in Coming of Age, and today I conclude with a little perspective on life and an expression of one of my deepest desires. You never know what will happen when you put something out in the Universe. Maybe my dream will come true. Chasing my entitlements When I was thirty years old, I found myself repeating mistakes and causing myself more unhappiness. I met some people who were happy and showed freedom of heart in the midst of the pressures of daily life. I wanted that for myself, so I joined their group and spent eighteen…[READ MORE]

  Having grown up in a community of elders with a long heritage, I have a deep connection to my old home town of Adams-Friendship, Wisconsin. I lived there throughout a blissful childhood until my family moved away when I was eleven years old. I struggled to adapt to my new environment always feeling like an outsider. In my Junior year of high school, I hatched a plan to go back to Wisconsin to have the high school experience I felt I was denied in Arkansas. I went home to come of age. https://www.youtube.com/watch?v=uwIGZLjugKA It was 1985, my thoughts were short my hair was longCaught somewhere between a boy and manShe was seventeen and she was far from in-betweenIt was…[READ MORE]

  Childhood in a community of elders Yesterday, in Ancestral Call, I detailed my family history. I was born into a close-knit rural community, swaddled by family, extended family and a broader community which shared the same values. Both my grandparents living within a few miles of one another, and several aunts, uncles and cousins lived nearby. I had the support of this community during my formative years. I grew up believing everything is possible: You can be anybody you want to be,You can love whomever you willYou can travel any country where your heart leadsAnd know I will love you stillYou can live by yourself, you can gather friends around,You can choose one special oneAnd the only measure of…[READ MORE]

I will be on vacation the remainder of this week. If you want to know where I'm going and why, read on. My rural roots My roots run deep in the rural farm community of Friendship, Wisconsin. My fraternal family line can be traced back to Thomas Roberts, a Welshman born in 1831. Thomas arrived with two bothers in New York, but sadly, he became separated from them and never saw them again. Thomas immigrated to Adams County, Wisconsin where he started a family which still boasts many local residents. Although my name is Welsh, the women who married Roberts men for the next several generations were of Scandinavian descent. I am a mutt of the American melting pot. Many…[READ MORE]

I am out of town this week. Please carry on in the astute observations without me. I chose to bring this piece out again because I am going through a reset of my own entitlements. Several months ago, I trashed or sold most of my stuff. I wanted to purge my attachments, but recent events demonstrated to me that I still had much work to do. I've read this post dozens of times, but now it's time for life to imitate art. The Great Housing Bubble cultivated a gentility of entitlement, a sordid societal residue, a system of reliance, a conviction among people that they may possess anything they wish just because; deserving without earning; Grace. Divine acceptance is given;…[READ MORE]

Historically, properties in this market sell at a 0.6% premium. Today's discount is 7.0%. This market is 7.6% undervalued. Median home price is $619,400 with a rental parity value of $668,000. This market's discount is $48,600. Monthly payment affordability has been improving over the last 5 month(s). Momentum suggests improving affordability. Resale prices on a $/SF basis increased from $401/SF to $402/SF. Resale prices have been rising for 11 month(s). Over the last 12 months, resale prices rose 5.9% indicating a longer term upward price trend. Median rental rates increased $31 last month from $2,823 to $2,854. The current capitalization rate (rent/price) is 4.4%. Rents have been rising for 12 month(s). Price momentum signals rising rents over the next three…[READ MORE]