Colville Real Estate Agents

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I’m actually pleased to say that I missed on important forecast for 2010, and that is that I expected a sell-off in the stock market coinciding with the end of the Bush era tax rates. I forgive myself a little for this miss considering that Congress and the President did extend those rates which was the major caveat to begin with, but that’s just more indication of Washington becoming the power-center rather than Wall Street, and politics driving economic decisions more than economics. Hi, I’m Steve Beaman and welcome to the Financial Path!

2010 saw a boom in several investment areas from the paper assets of stocks, to the hard asset commodities, and in farmland. There was still yet to be seen a recovery in real estate prices, and unemployment remained historically high at 9.4%, and that’s the stated number. We all know that it’s really more like 17%, but who is counting?

2011 to me looks like we could see an acceleration of the economy which quite honestly might be a double edged sword. A stronger economy will force up interest rates which will increase the national debt, which will force up interest rates. You get the picture. If there is one thing to be concerned about in 2011, it’s the federal deficit. December numbers aren’t out yet, but Novembers monthly deficit came to a whopping $150,000,000,000 which by the way, is $30,000,000,000 more than the so called experts had predicted.

With respect to this issue, it will be interesting to see how the new Congress attacks it. It does seem like there’s increasing amounts of pressure being applied to Washington to deal with this, so perhaps something will take hold, like a complete re-writing of the U.S. tax code. Somehow I don’t expect it… With the president ideologically opposed to most of what the new Congress ostensibly stands for, my best guess for 2011 is we’ll see very little done in Washington which simply means, more of the same. More debt, more regulation, more talking.

Companies are flush with cash, and that bodes well for the producers. And this Christmas does look like the demand side is beginning to grow again. But I think we’ll not see real growth because American’s are still de-leveraging their balance sheets following the 2008 problem, and companies will be hesitant to make major capital commitments when they’re unsure of what consumers will do. Further, until Washington lays out a real plan to reduce the deficits, it’s going to be hard to make long term commitments.

I look for commodity prices to continue rising as the dollar continues to slip. Thus, gold and silver, and other metals should do well. Oil is today around $90 per barrel and I think we’ll see that rise as the economy does heat up a bit, and the dollar continues to have problems. Agriculture is still a strong area to be investing in as food is the ultimate basic material.

I would expect to see another round of “Quantitative Easing” because quite frankly, I just don’t think we can sell our debt and there’s really no other choice but to expand the money supply. Bear in mind, the banks are sitting on the excess reserves created by the Fed’s policies and they’re using those to buy government bonds, not to make new loans. Should the banks use those massive amounts of money to create new loans, we could see very high inflation as the money supply would expand rapidly. But in order to fund our deficits, we’re going to have to keep playing this game, hoping for some miracle. The fact is, our government must reduce expenditures, and raise revenues. Time is running out for our political leaders to avoid having the laws of economics kick in a cause real problems.

We presently recommend a 10% allocation to precious metals, and a 5% allocation to cash. I think it might be prudent to raise that to a 15% allocation to precious metals, keeping the 5% allocation to cash. For the 80% in the middle, volatility will continue to be a winnable theme.

Happy New Year and let’s hope it’s a prosperous one! I’m Steve Beaman and thanks for listening.

For the SBG Cast, Click here! http://tinyurl.com/24yeqhn

Steve Beaman is the Author of “Happiness & Prosperity in the 21st Century: The Five Paths To a Transformed Life”. He has authored over 100 articles relating to the Five Paths including articles on Financial Prosperity, Emotional Wellness, Physical Health, Intellectual fulfillment, and Spiritual Security. He enjoyed a highly successful career in Economics and Finance prior to establishing The Steve Beaman Group. The “SBG” is an organization dedicated to helping people on their journey of life.

Why is it that the real estate industry is so self-centered and resistant to change? In times like these, couldn’t you argue that this is the most critical time to embrace change? You can’t seriously expect that practices of old will work equally as well when the market tips. The value proposition changes. Values change. So why aren’t we changing with it? Time is money right? Lately, time has put many out of business.

Lets look at the big picture. Traditional brokerages are starting to lose market share nationally. Deals are falling through. There is more market stagnation, and property values are still declining significantly. There is more urgency to sell as a result of rising foreclosure rates, bankruptcies, less leveraging potential…and buyers are still holding back waiting for the market to continue to fall. According to the Urban Land Institute, there were 80% fewer real estate transaction in 2008 than there were in 2007! If you are a broker or agent…I wish you luck and bid you well. I also suggest you change your perspective.

Take a look at history. I find it interesting to see that auction marketing trends are becoming far more common. Real estate auctions have grown by 30% over the last 5 years in the U.S. The National Association of Realtors, and the National Auctioneering Association, both concur that 1 out of every 3 real estate transactions will be sold through an auction by 2010/2011. In comparison, 20% of all real estate transaction in this country are already being transferred via the auction method today.

We are already seeing the shift. Real estate auction marketing has historically become the method of choice during times of economic stress. Some of the most well established niche based auction companies grew most successful when times were tough. That is how many started out.

Wondering why you know very little about auction methodology? Maybe you know a lot, but If you’re from the West Coast…you wouldn’t. It is far more common in the Midwest and on the East Coast, but that is changing. The Auction Method of marketing is perhaps the oldest and fastest method of converting hard assets into cash. It has been adopted and used by all Federal, State and Local Courts and Governments as the acceptable methodology of hard asset conversion. Here are the top 5 reasons auctions are gaining so much popularity:

1. Auctions create a strong sense of urgency.  Why wait months for buyers to make up their minds? The seller sets the deadlines and forces the market to respond through a carefully planned and aggressive marketing campaign.

2. Auctions set the seller apart from other competitive sellers. There is no haggling or negotiating and everything is sold as-is, contingency free – reducing frustration.

3. Auctions create increased competition between & among buyers- why place yourself at the mercy of a single buyer who not only determines price: but may also demand unusual or stringent demands prior to actually closing the transaction?

4. Auction transactions are accelerated, intense campaigns, that often result in selling the property much faster than through traditional methods. The savings in carrying costs alone can make a big impact on the bottom line for a seller.

5. Auctions do away with a list price. Determining value today is tough. If an asset is under-priced, the asset may be sold quickly and there may be money left on the table. If it is priced too high, the result is time delays, loss of money to maintain, frustration by the seller and no offers of any type or size from potential buyers. When price reductions occur, it negatively motivates potential buyers to wait and see how low will they go. Meanwhile, nothing has happened to the asset except that it is stale on the market and potential buyers begin to think that something is wrong with it.

At the end of the day, the asset will be sold to the largest audience of ready, willing and able buyers. Auctions are arguably the best barometers for fair market value. If you are a property owner, bank or institution that needs to sell – you might be thinking it’s time to talk to your real estate broker about auctions. I am here to urge you to avoid doing this without speaking to a qualified auctioneer first. Your broker or agent is very likely unfamiliar with how an auction works and will be extremely under qualified to conduct one…so he or she will not support it. If you think about it, your broker would have suggested an auction as a potential solution if it were understood and familiar to your broker. The broker would also lose commission potential. Even still, if your broker hires an auctioneer – make sure your broker allows you to speak with the auctioneer freely. If you cannot, then your broker does not have your best interests at hand.

If you are a broker or an agent, I suggest you open yourselves to the opportunity of collaborating with an experienced auctioneer (please note that the word experienced is highlighted) to get your properties sold. You’re purpose is to sell property, not to just get the listing and have it sit for 6 months, a year or more as the properties drop in value. Focus on the Net and not the Gross – you’ll do better and save your client the pain of market stagnation and carrying costs. You are not a full service broker if you don’t offer the service, and I am willing to bet you are sitting on some listings that will likely expire or already have. Co-listing property with an auctioneer might just be your ticket to selling those stubborn properties that are unique or tough to value. It’s time to learn something new and evolve with the market.

Michael Stein, CEO, SageListings. http://www.sagelistings.com
Michael is a seasoned, consummate executive with over 10 years of experience in commercial real estate, business development, strategy and entrepreneurship. He is characterized by peers as an innovative and motivational leader with a vision of changing the way the world does business.

For the last 8 years, Michael was part of the strategic development and growth of two privately held commercial real estate firms, Randall Realty and Weidner Investment Services. There, he worked with value-added commercial real estate investors and played a crucial role in repositioning several multifamily developments into profitable and valuable community additions in Seattle, Sacramento and Portland markets. Michael’s experience includes the direction of over 4,750 multifamily units ($670+ million), and the deployment of several successfully endorsed company programs designed to train, retain and develop the best talent the market has to offer.

Most recently, Michael’s endeavors include building real world solutions that compliment business, our environment and its inhabitants. He co-developed a patent-pending automated valuation model (AVM) for commercial real estate, and is committed to making “Green Building” and “Green Conscious” thinking our new standard moving forward, investing his time and money towards these pursuits.

Michael also maintains involvement with the Real Estate Finance Investment Society, holds a bachelors degree in public relations from Washington State University, and carries a Washington State Real Estate license.

His other interests include playing with his two children, relaxing with a glass of wine, advising new and emerging companies and playing chess.