Most real estate pundits have changed their forecasts for any significant improvement in the real estate industry from 2009 to 2010 or even 2011. The hoped for trend would be:

• 2009 – prices stabilize by mid-year
• 2010 – foreclosures begin to dwindle
• 2011 – real estate appreciation returns

What does this mean to homeowners?

If you think you will need to sell in the next 18 to 24 months, you need to consider selling now. The better bet is that the value of your home is going to decrease NOT increase or remain flat. Projected declines range from a few percent to as much as another 10% to 15% of your homes value.

Real estate is always local. There are significant differences in what is happening with home values in East Bay communities and among different price points. That’s why these market reports are so valuable. They are updated weekly and break the data down by zip code and price point.

What does this mean to buyers?

The two more significant points for making a decision to buy are interest rates and quality of life – not price. Price declines over the next year may not affect your monthly payment as much as interest rates. Getting a great interest rate on your mortgage can be worth more than a 5% savings on price.

If you find the perfect home, buy it. Many people waste their lives and miss out on good deals and opportunity by obsessing on getting the “rock bottom” deal. Few people actually get such a deal while tens of thousands look back in hindsight wishing they had taken advantage of the missed opportunity.

What does this mean to investors?

Great opportunities for investing in East Bay real estate are going to continue for the next 18 months. Home owners going into foreclosure are “hopscotching” into leases that were foreclosures a month earlier. These home owners are basically paying in rent what their mortgage payment was before their ARM reset. Rents in the East Bay are rising in most locales.

My Personal Rant

The big question for all of us is the U.S. economy. Will it collapse from the actions of the greedmongers and self-serving ignoramuses? Has all the conniving and sleight-of-hand been uncovered or are we in for more surprises? Will the government finally do what is right for the average citizen or will it be another case of taking care of our friends and bailing out the perpetrators at the expense of the average citizen.

The current bail out plan is sticking it to the average citizen on both ends. Not only are WE going to pay the bill, our retirement plans are being decimated as the government writes off whole institutions without allowing them to go through bankruptcy and sell assets to reclaim some shareholder value.

It seems Wall Street was more fact than fiction and there were many, many more Gordon Gekkos out there than we thought.

The Bottom Isn’t Here Until You Hear the Thump & Feel the Bump

Remember the Savings and Loan debacle?

The savings and loan crisis of the 1980s and 1990s (commonly referred to as the S&L crisis) was the failure of 747 savings and loan associations (S&Ls) in the United States. The ultimate cost of the crisis is estimated to have totaled around USD$160.1 billion, about $124.6 billion of which was directly paid for by the U.S. government—that is, the U.S. taxpayer, either directly or through charges on their savings and loan accounts[1]—which contributed to the large budget deficits of the early 1990s. – Wikipedia

Remember last year – 2007? The subprime meltdown was taking it’s toll in the mortgage industry. Over 90,000 people lost jobs related to the mortgage industry in 2007.

Have you noticed that banks are failing (IndyMac, WaMu) as are investment firms.

So the question is – who in their right mind watching these events unfold can really expect their home value to remain stable or increase?

If you need to sell, sell and move on. Make up the loss on the buy side. Believe it or not, houses are still being sold and financing is still available.

It took about 7 years to work through the catastrophe in the real estate industry due to the S&L crisis. Let’s see, if I recall, this downturn started in 2006.

Given the size of this mess and the politicalization of your suffering, who knows when things will stabilize. It seems the only thing reliable these days is the unforeseen.

Every time we think things are stabilizing, we’re broadsided with news that some other group of greedmongers has been duping the government, the SEC, the FED, the FBI. It seems your home equity has been the prime target for the Wall Street predators.

Homeowners – if you haven’t done so recently – connect with your lender or mortgage professional to verify that they are still in business. Make sure you have a solid connection, the way things are going, you may see an incredible opportunity to refinance in the not to distant future

Mediterranean Delights at Bablou's in Walnut Creek, CA

After attending the Walnut Creek Chamber of Commerce mixer on Thursday evening, Holly Beck, The Balloonman, and I sauntered over to Babalou’s Mediterranean on Bonanza Street.

Babalou’s was a new discovery for me. I like Mediterranean food, but have not gone looking for it in Walnut Creek.

I caught Hudson by surprise. It seems most people aren’t expecting some real estate blogger to walk in with a camera and want a quick pic for a blog posting.

Since, we had already snacked at the mixer, I settled for a Turkish coffee and Holly had some iced mint tea.

We sat outside and enjoyed the incredibly lovely fall evening in Walnut Creek. I noticed the parking valet at McCovey’s had a plate of Mediterranean delights he was devouring.

I think I’ll head down to Babalou’s this weekend – why don’t you?

Be sure to tell Hudson you saw him here first.

Home Sales Figures for Alameda and Contra Costa August 2008

Brentwood, Antioch & Pittsburg continue to see buyers and investors gobbling foreclosures. Concord, California is seeing a lot of downward pressure on condos as the price of single family homes has dropped to the level of what condos used to cost.

Danville, Lafayette and Walnut Creek are showing the slowest declines in median home prices for the month of August.

Michael Arirngton over at TechCruch has a great article today reviewing who is responsible for the current collapse of the US economy. How The U.S. Government Engineered The Current Economic Crisis The graph is worth the click.

How do you spell BILL Clinton?

Well, maybe not totally, he had a lot of help.

Well Tomorrow is finally here and a lot of us can’t stop thinking about it.

I guess Clinton was right – It’s the Economy Stupid – at least it was when we had one.

Peter Wallison has certainly earned the right to point the finger. Many others are pointing the finger, too - not the index.

This is not intended as a commentary on the upcoming election or party politics, there are lots of individuals to hold accountable - including ourselves.