Here is an easy to understand and informative explanation of the current housing market. I thought you might appreciate a calm and coherent antidote to all the hysteria and panic.
This cycle reminds me of a long family vacation...screaming from the back of the station wagon..."Are we there yet?" My Dad, sounding a little like John Wayne, would simply say..."No and if you ask me again...you might not make it there at all!"
Sit back and enjoy the movie...we'll be there soon!
Thursday, May 1, 2008
Wednesday, February 27, 2008
What type are you?
Sunday morning as I was shoveling down the last bites of my breakfast, I was rapidly thumbing through the Sunday Sun-Times before heading into the office. I was half-reading...reading headlines and pretending to absorb the whole story. I landed on a story that made me stop skimming and start reading. It was titled, "The Supervisor vs. The Champion" and it featured a picture of a smiling Barack Obama next to a smiling Hillary Clinton. It was written by Emily Yoffe from slate.com.
The subtitle pulled me in..."What personality tests reveal about Dem candidates." As I read the article I recalled the test the author was referencing. The Myers-Briggs Type Indicator test was a test I had taken a few times. The test uses sixteen different classifications to typecast people. The sixteen classifications are also sorted by psychologist David Kiersey into four sub-groups: Idealists, Artisans, Guardians, Rationals. The different personality types draw heavily from the work of the famous psychologist Carl Jung.
I read that according to Yoffe, Hillary Clinton was an "ESTJ" (Guardian/Supervisor) and Obama was an "ENFP" (Idealist/Champion). The following day in a Monday morning article Yoffe postulated that John McCain was an "ESTP" (Artisan/Promoter). Yoffe proceeded to use these "typecasts" to outline her view of the strengths and weakness of the three Presidential candidates. While it is unlikely that John, Hillary or Barack actually tested their MBTI with Miss Yoffe present, her typecasting seemed to be plausible and accurate on at least a surface level.
As I read the article, it seemed to explain my attraction to Obama's message of hope and change while also explaining my hesitancy to embrace Hillary's message of experience and competency. You see, I am an Idealist like Obama is...in other words Barack is most similar to my type and I seem to connect with his message more readily than I do with Hillary's. I am classified as an "ENFJ" (Idealist/Teacher). David Kiersey's and Typelogic's analysis of my type seemed to be fairly accurate...plus it didn't hurt that it was really cool to be psychologically similar to people like Abraham Lincoln, Ronald Reagan, King David of Israel, Michael Jordan, Oprah Winfrey, and Johnny Depp.
I don't really know if the MBTI test is much more than a HR department equivalent of a horoscope or if it is akin to a rigorous Wunderlic test administered to NFL rookie prospects prior to the draft. However, I do know that I enjoy the journey of understanding. Tests like the Myers-Briggs test, IQ tests and other silly tests like the ones you can find on Tickle.com have always been interesting to me. Perhaps it is the competitive part of my personality...I like testing myself and I enjoy the self-evaluation.
MBTI probably isn't the best way to pick a Presidential candidate but it can be helpful in understanding more about yourself. Self-discovery is always a worthwhile journey. Stephen R. Covey said it best in his book "Seven Habits of Highly Successful People". "Seek first to understand, then to be understood." If you want people to understand you, you need to understand yourself. Take some time and look inward. If you take the time to become more aware of your "self" you will likely be able to become more aware of others. So if you have some time, you can go to Humanmetrics.com to find your personality type using their short-cut MBTI test. Give it a try...
How can figure out where you are going if you don't know where you are?
The subtitle pulled me in..."What personality tests reveal about Dem candidates." As I read the article I recalled the test the author was referencing. The Myers-Briggs Type Indicator test was a test I had taken a few times. The test uses sixteen different classifications to typecast people. The sixteen classifications are also sorted by psychologist David Kiersey into four sub-groups: Idealists, Artisans, Guardians, Rationals. The different personality types draw heavily from the work of the famous psychologist Carl Jung.
I read that according to Yoffe, Hillary Clinton was an "ESTJ" (Guardian/Supervisor) and Obama was an "ENFP" (Idealist/Champion). The following day in a Monday morning article Yoffe postulated that John McCain was an "ESTP" (Artisan/Promoter). Yoffe proceeded to use these "typecasts" to outline her view of the strengths and weakness of the three Presidential candidates. While it is unlikely that John, Hillary or Barack actually tested their MBTI with Miss Yoffe present, her typecasting seemed to be plausible and accurate on at least a surface level.
As I read the article, it seemed to explain my attraction to Obama's message of hope and change while also explaining my hesitancy to embrace Hillary's message of experience and competency. You see, I am an Idealist like Obama is...in other words Barack is most similar to my type and I seem to connect with his message more readily than I do with Hillary's. I am classified as an "ENFJ" (Idealist/Teacher). David Kiersey's and Typelogic's analysis of my type seemed to be fairly accurate...plus it didn't hurt that it was really cool to be psychologically similar to people like Abraham Lincoln, Ronald Reagan, King David of Israel, Michael Jordan, Oprah Winfrey, and Johnny Depp.
I don't really know if the MBTI test is much more than a HR department equivalent of a horoscope or if it is akin to a rigorous Wunderlic test administered to NFL rookie prospects prior to the draft. However, I do know that I enjoy the journey of understanding. Tests like the Myers-Briggs test, IQ tests and other silly tests like the ones you can find on Tickle.com have always been interesting to me. Perhaps it is the competitive part of my personality...I like testing myself and I enjoy the self-evaluation.
MBTI probably isn't the best way to pick a Presidential candidate but it can be helpful in understanding more about yourself. Self-discovery is always a worthwhile journey. Stephen R. Covey said it best in his book "Seven Habits of Highly Successful People". "Seek first to understand, then to be understood." If you want people to understand you, you need to understand yourself. Take some time and look inward. If you take the time to become more aware of your "self" you will likely be able to become more aware of others. So if you have some time, you can go to Humanmetrics.com to find your personality type using their short-cut MBTI test. Give it a try...
How can figure out where you are going if you don't know where you are?
Monday, February 18, 2008
Facing the challenge and rising above it.
"Life is without meaning. You bring the meaning to it. The meaning of life is whatever you ascribe it to be. Being alive is the meaning."
"We must let go of the life we have planned, so as to accept the one that is waiting for us."
Those two quotes from Joseph Campbell are worth remembering while those of us in the Real Estate industry struggle to find a silver lining in all of the turmoil we currently face. As we read the morning paper and find more harbingers of bad news in the business section, we have a challenge broader than the sub-prime mortgage "crisis". We are forced to ask ourselves, "Is this what I want to do for the rest of my career?"
I think the answer depends on our goals. If we are looking for a quick and easy path to fortune and prestige, we might want to update our Monster.com profiles. However, if we are motivated by the quest for a meaningful life...now is the time to rise up. We get the chance to re-examine and maybe even reinvent our career goals.
I remember the day I first sold a new home. It was a Camden. A three bedroom, two and one half bath home on a slab. I sold it to a single guy named Tom. It was 1988. Interest rates were just dipping into the 10% range. I was a cocky "salesman" looking to make my first new home sale. To be honest, Tom would have likely purchased that home even if Pee Wee Herman was his salesman. It was the right home at the right price at the right time. Initially I was radiant in my own self-projected glory. Three days on the job and I slammed a sale! I was certain that I was destined for greatness.
As my intoxication started to wear off, I began to see things a little differently. Slowly at first. The meaning started to sink in. I just helped a complete stranger find his home...not a cell phone, a new car, a new suit, or a new bag of golf clubs...his home. I realized that this new job somehow meant a little more than just selling "stuff". I was participating in another persons life. That was an awesome revelation. And I mean awesome as in full of awe.
Like the Wizard of Oz...I was helping to grant wishes that my buyers could very well realize without my help. I was merely there to help guide them through the process. I wan't selling anything. I was helping them to change more than their address. I was helping them to find their home. Thankfully, I had this revelation early.
Without that revelation, the recession of the early ninties would have likely forced me to go get a job selling "stuff" in some other industry. Without that revelation, working weekends would have likely become intolerable. Without that revelation, making follow up calls when I should be home eating dinner would probably have become too laborous to endure.
Understanding that this career was more than just the sales process has helped me through this challenging market. Don't get me wrong. Sales awards, bonuses, and nice paychecks all make the journey more enjoyable. Closing a sale still brings a thrill that has never grown old to this day. But the awesome feeling of seeing a family find their home thanks to your guidance is the real bonus in our career. The paycheck just makes the intangible benefit into a tangible bonus.
When I am asked my opinion on the future of our industry I find myself thinking back to Joseph Campbell's quote..."Life is without meaning. You bring the meaning to it." These challenges will subside and new ones will replace them. The ability to find meaning is purely personal. This market is testing my stamina but not my committment. As long as there are people like Tom looking to find their home...I want to be there to help them find what they seek.
If you enjoy what you do and you strive to do it better every day the reward will find you. It may not be what we have grown accustomed to but as Mr. Campbell said, "We must let go of the life we have planned, so as to accept the one that is waiting for us."
"We must let go of the life we have planned, so as to accept the one that is waiting for us."
Those two quotes from Joseph Campbell are worth remembering while those of us in the Real Estate industry struggle to find a silver lining in all of the turmoil we currently face. As we read the morning paper and find more harbingers of bad news in the business section, we have a challenge broader than the sub-prime mortgage "crisis". We are forced to ask ourselves, "Is this what I want to do for the rest of my career?"
I think the answer depends on our goals. If we are looking for a quick and easy path to fortune and prestige, we might want to update our Monster.com profiles. However, if we are motivated by the quest for a meaningful life...now is the time to rise up. We get the chance to re-examine and maybe even reinvent our career goals.
I remember the day I first sold a new home. It was a Camden. A three bedroom, two and one half bath home on a slab. I sold it to a single guy named Tom. It was 1988. Interest rates were just dipping into the 10% range. I was a cocky "salesman" looking to make my first new home sale. To be honest, Tom would have likely purchased that home even if Pee Wee Herman was his salesman. It was the right home at the right price at the right time. Initially I was radiant in my own self-projected glory. Three days on the job and I slammed a sale! I was certain that I was destined for greatness.
As my intoxication started to wear off, I began to see things a little differently. Slowly at first. The meaning started to sink in. I just helped a complete stranger find his home...not a cell phone, a new car, a new suit, or a new bag of golf clubs...his home. I realized that this new job somehow meant a little more than just selling "stuff". I was participating in another persons life. That was an awesome revelation. And I mean awesome as in full of awe.
Like the Wizard of Oz...I was helping to grant wishes that my buyers could very well realize without my help. I was merely there to help guide them through the process. I wan't selling anything. I was helping them to change more than their address. I was helping them to find their home. Thankfully, I had this revelation early.
Without that revelation, the recession of the early ninties would have likely forced me to go get a job selling "stuff" in some other industry. Without that revelation, working weekends would have likely become intolerable. Without that revelation, making follow up calls when I should be home eating dinner would probably have become too laborous to endure.
Understanding that this career was more than just the sales process has helped me through this challenging market. Don't get me wrong. Sales awards, bonuses, and nice paychecks all make the journey more enjoyable. Closing a sale still brings a thrill that has never grown old to this day. But the awesome feeling of seeing a family find their home thanks to your guidance is the real bonus in our career. The paycheck just makes the intangible benefit into a tangible bonus.
When I am asked my opinion on the future of our industry I find myself thinking back to Joseph Campbell's quote..."Life is without meaning. You bring the meaning to it." These challenges will subside and new ones will replace them. The ability to find meaning is purely personal. This market is testing my stamina but not my committment. As long as there are people like Tom looking to find their home...I want to be there to help them find what they seek.
If you enjoy what you do and you strive to do it better every day the reward will find you. It may not be what we have grown accustomed to but as Mr. Campbell said, "We must let go of the life we have planned, so as to accept the one that is waiting for us."
Wednesday, February 13, 2008
Change on the horizon?
I never knew making dreams come true could be such a nightmare!
Buying a new home seems to be such a risky proposition these days that people are actually likening it to purchasing junk bonds or penny stocks. Too many people are caught in the "I don't want to make a stupid investment"mentality to actually examine the reasons why owning your own home is such a fundamental part of the American dream. If you watch the news you are led to believe that the folks at Enron got out of the energy business just in time to enter the home building business.
As a twenty year veteran of the American dream industry I can tell you that we are suffering a crisis of confidence and not an end to the dream. Most people I encounter, both prospective buyers and people in my social circle, feel that the economics are now more important than the emotion. That change in the buying process is certainly understandable but it is likely not sustainable.
Since I began my sales career, one of the axioms of new home sales was "justify with logic...close on emotions". For most people the decision to purchase a new home is more than an economic decision. It is usually a discretionary choice that we justify with a logical rationale. Does anyone really need a 4000 square foot home for a family of four? Of course not. But our homes are often a projection of our own self-image. Perhaps this industry correction will change the parameters but it will not change our desire for better homes, neighborhoods, and schools for our children.
When you examine what prospective buyers are saying these days you hear the same comments and objections. "It's not a good time." "I am afraid." "It's gonna get worse." "I don't want to make a bad decision." And the most insidious..."How big is your discount?" Are they really looking to buy their family home from the "clearance rack"? The answer is no. They are looking for reassurance and perhaps even some gentle persuasion. Given what we have witnessed in the past two years, who could blame them?
Buying a new home seems to be such a risky proposition these days that people are actually likening it to purchasing junk bonds or penny stocks. Too many people are caught in the "I don't want to make a stupid investment"mentality to actually examine the reasons why owning your own home is such a fundamental part of the American dream. If you watch the news you are led to believe that the folks at Enron got out of the energy business just in time to enter the home building business.
As a twenty year veteran of the American dream industry I can tell you that we are suffering a crisis of confidence and not an end to the dream. Most people I encounter, both prospective buyers and people in my social circle, feel that the economics are now more important than the emotion. That change in the buying process is certainly understandable but it is likely not sustainable.
Since I began my sales career, one of the axioms of new home sales was "justify with logic...close on emotions". For most people the decision to purchase a new home is more than an economic decision. It is usually a discretionary choice that we justify with a logical rationale. Does anyone really need a 4000 square foot home for a family of four? Of course not. But our homes are often a projection of our own self-image. Perhaps this industry correction will change the parameters but it will not change our desire for better homes, neighborhoods, and schools for our children.
When you examine what prospective buyers are saying these days you hear the same comments and objections. "It's not a good time." "I am afraid." "It's gonna get worse." "I don't want to make a bad decision." And the most insidious..."How big is your discount?" Are they really looking to buy their family home from the "clearance rack"? The answer is no. They are looking for reassurance and perhaps even some gentle persuasion. Given what we have witnessed in the past two years, who could blame them?
Maybe 2008 will be the beginning of a change. Maybe people will finally say, "It is time". Maybe the sales axiom will change this year..."justify with emotion and close on logic." The prospective buyers will need to be reminded of the unique non-economic/emotional benefits of purchasing a new home. The easy battle will be waged as skeptical buyers attempt to time the market. Simply put, there has not been a better time to purchase a new home in the past twenty plus years. Interest rates are at historically low levels. Prices have adjusted down almost 20% in some markets. There remains a year's worth of unsold inventory in most markets. Builders are fighting for each sale with amenities-enticements-incentives.
If a buyer has sufficient income, good credit, a modest down payment, and no home to sell...this is the buyer's market of all buyer's markets. Now is the time. My Econ 101 professor put it this way, "While markets can act irrationally in the short term. Over time, all free markets will act rationally. Consumers will know a good deal when they see one." My prediction is simply this: Change is on the horizon. The buyers will be back. Pent-up demand will lead to some rational buying behavior in 2008. We will not be seeing a return to the output levels of 2005 or perhaps even 1995 but we will see the Real Estate market shake off the standing eight count and return to the fight.
Owning a good home in a good neighborhood where your kids can go to a good school is still the American dream. While double digit growth in appreciation, homes that sell above list price, bidding wars, and speculative buyers are "so 2005"...
Most people will feel better about chasing their American dream in 2008.
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