Gayle and I took a road trip last weekend to Omaha, Nebraska to attend the Berkshire Hathaway (BH) Annual Shareholders Meeting and the opportunity to learn from the 77 year old Warren Buffet and 84 year old Charlie Monger. We were shocked to see the massive growth in Omaha. According to the World-Herald, Nebraska’s economy tops the nation.

Saturday morning, we arrived at the Qwest Center along with 31,000 others. By 9:30a.m. the Qwest arena was standing room only. Warren and Charlie sat a simple, draped table. Plenty of Cherry Coke and See’s peanut brittle was arranged in front of these two investment guru’s. Around the arena, the were 13 microphone stations where for the next 3 hours Warren Buffet moved from station to station taking questions from his flock.

Lot’s of questions as to the successors for Buffet and Monger. Mum was the word from Warren except to note that the Board of Directors had narrowed to the search to 3 or 4 candidates for each position, CEO and CFO. Charlie Monger thought there no need to worry as he had great “young” man at the helm (Buffet) who had plenty of good years left.

Warren usually answered each inquiry with less than a few sentences. Monger, next to reply, would often answer with only a few words and many times just a “no comment” except when a question came up about bio-fuels and if he were to rant about something bio-fuels was it. “Ridiculous, sure to fail, short term fix fo the farmers, to expensive to produce” were just a few of his comments and Buffet wholeheartedly agreed.

Questions about how to invest; Warren Buffet suggested any sized investor (small investors he classified as working with less than a million dollars!) follow him by staying away from get rich quick, trendy or highly risky ventures. Look for companies with broad appeal, steady growth financially and more importantly companies that have had the same managers in place for a long time and who intend to stay in place. Make your investments for long term. Stay the course.

When asked about the Presidential race, Buffet refused to saw he would support. Instead he noted that 2 of the 3 running he felt would make a good President. “The way the government system is set up, anyone could run it, even an idiot, and we have proof of that” he said as the crowd roared with laughter.

Many questions concerned the econony, oil prices and housing markets. The two guru’s assured the crowd, “we’ll be fine, just fine, were just in rough spot.”

In the convention center outside the arena, several companies owned by BH were there to promote themselves and offer the shareholders samples and special discounts on their products. After listening to Buffet and Monger speak of their investment strategies, it was apparent their advise worked well. Company’s in attendance included Fruit of the Loom, Justin Boots, Benjamin Moore Paints, Geico Insurance, Dairy Queen, Mars Chocolate, See’s Candies, Nebraska Furniture Mart and Wrigley Gum…not bad huh and Berkshire Hathaway has $66 Billion in the bank.

Final note: Buffet spoke of making hundreds of billionaires and thousands of millionaires…many of whom invested $10 a share, 44 years ago or $700 a share just 25 years ago…a share of BH “A” stock is trading today around $130,000 a share. Nice return on investment.

PLEASE PAY ATTENTION! Get off the fence. Quit waiting. I’ve been telling you that the Denver area real estate market is not the doom and gloom market the press is bellowing about. The “cranes” are everywhere and we are not talking birds.  Enterprise and commerce create jobs. Big box developments featuring top name tenants are quickly replacing old style shopping centers or once vacant acreage.

Denver Colorado ranks as the 6th BEST residential real estate market (single family homes) according to the Standard and Poor’s Cas-Shiller Home Price idices released data for February 2008. Rankings for the 20-city composite recorded an annual decline of 12.7% while Denver recorded an annual decline of only 5.5%.

Las Vegas, again the weakest market posting a 22.8% decline followed by Miami with a 21.7% decline. San Francisco, Las Vegas and Los Angeles were the worst performers in the west!

Charlotte with a 1.5% increase in home prices was followed by Portland Oregon and Seattle, leading the composite as best markets.

More good news. Read the rest of this entry »

The Universtiy of Denver Real Estate Chair, the MLS statistics continue to reinforce the facts that  the real estate markets in Denver and the surrounding areas are not in the same miserable condition as most of the rest of the United States.

Here is a link to an report from the local CBS4 affiliate in Denver. READ ON it’s GOOD FOR YOU! http://cbs4denver.com/seenon/denver.housing.market.2.685642.html

I say an article in the NY Times last Sunday that answered the question but was not area specific so I asked my insurance guru buddy Theresa Byrnes the question. Here is her reply:

“ Yes, I read the same article and yes this is true.
The reason it is more expensive is because first of all, most insurance companies (Farmers included) will NOT write vacant homes.  We have done this, but they can not be vacant for more than 90 days and in the market today it can be tough to flip these houses.  So….then you are dealing with “specialty dwelling” coverage which I can write though Foremost (Farmers affiliate)…however…the premium is higher.
 
The reason for this is because vacant homes are risky.  Vandalism is very high and water damage also is very high. When pipes break no one is there to know about it so the water runs for days causing catastrophic damage to the property. 
 
I get phone calls all the time from Realtors and attorneys or ask me to help them with this because foreclosed properties can’t get insured because the owner left and cancelled the insurance policies, and now it is vacant.  Because of all the ridiculous negative media about the housing market….it’s raising more concern….
As far as how much this can effect your premium? It can double. I have been writing Foremost policies more now than ever because of the exact thing the paper wrote about. So….for once, the paper is right.
 
I hope this answers your question and prevents any problems in the future.”

Theres Byrnes Farmers Insurance

Denver’s news about foreclosures led the national media for some time. Now Denver ranks 10th on the national scale. Real estate values in the metro Denver area never had the fast run up that cities like Phoenix, or Las Vegas experienced. Sadly our large minority populations seemed to have been victims of predatory lending now creating massive foreclosures in the inter-city neighborhoods. The builders who qualified about any buyer who could fog a mirror sold overpriced homes with huge incentives to buyers who added tens of thousands of dollars worth of upgrades to their already inflated mortgage amount. The result created massive foreclosures in the ex-burbs.

Today, Denver is looking up! Construction cranes populate the city as premium developments pop-up all around town. High dollar to extravagant projects are selling fast. Four Seasons & Ritz Carlton condominium offerings begin at $800 a square foot with already sold penthouses going for $10 million. Denver is fast becoming a destination for well healed 2nd home purchasers. Read the rest of this entry »

  Lawrence Yun - NAR Chief Economist foresees Denver’s Housing Turnaround

Denver’s housing market is not as bad off as most of the rest of the country is what I believe and have been reporting. The same will hold true for 2008. We’ll see the Denver markets improve faster than most. Prices will remain stable, no up’s or downs.

On Wednesday, Lawrence Yun, chief economist and senior vice president of the National Association of Realtors presented his 2008 real estate forecast to the Jeffco Board of Realtors in Lakewood Colorado. “All markets are local and the bleak national market conditions do not represent what is happening in the Denver area. The one thing that may be holding back your market is buyer pessimism. You have very strong affordability” Yun said. 

“Interest rates are basically at a 45 year low” and he reminded us that buyers have a bad attitude based on false beliefs fueled by the press and that the mistakes of Wall Street are in the past, not related to home buying now or in the future.

 Mr. Yun noted that if there is a recession, interest rates will go even lower making Denver housing even more attractive. Denver would weather a recession better than the country as a whole because of the educated work force here.Yun also noted however that the high number of foreclosures  will continue this year.

Read the rest of this entry »

The press and news reports are screaming “the sky is falling, the sky is falling” about the real estate market.  The only thing falling are interest rates!

Mortgage interest rates, reported by our beloved Freddie Mac fell to the lowest level in  a month, matching rates from more than a year past! Sure this could give investors reason to worry about about a possible ressession, but let’s face it money investors worry about everything!

30 year fixed rate mortgages averaged 6.07% The Adjustable Rate Mortagage (ARM’s) were unchanged and remain at 5.9%.

Yes, most neighborhoods in the Denver area real estate markets have suffered with declineing prices and slowed activity. The facts remain that homes are selling and there are many homeowners who need to sell. The banks are loosening up and understand they MUST sell to reduce their number of REO’s (real estate owned) as they anticipate the next wave of foreclosures.

Buyers,  sitting on the bench waiting to get in the game should seriously think about getting in shape, ready to buy in this amazing real estate market place.  Getting in shape?  Yep, get ready to buy, prepare yourself for the marketplace in order to optimize you ability to purchase.

So what to do to get in shape: First talk to a great lender with a long track record. Stay away from the fast talkers and promises of way below market interest rates. Then, think about your “wish list.”  Your written wish list is a must. Write it down then prioritize it. Include everything you want to find in your new home, from number of bedrooms, bathrooms, lot size, architecture, square footage to neighborhood schools, room sizes and everything else you can think of. Now reorder the list from “must have” to “really want” to “it would be nice to have.” Prioritizing will really make you think about the property so that when you begin your property search you will have a heighten understanding of what is important to you. Read the rest of this entry »

Well I’ll be…another New Year’s Day. The Rose Parade, 6 bowl games on TV and when the day is over, what have we got but another new year.

A year, that in just 11 months and 30 days you’ll be saying “wow, where did the year go? Glad that one is over!”  Well, don’t let that happen! Make this the year what you want it to be. A great 2008!

Forget about the mortgage crisis. Forget about the foreclosure numbers. Stop reading the bad press about real estate.  Ignore the Iraq war. Don’t pay attention to who is leading today for the party’s nomination. Forget about about teaching George W to read.  Instead pay attention to the positive.

Last year was horrible year for a lot of real estate agents and mortgage lenders. Gayle and I had a great year. We even sold 2 homes in the last week of December. Why?

Why?  Because we have written goals! Because we have a plan!  If you read our earlier posts you’ll know that our plan and our goals are ready to go for 2008!

So, what’s my point here. I say no matter what you do, no matter who you are, write down your goals for 2008. What do you want for you in 2008! What about your family? What about your finances? What about….what about? Write it down. Think and rewrite. Outline a plan for goal achievement.  Then share your goals and your plan with a partner. Make sure they will hold you accountable. Try it, you’ll see. Need help with the how to for your goals or your plans. No problem. Google GOAL WRITING and get to work.

You will have a great 2008. Happy New Year!

The National Association of Realtors membership roles are declining. Why? Real estate markets almost everywhere are in turmoil. An abundance of listings, the mortgage crisis and many buyers still fence-sitting waiting for whole bubble to burst.  The days of fast and easy transactions are gone. Loan criteria is tight and tightening. Appraisals are coming in low. Property inspectioners uncover often costly needed repairs and owners, especially bank owners, are unwilling to make the fixes.

So, no more “fast money” for agents who got into the business for just that! That’s a blessing. Let them go and stay gone. Better agents with more education, better customer service,and advanced marketing techniques who understand their fiduciary responsiblities to their buyers and sellers will tough it out, as in past down markets. 

Many times this year while attending a closing, the Colorado ceremony to celebrate the passing of the deed and signing the lender and title company documents, I felt the lack of communication, trustworthyness and misdoubt between the other client and their agent who “represented” them. Those agents often taking phone calls during the closing or their rudeness by leaving room to go work on another “deal”  make me think and wonder if this is the way they treated their clients from the start.

Jeff Rickard at 1760 Mortgage Guide asked me to be a guest speaker on his mortgage blog and talk about how to find a good agent to represent a home buyer’s best interests. I offered Jeff’s readers 12 points to consider when choosing a real estate agent. To find out more read Not Just Any Realtor.

I am not an economist or futurist, however my observations regarding the Colorado ecomony have been confirmed by the University of Colorado Leed’s School of Business economist Richard Wobbekind.

 I have experienced my share of the up’s and down’s of the Colorado economy and housing markets over my past 33 years in business here in Denver. I know that when the real estate markets on the coasts are taking a beating, Colorado’s markets pick up.  Sure the foreclosures and tighter than tight credit standards will continue to mess with our housing markets, but we will shake it off better than almost anywhere next year as our economy begins to booms again because of oil, gas, mining and technology. Read about the natural gas boom and how it will impact Colorado in today’s Rocky. Remember the oil boom of the 80’s and the positive impact it had on the entire state?

 Colorado will feel a small “boom” at that but enough of a boom in 2008 to put us out front of the national economy! Watch for the growth to start next year as related business and professional service provide jobs to support our growing economy.

The Denver Post reported that more than 100 economists, academicians and business leaders contributed to the 2008 Outlook. At the 2008 Colorado Business Outlook held Monday in downtown Denver, Mr. Wobbeking told the audience “Continued moderate gowth is on tap for the state.  Colorado will definitely not enter a ressession.” 

The jobs outlook continues to be strong as the State of Colorado continues to beat the national job growth index.  Unemployment will rise some as the Colorado population grows.

Look for more than a 100,000 new residents in 2008 pushing the state population over 5 million! A new record.

The economists suggest that inflation in the Denver metro area will  continue to move downward from 2.9% to 2.7%.

Banks are skiddish about investment lending. I think this turn upward for the state’s economy will provide the confidence needed to allow for substantial investment in the real estate markets, both residential and commercial. So what should you do. Buy real estate of course!