Luxury Real Estate

 By Jim Walberg of Caribbean Islands Realty

When a yacht leaves the docks for sailing adventure, the family and friends of the crew are standing on the dock waving your hands goodbye, and shouting “Do not be fearful!” This well known sailor’s mantra is because the crew have no idea what is going to happen during their voyage.

This phrase, “Do not be fearful,” is in many aspects of my life, not just sailing. How about real estate today. It is the phrase that is used by both the crew and the family and friends staying behind. My experience with this mantra is based on the fact that no one knows what will ever happen on a sailing adventure. The only certainty this is known by the crew and their family and friends is the latitude and longitude of the destination of the voyage. What happens from the moment you set sail to the moment you drop anchor at your destination is what is called “a sailing adventure”, or maybe we could substitute it with a business phrase - “a real estate adventure.”I could write a book about all of the unexpected events that have happened to me on many sailing adventures I have participated in the past 50 years. It is OK to have a healthy sense of fear for what may lie ahead, but fear does not prevent the sailor from setting sail, even by knowing the challenges that will be faced during the voyage. Someone that lets fear stop them from setting sail to a familiar or new destination is called a “landlubber”, not a sailor. So, fear can either serve you or it can paralyze you. I chose to have it serve me, even though I have been in some very scary moments during my life.

One example of my 50+ years of sailing adventures was during a sailboat delivery on the west coast from San Francisco to Cabo San Lucas in Mexico. The sailboat was a MacGregor 65 that is a “rocket ship” that is only twelve feet wide and sixty-five feet long, and is primarily used for racing. It is not considered a “blue water” sailing vessel. It is just built for speed - 12 to 14 knots for a mono-hull, which is VERY fast! However, the MacGregor design is known to break up in moderate seas because of it being so narrow and light.

Off the Santa Barbara Islands our crew of four decided we better stress the boat to the max to see if there were any flaws that could be uncovered before we got into Mexican waters. We put all the sails up on a day of 20+ knot winds. Within minutes the boom broke in half with me standing next to it. It smacked me on my bald head and knocked me overboard.My crew mates acted quickly - another important trait of a sailor, and turned the yacht back into the wind, threw me a life preserver, and slid the boat gently beside me and snagged me with a mooring hook so as to bring back aboard. They then lashed to boom together and the “adventure” began of how we could design a sail pattern that would allows to limp into the San Diego for repairs.

As a sailor you need to constantly improvise during these types of moments which requires focused and inventive mind. With the boom broken in half you can’t use your mainsail effectively. So, we rigged it to use the jib and “jerry rigged” the main so we had a small portion of it in the wind. The repair was completed in less than a day, and we were off to Cabo for another successful delivery. Another sailing adventure was placed into the ship’s log book.

Here is the point of my story. The only way a person gets to “new shores” is by being on the “yacht” when it sets sail - in spite of your fears. In the midst of the continued world economic crisis there is fear and trembling happening with Realtors and their customers. Today is THE real estate market. There is no wishing it was different. It will not change because of wishing. So, we need to adapt, have a focused and curious mind as to how to solve the “challenges” that are presented to us each day, and create magnificent outcomes for each of them. I would rather be in the midst of a life adventure any day, as opposed to standing on the sidelines paralyzed with fear, and missing the experience. Let me know some of your experiences where fear was overcome in spite of it being present. Your Caribbean lifestyle detective remains on duty. Until next time….fair winds!

By Robert Lockard

This is my last blog entry in this luxury real estate blog. After more than a year and a half of blogging, I'm afraid my time has come to an end. I'm about to move on to something new and scary, but I suppose change always involves some degree of fear and discomfort. I will no longer be the editor of the Luxury Real Estate Blog.

Thank you very much, everyone who has taken the time to share their thoughts on this blog. I'm sorry if I wasn't able to respond to all of your comments, but I definitely read them all and tried to incorporate what I learned from them into future posts. I have grown a lot in the past year and a half and I think you can definitely see that by going back through my many blog entries and seeing me try to articulate my feelings and ideas.

I don't know if I'll be able to respond to your comments on this blog entry, so I hope you won't be offended if you write me something and I am unable to respond for some time. Thank you again for sharing a wonderful discussion with me. I would say more, but once again I feel compelled to hold my tongue and simply encourage you to keep holding to hope in these perilous times. Don't put your trust in men, but build your foundation on something sure.

Farewell, my friends.

Sincerely,
Robert Lockard

By Jim Walberg
From his blog: Some East Bay Real Estate Is On The Slippery Slide Of FEAR!

Once you get on the Slipper Slide of Fear, it is difficult to get off! Please stay off that slippery slide!

So, I picked up USA Today last Saturday on my flight to the Luxury Real Estate Fall Conference in Philadelphia where I was a presenter. The USA Today headline was, “FEAR is a slippery slide!” In some of my past comments I have used the sailor’s mantra, “Do not be fearful!” It still applies today, in spite of an almost 900-point recovery on the Dow Jones the past two days. Don’t forget… once you step on the “slippery slide” of fear, the momentum carries you away very quickly.

The voice of experience, the voice of the local authority, and the voice of credibility can still prevail. And we are the ones that need to be that voice. I just completed a walk from the Philadelphia Ritz Carlton to Constitution Hall, the Liberty Bell, and other reminders of the work our founding fathers did on our behalf 230+ years ago. What an inspiring day! (You may recall this is the organization that is the acknowledged authority of luxury real estate! It was founded by John Brian Losh with a vision of connecting the best luxury brokers and agents in the world – 1,900 members from 65 countries.)

Do you think they were afraid? Of course they were. But, the consequence of letting fear paralyze them from action was not acceptable. Instead of the “slippery slide” of fear taking them away from the liberty and freedom they so dearly wanted for our country, they discovered – step by step – the actions needed to create the most incredible democracy in our world’s history. It was very hard. Thousands of lives were lost as part of that payment for liberty. And, the founding fathers never lost site of end result that was required – FREEDOM!

There is a book I have enjoyed reading several times – “The Tipping Point.” They have a very insightful analysis of Paul Revere’s ride in Boston a few days before the Revolutionary War was officially declared. His ride was so effective that it mobilized the citizens along his route in a manner that called them to action in stopping the British from confiscating their arms stored in Concord. Did you know there was a second rider who was sent in a different direction to alert another section of Massachusetts to immediately prepare to defend Concord. Does anyone remember his name? In fact, I had never heard of him before I read “The Tipping Piont.” He was totally and utterly ineffective in his call to arms.

What was the difference between these two men with similar intentions? Paul Revere was one of the most respected local authorities on what was happening within the colonies which he believed required a liberation movement to break away from British rule – even if it meant war. I would like to be as effective as Paul Revere during these uncertain economic times. We are the local citizens calling our “citizens” to action in order to work through the financial crisis we are in. Will you join me as we serve our clients and communities, and help them off the “Slippery Slide of Fear?” (You get bonus points if you email me with the other freedom rider’s name whose ride was a waste of time.) Contact me with your thoughts. Until next time…


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. Simply marvelous. This is the last blog entry from Jim that I will have the privilege of editing and posting to the Luxury Real Estate Blog. I am always impressed by his enthusiasm, cheerful disposition and unparalleled kindness. Thank you, Jim, for being such a good person and being a light to a world of shadows and fear. You are amazing.

By Jim Walberg

From his blog: Economic Meltdown Causes Fear In East Bay Real Estate Community!

No matter how positive and resilient one is, we are in stormy economic times! However, opportunities abound in the midst of this economic hurricane!

I was chatting with my friend, Bob Waun – president of Vacation Finance, which is headquartered in Michigan – about the financial meltdown going on in the credit markets and the stock markets. He asked if I was afraid for what is next for our real estate businesses in the Bay Area and the Caribbean. I told him, “Nah… we are still having the time of our life!” The mantra of a sailor is…, “Do not be fearful!” And, the definition of FEAR is False Evidence Appearing Real! If you didn’t know, my favorite condition in sailing is with the gunnels (side rails on each side of the boat) in the water and salt water spraying all over me. You can’t imagine the big grin on my face while I am sailing in those conditions. However, it is not the time for the faint of heart if you are a sailor in stormy seas. It is the time when experience pays off.

Both our Bay Area and Caribbean real estate businesses are thriving… however, it is taking all hands on deck to pull it off. We are blessed with a great team who only look at the glass half full, and are committed to creating a GREAT experience for our customers. Many of our competitors are running down to Starbucks talking about how the sky is falling. The vacuum they are leaving within our real estate community is amazing, and whoever fills that void today will have a larger market share when the market shifts again – which it will. In order to make it through these tough financial times we all need to work together, side by side, realizing storms don’t last forever. At the end of Bob’s and my conversation, he left me with these thoughts:

Faith, beliefs and conviction can be fickle friends when they are tested by panicked masses. “The end is near!” seems to be the chant of the crowd across the world today. But what of substance has changed within our global economy. Did a world of Fathers change their commitment to feed and clothe their children? Did Mothers decide that the generic brand cereal would be fine in mass? Did we stop wanting nice things and suddenly over the weekend decide to settle for less? What is the shift that causes such a panicked response? What fundamental changes are causing us to doubt the future? Purely fear of what “MIGHT” change. Does that sound rational to you?

Historians and economists can attest that humans don’t always act rationally en masse, but as individuals we can still choose to be rational – to act out of faith and conviction, not panic. ”Looking back on it, I was a trader in the pits of the S&P in 1987. It was the most exciting and profitable stock market opportunity of my lifetime,” a friend told me today… Did he notice it at the time? No. He said he was scared to death, but he kept at his work of trading stocks in the best way he could. Life is clearer in the rearview mirror. Regret is more painful than overcoming fear…

In a storm, it is not time for people to jump ship and swim to safety. A storm is the time for experienced sailors to do their work and sail through it. It doesn’t mean we are not afraid. However, it does require us to not panic – which could cause our ship to go down. I promise we will all will make it through this economic mess. We may get wet and a bit wind-blown, but working together, we will get to a safe harbor and live to see another day when we will look back and tell the stories of how we made it through the storms of 2008 and 2009. Contact me today if you would like some help through your storm. Until next time… fair winds!!!


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. Such wonderful words of hope! Thank you, Jim, for your marvelous understanding of what is really happening in today’s market. People are filled with great fear at the moment and it’s hard to know what to do when we’re in the middle of so many crashing waves. I trust that wisdom and goodness will lead us to prevail over these hard times. I hope that we will all be wiser about who we put our faith in after we come through this. I am in total agreement with Jim that this is no time to panic or jump ship. Let us return to honesty and kindness, for it appears to me that this crisis was brought on by the dishonesty and selfishness of a few. Now people don’t know who to trust. I hope we will all be trustworthy and good, like I know Jim is.

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 Jim Walberg
From his blog: Fannie Mae & Freddie Mac Bailed Out Today! Boom Or Bust?

“The Feds took over Fannie Mae and Feddy Mac today! Time will tell what happens next for East Bay Real Estate consumers and who will pay the bill, says Jim Walberg.

The Federal Government made their historic announcement today – a Federal bailout of Fannie Mae and Freddie Mac could not wait another day! The straw that broke the camel’s back was the liquidity condition of both of these mammoth financial entities. It is frightening to imagine that both of these companies own or guarantee about $5 TRILLION in home loans – about half of all the nation’s total home loans! And, we need to be reminded about my phrase, “Do not be fearful!” – False Evidence Appearing Real!

The plan that was announced today by Treasury Secretary Henry Paulson and James Lockhart, director of the Federal Housing Finance Agency, places the two companies into a “conservatorship” to be run by the Federal Housing Finance Agency. Under conservatorship, the government would temporarily run Fannie and Freddie until they are on stronger footing. “A failure of Fannie and Freddie would affect the ability of Americans to get home loans, auto loans and other consumer credit and business finance. And a failure would be harmful to economic growth and job creation,” Paulson said at a news conference today in Washington. With this bailout, the Feds have now made $200 BILLION available to them to shore up their liquidity issues. Again, this money is coming from the United States as an addition to the national debt.

The role of these two financial institutions is to buy mortgage loans from banks and package those loans into securities that they either hold or sell to U.S. and foreign investors. This allows national banks like Wells Fargo Bank and Bank of America to make more loans. The problem affecting the mortgage meltdown has hit Fannie Mae and Freddie Mac VERY hard! The past 12 months have seen an alarming number of their loans started going into default, emptying out the companies’ financial reserves and sending ice through the veins of the credit markets around the world. Costs have skyrocketed and the Feds could not wait another day by placing them into a conservatorship. The Treasury Department is now guaranteeing the solvency of these two lenders. That means that YOU and I are the ones guaranteeing the loans because more money is just going to be printed to bail them out.

With this bailout, mortgage rates on conventional, 30-year fixed-rate loans are expected to fall by the end of September. If the mortgage interest rate falls for home loans, it should attract more buyers into the market, which would then have a positive effect on home prices. However, Greg McBride, a senior financial analyst at Bankrate.com, did say, “Continued investor wariness and a depreciating housing market may keep rates from dropping. We are not looking at sunshine and daffodils in the housing market anytime soon.”

Paulson stressed that both Fannie and Freddie are still in business and will have a new management team. Freddie CEO Richard Syron and Fannie CEO Daniel Mudd will no longer run the companies, with the FHFA taking over control of their boards. Syron and Mudd will be replaced by two market veterans with the job of restoring the mortgage agencies to a profitable condition. Herb Allison, the former chairman and CEO of pension provider TIAA-CREF, will head Fannie Mae. Allison formerly served as president of Merrill Lynch. David Moffett, who served as vice chairman and chief financial officer of U.S. Bancorp until early 2007 and then joined the Carlyle Group private-equity firm as a senior adviser, will take over Freddie Mac.


Federal Reserve Chairman Ben Bernanke, who led the efforts to help get the U.S. housing market and the broader economy back on track, applauded the decision by Lockhart and Paulson. “These necessary steps will help to strengthen the U.S. housing market and promote stability in our financial markets,” Bernanke said in a statement. The real test will come when financial markets around the world open Monday. Pimco’s Bill Gross, a widely followed bond fund manager, said that the Freddie-Fannie plan was the right move. “This is a significant step and almost exactly what we had hoped for,” Gross told CNNMoney.com Sunday.

Time is always the judge of any decision, especially one of this magnitude. I am not a fan of ever increasing our national debt. Today it is already staggering without the additional billions required to support this bailout. Still, the rescue of Fannie and Freddie may go a long way towards bringing stability to the housing market while making it easier for consumers to obtain affordable mortgages. We will see. I look forward to your comments.


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 LuxuryRealEstate.com 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 is a pretty scary time. It’s disappointing to see that things became so tough for these two institutions that they were unable to survive without government help. This definitely deserves some close scrutiny, and I hope that things will turn out all right in the end.