Yesterday, when updating our Industry News page, I found this little tidbit included in the report from the National Association of Realtors®: 

Existing-home sales eased but prices stabilized as inventories tightened in December, while 2006 was the third-highest sales year on record, according to the National Association of Realtors®.

It got me to thinking about Rick Geha of Keller Williams over in Freemont, CA. Rick is owner and part owner in several KW franchises in the East Bay area of California. He is also one of the elite trainers in Keller Williams University. Rick travels around the country helping KW agents build successful careers in real estate.

I attended two Rick Geha trainings last year – the year of continued "doom and gloom" from the media about the real estate industry. Rick started both classes asking, "How's the market?" As you might expect, he got varied responses as some agents actually parroted the media. The first thing Rick did was set everybody straight – "It's unbelievable!!" is his reply.

And then he goes to work to show you why it really is. Rick Geha has been selling real estate in the East Bay area almost as long as my buddy Jim Walberg. He's been through blood-letting of a couple of real down markets and he knows the market as well as anyone. When he tells you the market is unbelievable, he's not blowing smoke up your …

All along, he was telling us – It's the second hottest market in history for this area. It seems to have been, or close to it. The wildfire market of 2003 – 2004 is going to make any other market look extremely bad.

This has raised a couple of interesting thoughts in my brain. Many people think today's interest rates are not so good, but they're comparing them to the interest rates of post 9/11 when they were lowered to help the country move through some difficult times. Historically, interest rates are a great deal right now.

The other point is how attached we become to "paper profits." Many property owners are holding on to the thought of having money in the bank that was never there. Property values fluctuate and until you sell it, the money is imaginary. Just ask all of the millionaire investors of the dotcom era that woke up one day a lot poorer than the day before. Many had still realized great profits from their original investments, but it was interesting to watch them suffer losing their "paper profits." 

One situation we are seeing more and more of these days – clients attached to a home valuation that is a year or two years old. We often hear – an appraiser told me… Rick Geha's advice is call the appraiser and see if he/she will buy it for that.

That Rick, he's a funny guy and one hell of a trainer. He's the reason you see us putting so much time and effort into "knowing our market" and communicating to our clients so we're all on the same page – current reality.