GregShepard.com

What do you mean no Wikipedia today?

2012-01-18T15:20:00.000-06:00

I tried to "Wiki" something today, but see that they are on "strike", so to speak. There was a hot link to their "side" of the argument. http://en.wikipedia.org/wiki/Wikipedia:SOPA_initiative/Learn_more And it brought up some valid points...just as the other side undoubtedly has their valid points.

Unfortunately, I haven't really paid much attention to their battle as it has not, until today, made any difference. But this now has caught my attention, as it has no doubt caught millions of American's attention today. And as so often is the case now that the grey hairs outnumber the others, I tend to see both sides. Years ago I heard a quote that has stuck with me ever since. And it was the story about an old Virginia coal miner that said that no matter how thin he made his pancakes, they always ended up having two sides.

If you allow yourself to only hear one side of any argument, it is easy to be swayed that direction. But invariably there are two sides. And if you heard the other side of the argument first, that would sway you in that direction as well.

It is kind of like going for a ride in a canoe....The goal to going for a ride in a canoe is to stay as close to the middle as you can. If you lean too far one way, you will wildly flap your arms in order to correct your balance. And all too often, you will tend to go too far the other way after the correction....with the process often then repeating itself. "Been there, done that" on a canoe ride with Dad years ago in northern Minnesota on Halloween evening trying to bow hunt for whitetail deer in a river that always had deer hanging out on either side in the red willows...but that is a story for another time. Suffice it to say, we got our knuckles wet on each side of the canoe while trying to "shoot" a beaver dam and the subsequent wildly flapping arms. With ice forming on the canoe paddles as we went, you get an idea as to how bad that would have been to go for a swim.

The point is this...It wouldn't be necessary to wildly flap your arms in corrective measures if you had not gotten so far to one side to begin with. Staying in the middle the entire time would have resulted in a much more stable ride without the extremes. Alaska is no different than any of the other states. The Anchorage Daily News has a story today about the 2012 legislative session beginning. One of the main topics is of course the ACES tax on oil corporation's profits. But as was the case last year...both sides of the AK Senate seem to have their knuckles deeply in the water on their respective side and are comfortable going for their canoe ride that way.

The same principal applies to many things...The financial market, the housing market, and many of these types of "causes" that the government decides to referee. But there is always a cause and effect dynamic. And all too often, decisions are rushed into before all the facts are reviewed without prejudice.

My industry would no doubt go through substantial gyrations in the event that the feed of our data was elected to be shut off. Where would consumers go if they wanted to get information on a variety of listings? With the amount of clearinghouses for our information increasing exponentially from where we first began 15 years ago with the introduction of REALTOR.com, there are increasing cases of fraud, and identity theft as "opportunists" see a means of scamming the public. Particularly so here in Alaska. The very nature of Alaska real estate is such that it is remote...and the only way that many people have to access information here is online. But if the data becomes restricted as a result of SOPA/PIPA then what? Fly up every time there is a new listing that would work for them? It isn't practical...but may become necessary in the event that congress becomes involved in the matter and passes the legislation.

I don't know where I am at on the matter...and if forced to "vote" on such a measure, don't know if it would be possible only really having heard one side of the argument so far.

And by tomorrow, it will all be back to normal....or will it?

Greg

Interest rates at historically low rates...but for how long?

2012-01-13T14:18:00.000-06:00

Ok...I am going to go out on a limb. A limb filled with snow...but nonetheless a limb. Although interest rates are at historically low rates right now, I am going to go on record predicting that they still have more room to drop given the economic indicators that I track. But the question is, if you are a home buyer is it wise to wait? More on that shortly....

The U.S. 10 year Treasuries dropped to 1.843% today. The 10 year U.S. Treasury rate is one of the key indicators in establishing mortgage rates. But why is it dropping if the U.S. economy is in such rough shape? The reason is that although the U.S. economy is in rough shape it, for the moment at least, apparently it is more attractive to world wide investors than anywhere else. Someone on the news recently referred to the U.S. economy as the "prettiest horse in the glue factory". An odd analogy to be sure, but the point was very clearly made.

With western Europe struggling with how to deal with their deficits, and their 10 year bonds skyrocketing upward (meaning higher and higher interest rates) along with an almost certain lowering of their credit ratings by the major credit rating agencies, worldwide investors are nervous about putting their capital in those currencies. So for now...the 10 year U.S. Treasury is "safe" based on the world wide investor sentiment.

But back to the question about whether to wait for even lower interest rates if you are in the market to buy a home. 2011 proved to be a much better year for home sales in the Mat-Su Valley real estate market with nearly a 10% increase in the number of units sold. But it also experienced a 1.7% drop in average sale price.

The decision as to whether to buy now or roll the dice and hope for lower interest rates needs to be based on this one simple mathematical equation. The payment based on an increase of 1% in interest over 30 years would need to have a reduction of price of 11% in order to have the same monthly payment. Given the substantial increase in the number of homes that sold in the Mat-Su Valley in 2011, it may be an indicator that we have either hit the "bottom" of the market or are very, very close. As the bottoming of a market occurs, units are always the first to go up with pricing to follow as the supply vs. demand dynamic occurs. It doesn't matter if it is homes, cars (remember cash for clunkers and how that made the prices of used SUV's increase?), or sweatpants at Wal-Mart. Price anything low enough, the inventory will go away and scarcity then drives the price back up. One does not need to have an degree in economics from Harvard to understand the basic principles of a market.

So the question you have to ask yourself is this...What do you anticipate happening first? Interest rates dropping another percentage point, or the average home price dropping 11% or more? If interest rates go up and home prices also go up, the affordability factor drops exponentially.

With Alaska recently placing 3rd in the country for the fastest growing state, http://www.adn.com/2011/12/21/2228072/alaska-is-3rd-fastest-growing.html I know what my guess will be.

But we will have to wait until this time next year to know how it actually all plays out.

Enjoy your Friday with a much needed respite from the snow!

Greg

Larry the Cable Guy in Alaska with a surprise visit to Gov. Palin's home

2012-01-12T18:27:00.000-06:00

Did you happen to catch Larry the Cable Guy's television program "Only in America" last night on the History Channel? Last night was the season premier and it was entitled "Alaska Road Trip". Here is a link to it. http://www.history.com/shows/only-in-america-with-larry-the-cable-guy/videos/playlists/full-episodes#Only-in-America-with-Larry-the-Cable-Guy-Alaska-Road-Trip

A friend of mine in Minnesota sent a text message last night telling me about it. He said that Larry was going to be moose hunting with Gov. Palin in Alaska. In watching it, that isn't exactly what happened, but it was nonetheless entertaining. And pretty accurate to life here in Alaska. At the end of the program, he proclaimed that he loved Gov. Palin's parents. (or something like that affect)

Having had the honor and privilege to meet Gov. Palin's parents in person at basketball games here and would have to agree with Larry...they represent the best of Alaska and are truly wonderful people.

The part where Larry drops in unexpectantly at Gov. Palin's home actually did seem to be impromptu. I thought it was just "acting" to begin with, but he maybe did stop in without an appointment.

His show did capture the spirit of freedom here and the sense of community showing the Palmer football team packing out a moose to donate to charity.

The only thing that would have made it better would have been to cut the "adult" humor contained in it so that you would feel comfortable having your kids watch it. There is a time and a place for that in his stand-up routines, and although most of it was funny, some of it wasn't necessary for this production.

I would give it an 8 out of 10 on the entertainment scale and is worth watching if you missed it.

The snow is really coming down now...Drive careful Alaska!

Greg

Alaska Minnesotans

2012-01-09T18:45:00.000-06:00

It isn't hard to find someone from Minnesota in Alaska. In fact, it is nearly impossible to not meet someone from Minnesota if you are out and about. We were in the ATT store a week ago and I was wearing my Minnesota Viking sweatshirt. The gal that checked us in said that she wished she could give us a discount because of that shirt. Evidently her dad is from Minnesota and is a Viking nut...has a whole room dedicated to Viking paraphernalia. And while waiting a guy came up and started to talking to us. He is from White Bear Lake and has been here for about 7 years. He works on the slope as a valve technician. Seriously..you can't go a day without finding a Minnesotan here

And when you read about the history of the Mat-Su valley and how it started to be developed, you will soon learn that many of the people that are here now had roots in Minnesota, Wisconsin and Michigan. During the 30's the Great Depression was in full swing. The Alaska Territory needed to colonize and to be able to grow food. The U.S. Dept. of the Interior sent out a guy from Washington D.C. to the upper midwest because Washington knew that there were people there that would be interested in a "fresh start". He was directed to look for married couples between 25-35 years old that had children. He was to find people of Scandinavian decent that could handle the climate here. PBS had a fascinating program on the colonists that came to Alaska.

They say that history has a habit of repeating itself....and that is often the case. During the 30's the U.S. unemployment rate was at all time highs, banks were failing, and the housing market took a hit the likes of which it had never seen. Until now.

When the tea leaves settled and it became clear that Alaska was where we needed to be, the "signs" began to appear. Have you ever bought a car or truck because it was unique and you had never seen one before. And as you drive away, you start to see them all over the place? Or learn a new word, a word that you have never heard or seen before and then it suddenly seems to appear everywhere? That's what it was like.

The day after the decision was made to investigate Alaska further, there was an ad in the Brainerd Dispatch classifieds. It said "free household items...moving to Alaska" I just about fell out of my chair in the office. It was the very same thing that I saw the night before on PBS about the colonists that came to Alaska. Each person was allowed 100 pounds of belongings to put on the ships that delivered them to Alaska. They sold what they could, and gave away the rest.

As we tried to sell the unnecessary items in garage sale after garage sale, it became clear how depressed the economy was there. When you had to give away gallon jugs of windshield washer fluid because you couldn't sell them for 50 cents, it became clear that the end was no where in sight for an economic recovery there.

It is very refreshing to see people doing things and enjoying life. I recently talked to a couple that moved here from Menagha. He is a builder and left Minnesota about 4 years ago. He didn't have real work for years and decided that he wanted out. They came up and have carved a new life for their family. It sounded like they all have went through periods that they missed friends and family there and have often thought about going back. He recently sold his home here and scheduled a family meeting. He had made enough money on the sale of the home and that if they, as a family, decided that they wanted to go back to Minnesota, that they could. The result? No one now wanted to go back.

When we were trying to decide what to do, we had friends whose parents spent a lot of time up here and they had a stack of Alaska magazines. We poured through them trying to learn about Alaska. And in one of them was a photo of a guy wearing a belt with a big buckle that said, "Alaska is what America was". In fact you can pick one up on ebay for $30. http://www.ebay.com/itm/Alaska-Pewter-Belt-Buckle-Alaska-America-/330555208344 What a statement...

There is life out there... but you may have to move in order to find it again.

2011 Mat-Su Valley Real Estate Market Year in Review

2012-01-06T19:20:00.000-06:00

Happy Alaskan New Year!

Just slightly over 1 year ago, I was analyzing the past, present and future of the real estate market in Pequot Lakes, MN...and didn't like what the tea leaves were revealing. Not one bit...

And so the process began in trying to determine where best to relocate my family. Not necessarily just where we should move in order to better ourselves financially, but where would we fit? Where could we move so that we were comfortable with not only the surroundings, but the people as well? And so the search was on....where could we go? Yes we chose Alaska....or perhaps Alaska chose us?

When we had our first child, everyone told us to enjoy them as they grow up so fast! And of course we said that we would...but we had no idea how fast it actually would go. With just a few short years now remaining with the kids, we not only wanted to relocate somewhere where would be able to prosper and provide for them, but to also have some fun with them. Not just a hot dog at the county fair kind of fun, but something that we hoped would actually make a significant statement in the forming in their lives. Mountain hiking, whale watching, world class salmon and halibut fishing, and the variety of hunting challenges that heretofore only were imaginable via Sports Afield and the like.

As I sat up every night in my recliner trying to determine where to go, the indicators routinely kept pointing to Alaska, and perhaps more specifically, the Mat-Su Valley. And so the wheels were set in motion to come up and see if it was as the research indicated. And it was.

Having witnessed a real estate market collapse and being virtually powerless to help my long time clients, a change needed to be made. Having been a licensed real estate professional since 1993, there have been good, as well as bad, periods in the market, but at no point had it ever looked so grim or had such a lack of hope. With the oil boom in North Dakota attracting the unemployed from Minnesota in droves, the outlook for a recovery loomed further and further. And although we have deep family roots to North Dakota, it wasn't where we envisioned having that much "fun" with the kids in our time remaining with them.

And so on what was the arguably the hardest thunderstorm that Minnesota experienced all year, I shut the hatch on the 26' U-Haul attached the car hauler to it and pulled away. We will never know whether it was tears or rain drops that were running down our faces as we watched our home, our business, our family and our friends disappear in the rear view mirror. And although we are 3100 miles from where we were at this time last year, we have met new friends and even some family members that we were unaware of.

As it relates to the real estate market...there is life. More life than we have seen in years. And although the market has not yet hit the levels that it experienced in 2006, it did experience a nearly 10% increase in number of homes sold this year and only a 1.65% drop in values. In a recovering market it is normal for the price increase to lag slightly behind an increase in units. Of note, the number of units sold in 2011 was the highest since 2007. With interest rates hovering at record lows, and an inventory that is decreasing, it would be logical to expect that 2012 will result in an increase in average sales price over 2011.

10-year Comparison Report

Property Type: Residential
Borough: 1D - Matanuska Susitna Borough
Construction Type: Existing and New Construction

Year	# Sold	Avg. List Price	% List Price Change	Avg. Sold Price	% Sold Price Change	Avg. DOM
2002	1095	$153,417	NA	$150,753	NA	70
2003	1323	$164,928	6.98%	$163,486	7.79%	60
2004	1551	$180,691	8.72%	$179,618	8.98%	68
2005	1671	$204,468	11.63%	$203,333	11.66%	66
2006	1679	$218,546	6.44%	$216,733	6.18%	71
2007	1495	$224,335	2.58%	$221,547	2.17%	79
2008	1204	$225,420	0.48%	$221,539	-0.00%	88
2009	1145	$216,615	-4.06%	$212,436	-4.29%	93
2010	1162	$221,998	2.42%	$217,573	2.36%	86
2011	1232	$218,402	-1.65%	$213,795	-1.77%	88

We have went through a lot over the last 12 months...of course there have been highs and lows as you would expect, but the highs outweigh the lows.

I am now fully immersed in Alaskan real estate and although I may not know every street in the Mat-Su Valley, the knowledge that comes as a result of selling in a market that has lost over 50% of its value is proving to be invaluable as we set about creating a long list of satisfied past clients. Many of the licensees here have not been through a declining market, and are struggling to know just how to solve the problems that a downturn can create.

And that's where experience over experiments pay off.

Let me offer a heart felt thank you to Alaska for welcoming us and for making us feel more welcome than we could have ever imagined.

Greg

New Alaska Website

2011-09-07T16:25:00.002-05:00

I officially have my new Alaska web site open. If searching for an Alaska Property please check out www.Akhomesonline.com

Residential Financial Consultant

2011-06-23T16:16:00.001-05:00

Greg Shepard, Broker, GRI, SFR, CDPE, RFC

A Residential Finance Consultant (RFC) is a real estate professional committed to helping buyers and sellers understand the tax advantages, financing alternatives and investment aspects of home ownership. Residential Finance Consultants' training and experience provides solutions to make homes more marketable and help structure a favorable transaction.

Understanding and identifying the best mortgage for a buyer's individual situation can be confusing and a RFC is very valuable in the transaction. Selecting the proper financing can dramatically reduce the cost of housing for buyers and make the difference in getting a home sold. Agents with the RFC designation are trained and equipped with tools to address buyers' and sellers' specific needs.

With an RFC, you'll be presented information that make decisions clear and obvious. You'll be able to adjust variables such as interest rates, terms and appreciation to identify the most favorable outcomes.

A home is one of the largest investments of a lifetime...doesn't it make sense to trust it to a Residential Finance Consultant. It will make a difference.

Market Advantage

2011-06-23T16:14:00.001-05:00

Are you concerned about how to ensure your home gets the best marketing and exposure to qualified home buyers in today's market conditions?

90% of Home Buyers turn to the Internet to look for homes. Which homes capture their time and attention?
Listings of homes for sale, of course. But listings with plenty of information including a visual presentation of the home.

Providing a quality, rich media Internet based showcase is now one of the minimum requirements for a real estate professional to effectively market a seller's home and to attract buyers.
The Shepard Home Marketing Team utilizes virtual tours and traffic reporting on all of our listings.

Shepard Home Marketing Team in Wasilla, AK

2011-06-23T16:13:00.001-05:00

This is the new blog site for Greg Shepard and the Shepard Home Marketing Team.

We have been full-time professional REALTORS in the Brainerd Lakes Area of Minnesota for the past 18 years. Greg has now obtained his Alaska Real Estate License and has placed his license at Prudential Jack White Vista Real Estate of Wasilla.

Along with being an expert in the Lake Shore market Greg has also become well versed in the Short Sale process and is a Certified Distressed Property Expert. If you or anyone you know is facing challenges in their life and is having a hard time keeping up with their mortgage Greg may be able to help.

Certified Distressed Property Expert

2010-11-19T14:03:00.001-06:00

After having been in the real estate industry for 18 years, it seemed like there was not a continuing education class that I hadn't been to....many of them more than once....and that it would be difficult to attend a class that could garner my undivided attention. Boy was I ever wrong.

Having attended the Certified Distressed Property Expert (CDPE) class in October we have been devoting a major part of our days incorporating the skills taught at the class into our day to day business plan. This blog is only scratching the surface, but it nonetheless is necessary to begin the dialogue with the homeowners in our market.

To be completely honest, the decline of values in the Brainerd Lakes Real Estate market happened before our very eyes and we were just as incredulous as the homeowners that we were representing. It didn't take long to understand that our listings were not selling because we were not illustrating to our clients how dramatically our market was changing and still continues to change. Most sellers are now beginning to understand that our market has changed and now know that their properties are not worth as much as they were just a few short years ago.

We are now employing the same tactics for our sellers that the banks are using in order to maximize the amount of money they will get on the sale of a property.

When values have dropped 30, 40, 50% (or more), it has left many home owners that have had financial challenges feeling helpless in that they can't afford to stay, and most think they can't afford to sell either! Many have talked to real estate agents and have been told that there isn't enough equity in the property in order to satisfy the mortgage balance(s) and still pay a brokerage fee so are advised to sell the property For Sale By Owner (FSBO). But the majority aren't successful because they price their property at their mortgage balance. Unfortunately, many end up in foreclosure and have to move because they don't know what to do or where to turn.

Let's not confuse mortgage balance with current market value. The two have no bearing on one another, although nearly 100% of homeowners have that misconception.

Here is where my skills, training and expertise come in.

Statistically 1 in 6 homeowners are in trouble and have fallen behind on their mortgage payments and don't know where to turn to get answers. Because of the fear and embarrassment, many turn to (800)BIG-SCAM type of businesses as opposed to talking to a trusted friend and resource, only to be left in a worse position than they were to start with. Now is the time to consult with a trusted professional that can help, not some scam artist of which you know nothing.

Because we recognize that many of our clients have suffered financial setbacks, they are not in a position to pay for legal advice at a time when they may need it more than at any time in their lives. Because of this, we also have recently became affiliated with a law firm in the twin cities that will provide our clients legal counsel at NO CHARGE to them! The biggest concern that I had representing clients in the current economic arena that we are in, is that they weren't getting competent legal advice to protect themselves after the sale to make sure the mortgage companies aren't coming after their assets down the road.

In my next blog, I will be addressing who can qualify for this service.

As always, if you have any questions feel free to call for a confidential consultation to see how we can help at (218)820-2945.

Greg

Real estate is like Newton's 3rd Law

2010-02-05T13:24:00.002-06:00

Real estate is just like Newton's 3rd Law which states for every action there is an equal and opposite reaction. Bad for a seller = good for a buyer.

To those who believe that the market is bad and that they should not get in, the question that needs to be asked is, "Who is the market bad for?" If you are a seller, the news is going to be a lot different than if we talked 4 years ago. And if you are a buyer, the news is going to be a lot different than if you had talked to us 4 years ago too. Both of these say exactly the same things! It is kind of like the old Virginia coal miner that said that no matter how thin he tried to make his pancakes, they still ended up having two sides! The difference between the market that we have today compared to the boom market is that the unemployment rate and consumer confidence levels are dramatically different.

The Brainerd Lakes area has the dubious honor of holding the highest unemployment in the state of Minnesota according to the Brainerd Dispatch on Dec. 30th, 2009. With a current rate hovering at around 15%, it is approximately twice as high as the state average. And if that number is similar to the national number, which is currently at 10%, it is likely to be actually much higher by the time you factor in the under-employed, those whose benefits have ran out and those that have simply gave up looking for work. The national number is then closer to 18% representing an increase of nearly double the actual posted number. Using that number, it then puts Brainerd at closer to 30% unemployment!!

With the combination of these events, many property owners in the Brainerd Lakes area market are falling behind on their payments. I recently attended a continuing education class that addressed the short sale process. A short sale is when the bank agrees a property to sell for less than the principal balance on the mortgage rather than go through the foreclosure. It is unfortunately a bi-product of the boom market that we experienced just a few short years ago. There are strict rules associated with them, but the banks are willing to work through these. Why do you ask?? According to the class, a bank stands to gain over 20% more by accepting a short sale than going through a formal foreclosure process. Because of the sensitive nature of these, we commit to absolute privacy. Roughly 2/3rds of the listings did not sell in 2009. Many of those sellers “wanted” to sell in 2009 and many of them will “have” to sell in 2010. That’s where we can help.

More to follow in the next few days....stay tuned!

Greg's prescription for the Brainerd Real Estate Market

2009-06-10T20:59:00.000-05:00

There was an article written recently comparing real estate agents to doctors. Both are professions that require careful analysis and knowledge to solve a client/patients problem.

But they are clearly two completely different professions in the way that the client/patient follows the diagnosis. Patients rarely disregard the diagnosis from the doctor, but often question the advice and counsel of their REALTOR, and often rely on the advice of friends/family, or by another REALTOR that will tell them what they want to hear. If you were diagnosed with cancer, would you take the advice of a friend or family member or go to another less capable doctor in hopes of having a more favorable report? Be careful with your answer on this. If you decided to take the advice of the first doctor, and "took your medicine" so to speak, chances are that you will soon be on the mend. If you decided that the pill was easier to swallow with Doctor #2, and that you would take your chances, you are in the same boat as many sellers in the current real estate market. And odds are, not feeling like it was the best decision as time goes by.

The decision as to what to do with the property is clearly up to the owner, but the real question of whether to keep it or sell it often is a tough decision.

With the market being what it is, and the number of listings now growing over the last couple of weeks, if you either have your property on the market or are thinking about it, when you decide to sell it, sell it. Don't "try it". There are hundreds and hundreds of sellers that are "trying" it at the moment, and they are unknowingly making the real estate market worse. Think about it. If you go into your favorite grocery store and there was only one gallon of milk left, how much could they get for it if there were hundreds of people wanting it. Conversely, if they had hundreds of gallons of milk and only one person in the store (that may not even need it), how much would they have to lower the price on a gallon to get that person to buy it?

The optimism that I held at the start of the season with a projected lower level of inventory has been somewhat squelched with the steadily rising inventory. Chasing the market down is rarely a good thing for the bottom line of a seller, but yet it is often exactly what happens. We should make every attempt to get it done in the next 3 months, as the data that we are tracking shows that 2010 is not going to look much better the more that I pour over the data.

That's when the second wave of ARM buyers realize what is forthcoming for them. Those are the buyers that took 5-1 ARMs and with the mass of property that sold from 2003 to 2006 we are likely to see yet another spike in inventory starting next year.

If I had to say where we are at right now, I would compare it to being in the eye of a hurricane. The first "front" went through, as the first wave of bank mediated properties did their damage. Those were the buyers that used 3-1 ARMs that created the spike in inventories over the last couple of years when their rates adjusted and that were the then buyers of the 03-06 seasons. And it is likely we have the backside of the hurricane that hits next. And often it is the backside of the storm that is worse than the initial storm. That, we predict, will probably start early in 2010.

If history repeats itself, it will take 18 to 24 months to clear that inventory out. Meaning that we will be postponing a balancing of the real estate market in the Brainerd Lakes Real Estate Market out until 2012 and into 2013. Bear in mind that we have not completely eliminated the first wave of available housing, and we will start with higher inventory levels initially in 2010 than we did in 2006, 07 and 08. Send me an Email if you would like to see what we are looking at.

There is legislation that is being debated currently that could avert much of this. If there becomes a mass restructuring of the nation's outstanding mortgages, it could certainly change the outcome of this. Another thing that is being debated is to extend the $8,000 tax credit that has been available since this spring for first time home buyers to include anyone that is buying.

In case you haven't caught it, interest rates are starting to rise based on inflationary fears. They are already up about a half percent from their historic lows over the last couple of months. The 10 year Treasury Bonds are up 50% over the last 5 weeks. Many savvy buyers are now using this opportunity to buy while interest rates are low. If interest rates go up to 6, 7 or 8 percent, the purchasing power of the buyer declines rapidly. If the buyers wage goes up proportionately, no big deal. But if not, careful consideration should be given to determine if this is the right time to get into the market.

The data that we follow when we started to analyze it at the beginning of the year appeared that there would be much less for sale in 2009, but the last month has changed much of that. It is still somewhat less than in 2008, but not as much as we all hoped.

Please know that the advice that I give our clients would be the same advice that I would give to my family. My interests always lie with my clients over my own. Sounds like drivel probably, but I can not be more sincere about that.

Until next time,

Greg

To buy, or not to buy, that is the question...

2009-01-08T14:22:00.000-06:00

Although the current market in the Brainerd area is better for a buyer coming in than it has been for years, many buyers are still out there trying to time the bottom of the market. They are afraid to pay too much. In giving this topic considerable thought, the following thought arose.

Years ago Sherri and I were in Santa Fe, New Mexico and ventured down into their market district, kind of a town square in the old part of town. Beautiful shops with custom jewelry, original artwork from the area, unique clothing stores with product not found anywhere else...you get the picture. We also found the best gyro sandwich we have ever had that was prepared from a street cart similar to the hot dog carts out east, but I digress.

The thing that struck us odd was that most of the stores had huge signs in their windows toting the benefits of "Huge Sales", 700% Off Today Only, etc. etc. This was in May or early June as memory serves so it certainly should have been "tourist" season and not their off season.

What we ultimately deduced was that the "sale" prices probably were at about what the market should bear. Anything more than that could best be described as frivolous or highway robbery if you will. But the message that was being conveyed was that the prices were extraordinary, and that if you saw something that you liked you ought to act fast.

We are now seeing this in the values of real estate in the Brainerd market. Savings of 20-50% or more off of original listing prices are not uncommon. But if you pay $300K for a property that was listed at $500K that is probably only worth $300K, is it a better value than paying $300K for a listing that is worth $300K? It is an interesting question. The difference between Santa Fe and our local market is somewhat different however as in many cases the sellers in today's market actually paid much higher prices 2-3 years ago. The prices during that period were justifiable and there were appraisals that verified those values. But like in any market, prices don't always go up. If you don't believe that check your 401K balances. But just like the stock market, there becomes a point where prices become so good that you can not help but to buy. Warren Buffett said late last year one of the secrets to his success was, "Be fearful when others are greedy, and be greedy when others are fearful."

The key to it all is to first narrow the search to the type of property that one wants. That in itself is a substantial undertaking given the amount of inventory that is available. Once that is established, the next step is to then determine out of the list which properties are the best values compared to the rest. Experience shows that if these steps are followed the best available property will be readily identified. That's where I come in. We will spend the time to go through this process and figure out which ones are the best deals. And they are out there.

Once the decision has been made to get into the market, rest assured we will find a "deal".

Stay Warm!

Greg

Greg

Greg's View of the end of the year market

2008-12-30T22:08:00.000-06:00

The savings between now and 2 years ago is extraordinary. For those buyers that are in a position to buy in the current environment, they will be telling their grandchildren about the "buy" they were able to get in '08/'09!

In my 15+ years of experience, there has not been a period that has been more conducive to securing a deal of a lifetime in the Brainerd Lakes Area Real Estate Market.

If you have time, it certainly would be worth a day to come up and take a look to see what you think. And for those that live in the area, now may be the time to get that lake home you have always wished for. I know, I know you are thinking yeah, he's a REALTOR what else would he say. All I can do is report what I am seeing and help those that wish to take advantage of this great market. It really is a better market than anything I have seen in all my years of experience. From a REALTOR'S stand-point it is just shocking to me that more people are not out snapping up these bargains.

There is one item to factor into the decision making process and that is whether you have to sell another property in order to purchase your next one.

When the markets emerge in favor of one segment it means that another segment is also affected. It is much like Newton's 3rd law if you will in that for every action is an equal and opposite reaction. While the values for buyers are extraordinary, those prices are having the opposite reaction to the values of just about every segment of the market.

But stay with me for a couple more minutes. If you do have a property to sell AND you plan to move up in price, your net gain will likely be positive for you. Let me illustrate. Let's say that you have a property that was valued at $200,000 a year or two ago. And if it has lessened in value by 10% (which is very likely it has) your new value is $180,000. But if you take advantage of the market and buy a $300,000 property that also has taken a 10% reduction in value the savings is $10,000! ($30,000-$20,000=$10,000) Now factor in the extremely low interest rates that are available currently and the savings can really mount up.

I will do my best to keep you posted as the markets shift. In this new and changing economy I felt posting a blog would be the best way I could keep everyone updated as to what the local market is looking like.

Stay Warm and Have a Happy New Year!!!

Greg Shepard Starts a Blog

2008-12-10T22:14:00.000-06:00

Please return soon for current insights on today's changing marketplace and what it means for real estate sales in the Brainerd Lakes Market.