Archive for October, 2010

I like toll roads and I’m not afraid to admit it
October 31, 2010

Never in my life have I been so inspired by such a mundane topic as toll roads.  But what I’m really excited about is that toll roads provide a solution to a very nasty traffic problem in the Metroplex, and toll roads are finally being embraced as such.  Currently, there are approximately 6.6 million people living in the DFW Metroplex, making DFW the 4th largest metropolitan area in the US.   With this many people, it’s easy to see why getting anywhere has become increasingly difficult.  To complicate matters even more, the number of people living in the Metroplex will swell to 10 million plus by 2035.  That’s why I’m going on record as being ready and willing to pay for the privilege of getting where I want to go faster.  If paying a toll allows me to avoid the traffic problems in DFW that I’ve come to know and hate, I’m on board 100%.  And let’s not kid ourselves, traffic problems in DFW are getting worse, not better, by the minute.  Toll roads are the only viable answer, and they provide a lasting solution to the traffic congestion we face in North Texas.  It’s obvious that toll roads are here to stay regardless of how you feel about them.  Furthermore, toll roads enable public and private groups to partner together to fund, construct, and manage tollways.  There are very few other alternatives that work.  Raising taxes is unpopular and tax revenue is often diverted away from transportation to other more popular causes.  Also, alternatives such as rail systems, public transportation, and carpooling are great ideas, but we must also face the fact that Americans, especially Texans, want to drive their own cars, trucks, and SUVs and nothing, it seems,  is going to change that.   Although alternatives such as rail and HOV lanes might be part of the overall solution, they alone will not solve the traffic problems we face now and in the future.  That leaves us will toll roads.  Fortunately, modern technology has made toll roads more efficient than ever, and most  people in the Metroplex, I believe, will pay for the privilege of getting from point A to point B faster.  We’ve seen this with the success of toll roads like the North Dallas Tollway and the newer George Bush Tollway.  More toll roads are good for the citizens of DFW and they are good for business – that’s why I like toll roads and I’m not afraid to admit it.

Q: What’s your take on toll roads?

Is real estate really local?
October 27, 2010

Real estate is indeed very local but the story doesn’t end there.  In North Texas, the real estate market has been fairly insulated from the national economic woes.  However, local markets, including North Texas, are influenced by broader real estate trends.  Let’s take, for example, one of our 2009 clients.  These clients are retirees who, unlike many of their neighbors, own their Michigan home outright.  They have lived in their home for many years, have maintained the home, and were generally willing to accept any reasonable offer to purchase their home, including, if necessary, one that was below market value.  What, then, kept them from moving to North Texas?  What stopped them from moving here was the depressed condition of their local market.  As it turned out, they were willing to sell their home at a fair price, but they were unwilling to suffer the huge loss that would have been required of them to get their home sold.  The culprit — foreclosures in their area have dramatically driven down home values.  In the end, they had several great reasons to move to North Texas – warmer climate, kids in the area, grandkids in the future, no job strings, and a desire to make a change – but they won’t be moving to Texas any time soon.  Instead, they plan to stay put and ride out the storm.  This example illustrates the close connection between two completely different local markets, and this same scenario is undoubtedly being played out across the country.  There are many people who would move here in a heartbeat if they could only sell their current home.  The truth is that real estate is local until it’s not, so I’ll be keeping my fingers crossed that the recovery gains traction throughout the US, not just here at home.  In the meantime, I’ll count my blessings that I’m already in Texas and not just hoping to get here as soon as possible. 

Q: How has your home’s value held up during the Great Recession?

Texas Rangers advance to World Series
October 24, 2010

In case we needed more proof that Texas is a great place to call home, the Texas Rangers have advanced to the World Series by beating the NY Yankees.  For baseball fans in the Metroplex, it’s a dream come true, and it’s even better given that the Dallas Cowboys have about as much momentum as a Galveston size wave.  That really doesn’t matter because the eyes of Texas are upon the Rangers.  It’s great when a professional home team plays like winning matters, and this season the Rangers have done just that.  They have given their fans something to be proud of, something to cheer about.  One has to wonder where Texas as a state might be in three to five years if it plays like winning really  matters.  When 48% of all jobs in the US are created in Texas, it’s easy to see how Texas could become a very exciting and prosperous place.  However, it won’t be easy since the state is facing its largest budget shortfall ever.  Perhaps Texas should borrow a few plays from the Ranger’s playbook and realize that a choice must be made – seize the moment or accept the status quo.  The Rangers have clearly opted to seize the moment. Maybe Texas will follow suit.  Let’s hope that Texas legislators can make the citizens of Texas as proud as the Rangers have made their fans.  Much is at stake but hopefully the next legislative session will be one that addresses the major issues we face in a way that will make all Texans and Texas-based businesses proud to call this great state home.  Go Rangers; go Texas!

Q:  Do you think the Rangers can come from behind to win the 2010 World Series?

Mortgage Rates At All Time Low
October 17, 2010

With rates on 15 and 30 year mortgages at or below 4 percent, right now is a great time to buy a home or refinance.  It is still possible that rates will continue to drop and we could see 30 year rates under 4%.  It’s unlikely, however, that rates will remain this low for very long.  The current zeal for bonds that is driving up bond prices and pushing down yields will fizzle, but for now, the exuberance for bonds is great news for home buyers.  Take advantage!  Those who are waiting to see if interest rates will go lower should be cautious.   Knowing where the bottom is means that rates have already started to rise, so timing the market perfectly is impossible.  Just like it’s possible that mortgage rates could go down a little more, it’s very probable that rates could rise much more dramatically.  If you are sitting on the fence right now with regard to purchasing a home, don’t sit there too long.  Otherwise, you could miss out on what many will look back on and describe as the greatest home buying opportunity ever.

Q:  Have you opted to refinance your existing home as a result of low home mortgage rates?

Serving The Next Wave of Home Buyers
October 9, 2010

The next big wave of buyers is hitting home buying age.  Born between 1980 and 1995, this generation, known collectively as millennials, is approaching the purchase of their first home with a big picture perspective.  They are budget conscious and really want to understand the home buying process.  They usually start doing their homework online and are looking to purchase less home than they might otherwise be able to afford.  They want their payments to be manageable and understand that being house poor is not a great way to start out in life.  They are concerned with the total cost of home ownership, not just the monthly payment.  As a result, they often ask about maintenance and utility bills and the impact they have on the overall budget.  Generally, they understand they are not purchasing their forever home and are looking for a home that fits their current budget and needs.  For them, location is flexible.  They want to find a first home that is convenient to things and places that are important to them but generally are not afraid of a reasonable commute.  They don’t seem overly concerned with prestige and status, and they have a thirst for knowledge, are easygoing and fun to work with, and they are looking for value and lifestyle options such as backyard living as opposed to specific amenities such as granite counters.  Real estate professionals should be excited about working with and serving the next generation of buyers.  The millennials are 80,000,000 strong, smart, flexible, and much more sophisticated about money management than previous generations.  Of course, they are very tech savvy as well.  As consumers, the millennials watched their parents buy several homes and are highly thoughtful and informed about real estate in general.  Educate them and help them understand the specifics and you will have a client for life.

Q:  When do you plan to buy your first home?

American Style Capitalism?
October 4, 2010

Right now, capitalism in America sits somewhere between “Don’t tread on me!” and “From each according to his ability; to each according to his need.”  In the US, we have traveled a long way from trusting in the invisible hand’s ability to determine the direction of the economy.  Of course, history has shown time and time again that unbridled greed creates a corrupt financial system the same way that absolute power corrupts absolutely in government.  The past decade has illustrated the need for economic oversight and intervention.  However, a return to true capitalism in America will require that free-enterprise be a reflection of market forces and the fundamental notion that hard work coupled with taking risk will lead to financial reward.  Now more than ever, politicians must realize what’s at hand.  Whether the US government’s bailout of the financial industry was absolutely imperative will never be fully known.  Obviously, too much was on the line to step back and let things sort themselves out.  Ignoring the consequences of such a prolonged period of  easy money would have been irresponsible, but it’s now time for the government to refrain from more bailouts and stimulus packages.  Instead, the government should be promoting fiscal policies that will restore confidence in capitalism by encouraging business growth, job creation, and overall economic expansion.   The basic principles underlying capitalistic economic expansion still hold true – free markets function best, albeit  imperfectly, with less government involvement.   Creating an environment where free-enterprise is encouraged and rewarded will, at times, mean the government must intervene and create boundaries to prohibit corruption.  Most of the time, however, promoting capitalism means understanding that intervention must be the exception not the rule.  Whenever possible, government needs to work toward revitalizing and restoring confidence in the principles that help capitalism function smoothly.  Although capitalism is not a perfect economic system, it works and it’s much better than the other options.  The choice then should be to lean toward the “Don’t tread on me!” alternative and move away from the form of capitalism that has taken root in America.   Let’s heed the flashing lights and be a country that pulls itself up by its boot straps, thinks deeply when it matters, legislates lightly only when it has to, and fervently understands what’s at stake for future generations.  If we do this, we can become a prosperous nation once again, a country mindful of the fact that democracy and capitalism are not in opposition to one another; instead, they fit each other like a glove.