(More) Meaningless Marketing Mumbo-Jumbo from — Guess Who? — Big Banks

Somebody has to carry on the George Carlin tradition.

In that vein . . .  I’m sure he’d scratch his head about the difference between between “pre-selected” (for yet another credit card I don’t need), and just plain, old ordinary “selected.”

Pre-what, exactly?

Is there another group of prospective customers out there that is going to be post-selected??

Just wondering . . .

See also, “Bloomingdale’s Cologne ‘Pre-Sale.’”

P.S.:  Want another word that doesn’t hold up to scrutiny?  “Deluxe.”

As in “deluxe Kitchen,” “deluxe vacation,” etc.

(Not to Be Confused With Guard Dog)

Our Golden Retriever’s favorite place to “hang” in the house (when he’s not sleeping) is the Living Room couch — which not so incidentally offers a view of the rather-active boulevard in front of our home.

When he sees another dog being walked, he’ll perk up and even bark.

But, it’s a “take me with” bark, not a “stay away, I’m fierce” bark (he is a Golden, after all).

Encore Performances

The other night, after each kid had made multiple, unbidden post-bedtime appearances in the Master Bedroom, the edict was issued:  ’Stay in your rooms . . .  Go . . . To . . . . Bed!!”

Five minutes later, the Bedroom door opened once again, but I couldn’t see anyone standing there.

It was the dog.

Gas Price Sticker Stock in the Twin Cities

Once upon a time — like, until yesterday — savvy motorists (and Costco members) knew to head to Costco’s gas pumps whenever prices jumped.

Like they did Wednesday.

A LOT.

That’s because Costco’s gas prices notoriously lagged other stations’ price changes by a full day.

Not anymore.

On Wednesday, I filled up car #1 at Costco at 3:30 p.m. for $3.83 a gallon; scarcely three hours later, the same 89 octane gas was $3.99 a gallon (it’s $4.09 today).

Total cost to fuel our household’s two cars:  about $170!

Cause and Effect or Effect and Cause?

Having been south of the (Minnesota) river earlier in the day Wednesday, I can also report that strategy #2 — buy gas in the far south or north ‘burbs, where it’s cheaper — no longer works, either.

On the contrary, the Apple Valley and Burnsville gas stations seemed to be ahead of the closer-in stations hiking their prices.

Once upon a time, I (also) used to think that oil companies shares went up because gas prices — and therefore the companies’ profits — were up.

Now, I think prices at the pump go up . . . because the oil companies’ shares are up (I had the causation backward).

P.S.:  the same phenomenon appears to be true of sports franchises’ market value and ticket prices.

That is, franchises appreciate, then ticket prices rise, not the other way around.

The explanation:  the new Buyer seeks to support the lofty purchase price by squeezing out more revenues.

Lower Rates, Yes, But Higher Prices (& Fewer Choices)

First, a caveat:  to home Sellers, higher home prices are an unalloyed plus.

More money at closing is . . . more money (Realtors paid commissions like it, too).  

And lower interest rates are catnip to Buyers — at least ones financing their purchase.

But at what point do rising home prices — occurring now in most markets nationally — offset (or worse) the benefit of cheaper money?

Half-full or Half-empty?

Some concrete numbers illustrate the issue.

Re-wind the clock a few years, to when interest rates were closer to historic levels, and assume the following numbers:

Home sale price:  $425k
Downpayment:  10%
Mortgage:  $382,500
Interest rate (30-year fixed):  5%
Monthly payment (Principal & interest):  about $2,000 a month

Now, let’s revisit the same house after interest rates have collapsed to 3.5%.

How much can the Buyer afford to pay and still have the same $2,000 monthly payment?

Answer:  $500k.

Surprise, surprise, it sure looks like (at least to me) that a lot of homes that would have fetched $425k a few years ago are now selling for  . . . around $500k.

Except that now, thanks to reduced inventory, Buyers have fewer choices, and as a result more of those homes are selling in multiple offers.

Now do you get what Ben Bernanke’s detractors (I’m one of them) are carping about??

Other Factors

Of course, at higher prices, Buyers have to come up with more money for a downpayment as well (and will have higher insurance premiums on the more “valuable” home).

In the example above, the difference between putting 10% down on a $425k purchase vs. 10% on $500k is $7,500.

Somewhat offsetting that:  1) more Buyers today are asking for (and getting) points from Sellers to finance their closing costs (in essence, they’re borrowing them at today’s ultra-low rates); and 2) Buyers who itemize their deductions pay lower taxes on their bigger mortgages.

P.S.:  You’d certainly think that another feature of today’s housing market relative to the peak would be lower property taxes.

While tax assessed values have certainly dropped, rising mill rates have more than made up for that, leaving most homeowners no better off.

Dealing with a Too-Fussy Home Inspector

Yes, there is such a thing as a home inspector who’s too lax.

But, there are also home inspectors who are too fussy — mostly to protect themselves in the event that the Buyer later wants to pin some problem on them (good luck with that – most inspectors’ contracts say if the client is dissatisfied, the inspector will refund their money  . . . and that’s it).

If you think you’re dealing with a nitpicker, a good reality check is to ask them, “If this were your home, what would you do?”

If they hesitate before mumbling “umm . . . probably nothing,” at least you know what’s going on.

Inspector Skill Set

As I tell my Buyer clients, good inspectors are good at two things (besides communicating clearly):

One.  They’re technically proficient inspecting homes and detecting issues/problems; and

Two.  When they do detect a problem, they’re able to characterize it for the Buyer, and provide a ballpark estimate of the repair cost (of course, for big-ticket items, it’s appropriate to extend the inspection timetable and get contractor quotes).

I stopped working with one inspector years ago who, even though he was technically superb, was unduly alarmist on even the most trivial details.

So, if he saw a burnt-out bulb in a light fixture, rather than say that a new bulb would cost $1, would counsel the Buyer ”to hire an electrician, just to be safe.”

If there was a leaky faucet, rather than say “a new (50¢) washer will likely take care of it,” would recommend having a licensed plumber check it out, etc. etc.

By now, most people know what an upside down home owner is:  someone who owes more on their mortgage(s) than their home is currently worth.

Supposedly, Americans are (still) collectively underwater to the tune of $5 trillion.

So, what’s an “upside down” house?  (my term)

It’s a home where the finished square feet are disproportionately below grade (= basement) and/or the lion’s share of the home’s updates and amenities are located there (like the Master Bedroom).

Above vs. Below Finished Square Feet

Nothing wrong with that — the lower level is certainly quieter!

And with ramblers (“ranches” on the Coasts), that’s where almost half of the home’s potential finished space is (mechanical’s subtract a bit).

But, Realtors typically discount below grade square feet by as much as 75% (for what people think of as “scary basements”), or, in the case of lighter, nicely finished walkout basements, “only” 50%.

Meanwhile, Appraisers generally disregard below ground finished square feet altogether, because of their variability (height, finishes, walkout or not, etc.).

Instead, they focus on what’s called “above ground finished square feet.”

Proof that Stocks Are “Bubble-icious”

“The degree to which this market is dependent on continued Fed easing was demonstrated just last week when rumors of a Jon Hilsenrath article on the Fed’s exit strategy knocked the market down nearly 100 points in a matter of minutes Thursday afternoon. Hilsenrath is known – or at least believed – to be the Fed’s unofficial mouth piece at the Wall Street Journal so when he writes, Wall Street listens. When the article failed to materialize Friday morning, traders apparently took that as the all clear and the market recovered back to near its weekly high.”

–”Happy Mother’s Day, Mr. Bernanke“; Alhambra Investment Partners (May 12, 2013)

Unless you’ve been in a cave lately, you’re likely aware that stocks — and bonds — are both making record highs.

The question is “why?”

One camp posits that corporations are posting record earnings, dividends are on the rise, and even if they weren’t, bonds don’t pay anything, anyways, thanks to the Fed’s policy of zero percent interest rates (“ZIRP”).

Then there’s camp #2, which notes that all of the foregoing is occurring against a backdrop of anemic economic growth and stagnant hiring, even as the Fed undertakes unprecedented monetary stimulus (most notably Quantitative Easing).

Paging (Texting?) Jon Hilsenrath

Which is where Wall Street Journal reporter Jon Hilsenrath comes in.

Apparently, when the Fed wants to communicate something to the market these days, it leaks that info through Hilsenrath.

Or, at least Wall Street thinks it does, which is effectively the same thing.

In a “normal” market, you’d expect stock prices to be driven by corporate and general economic news.

However, in a Fed-driven market, all that matters is what the Fed is — or isn’t — going to do next.

A 100 point drop last Thursday based on rumors of a possible story by an obscure journalist tells me that all eyes are on the Fed.

And little else.

98º in Twin Cities!

In the Sherlock Holmes story, the reason the dog didn’t bark was because it recognized the intruder (providing the clue that solved the mystery).

In the case of my golden retriever, the reason he’s not barking in our backyard this evening is that he just finished a three-mile walk around Lake Calhoun (in 98º temp’s) . . . . and he’s pooped!

Given the very low (20% humidity) and how long it’s been since it was last hot here (forever), it actually feels terrific! (and not a little shocking after snow — at least for 10 minutes — on Saturday).

“Vegan” vs. “Vegetarian” — Housing Edition

A “car light” is popularly known as a headlight (or perhaps headlamp).

So, what’s “car-light?”

A lifestyle many young, urban-types are embracing, that involves getting by with one — or zero(!) — cars per household.

That’s possible by using car-sharing services like ZipCar (just bought by Avis) and/or living close to public transportation, bike trails (like the Midtown Greenway in Minneapolis) or . . . walking distance to work, groceries, etc. (imagine!).

Of course, the ultimate form of “car-light” would be . . . “car-less” (think of it as “vegan” vs. “vegetarian”).

P.S.:  I suppose “bike-light” would be renting a bike (vs. owning one).  That’s now possible to do in Minneapolis — at least from April to October — thanks to the city’s “Nice Ride” program.

“Good,” “Better,” and “Best” Inspection Timetables

The best way for a Buyer to prevail in multiple offers?

Easy.

Come in with the highest price and the lowest financing risk — or none, in the case of a cash offer.   See, “Tiebreaker in Multiple Offers:  the Buyer’s Loan Officer.”

But that doesn’t mean there aren’t other ways Buyers can make their offer more attractive to a Seller choosing amongst multiple suitors.

So, another good strategy is for the Buyer to reduce the Seller’s Inspection risk.

Inspection Timetable

Of course, the ultimate way to reduce the Seller’s inspection risk is for the Buyer to waive their inspection.

No doubt, there are at least some hyper-motivated Buyers out there now willing to do just that.

Although I NEVER recommend that a Buyer do that — even at the risk of “losing” the house in multiples — there are other ways to reassure Sellers.

I’ll call the following options “good,” “better,” and “best” — at least from the Seller’s perspective:

“Good”:  Contractually agree to accelerate the inspection timetable from the standard “5-1-1″ to “2-1-1″ (the intervals refer to the number of days the Buyer has to do the inspection; follow up with a list of written issues to negotiate; and finally, how many day to resolved any issues).

“Better“:  Offer to do the inspection within 24 hours of Final Acceptance.

“Best“:  Have an Inspector along at the Buyer’s showing, to do at least a cursory exam, so that the Buyer’s offer already addresses any inspection issues.

“But, But . . .”

Does such a strategy put (time) pressure on the Buyer?

Sure.

It also precludes some additional inspection tests — such as radon and a main sewer optical inspection — that require more setup and/or turnaround time.

However, in the majority of cases, both of these tests come back negative, and even when they don’t, have finite associated costs (about $1,200 to remediate radon, and up to $5,000 to repair/replace the main sewer).

For the right house, at the right (otherwise) price, those are risks that at least some Buyers may be willing to assume.

Math Dunces

“It seems we’re somewhat ahead of schedule, but I think we’re still on track for Dow 20,000 by the end of the decade.”

–Seth Masters, Chief Investment Office –Bernstein Global Wealth Management; “Forecast for a 20,000 Dow Still Holds”; The NYT (May 11, 2013)

The leading contender for dumb article of the day (decade?) would be the one quoted from above.

That’s because “predicting” that the Dow will reach 20,000 in the next 7 years is no prediction at all:  it merely extrapolates 5% annual returns between now and then.

Who knows, with a couple more rounds of Quantitative Easing, perhaps the Dow will hit that mark by December.

This December.

Using the same dim-witted math, I hereby predict that the Dow will cross 100,000 — by the year 2053.

That’s where it will be if it simply averages 5% annual returns the next 40 years.

How Big a Premium for Higher Floors?

If Eskimos supposedly have 38 words for snow, leave it to New Yorkers to coin the most and best words for anything relating to skyscrapers, views, and the like.

Words like “view-break,” defined as:

“The price-point at which views in a building clear the treetops or crest above the brick-and-mortar horizon of neighboring buildings.”

–“The Stratospherians”; NYT (May 10, 2013).

“View-break” explains why there are actually two scales for determining the premium associated with increasing height in a building:

One.  An incremental scale for each successively higher floor in a building.  Such an increment is typically considered to be 1% to 2% per floor.

Two.  Above or below the “view-break.”  (In theory, I suppose it’s possible for a skyscraper in a thicket of other skyscrapers to have multiple “view-breaks.”)

As opposed to the first premium, the premium associated with being above the view-break is very much not incremental.

Price Bump  . . . or Jump?

What kind of numbers are we talking?

Assume two units in “Building A,” both south-facing and identical in all ways except that one is on the 25th floor and the other on the 26th.

Now assume that immediately to the south is “Building B,” which just so happens to be  . . . 25 stories. 

Because the higher unit is above the view-break, it could command as much as a 30%(!) premium!

Scenario #2:  Below the View-Break

Which raises the question:  in the same building, how much more would you be willing to pay for a 20th floor unit vs.  . . . say, an 8th floor one?

A lot, because the higher unit will have more natural light and less shadow — not to mention less noise, another “big city” consideration.

P.S.:  This all sort of recalls a “motivational” speech I heard when I was prepping for the bar exam, more than 20 years ago.

The instructor’s “carrot” to get us to study hard and pass (I did) was this quote (observation?):  ”Life is like being a sled dog.  Unless you’re the lead (top) dog, the view never changes.”

Do You Know Where That [Beef/Chicken/Fish/Dairy/Water] Came From?

Once upon a time, it was journalists who were referred to as being “well-sourced” (i.e., had good connections, up to and including the most famous one of all, Watergate’s “Deep Throat”).

Now, food critics use that term to describe restaurants.

As in:

“The perfectly medium-rare burger at Red Cow [new Southwest Minneapolis restaurant] was made of well-sourced beef.”

–Emily Weiss, “Chow Now, Red Cow”; City Pages (April 24 – 30)

The writer explains that the term is “increasingly important when phrases like “pink slime” and “secret horse meat” are in the headlines.”

Hard to argue with any of that.

(Another) Contrarian Kaplan

So, how is Red Cow? (“How Now Red Cow??”).

Having just finished lunch there today with my 8 year-old daughter, I can report that it got the ultimate seal of approval:  she h-a-t-e-d it.

Her exact words:  “McDonald’s is MUCH better!”

Fine by me:  McDonald’s is also MUCH cheaper.

For the record, my Patty Melt was terrific, and the entrée my contrarian daughter gave a little too-enthusiastic “thumbs down” to was the cheeseburger slider(s) off the kids’ menu.

P.S.:  Besides good food, what Red Cow has going for it is a (very) prime Southwest Minneapolis location.

Credit Convalescence

I know don’t know that there’s a firm rule of thumb out there — ultimately, individual lenders decide to make a loan or not based on individual circumstances — but there are some conventions as to how long it takes a would-be borrower to rehabilitate their credit after a short sale.

The consensus?

Five years of good credit history — presumably longer if there are aggravating factors such as a bankruptcy.

Not to the Starting Line

The issue came up on a recent deal involving a contract for deed (a type of Seller financing), where the would-be Buyer was firm that they needed a 7 year term.

They didn’t dispute the five-year timeline, but explained that they had two “underwater” investment properties likely to go through a short sale, which could take 18-24 months to play out.

In other words, they weren’t to the starting line yet.

Rehab Timeline Getting Shorter

Given that millions of homeowners lost their credit due to the housing downturn, the “credit rehab” timeline has been getting shorter — just not short enough (see, “Wall Street’s Latest Housing Play (Ploy).”

In fact, the downturn was of such historic proportions in both scope and magnitude — unrivalled since The Great Depression — I’d argue that an equally historic response is called for.

And I’m not talking about idiotic refinancing programs administered by the predatory banks themselves.

Or in the vast majority of cases, not.

Needed:  Credit Amnesty

My proposal:  a “credit amnesty,” halving the time Buyers’ credit is dinged as the result of a foreclosure or short sale, and a $500 billion pot for new mortgages funded directly by the federal government.

“Expensive,” you say?

Not compared to the largesse shown the big banks, credit rating agencies, and other ‘Crash culprits, not to mention the ongoing costs associated with the Fed’s ongoing policy of zero percent interest rates (“ZIRP”).

Watch Out for the Refund Line

It certainly looks like this Golden Valley strip mall is offering drive-thru income tax prep.

In fact, the drive-thru lane is for customers of the adjacent dry cleaners.

I still like the idea, though:  figuring out their annual tax liability is supposed to cost Americans hundreds of billions a year (never mind the time sink).

What’s Behind It?  Can You Say, “Financial Arbitrage?”

“After a period when cheap mortgages were too available, the pendulum has swung too far; a lack of finance is holding the economy back. The clearest evidence is the growing number of lower and middle-income families paying rents to the private-equity firms that own their homes at rates far above what a mortgage would cost.”

–Larry Summers, “The Growth Agenda We Need“; The Washington Post (Feb. 10, 2013)

I don’t see much evidence of it in the Twin Cities, but apparently in markets like Phoenix, Las Vegas and parts of Florida, (very) well-heeled Wall Street investors are literally buying up tens of thousands of single family homes.

Doing the buying:  Wall Street’s Leverage Buyout (“LBO”) types — now rechristened “Private Equity.”

Step #2:  rent out the houses to former home owners whose credit is shot, and are now involuntarily renting.

Step #3 (presumably a few years from now):  sell the homes at much-higher prices, reaping millions (billions?) in capital gains.

Bullish on Housing?  That, Too

It’s easy to view such behavior as a bullish bet on housing — and indeed, it may be.

But what it’s really a bet on is financial arbitrage.

That is, thanks to the Federal Reserve’s policy of zero percent interest rates (“ZIRP”), well-connected, financial behemoths can borrow money virtually for nothing.

Meanwhile, millions of homeowners whose credit was damaged in the housing bust . . . . can’t borrow at all (cue Larry Summer’s quote, above).

Borrowing low and lending high — or in this case, renting — is a surefire way for Wall Street’s especially well-connected to cash in on housing.

Again.

Five Job Duties

In “Realtor Job Description,” I summarized what good agents do in their capacity as a “Listing agent” (representing Sellers) and as a ”Buyer’s agent” representing . . . . (obvious, right?  Except that after closing, the Buyer’s Agent is referred to as the “Selling agent”).

In this post, I’ll discuss modern Realtors’ five different job duties, at least as I see them.

One. Doing deals.  Includes finding either the home (as a Buyer’s agent) or the Buyer (as a listing agent), doing Comp’s, writing up the offer, presenting and negotiating it, etc.

Call that part of the job “playing offense.”

Which leads to Job Duty #2, “playing defense,” also known as . . .

Two. Keeping deals together.  That is, navigating the various obstacles that can pop up once there’s what Realtors call “Final Acceptance” (when the last signature hits the last blank line, and the executed contract is constructively delivered, i.e., sent to the other agent).

The most common issues that sink deals are either inspection-related or financing-related.

For example, the Buyer and Seller can’t agree on how much to reduce the price because the roof needs to be replaced — or can’t even agree that it does need to be replaced.

Three. Landing new business.  The ideal is a nice distribution of early stage deals, mid-stage deals, and closings (yes!).

The reality is . . . a bit different.

It’s a cliché, but the time to be attending to new business is when you’re already busy — not once you’ve slowed down and suddenly have time for it.

Four.  ”Home prep.”  What you immediately begin doing once you land new business — specifically, listings.

Involves walking the owner through suggested repairs/updates; overseeing the municipal inspection (if any); getting staging, photography, pre-list marketing, etc. up-and-running; and walking the Seller through the various required legal disclosures, etc.

And doubling back for any overlooked paperwork (see Step #5), like the “Withhold from MLS” form that’s almost always needed these days.

Forms, Forms, Forms (or “Necessary Evils”)

Which leaves the bête noire of most Realtors, myself included:  dreaded Step #5, consisting of miscellaneous paperwork, housekeeping, etc.

I don’t really care whether the process is paper-driven or electronic today; the actual number of steps in a standard real estate transaction (never mind unusual one) certainly hasn’t gone down in the last 5 years or so (to saying nothing of 20 years ago).

More anecdotally, neither has the amount of my handwritten notes documenting same, on yellow legal notepads no less (a carryover from my lawyer days).

At each step of the deal, from signing on a new client to writing an offer to resolving any Inspection issues, there are corresponding forms, client signatures, net sheets (my particular bugaboo), worksheets, etc.

In each deal, there will also be the inevitable “clean-up process,” which consists of doubling back for any missed documentation (marshaling same would be the job description of another key real estate job:  Office Administrator, or “OA”).

So, what do Realtors prefer to spend their time on?

Here’s my order:  Step #1, Step #3, Step #2, and dead last, Step #4.

Call me crazy, but I actually like Listing Presentations (a key part of Step #3).

My Stock Market Advice

Three years ago, I told anyone who asked that I thought it was too late to sell, but too early to buy.

Today?

My take is that it’s too late to buy, but too early to sell.

Based on my abysmal market timing, that no doubt means that now is positively a great time to buy.

P.S.:  If you’re looking for an investing guru, the ideal is someone who is consistently right.

Less understood is that finding someone who is consistently wrong is just as useful:  you just do the opposite.

In statisticians’ lingo, a coefficient of correlation of either +1 or -1 is equally desirable.

From Star Growth Company to World’s Biggest Cash Cow

Before tackling what turns out to be the not-so-novel question, “Is Apple the New Microsoft?,” I thought I’d check Google to find out how many other people had the same thought.

Answer:  a lot.

Even more interesting, though, was when the query (observation?) first started popping up:  at least as far back as 2005.

In other words, before Steve Jobs’ illness became public, before the iPhone, iPad, and before lots of other innovations that cumulatively generated more than $1 trillion in sales, leaving the company with a ginormous $100 billion pile of cash (see below).

Finally Timely

Unlike before, though, the question, “Is Apple the new Microsoft?” finally appears to be timely.

That’s because for the first time in a decade, the company’s earnings are falling, at least temporarily.

There are lots of reasons, but ultimately the main one appears to be that the company’s trademark franchises, the iPhone and iPad, have now been eclipsed by competitors’ superior performance, lower price — or both.

Installed Base; Legacy Rents

Fortunately for Apple, such a development doesn’t necessarily spell instant doom.

It’s been a decade since Microsoft has been considered technologically innovative, yet it still reaps billions of dollars annually in what I’ll charitably call “legacy rents” (“monopoly tax” would probably be more accurate.)

Thanks to a “sticky,” installed base numbering  in the tens (hundreds?) of millions, Microsoft has been the world’s biggest cash cow since — I dunno, 2000(?) — milking its pantheon of software once-greats (Windows operating system, Office suite of software, etc. ).

Comparing Apples & . . . uhh, Oranges

Now, Apple appears to be following the same path.

If anything, its key franchises — the iPhone and iPad — tap bigger global markets than Microsoft’s products.

Unfortunately, that big plus is at least partially offset by these three negatives:  1) the pace of change in Apple’s markets (mobile, phones, tablets) is faster; 2) its key competitors (Samsung, HTC, and Google) are bigger and more nimble; and 3) its customers’ ties to its products are more attenuated.

Bottom line:  Apple may turn out to be a richer cash cow than Microsoft, at least initially, but it may not have the same staying power (or anything close).*

$15 Billion in Bonds

Will that matter?

It might, if you just bought a 30-year bond from the company, paying a rather modest 2.5%.

Likely to fare better:  stockholders, whose return is going to come much faster, in the form of $75 billion in dividends to be paid out over the next two years.

Borrowing (Cheap) to Pay Dividends

So, is Apple finally parting with its mountain of cash?

Not exactly.

For one thing, it’s still coming in the door faster than it’s going out.

That’s what 50% margins — or 95% margins, in the case of software — will do.

For another, the money to pay the dividends — or at least the first $15 billion — is actually being borrowed.

That’s explained by two things:  1) Apple’s cash hoard is held abroad, and would be taxed if brought back to the U.S.; and 2) thanks to the Fed’s ZIRP policy (zero percent interest rates), Apple can borrow money in the credit markets practically for free.

*Query:  would that eventually make it a “cash goat??”

Winnowing Out Underperformers

“The reason dolphins have a reputation for saving drowning swimmers is you never hear from all the ones they push out to sea.”

I remember asking an electrician — years ago — how a layman like me could tell a good electrician from a bad one.

“The really bad ones are dead,” he replied, matter-of-factly.

No Fatal Mistakes, But . . .

No, there’s nothing life-threatening in residential real estate sales.

But, I suppose the equivalent would be professional longevity — and the flip side of that coin, attrition and turnover.

That’s especially the case in a field where something like 4 out of 5 new entrants are out of the business in less than 2 years.*

If someone’s a bad (or even mediocre) Realtor, they tend not to make a living at it, and disappear.

Conversely, the ones who’ve been at it awhile presumably are doing something right (hopefully, several things).

*In contrast to “newbie’s,” who wash out at an alarmingly high rate, I suspect the attrition % for established Realtors goes down dramatically.

So, at least anecdotally, it seems like the chances that a 15 year veteran will still be in the business 5 years later are quite high, like better than 80%.

Back in Fashion:  Ramblers

“People want to remodel their homes so they can age in place.  They’re adding main-floor Bathrooms and Laundry Rooms, zero-curb showers that could accommodate a wheelchair, and Family Room additions that could easily convert to main-floor Bedrooms.”

–Kim Palmer, “Remodeling on Rebound”; Star Tribune (5/5/2013)

Along with the housing market, remodeling is rebounding . . . with a twist.

Instead of getting their homes ready for sale, millions of baby boomers are retrofitting them to stay in place.

Rambler Revival

The trend is bringing back in vogue some housing styles not usually thought of as “trendy.”

Such as:  staid, ’50′s ramblers (called “ranches” outside the Midwest), that lend themselves quite nicely to one-level living.

When staying in a single family home doesn’t make sense because of health or lifestyle issues (like travel) — or simply because of space needs (more like, lack thereof) — Baby Boomers today have their choice of more types of senior housing than ever.

Ad Hoc vs. Whole Building Approach

For at least a couple years now, I’ve counseled my condo Buyers to be leery of a certain Lake Calhoun condo building.

My concern(s)?

That is, besides suspiciously low sale prices (often a giveaway):  I’d heard numerous stories about alleged problems (remember, I’m a former attorney) with the building’s exterior and windows, including lots of messy, unresolved litigation.

That was in addition to assorted rumors about individual Buyers and Sellers working out various, “ala carte” escrow arrangements, etc.  to get deals closed.

Cloud Over Building (Legal & Otherwise)

The impression one got (OK, me) was that, rather than the entire building biting the bullet and addressing the alleged issue(s), individual condo owners were each figuring out for themselves what — and how much — to tell prospective Buyers.

So, lo and behold, what did I notice today driving past?

The entire building was swathed in top-to-bottom scaffolding — presumably to address aforesaid issue(s).

Much more expensive, I’m sure, in the short run.

However, multiply my advice as an active Buyer’s agent times 10 (or 100), and the cost of not addressing a major issue can be quite expensive, too.

It’s premature to call it a “corridor.”

But it’s not too soon to note that there’s a mini-building boom in progress along the Midtown Greenway, in Minneapolis’ Uptown neighborhood.

The heaviest concentration is clustered on the north side of the Greenway, between Bryant and Lyndale.

However, one mile west, about 3 blocks northwest of Lake Calhoun, a ginormous rental complex is going up now as well.

Let’s hope that the new tenants are avid bicyclists, and make good use of the Greenway (and coming Light Rail!); some of those side streets are (already) pretty tight.

See also, “Developers Flock to Minneapolis’ Uptown.”

The easy way to tell the difference?

Drive by the house.

Assuming that’s not convenient, the other way to tell is to note whether the grass is too uniformly green (characteristic of Photoshop), and whether other detail (like budding leaves) is consistent with the rest of the photo.

Of course, while I have seen digital photos with added shadows and other touches, that’s usually associated with a real photo, if only because those things are expensive to add digitally.

Verdict?

The shot above is real (vs. “Photoshopped,” or digitally altered), taken six weeks after the photo below.

See also,  ”Photoshopped?  Or Not?;” ”Faux Photo?”

Not Waiting for the Weather

There are two situations I can think of where “digitally” adding green grass to an otherwise brown front yard makes sense:  1) early Spring, after the snow has melted but before lawns have “greened up”; and 2) new construction, where earth-moving equipment has trampled the yard, and the developer has yet to put everything back together.

As you can see from these “before” and “after” shots . . . the difference can be dramatic!

P.S.:  Another popular technique:  digitally substituting a blue sky for an overcast one.