McKae Properties Real Estate Market Commentary

3rd Month of Shelter in Place Real Estate is an Asset Class.  As an asset class it has value from appreciation and income.  It has value as a store of value.  It has an important attribute no other asset has.  It has security in shelter. When any asset is looked at it has a value for 1. SHORT TERM, 2. INTERMEDIATE TERM, 3 LONG TERM.  The ownership of Real Estate is for investors looking for income and appreciation, investors looking for Store of Value.  The majority of real estate owners are for residential purposes.  Not rental properties but for a home to raise family enjoy grand children and spend their later years together. It is for the later I write this Blog.  It is so easy for either Buyer or Seller to be frightened by commentaries in the media.  For example Zero Hedge wrote "Somebody is Dumping Everything"  Mystery Investor Pukes $333M in Real Estate ETF in Dark Pool Trade.  Key word is INVESTOR.  Does that really mean anything for a personal home.  Does it a

I thank all of those who have complimented me and encouraged me on the posting for McKae Properties Silicon Valley Market Commentary.  It is encouraging to know that it is appreciated and encouraged. WOW, what a week!   Listings falling, prices being reduced and terms being adjusted.  All this in the face of a Shelter in Place that has been most challenging.  From Face masks to booties, to gloves and hand sanitizers just for a starter.  Then there are the new forms that the California Association of Realtors have included in the listing, visitation, marketing and sale and closing.  To add to the frustration of both sellers, buyers and agents, the new conditions eliminate brochures, open houses and brokers tours.  These are to be replaced with virtual tours to be added to the Multiple Listing Service and a requirement that final or first viewing of the property must be done with a firm desire to purchase the property listed.  In other words, no more Lookie Lews.  Visitations will requ

The ability to look back to give an indication of what the future could or will bring is essential when one looks to plan one's future. That could not be more the case in real estate than it is now. 2009 is the most recent period we can look at.  Remember the term "Black Swan", an unlikely event that occured?  At that time it was the mis pricing of real estate values due to the packaging of bonds created from mortgages.  The mis pricing that occured in that the risk was improperly recognized.  What followed was foreclosures, unemployment, lack of mortgage money and to a certain extend illiquidity in real estate.  It also created the best opportunity to buy real estate.  It took the stock market as we measure it in the S&P 500 to gain back a 58% drop in value about 4 years to hit the peak from the collapse.  During that period, great opportunities in real estate occured. What we have now is something that is close but far from the crisis level that was created in

Wasn't Yogi Berra a kick?  He took from Lord Toynbee his Nobel Prize on history repeating itself into Brooklyn speak.   I was reminded of that when I read about the closing of the slaughterhouses and the issue of hogs.  What does one do with all the hogs accumulating without their way into food chain?  They are not like cattle.  Cattle can be released to the pasture and graze until the food chain opens up again.  "Where did I experience this before?"   As a rookie stock broker in 1970, just out of college, I came to a stock market not much different than the past few  years.  New Highs after new highs and nothing could stop the stock market ascent.  The "new normal" was in vogue.  THEN, like something out of nowhere prices began to fall.  Fall they did, over 60%!  The Nifty Fifty were the FANG stocks then.  The difference it took over 3 or so years to fall 60%.  This past month it fell 60%.   Interest rates were rising back then and kept rising along with