Predictions For 2008 — Volume II — 2007 Batting Average
Posted @ 8:34 pm - Filed under Cool Info, Real Estate Investing, Check This Out, Real Estate Brokerage, Real Estate Markets, Predictions
It’s late Christmas afternoon, and Trophy Wife and I are watching our laptops, Tom Hanks & Meg Ryan in You’ve Got Mail, and each other while 15″ away apart. I’m writing this, while one of my brain’s many caches is helping me ponder what’s next on today’s list of, How Much Food Can I Eat Today? The list has truly risen to the level of felonious, accomplishing that effortlessly before noon. For a guy who’s been shamelessly bragging about losing so many pounds and inches, the 24 hour period from last night through tonight has been nothing short of a culinary crime spree.
I couldn’t care less. It took me three days to lose back the 4 pounds gained in Texas, so I’m more afraid of what’s ahead this week in the gym, than I am of the actual crime. That’s my story, and I’m stickin’ to it.
Next up: Either a plate of cold shrimp and way spicy sauce OR Nachos with ground beef and everything needed to ensure a week of nothing but paying the price the gym will require.
Turns out there was a third choice. Josh came over and decided a new batch of warm chocolate chip cookies would be the perfect
On to predictions and the 2007 report card.
Remember now, these predictions are what I think, for my own reasons. Your laughter will not detour me from my appointed rounds. If you think we’re all goin’ to hell in a hand basket on June 22nd next year, good for you. Just make sure you act accordingly. 
Prediction — Apartments, including 2-4 unit props — my all time favorite real estate investment — will become even more of a darling with serious real estate investors. As more folks are relegated to the growing list of what appears to be permanent renters, apartments will be their obvious destination. Rents will, over the long run, go up a bunch. (real estate technical term)
Tip: Buy duplexes and fourplexes by the dozen. Houses, townhomes, and condos are wonderful, and they’ll probably out-appreciate every kind of apartment property. That’s why currently much of what we recommend fall into those categories. That said, when we locate solid multi-family product, we get all tingly inside and make our move. Especially — and this is key — when the units are already sporting their own separate tax ID numbers for each unit.
Prediction — Many large (at least 1 office w/75+ agents) real estate offices close their doors. This will give birth to more narrowly defined and much smaller operations. These companies will be populated by established, seasoned pros, who many times will also own a piece of the pie. They’ll take business from larger but less talented firms.
Prediction — What I’ve been hearing for the nearly 40 years of my career may finally be approaching reality. As a direct result of smaller (boutique?), far more talented real estate firms, the pretenders will accelerate their permanent exit from the real estate brokerage business. This will pose a huge problem for Prudential, C/21, and all the rest of the biggies who rely heavily on Chuck and Debbie Newbie selling/listing a couple family and/or friends’s homes — while paying Chuck and Debbie a commission of only 50%. It’s in large part what’s been keepin’ many of those firms above water. Those listings will start going to solid pros whose expertise, experience, and plain old savvy will trump their favorite niece/nephew.
Prediction — Lenders will split into a couple camps — incredibly conservative
, and those who will be more conservative than they’ve been, but still wanting to live up to their title as lenders. I’m betting a new loan approach, predicted in Volume I, will come from the latter group of campers. Brian Brady thinks it’ll be pretty radical in four states. Those currently investing in solid growth regions outside of those states, will reap the benefits of those fleeing said states. (I even talk that way sometimes just to crack myself up.)
Tip They’ll be heading towards anything they can remotely describe as stable. Which means they definitely won’t be headed our way, San Diego. You need to be headin’ out now. If Brady’s correct, and I think he is, just not with as dire consequences, you’ll be facing stiff competition as you try to sell your income property. Now is the time to make your move.
2007 Predictions — Some came true — Some went into the porcelain fixture.
Said fixed rate loans would be 5.5% by the end of the year. Close, but no cigar. The last client to refi their home, a San Diegan, is now happily paying 5.75%. Rates are still available at just under 6%. I’m hoping for a half point drop by next Monday, but not betting much on it. wrong — but close.
Said traditional neg-am loans would give way to some sort of compromise (hybrid?) which would help solve the issue of lenders becoming grotesque hogs in the setting of their neg-am spreads between payment rates and indexed rates. Right on the money. It was a simple modification too.
Said Brown and Brown would sell less than $1 Million worth of San Diego income property. The younger of the two Browns confirms this as having come true in the strictest sense possible. Though this was more or less part of our ‘07 plan, he wants to see that changed in ‘08. I agree. Right again! Not only less — none — zip zero nada. Very little of it sold period — with us or without us. As I keep bellowing from the mountain top — get outa Dodge now.
Said the Dodgers would win the National League West Division crown. Wrong.
Also said the Padres wouldn’t win the division. Another one for One With Smooth Pate.
Said Keller-Williams would be an exception to those losing money and closing their doors. Since they tend to attract more than their share of Alpha Dogs, it makes sense. Also, since they share profits, their agents do their best to ensure there are profits to share. Right. I also think they’ll be attracting more than their share of solid producers as they jump sinking ships.
That makes me 6/10 so far. That’s a cool .600 batting average for 2007 predictions. Of course, that’s not all of them by a long shot. I was wrong 40% of the time so far. In subsequent Volumes we’ll see if my batting average holds up, or folds under the weight of life’s merciless and unrelenting reality.
Volume III soon — plus more of my 2007 report card. As always, feel free to add your predictions to mine, and let us know how your ‘07 predictions fared.
If you Christmas was as cool in every way as mine, you’re still smiling from ear to ear — while not movin’ to quickly just yet.
This entry was posted on Wednesday, December 26th, 2007 at 8:34 pm and is filed under Cool Info, Real Estate Investing, Check This Out, Real Estate Brokerage, Real Estate Markets, Predictions. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.