Luxury Real Estate

By Robert Lockard

I am sorry to keep talking about sad things in my luxury real estate blog entries, but I just read an article in CNN entitled “Ex-bankers on pushing customers to rack up debt” and it once again brought up many familiar concerns to my mind on the topic of consumer debt. I wish that I could talk about happy topics. I would much prefer to discuss luxury properties or any other topic, including how getting adequate sleep can lead to more success, but, alas, I feel it much more pressing to focus on the problems upon us.

I am absolutely disgusted by the state of our financial markets. It seems to me that dishonesty is rampant and the very people who are responsible for this mess are asking for a great deal of money to supposedly solve the problem. But I care about people much more than institutions. And, based upon the testimony of the two honest women in the CNN article, who both have good consciences, I see little difference between the practices of certain banks and lenders and the practices of drug pushers. Many lenders trick people into taking more money than they need, they strive to get young people addicted and they keep people in a state of dependency for extended periods of time. All of that adds up to trouble.

Debt is a plague that, when handled unwisely, can lead to all sorts of problems that I think are even worse than the horrible effects of drug abuse. People can at least stop taking drugs and eventually go through a process of withdrawal and recovery. But with debt, even if a person stops going into more debt, they still have interest building up on the money they owe and they face all sorts of roadblocks on the way to recovery.

The very institutions that have pushed so many people to get addicted to debt are now suffering from a major withdrawal (pardon the banking pun) and seem on the verge of collapse… wait a minute – collapse? How is this possible? It starts with how good people are treated. We have not been treated fairly and now those who have been engaging in dishonest practices are reaping the bitter fruit. We have become a nation of debtors, instead of a nation of wealth.

Perhaps our financial market, as it currently stands, should not be saved. Perhaps we must soon create an entirely new and honest way of working with our money. Whatever we choose, we cannot keep doing what we have been doing.

I feel like I’ve been ending every blog entry with an apology for being so negative. I just don’t want to leave my readers with a sense of anger or hopelessness. I think that there is much to hope about. There are plenty of good people in this world and in our wonderful nation, the United States. I am confident we will make it through this sad time. I just want to make sure this never happens again.


Editor’s Note:
Robert Lockard is the Public Relations & Media Specialist with LuxuryRealEstate.com. I am Robert. I create all of Luxury Real Estate's newsletters, write the editorials in LuxuryRealEstate.com Magazine and much more. The photo of the parrot biting a credit card is from www.flickr.com/photos/djkbird214/2695122732 and it is the copyright of dj-squared.

By Jim Walberg
From his blog: Caribbean Real Estate: U.S. Financial Crisis Has Created Great Fear Throughout The Islands!!!

In the midst of the biggest financial meltdown since the 1930s some hard questions are being asked of Jim Walberg this week.

My email box is overflowing and the phone has been ringing off the hook. The people who have an interest in the Caribbean real estate markets are afraid. They are asking some very hard questions that need to be immediately addressed by our Federal government as to how a further financial collapse can be averted. You may recall my past article about the mantra of a sailor as he sets off on a voyage – Do Not Be Fearful! Well, it is a challenge to get to that place when the walls or the U.S. financial structure seem to crumbling down before our very eyes. There is no getting around the fact it is a historic financial mess. My focus is to always get to “what is” as fast as possible, and start making lemonade out of the truck load of lemons that has just been dumped on our front porch.

When I want some well-thought-out ideas on National financial issues I call my REALTOR® friend in Naples, Florida. His name is Mike Lissack. He is one of the smartest financial minds that I know. He came to real estate from a long and successful career on Wall Street where he was named by Worth Magazine as one of “Wall Street’s 25 Smartest Players”, and is one of the top 100 Americans who have influenced “how we think about money.” Before he retired from money management he directed more than $25 billion of investments, supervised their financial reporting, and assisted in the design of their risk management and investment operations.

So we have been corresponding about the financial meltdown that is surrounding all of us. He has some pretty interesting ideas as to what he would do if he was in charge of the direction our Nation takes next, regarding making sure these events never happen again. I felt it was important for you to also review what he has been proposing to me. Here are his latest thoughts, given the events of the last few days. Mike’s view on the financial solutions of our current crisis is we need someone in our government to take proactive action NOW! Here are some more of his suggestions for your consideration, and those of my Caribbean friends asking some very hard questions:

Now that all of Americans again “own” another financial institution because a bailout was required – AIG – and the Feds have stepped in and are claiming they will finally fix the financial mess that our country finds itself in, there are further urgent steps that are needed now:

1) Remove the FDIC cap or raise it to $250k (we do not need any runs on the bank)

2) Nationalize the rating agencies – they do not do their assigned task – they rated junk bonds “AAA”, and then their reversals of these ratings led to the present financial meltdown. Ratings are a utility that needs to be performed by competitive institutions who answer to investors – not issuers and NOT bankers.

3) Establish a “swaps” clearinghouse and prohibit implicit leverage on “swaps” by legislating that no position can be swapped or hedged more than once without a prior trade being offset.

4) Prohibit “third order and higher” derivatives. There is an underlying transaction, it spans derivatives. Then there are derivatives which rearrange the first set of derivatives. At that point, enough is enough!!! The system cannot deal adequately with the complexities of continuing to dilute and issue more derivatives using the same bundle of “AAA bonds” that are actually junk.

5) Write down 90 percent of current appraised value guarantee on Fannie and Freddie mortgages.

6) Announce a national shared equity appreciation fund into which the excess of the 90 percent of current appraised value loans can be dumped.

This is a summary of his second round of suggestions for me to consider. His first email addressed the Fannie Mae and Freddie Mac mess. Let me know your thoughts. Also, if you want to contact him directly, go to www.Lissack.com. We will always figure out a way to make lemonade out of lemons with this financial mess. Do you know why? BECAUSE WE DON’T HAVE A CHOICE! Until next time… fair winds to you in the midst of a BIG storm!!!


Editor’s Note:
Jim Walberg is the co-Broker/Owner of The Bay Area Team, the most-successful team at Keller Williams Realty-Danville. He is also a member of the global Luxury Real Estate network. Jim is an exceptional blogger, as you can see by visiting his blogs, East Bay Real Estate and Caribbean Islands Realty, and reading his great blog entries like the one above. He is the master of fractionals and other luxury homes in the Bay Area and the Caribbean, and he always has a lot of great opportunities to share. This whole situation makes me sick. The fear is practically palpable and we are right on the edge of crumbling… why? Are there fewer workers, fewer skills, reduced demand or anything like that? No. The big problem is greed and pride. Honestly, it’s very hard for me to find anything positive in this current situation. Dishonesty has become so rampant that the truth is becoming harder to find. Why should we fall? My heart is filled with sorrow and disgust. I am not a negative person, but it seems to me that the foolishness of a few people has led to the destruction of much that good people have built up. How can we let this stand?

By Robert Lockard

As promised in my last luxury real estate blog entry, here is my discussion of some meaty topics I’ve wanted to talk about for a little while. The past few weeks have been pretty thrilling, wouldn’t you say? Wall Street dropped an incredible 504 points on Monday and 449 points on Wednesday. Fannie Mae and Freddie Mac, organizations designed to create stability, have failed. Other financial institutions, once seemingly healthy and sound, are facing bankruptcy and other troubles. Think that’s bad enough? Russia’s stock market is doing considerably worse.

Okay, that’s the bad news. Now let’s take a step back and switch gears a little. I am an optimist. I believe that good wins in the end. I think that right now many bad companies and practices are facing the fact that they have built upon a sandy foundation and they are in danger of falling. All of the companies that are failing are doing so because of their own greed and recklessness. Home loans were turned into investment packages and many other bad ideas were allowed to come about because of greed.

If these companies had built upon solid foundations and principles that were put into place to safeguard the country after the Great Depression, we would probably be all right. It comes back to greed and pride. There is safety in old wisdom.

I cannot say a hundredth part of what I desire to say right now because this might not be the most appropriate forum to share the most treasured things in my heart. However, I can say that we need not fear what people can do or what problems may arise if we can see how temporary they are. We should be patient, long-suffering, forgiving and kind, especially when times are tough. Anyone who knows me knows that I definitely try to practice what I preach, so I hope you won’t think that I’m giving this advice lightly.

Let these organizations tremble because of their fear of falling. We will not fall if we are firmly planted on truth and honesty.


Editor’s Note:
Robert Lockard is the Public Relations & Media Specialist with Luxury Real Estate. I am Robert. I create all of Luxury Real Estate's newsletters, write the editorials in LuxuryRealEstate.com Magazine and much more. Stribling & Associates is a member of the Board of Regents, an exclusive group of brokers that leads the Luxury Real Estate network. The photo of the Grand Canyon is from www.flickr.com/photos/raindog/2838872767 and it is the copyright of raindog.

By Robert Lockard

I don’t have a whole lot of time today, but I just wanted to share an interesting CNN article entitled “The staycation effect: 5 reasons to travel now.” Because people have been very wise with their money this summer and have not gone on as many vacations, right now is a great time to take a vacation. Many hotels and luxury resorts are offering special discounts to entice people to get out of their homes and into a luxury community.

As soon as I saw this story I thought of Andrew Harper. They’re the experts on luxury hotels and travel, and they’ve posted some great blog entries in the Luxury Real Estate Blog on scoring free hotel upgrades and 10 places in the U.S. to see before you die. Plus, I just finished writing a City Spotlight on Nassau, Bahamas for the winter 2009 issue of LuxuryRealEstate.com Magazine. That definitely seems like an excellent getaway in the Caribbean. I can’t wait until the magazine comes out so you can read my fun take on the islands.

I wish I had more time to talk about this topic, but I highly recommend reading the whole CNN article. It’s quite concise and informative. Enjoy!

Editor’s Note:
Robert Lockard is the Public Relations & Media Specialist with Luxury Real Estate. I am Robert. I create all of Luxury Real Estate’s newsletters, write the editorials in LuxuryRealEstate.com Magazine and much more. I had mixed feelings about writing this blog entry today. I just don't know if it's super appropriate to share on September 11, when feelings of melancholy and seriousness should prevail in my heart. I hope you don't mind.

By Robert Lockard

A while ago I stepped back from writing about luxury real estate to discuss a terribly destructive force that threatens to destroy families and make people miserable: debt. I would like to discuss something that I find to be just as dangerous as addiction to debt – the illogically high cost of earning a college degree.

I read a potentially explosive story on CNN yesterday about a bubble in the cost of higher education that makes the real-estate bubble or the tech crash in 2000 look tame in comparison.

I’d like to start by talking about my experience in college. When I attended college not too long ago, tuition and book costs were already getting out of hand, although they were manageable. I attended a community college in Washington state for my first two years to obtain my Associate’s degree. I had hoped to transfer to the University of Washington to complete my Bachelor of Arts in Communications, but the cost was prohibitive and, even though I graduated with honors and on the Dean’s list, I still had to wait a long time to enter that college.

Instead, I decided to accept a scholarship at Brigham Young University in Provo, Utah and that turned out to be a very smart decision. In addition to the positive environment that beautiful campus offered, the cost of attending there was relatively low compared to my other options and I was able to pay for my entire education without going into hardly any debt. I am one of nine children, and my parents wisely told me that I would have to find a way to pay for my education by myself. Through a great deal of hard work and tight budgeting, I made it through without having to burden my family members.

During my time in college, I kept my mind focused on why I was there. I wasn’t there to waste time or take frivolous classes; I was there to finish my degree as quickly and as meaningfully as possible so that I could put my skills to use. I am grateful for the opportunities my college degree has opened for me. However, education costs are rising so fast that there might not be much reason for people to attend college in the future.

I would probably be sympathetic to colleges if the reason for the rise in education costs was because they were improving their education techniques or doing other things that would warrant such cost increases. But the truth is that this is not the case. Many colleges are increasing tuition costs for no other reason than because they want more students to apply. It seems to defy logic, but it’s true. Colleges appear to be playing a game that they will eventually lose. When they raise prices, people assume that they must have done so because they are more prestigious or offer better learning opportunities and so the colleges usually receive an increase in applications. This pattern cannot last forever.


Education is extremely important. It allows people to rise from humble circumstances and it also helps them make informed decisions about where they want to go in life. By making education worthless, colleges are doing a great disservice to their students. By worthless, I mean that the cost far exceeds the rewards. Greater cost does not always mean greater return on investment.

Increases in healthcare, energy and real-estate costs don’t even come close to touching the rise in education costs, as you can see in the graph in the CNN article. Knowledge is power, and if the cost of education becomes so high that that the benefits of earning it become small in comparison then we will be in big trouble. I am not suggesting that college degrees be easier to obtain or that unqualified people should receive an education without working hard. I am suggesting that colleges are in danger. They spend much of their increasing amount of money on frivolous amenities that do not improve their educational services or make their students’ diplomas any more valuable. Posh restaurants, nicer dorms and other foolish perks are unimportant for students who are simply hoping to receive the education they need to progress in life.

At some point people are going to realize that an education is not worth living under such an extreme amount of debt to obtain. When that day comes and colleges must cut their tuitions drastically, many cherished institutions will most certainly be unable to cope with this dramatic shift and they will come crashing down. Destroyed by their own pride and haughtiness. They will discover that they have spent their money on things that have no value and they are unable to offer students what they promised: an honest education.

I dislike focusing on something so negative as this, but I think it deserves special attention. Thank you very much for your comments. Feel free to let me know what you think of the state of higher education.


Editor’s Note:
Robert Lockard is the Public Relations & Media Specialist with LuxuryRealEstate.com. I am Robert. I create all of Luxury Real Estate’s newsletters, write the editorials in LuxuryRealEstate.com Magazine and much more. I apologize again for sounding so negative. I am a very hopeful person and I trust that things will turn out right in the end. The photo of the bleeding wallet is from www.flickr.com/photos/adobemac/161319144 and it is the copyright of adobemac. The photo of the door is from www.flickr.com/photos/ben-zvan-photography/468487548 and it is the copyright of Ben Zvan.

By Robert Lockard

Nick Antonicello, Director of Sales for Unique Homes, pointed out an interesting story to me last week in the Los Angeles Times Blog. You might have already heard about it, but I just want to put in my two cents about the whole affair.

Peter Viles, Senior Producer for Real Estate at LATimes.com, wrote in his blog entry that Donald Trump, possibly the best-known real-estate developer in the world, is seeking to buy Ed McMahon’s mansion to save him from foreclosure.

In an even more bizarre turn of events, Mr. Trump now might be having some competition for buying Mr. McMahon’s luxury home. That’s according to a new blog post today by Ann Brenoff, author of the Los Angeles Times’ weekly “Hot Property” feature.

As Mr. Spock would say, “Fascinating.”

To be honest, I’m not sure what to make of this story. I mean, Mr. McMahon certainly seems like a good man who simply let his finances get out of control until he went from delivering oversized million-dollar checks to being unable to pay for his multimillion-dollar luxury property. His story just seems remarkable and bitterly ironic.

Since he went public with his mortgage troubles, it appears that Mr. McMahon will now be able to make it through this difficult experience fairly well. Competing offers on a house that’s about to be short sold is pretty impressive, I think.

I guess, in the end, my point is: Is this justice? I mean, not everyone can be helped like this. Is Ed McMahon’s celebrity status the main reason why he is receiving this attention and assistance? I’m uncertain of the answer to these questions. I hate to see anyone suffer, but is some suffering just while other suffering should be alleviated, and how do we judge that?

I believe that life is generally good, although it is difficult and filled with perils. Mr. McMahon seems to have had a very good life, gaining much more success and fame than most people will ever know. I feel bad that he is facing failure near the end of his life, but perhaps that is a lesson he needed to learn. I am sure we all must face failure and seek to succeed afterwards. Hopefully we will learn to be better people in the process.


Editor’s Note:
Robert Lockard is the Public Relations & Media Specialist with LuxuryRealEstate.com. I am Robert. I create all of Luxury Real Estate’s newsletters, write the editorials in LuxuryRealEstate.com Magazine and much more. I was really tempted to call this blog entry “Wake up with the King” Luckily, I refrained. You can share your blog entries on the Luxury Real Estate Blog by emailing them to me. By the way, ordinarily I would link to the two blog entries above via their TrackBack links, but they don’t appear to be working, so I just used their regular links. The photo of Mr. Spock is from www.flickr.com/photos/cultureculte/2306916969 and it is the copyright of culture.culte.

By Robert Lockard

“Do you ever stop smiling?” One of my neighbors asked me that question on Monday, June 2, 2008 while I was walking back home from my mailbox after I got home from my job at Luxury Real Estate. I was pleasantly startled by the question because it was asked by the young woman before me in a slightly exasperated way, as though it had been building inside of her for some time. She said that she has seen me on numerous occasions walking nearby and I always have a smile on my face. She found herself worrying that I was either hiding something or crazy.

I assured her that neither is the case and that I most assuredly do stop smiling from time to time. Looking back, I wish that next I would have pointed out that I find much to smile about in life and I try to just prepare for hard times and then not let bad things or hurtful words cause me to be unhappy, bitter or unforgiving. But what actually came out of my mouth was, “I guess I’m just a happy-go-lucky kind of guy.” That’s not strictly true because I do strive to plan and live wisely instead of just throwing caution to the wind, but I am most certainly happy.

Despite my less-than-profound answer, the young woman said that she was glad that I was happy because when she sees me smiling she often feels a desire to smile, as well. I like sharing happiness with other people, even if it’s completely by accident, so I was filled with joy to hear that and I smiled even more. I thanked her for stopping me and telling me all of this. Then I introduced myself so I wouldn’t be a stranger and she introduced herself. I love making new friends.

I bring this up because I read an interesting article in CNN on the same day as this experience, entitled “Want to be rich? Don’t get too happy.” I was fascinated by this article because, according to its findings, people who claim to be perfectly happy and content are not usually as successful as people who are somewhat less happy. I personally find it a bit questionable to try to quantify happiness since everyone’s definition is probably slightly different and there’s no clear way to delineate between the different numbers on a 1-10 scale. Also, I’m sure that a person’s answer would change on a day-to-day or week-to-week basis.

For the purposes at hand, though, I’ll just push these objections aside for the moment and talk about something interesting I find from the results. People who rated their happiness as 10 out of 10 on the scale were less likely to be as successful as moderately happy people. Also, perfectly happy people were less likely to save money or plan ahead for hard times, while less-happy people exercised a bit more protectiveness and foresightedness. I think that if the survey takers were to check up in the next few months or years on the people who claimed to be perfectly happy, they would find that their happiness wouldn’t always last.

Life has a way of pulling the rug out from under us when we get too comfortable. I apologize if I sound too pessimistic. I just want people to be wise and not be too unhappy all the time or too happy if their happiness is based upon a false hope. I recommend living wisely so that we can be very happy but never perfectly content to stay the way we are. I want to always grow and so I do not intend to be perfectly happy in my current state. However, if I worry too much about my imperfections or desire to grow too quickly, I will probably waste time and energy being miserable or sorry for myself. I prefer being happy for a long period of time by making small improvements each day. Out of small and simple things are great things brought to pass.

Do I ever stop smiling? Of course I do. But the trick is that I start smiling again and again.


Editor’s Note:
Robert Lockard is the Public Relations & Media Specialist with LuxuryRealEstate.com. I am Robert. I create all of Luxury Real Estate’s newsletters, write the editorials in LuxuryRealEstate.com Magazine and much more. Feel free to let me know what you think of this story and how you feel about your success and happiness.

By Robert Lockard

I would like to share a confusation with you. What’s a confusation? It’s a mixture of confusion and conversation. I’m all for preserving the English language and avoiding the addition of new and pointless slang terms. But, at the same time, I enjoy having a little bit of fun with ideas and rules because of my playful nature. I would like to share some of my thoughts in an open, possibly random, way. So, without further ado, let’s begin our confusation.

According to a CNN article entitled “Majority not buying homes, poll shows,” an Associated Press-AOL Money & Finance poll found that 60 percent of their respondents have no plans to buy a home in the next two years. However, the same poll also found that “59 percent think now is a good time to buy.” So let’s get this straight. Sixty percent of the people in this poll said they won’t buy a home in the next two years, even though nearly the same number of people thought that right now is a good time to buy.

That seems odd to me.

I generally don’t give much credence to surveys because I understand all about the standard deviation, margin of error and, of course, the fact that one out of every 20 surveys is completely wrong. Plus, with the advent of cell phones and Do Not Call lists, surveys reach a smaller and smaller group of people and leave out many key groups. Because of all this I try not to take surveys too seriously.

Having said that, this survey does shed some light on an interesting, if confusing, situation. People realize that there are great deals to be had in the current market with prices easing in some markets, but they are either unable or unwilling to take advantage of these deals. Why? Perhaps it is because current homeowners would have to sell their homes to buy another primary residence at a great price.

This might not be especially applicable to buyers and sellers in the luxury market, but it might affect people trading up into the higher echelons of luxury properties. Unless they’ve owned their home since 2001 or earlier, many homeowners face the problem of having to sell their homes for less than they would like.

Now that is a conundrum.

I’ve had my say. Feel free to share your thoughts with me on this. What can we do to let people know when the benefits outweigh the costs of buying a new home?


Editor’s Note:
Robert Lockard is the Public Relations & Media Specialist with LuxuryRealEstate.com. I am Robert. I create all of LuxuryRealEstate.com’s newsletters, write the editorials in LuxuryRealEstate.com Magazine and much more. I appreciate your comments and insights into this topic.

By Jean-Yves Piton

Are you presently intensifying your global promotional and advertising campaigns regarding your most-prestigious properties to ensure your presence amongst the upper-class segment?

Despite a weakening global economy, wealthy investors and property buyers are not affected by slowdowns and market volatility. As communicated in the recent IBNLive.com/CNN video “Despite weak economy, super rich continue to splurge,” the wealthy clientele “doesn’t usually look at the price tag, despite what's happening to the global economy” while making purchasing decisions.

While planning your upcoming sales and marketing strategies/initiatives, keep in mind that promoting and showcasing your luxury properties in the best light possible will provide you with a much higher level of success to reach out to this niche market. Equally important, your wealthy international client might be aware of Who’s Who in Luxury Real Estate (LuxuryRealEstate.com) and looking to indulge himself/herself with a one-of-a-kind property.


Editor’s Note:
Jean-Yves Piton is the Global Services Membership Manager for LuxuryRealEstate.com. He assists Bente Madtsen, the Director of Global Services, in expanding the LuxuryRealEstate.com brand into even more countries around the world. One good idea for marketing your luxury properties is to have great photos that showcase their impressive features. Ilya’s Photography, the official photographer of the 6^th Annual Luxury Real Estate Spring Retreat, is an excellent resource for you, and I highly recommend him.

By Robert Lockard

I am not a particularly pessimistic person. I believe that good eventually triumphs. I put my trust in “old-fashioned” values, such as honesty, saving for a rainy day, avoiding harmful substances and risks, and being kind to all people. Some or all of these things might be out of style right now, but I think that they will always be important. I’m not even sure if this introduction is relevant to what I want to talk about, but I just started writing what is on my mind and this is what came out. I hope you don’t mind.

I recently read a CNN article, entitled “Home prices in steepest quarterly drop.” According to this aptly written article, the national median home price dropped 5.8 percent in the fourth quarter of 2007. This wasn’t an isolated decline either. Median prices in all four quarters of the United States went down. However, the article also mentioned that 73 of the 151 U.S. real-estate markets actually had price increases. That’s almost half. Also, the median condo price was basically unchanged from last year.

Perhaps it is my belief that good will win in the end, but I just don’t see much reason to fear a drop in home prices – even if it is a record drop, according to credible data from the National Association of REALTORS®. There is no need to fear if we are prepared. No matter what problem we face, I’m sure that we can make it through, as long as we’re willing to learn from mistakes and be flexible.

I have tried not to focus on interpreting the NAR’s data in this blog entry. The cup can be half-full or half-empty, but it won’t change the fact that we can choose how we react to the data. I choose not to fear.


Editor’s Note:
Robert Lockard is the Public Relations & Media Specialist with LuxuryRealEstate.com. I am Robert, so I’ll talk about myself in the first-person now. I create all of LuxuryRealEstate.com’s newsletters, write the editorials in LuxuryRealEstate.com Magazine and much more. I hope you don’t mind getting a peek into my way of thinking. I just want to share what I think is important to talk about.