But Will I Love You Tomorrow?

The one word that describes this market climate most accurately is "Certainty". The whole world seems to be a tipping point.  Will Yellowstone blow up?  Will the Mayans be right and the tipping of the earth's axis fling us off the planet? Will the Magnetosphere crumble under the weight of historic solar storms and we will burn up like a marshmallow too close to the heat?  Will the US computer system get hacked?  Will water supplies get a dose of  a lethal something?  Will Iran pursue a nuke?  The list is endless.  So dear readers, when it comes time to buy real estate, what the heck metrics do you use to gauge your risk-o-meter? 

Well, whatever you choose to use as a guide, you want certainty!  Buyers want to know will this house appreciate? Will the bank approve the short sale?  Sellers want to know if this buyer will perform or get skittish and vaporize after 6 months of tedious on line entries to Equator and emails to the black hole called the negotiator!  Will the house appraise? Will the trustee postpone the sale?  There is NO CERTAINTY!

THAT  is the only thing that is certain. Fagetaboutit!

So as a buyer, how do you get an offer accepted?  Strut your stuff.  Write the letter of your life about why this is THE house for you, after exhaustive searching this is the one. You will not get frustrated and find another house.  You understand the bank process is more snarled than than a lion deprived of red meat for a month!  You swear, on a stack of disclosures, you will hang in.  Then you bring a suitcase of money to the seller. ALL CASH is king.  Sorry, but there it is... 20% down, nice but no cigar.  Lending conditions could be different by the time the bank calls with an approval.  Your loan could go poof, you might spend your down payment  on a  depression correcting shopping spree.

If you are a regular nice guy owner buyer, you could get lucky.  Your agent could be a dream influencer and charm you into the heart of the listing agent.  It can happen, but don't count on it. And if you are financing, it will be harder to drive the discount chuck wagon.  They will punish you for not having cash.

Here is  the certainty you can rely on~~  it is certainly going to be a tough ride.  But keep trying, what is it they say about blind squirrels?  There are lots of opportunities.. Keep your hand in the pie, you will eventually find your plum!

America Is Much Better Off Than Reported!

Consider this:

In 1941 there were only a dozen democracies worldwide, now there are over 100. For four centuries prior to 1950, the global gross domestic product (GDP) rose by less than 1% a year. Since 1950 it has risen by an average of 4% a year, and billions of people have been lifted out of poverty.

In the first half of the 20th century we saw the two most destructive wars in the history of mankind and in prior centuries, war among the great powers was almost constant. In the last 60 years no great powers have taken each other on, in fact, our era is best known for the war that never happened, between the US and the Soviets. But we sure heard a lot about it to engender fear in the populace. (sound familiar?)

China's economy is predicated on sheer numbers of people. While it certainly is the largest economy, it is not the richest. In fact, China , as I've written before remains relatively poor. The US, Germany and Japan have per capita GDP's of $40,000 whereas China is ranked at $4,000.

Moreover, despite the latest economic upheaval we have all been through, America's position in the world has not changed all that much. Its share of the worlds GDP has held remarkably steady. And this steadiness was not only over the past decade but over the past four decades!

In 1969 the US produced roughly a quarter of the world's ecomonic output. Today it still produces approximately that same number.

Americans are , by nature, optimistic, innovative and resilient. We find a way when there is no way. "The measure of intelligence, is the ability to change" Einstein

Ojos Contacto, Sign Here!

I have recently been very concerned that in our quest for efficiency as Realtors, and the crushing weight of the minutia driven bank's on line platforms for clearing distressed properties, (and which give no quarter to the distressed owners), that we are making a grave mistake. In fact, it could send our industry to the grave.

Buyers and sellers need emotional time to process what they are doing. Sitting at a kitchen table and working through the signature lines is the best line of sight to airing out fears, feelings and excitement. From the beginning of a contingency release signing party, to the end, often the buyers have moved light years in terms of resolve. But only because they can muse and reflect on this momentous event as I am sitting with them. I watch as the mental clutter comes out and we take each conflicting thought and find a home for it. I neutralize irrational fears, agree with rational reservations, review the game plan, review the product and at the end of an hour or more, everyone moves forward. The sellers are relieved and start packing, the buyer is confident in their decision.

But now with on line signatures and the time demands and the feeling you are not an effective agent if you are not demonstrating your digital savvy, we rush through email signatures without the benefit of breaking real estate bread together and letting the emotional body butter the sandwich.

AND, reading online documents is not the same as holding a paper in the hand. I can't tell you why, whether it's the angle or what, but I absorb detailed documents when I can tough them and read every line for a hidden bomb delivered by the bank, lender or inspector.

If we can commoditize the sales process , then anyone can do it. What the good agent brings to the table is the wisdom, life experience and knowledge of how humans make decisions to GUIDE the client through their own unique process which allows them to making a comfortable and informed decision. To make the process less stressful and confusing. To hand hold, affirm, review and reveal.

I miss the long coffee chats when signatures were required. I think I may just have to move past digital signatures and ask for 'ojos contacto' at key points in the transaction. I miss looking deeply into the eyes of my clients and reading their souls as they sign on the dotted line.

2012 Worries, Walmart and Tiffany's

Well, the year was not an easy one. And as we go into the next election, respondents to a Houselogic survey indicated that housing was a large cloud on the mind of the public and fundamental in who they will vote for in the election . Chief among their worries:

Jobs/unemployment – 54 percent
Housing – 27 percent
National security – 8 percent
Healthcare – 4 percent
Energy/Environment – 2 percent
Other – 4 percent

Interesting that being deathly ill with no insurance or being bombed was less threatening than being homeless or unemployed. Brings up my favorite topic, Maslow's Hierarchy of Needs:







You just can't be worried about making love when the roof over your head is mortgaged to the hilt and you can't come home from a long day at work when there is no work. Additionally having the phone ring every ten minutes from your loan servicer reminding you your life is going to the dogs doesn't do much but wire your nervous system to crave some certainty.

The challenge with this market is the fear that things are going to correct the minute you cave in and sell short. Now your credit is wrecked and you are a renter again. Or, your FICO is already in the toilet from months of stringing along and the self concept you held of yourself as a prosperous adult homeowner is trashed. "What if I can't trust my own judgement anymore?" The idea that your best thinking landed you in this mess undermines your self confidence which paralyzes you when you have to make yet another critical decision. "Do I stay or do I go now?" The clash is real right now.

The idea of relief in the form of letting go of the precipice and falling onto anything remotely solid is alluring. The idea of letting go of family memories, your pride of ownership, your loss of stature is bruising.

One thing to consider and may console you is this: if you are over 50 you didn't grow up in the age of the internet. You depended on family for fiscal guidance and wisdom. You probably repeated the beliefs and expectations of your family culture and because you were not immersed in information about how the 1% lived, it was okay to have one TV, an old sofa and spaghetti every Family Friday night.

Then came the internet.. Investing was transparent, 401K's for everyone, pressure from the media to invest, to buy homes, to be a full fledged American citizen complete with debt to the hilt. So instead of living within our means we credited up and bought not one house but several. We put money in the stock market and took vacations, because it was expected. Frugal was social leprosy.

Had we stayed naive in our own little community cultures, content with less, we might have actually been happier, ala the cultures in Costa Rica or Columbia.. Very little material wealth, high peace of mind.

But here we are now, aware of fine cigars and fast cars, the ability to stay young and beautiful with enough coin, careless wealth displayed by gold grills on music artists and Mira Lago's over 67,000 sq ft home for the Donald and his 38 year his junior wife. What the hell happened? And we are 114th on the Happiness Index. Go figure.

So we trudge into 2012, (with the Mayan calendar sounding not so bad), and wonder is this the year that things may inch toward happier times?

We know we have an hour glass economy. The Tiffanys and the Walmarts are doing great. The upper crust barely noticed a blip or actually got richer. The 99%, whether they are newly demoted middle class types or the under educated and long bitter bottom of the 99% is disenfranchised. There is no middle anymore. These were the contented folks that poured coffee at Starbucks, delivered our mail, worked at Nordstrom, opened fancy restaurants for the 1% to flaunt their affluence. They had bed and breakfasts, car dealerships, they held us all together, the stitch in the middle that has come unraveled.

So as you ponder your underwater mortgage, your job prospects, keeping the kids in private school, foregoing your annual trip to Hawaii, take heart. You have a lot of company.

I can't say any of this is fun. Working through the broken hearted is awful work. But we will get through it and I find that after the move and the pressure is off and everyone is settled in new surroundings that joy does return. The pleasure in simple things is restored and there is a patina of gratitude that rests nicely on people. There are no U Hauls going to heaven, it's just stuff and when the game is over, all the pieces go back in the box. Embrace simplicity. Look within. Be kind. Do no harm.
And come Jan 1, 2012, you have a nice new white board for your life. Create it carefully and with joy.

America is Falling Behind. Maybe

While China is poised to become the world’s largest economy within a decade, according to some economists, India already has a rising middle class that is larger than the entire US population, says others.
Dire prophesies about the fall of America abound, and they sell books and interviews like moo goo gai pan sells the fortune cookie.

Yes, there has been rapid growth in those two countries, but Americans have not stopped innovating. China and India are moving up, yes, they are rated 94th in GDP and 129th respectively in the CIA’s World Factbook. But China and India lack clean water and access to safe food in many cases where rural communities are filthy compared to the standard of living we enjoy here. Many citizens are subject to horrible working conditions, urban noise, and air pollution. It will take years for the culture of social justice and responsible entrepreneurship to be inculcated into those countries, if at all.

As consumption becomes less and less tolerated, as excess is shunned and the new status symbol is simplicity, those countries may for both cultural and religious reasons choose to act more moderately. What we see as progress they may feel is moral and or social decline. The pursuit of pleasure in the US has reached a borderless state and many believe it's time to reign in pleasure for pleasure's sake and return to more a demure expression of our society. All three economies may undertake a wholly more contained expression.

For many in South and East Asia, the teachings of Lao Tzu's "Tao Te Ching" still resonates and the ideas of individualism, disruption and innovation are not as deeply embedded in those cultures.

America is unique in that it embraces change, tolerates differences, seeks novelty and creativity. We still boast some of the top universities
in the world.

According to Rob Asghar , Fellow at the University of Southern California's Center on Public Diplomacy , for these countries to "become long term giants, they must become more economically and socially integrated." And to achieve that, "they must be culturally integrated, which means a host of conflicts are on the horizon regarding varying societal views on change, tradition, materialism, social mobility, openness, patronage and so on."

Our biggest threat is our own internal polarization and political dysfunction. The American people are ready and willing to adapt, to protect our country's beauty and re assert our best values. If we could stop worrying about our neighbors and pull ourselves up by our own Birkenstocks or Manolo Blaniks, we would make more progress and lessen our anxiety about the threat of the 'other'.

Limes, Potatoes and Cheese!

All the names of our Santa Cruz County agricultural, industrial and tourist history are on the street signs.

Hames, Moran, Corcoran, Hihn, Rodriguez, Castro, Spreckels, Johans, Neary,Portola, Swanton, and Porter, just to name a few. These are some of the names that brought cattle, sweet potatoes, logging, apple farming, tanning, lime kilns, dairy farms, fishing or tourism to Santa Cruz County.

You can see a beautiful remnant of the lime industry here in Santa Cruz at Fall Creek Park in Felton. The plaster and mortar industry depended heavily on Santa Cruz lime kilns which barged the lime blocks up to San Francisco 75 miles away. The history of the lime industry is fascinating and now the old kilns are covered with moss and ferns and are lovely to see and imagine the workers and the hot fires that transformed the lime.

Sugar Beet farming began in Rio Del Mar

Claus Spreckels was another influential founder. In 1872 he purchased 1,500 acres of what is now Rio Del Mar, Seascape and parts of Aptos by Cathedral Dr. He paid about $81,000. He started with one dollar .

Claus was impacted by the turmoil of Europe growing up in Germany in the early 1930's and so left for the US. He arrived in America with a $1.00 and could speak no English. He found work in a grocery store for $4.00 a month! Yes, $4.00 a month. And he was allowed to sleep in the store. After 4 years he understood the grocery business and opened his own store. Not content with that success, he took the arduous journey to San Francisco and opened another grocery and a brewery! He sold the store for $50,000 and the brewery for $75,000 and found his way into the sugar business.

Would you work for $4.00 a month?

He experimented with the land he bought in Rio Del Mar and grew sugar beets. He built a refinery for the beets at what is now the Capitola Fire Station. The beets were shipped from Soquel Landing, which is now the Capitola Wharf.

Adolf Speckels accused of murdering co founder of the
San Francisco Chronicle

He also utilized and extended the wharf in Aptos, now only visible at low tide and then only the remnants of it, as a violent storm left behind only pieces.. He built a spur from the narrow gauge railroad to the pier in order to back haul redwood lumber to Hawaii.

Claus fathered 13 children but only 5 reached adulthood. They married into the Mangels, Corcoran and Grosse families and built some beautiful homes in the area.

Find out why Claus' son Adolf, was acquitted of a charge of murdering the co founder of the San Francisco Chronicle with whom he was angry!

More to come on

The original Spanish Land Grants offered to only a few powerful families .
There were 16 Ranchos covering the Coast to the mountains.

When the Mexican government began giving the large Ranchos away, they were sold only to a few powerful families with long time ties. Later, the families, over time, sold off or leased pieces of the grants to developer luminaries and visionary farmers or men of industry.

Rancho Agua Puerca y las Trancas, or Dirty Water Rancho was the most northly including Swanton and Davenport.


Rancho Refugio connected the Western limits of the city of Santa Cruz to Davenport.


Rancho Canada del Rincon en el Rio San Lorenzo lay north of present day Santa Cruz along the San Lorenzo River.


Rancho Tres Ojos de Agua, or Three Springs, covered most of today's High Street in Santa Cruz.


Rancho Arroyo del Rodeo covered what is now Live Oak and Soquel.

The Castro Family owned Rancho Soquel, Rancho Aptos and Rancho San Andreas
which covered the coast from Watsonville to Rio Del Mar and Soquel.

The Perils of Pricing Too High

Perils of Pricing Too High
According to data wizard, Peter Krause, "The principle of conformity states that value is created and preserved when a property’s characteristics “conform” to the demands of the market." Does it have a home office? Is the yard sunny and private? Does the home have hardwood floors. These are common attributes that have appeal to a wide swath of buyers in the immediate market.

Peter continues, "Thus, properties found within this price range are well anchored from a value perspective. Properties that lie outside of this range will, to one degree or another, be impacted by their non-conforming status." for example, a location that is near a body shop or a property that has 4 different flooring materials will find that those characteristics will pull the value proposition down.

This is described by the principle of progression/regression and depends on whether the property is inferior or superior to surrounding properties.

While there are many opinions on pricing there is only one set of facts. I will reveal more soon.