December 2009

That’s it for 2009!

by Ross Kaplan on December 31, 2009

Just to go out on a high note, here are a couple of the 2009 developments that I think are huge positives (some already remarked on, some not):

–Improved racial comity in the U.S. (the biggest development of the year — if not decade);
–Spread of Instant Run-off Voting (also known as “Ranked Choice Voting”). In my (and many others’) opinion, IRV holds the key to opening up our sclerotic, corrupt political oligopoly (a mouthful, I know)
–Crest of the SUV/McMansion trends. Good riddance. Maybe 2010 will mark the arrival of the electric car??
–The “locavore” movement (grow, consume, live locally)
–On a personal note: my three kids –ages 10, 7, and 5 — all bigger, brighter and more and more engaged in the world! This was also the year my 7 year-old conquered his dyslexia and became a reader!
–Social media and the blogosphere (you’re reading this, aren’t you?) Yeah, the “signal to noise” problem is still there, but leave it to technology to solve that one, too.
–Smart phones and ever-more sophisticated networking (remember the long wait for a “killer app?” It turned out to be the smart phone platform).
–No more icons. Yeah, it’s a bummer to find out that erstwhile heroes –financial and otherwise (Alan Greenspan, Tiger Woods, etc.) — turned out to have feet of clay. But putting one’s faith in icons fosters complacency, and complacency begets, well, you know.

Which is not to say that contemporary society doesn’t have any “wise men” (and women) left.

That’s always the lament whenever there’s a major crisis.

So, let’s hear it for pillars of rectitude and common sense like Paul Volcker, and John Bogle, and Elizabeth Warren, and Jeremy Grantham, and Simon Johnson, and Joseph Stiglitz, and . . .

See you in 2010!


"Financial Innovation" Winners & Losers

by Ross Kaplan on December 31, 2009

I’m a huge fan of Nobel laureate (economics) Joseph Stiglitz. This paragraph is an example of why:

Financial engineering did not create products that would help ordinary citizens manage the simple risk of home ownership – with the consequence that millions have lost their homes, and millions more are likely to do so. Instead, innovation was directed at perfecting the exploitation of those who are less educated, and at circumventing the regulations and accounting standards that were designed to make markets more efficient and stable.

–Joseph Stiglitz, “Harsh lessons we may need to learn again” (China Daily, 12/31/09).

Former Fed Chairman Paul Volcker puts it in even starker terms: in his view, the last significant financial innovation was . . . the ATM.

To name something is to own it.

So, instead of framing the issue as being “pro” or “anti” financial innovation, how about characterizing it as being for or against prudent financial “speed limits.”

After the biggest financial crack-up since The Great Depression, you’d think there be little opposition to lowering the prevailing speed limit from, oh, say 200 mph, to maybe 50 mph.

But you’d be wrong . . .


Real Estate . . . on the Road

by Ross Kaplan on December 31, 2009

Is Everyone in Wisconsin Fat?

If we can reduce the number of people deferring medical care — or postponing it indefinitely — while at the same time managing to not go broke, this time next year we can look back at 2010 with pride.

This post is from on the road, in the heart of “The Heartland.”

In fact, it doesn’t get more “heartland” than Janesville, WI, about 30 minutes Southeast of Madison and two hours short of Chicago. Hence, its appeal (or more specifically, the roadside Hampton Inn about 9 p.m. last night).

Southeast — or Southeat?

This observation is not going to win me any local fans — but hey, I’m licensed to sell real estate in Minnesota, not Wisconsin.

As best I can tell, everyone in Wisconsin is fat.

Or at least everyone eating at the McDonalds’ where we stopped for dinner (parents, kids, grandparents — you name it), everyone working at the McDonald’s where we stopped for dinner, everyone getting gas and windshield wiper fluid at the gas station where we stopped, etc.

And no, no one’s looking in any mirrors.

In all seriousness, I’d say it’s progressed from something that’s become a minor national embarrassment to something that’s truly alarming.

When millions are obese, the solution isn’t for everyone to enroll at Weight Watchers; it’s for a change in the national culture, led from on-high (and dare I say by at least some of the corporations whose ox would be gored by a healthier America. I won’t name names, but they rhyme with Schmepsi and Schmairy Queen, to cite a few).

If you’re looking for a fundamental way to divide Americans these days, it’s not White or Black, Blue or Red, Main Street or Wall Street, or even fat and thin (although that’s my runner-up).

I submit, it’s between people who are deferring some needed medical treatment, and those who aren’t.

Put me in the latter category: on Monday, I’m upgrading glass prescriptions that I’ve now had 3 years.

Why the wait?

We maxed out our medical spending account in November, and it re-sets, full, on Jan. 1

Sacrifices, Minor (and Not)

As sacrifices and inconveniences go, that’s trivial.

My wife, a physical therapist, routinely has patients go long intervals without seeing her.

And it’s not because their cancer went away, or they miraculously recovered from that broken hip.

It’s because they can’t afford the co-pay. Or the babysitter. Or sometimes, even the parking in front of the hospital..

If we can prospectively manage to make the group deferring medical care — or postponing it indefinitely — a little smaller while at the same time managing to not go broke, this time next year we can look back at 2010 with pride.

Throw in punishing Wall Street (actually, I propose short-circuiting, or “routing around” it, in Internet parlance) and overhauling the U.S. financial system, and 2010 has the makings of a great year!


1 for 298!

by Ross Kaplan on December 31, 2009

Housing “Ahab” Finally Finds Her Moby Dick

Bay Area real estate has always demanded patience on the part of buyers. Many spend months scouring listings in hopes of finding “the one.” Then there is Lidia Pringle. Over two-and-a-half years, Ms. Pringle personally inspected 298 homes in Marin County.

–“A Picky Home Buyer Pursues An Epic Hunt for ‘the One’“; The Wall Street Journal (12/29/09)

My Realtor’s take on Ms. Pringle’s quest isn’t surprise that she actually went through 298 homes.

The surprise is that she actually bought one.

In my experience, viewing that many homes — in fact, a fraction of that number — invariably takes one out of the “serious Buyer” category and into an altogether different one: “open house hobbyist,” perhaps, or maybe “too-much-time-on-your-hands architecture buff.”

Given that the upper bracket properties Ms. Pringle was checking out typically don’t open their homes to the public, the likelihood is that she viewed most of those homes through Realtor-arranged private showings.

Poor Realtor(s).

Apparently, Ms. Pringle ditched the Realtor who’d arranged most of those showings and bought through one who showed her exactly one home, the one she bought.

Ahh . . . the agony (and the ecstasy) of working on commission!

P.S.: one of the things Realtors quickly realize is that sometimes, the harder you work for a client, the less they appreciate it. Realization #2: so-called tire kickers never kick the tires on the housing equivalent of Chevettes and Pinto’s (remember those?); it’s always Porches and BMW’s.

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Plodding Pace of Year-End Deals

December 30, 2009

Hurry Up and Wait If you’re a prospective home Buyer who initiates a deal just before Christmas — especially if it’s a bank-owned property — you’re likely to get everything wrapped up a week into the New Year (if you’re lucky — I’ve got one in progress now). If you’re a Buyer who initiates a […]

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Slowest Week of the Year

December 28, 2009

Christmas Vacation — for the Housing Market, Too It’s official: last Monday thru Sunday (Dec. 21 – 27) was the slowest week of the year. Just as it was last year, and the year before. My office — Edina Realty City Lakes — recorded 44 showings for that period. By contrast, the peak period in […]

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Not More Square Feet — More Per Square Foot

December 28, 2009

Home Trends 2010: ‘Don’t Call it a Basement’ First, some background: The big trends in housing at the moment are being driven by technology, demographics, and economics (primarily, the Recession, and secondarily, energy costs). Demographics: lots of upper bracket Baby Boomers — ages 50-65 and on the verge of becoming “empty nesters” — are suddenly […]

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Estimating Home Upkeep

December 28, 2009

“Lumpy” Home Repairs How much should you earmark for annual home upkeep? According to one LA-based Realtor: Homeowners should have 1% of the purchase price of their home in savings for improvements and surprise expenses. That is the absolute minimum. It’s better to have 2% to 3% socked away somewhere. –“Home Costs Keep Going Up“; […]

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