Is Peter Schiff Right About Housing?

Schiff: ‘Home Prices Are Still Too High’

The market can stay irrational longer than you can stay solvent.

–John Maynard Keynes

Just for argument’s sake, assume that Peter Schiff’s Op-Ed piece in today’s Wall Street Journal is right: namely, that even after a 30%-plus drop nationally the last four years, U.S. housing is still overvalued by at least 20% (never mind various benchmarks indicating that housing has never been more affordable).

Should you heed Schiff’s advice, and wait till housing prices regress towards their historical mean?

Or even longer, until they overshoot on the down side? (as Schiff speculates will happen).

The problem with relying on historical trend lines to make long-term decisions like buying a family home is that you may be waiting a long time.

On the Sidelines

In fact, according to Schiff’s preferred benchmark — “Standard & Poor’s Case-Schiller 10-City Home Price Index” — the last time home prices nationally were at or below their historical averages was . . . 1998.

Ala Keynes, that’s a long time to wait -- presumably in an apartment or rental home -- for a mean reversion.

If you got married and started a family then, your oldest child would now be nearing junior high school while you waited, patiently, for housing prices to correct all the back to the long-term mean.

Understandably, most people don’t suspend their lives based on such historical considerations.

They buy homes when their life circumstances dictate — and they can afford to.

When people have better housing choices buying rather than renting — which certainly seems to be the case today, in the Twin Cities and many other cities nationally — that’s usually what they do.

Seller Liability for Ice Dams

Who Pays?

Unfortunately, the way this Winter is unfolding, the first major (and expensive) repair facing many people who bought Twin Cities homes this Fall is for ice dams.

Can they look to their Sellers to absorb some -- or all -- of the expense?

Legal Standard

To answer the question, first revisit the two-pronged legal standard for recovery: 1) the problem existed before the Buyer purchased the home; and 2) the Seller knew -- or should have known -- about the problem.

So, if you closed on one of those balmy October days we enjoyed this Fall . . . you likely flunk #1, never mind about #2.

Pre-existing Condition

But what if the home historically suffered from ice dams, and this year's are simply the latest recurrence?

Usually, there's residual evidence that a home previously had ice dams, even after the damagehas been repaired.

Plus, a good home inspector will note the roof's pitch and design, following any roof valleys to the home's interior ceiling(s) to look for signs of past leaking (stains, fresh paint, etc.).

Seller Disclosure

Of course, at least in Minnesota, the Home Seller is obliged to tell prospective Buyers if they've previously had ice dams -- or any other roof damage -- in state-mandated disclosure forms.

Misrepresenting such material information not only risks liability for fraud (and its open-ended statute of limitations), but isn't likely to fool a Buyer who does their due diligence.

For all those reasons, it's likely that either a home hasn't previously had ice dams -- or, if it did, the issue was identified and dealt with prior to closing.

Bottom line?

Just like Buyers usually can't recover from Sellers when, post-closing, they get water in their basement after a rare, torrential rain, it's unlikely that they have recourse for ice dams following this year's record-breaking December snowfall.

Fortunately, most homeowners' insurance policies cover ice dam-related roof damage, subject to a deductible.

Trust "The Experts?" Don't.

The Wall Street Journal . . .
or The Onion?

Sometimes -- OK, a lot of the time -- I think The Wall Street Journal needs a meta-editor.

Their job?

To spot risible inconsistencies and contradictions between articles literally on the same page.

Or, if you're reading online, between articles barely centimeters apart.

Are They at Least Different Experts?

So, The Journal's Web home page today features a video with this title: 'News Hub Extra: Homes Sales Drop Surprises Analysts.'

Meanwhile, scarcely an inch away, is this quote:

Many economists expect housing declines to continue into at least next Spring, erasing most of the gains made since prices bottomed out in early 2009.

--"Housing Recovery Stalls"; The Wall Street Journal (12/29/2010)

See what I mean?

Next Spring, look for yet another installment of "surprised analysts" coupled with "housing experts' latest predictions."

P.S.: Today's Journal contains no fewer than three articles on the housing market, including the lead (print) article, excerpted above, and a piece in the "Money & Investing" section titled, "Housing Market is Still Facing a Blizzard."

"The Edgewater" in Uptown

Minneapolis' Most Discounted Condo?

I've blogged previously about deeply discounted single family homes in the Twin Cities.

A second-floor condo (#201) in The Edgewater (pictured above) may very well be the Twin Cities' most discounted condo.

Now at $749,823, the unit was originally listed for $1.981 million almost exactly three years ago.

That's a whopping 62% reduction!

"But Can You Afford the Property Taxes?"

The catch?

Not the A+ location, just off the Northeast corner of Minneapolis' Lake Calhoun.

And not the 2005 building it's in, a gleaming glass-and-stone structure with sleek walls of windows, great views, and open floor plans.

Rather, my guess is that it's the $19,000 annual property tax bill that is still attached to the unit, courtesy of its $1.35 million tax assessed value.

Opportunity Knocks

Does such a mismatch spell opportunity?

In this case, I think it does.

That's because the property isn't a short sale or foreclosure, where the tax authorities can (and do) argue that the ultimate purchase price doesn't reflect fair market value since it was a "distressed sale" -- and therefore disregard the sales price.

Translation: if you pay say, $725,000, that's also presumptively the new tax assessed value -- and that $19k property tax bill plummets.

In fact, if the Buyer closes in the next few months, they still have time to contest Hennepin County's 2012 assessment (determined January 2, 2011).

(Seasonally) Quiet Out There

Very Still Ponds
On the assumption that Edina Realty's City Lakes Office is a good bellwether, it's pretty quiet out there at the moment.

How quiet?

For the seven day period December 20-26 -- in other words, spanning Christmas -- there were a sum total of 26 showings for my office.

By contrast, in early April, before the Buyer tax credits expired, weekly showings peaked at just under 300.

In non-tax credit years, the peak typically arrives a few weeks later, in late April - early May.

P.S.: And no, that's not a local pond; Minnesota's lakes and ponds are now very much frozen.

2010 Person of the Year: Jon Stewart

The New "Most Trusted Man in America??"

Yeah, yeah, I know who Julian Assange is, and about WikiLeaks.

And I'm aware that Time magazine chose Facebook founder Mark Zuckerberg as its "Person of the Year" -- if not a "jump the shark" moment, then awfully close.

But my candidate for "Person of the Year" is Jon Stewart, of The Daily Show fame, and now an increasingly assertive political voice.

People such as myself have been decrying that this generation has no one comparable to Walter Cronkite: someone of unimpeachable credibility and stature (dareI say "transcendant"?), who both serves as society's conscience, and whose sentiments on a subject, when they weigh in, are decisive.

Cronkite played such a role vis a vis the war in Vietnam.

Stewart just played a similar role in getting Congress to fund health care for 9/11 responders:

“Jon Stewart so pithily articulated the argument that once it was made, it was really hard to do anything else."

--Robert Thompson, professor of television at Syracuse University; "In ‘Daily Show’ Role on 9/11 Bill, Echoes of Murrow" (The New York Times, 12/26/2010)

Junior "Senior Statesman"

Oddly, the person who Stewart reminds me most of is Ronald ("we begin bombing in five minutes") Reagan, circa late 1970's.

A two-term California governor and a fixture on the political right for decades, Reagan had yet to be embraced by the mainstream.

Instead, he was derided as a washed-up actor of dubious intelligence, who may or may not also be a trigger-happy cowboy.

Posthumously, Reagan is warmly remembered as The Great Communicator, a man with a genuinely sunny disposition and bedrock principles who guided the country into and through a period of national prosperity -- and not incidentally, a successful resolution of the Cold War.

(Sorry, lefties, he did.)

Stewart's Ascent

It's a bit hard to see Stewart's new-found stature, both because Stewart is a contemporary, and because his credentials -- in this case, as a wise-cracking satirist and media personality -- can also be easily dismissed by the opposite end of the political spectrum (ask now-U.S. Senator Al Franken whether his comedian background helped his candidacy).

But as evidenced by this month's 9/11 legislation, Stewart's growing influence -- culturally, politically, etc. -- is for real.

Amongst all our other problems, perhaps lack of leadership is the most acute.

If we can cultivate a couple more "senior statesmen-types" like Jon Stewart in the next few years, there's cause for optimism.

P.S.: Maybe it was the "avuncular" thing, or that "Walter" sounds so, well, senior citizen-like.

Or perhaps it was just because I happened to be 8 years old at the time.

But it sure seemed like Cronkite was older than 52 when he pronounced Vietnam a lost cause in 1968 -- barely older than Stewart's now 48 years old.

Realtor Business Card Collection

"What's in YOUR Wallet?"

I don't collect stamps or coins or baseball cards.

I collect other Realtors' business cards.

Not as keepsakes -- no one's that nerdy -- but to get design ideas.

What makes for a good Realtor business card?

One that stands out -- in a good way.

Miniature Billboards

The business card's front side is necessarily limited by certain conventions, i.e., the need to communicate your name, broker, and contact information.

However, the back side allows for more creativity (mine is a screen capture of this blog's masthead).

Other Realtors, meanwhile, use side 2 of their business cards to make a pitch for referrals; provide mortgage principal and interest tables; or even provide metric conversion charts (to that one, I suppose I have to add, "go figure").

However, my (second) favorite is fellow Edina agent and blogger Aaron Dickinson's: 'Write on me, I'm good for taking notes.'

And so it is.

P.S.: For a decidedly improper use of other Realtors' business cards, (re)read "Reason Not to Lie #37."

P.P.S.: The ultimate business card?

A vanity license plate.

Mine reads, "MY RLTR" -- as in, "There goes my Realtor."

"Kids Say The Darndest Things"

"Isn't That Obvious?!?"

"Kids Say the Darndest Things" was the title of a TV show hosted by Bill Cosby, and decades earlier by Art Linkletter.

It came to mind hearing my six-year old daughter (not her, that's a stock photo) talking on our (Skype-less) phone to her paternal grandparents in Arizona earlier today.

Presumably fielding the question, "What are you doing now?, a couple days into Winter break, she replied, "I'm inside, talking to you!"

Review: 2011 Honda Odyssey

Technology Time Capsule

Want an x-ray snapshot of where technology is headed?

Juxtapose an earlier version of a time-tested product used by millions -- in this case, Honda's best-selling minivan, the Odyssey -- and compare it with the new-and-improved version, the just-released 2011 model.

Evolutionary, not Revolutionary

Faced with an increasingly long list of deferred maintenance on our warhorse six-year old Odyssey, my wife and I made the fateful -- and expensive -- decision to instead plow money into a new model.

A month into driving it, I can report that the changes seem to be mostly incremental, and that the theme(s) seem to be (even) more technology, plus added comfort.

Shades of "Wall-E"

So, now there are not only built-in cup holders everywhere -- but they all have Styrofoam-like petals that stabilize your beverage.

Which is actually brilliant, because Honda's designers have no way of knowing the diameter of your beverage.

The solution?

Make the cupholder big enough to accommodate the largest imaginable drink, but then add flexible Styrofoam to stabilize smaller drinks.

Similarly, the armrests not only adjust, but now they have intermediate settings, for added comfort and customization.

It all sort of reminds me of the Pixar movie "Wall-E," where humans of the future have morphed into sedentary couch potatoes with atrophied appendages, who move about on mechanized barca-loungers with built-in . . . everything.

Safety & Design

The most functional of the upgrades is actually quite useful: a backup camera that now superimposes, NFL-style, a grid of yellow lines to provide perspective.

The previous version showed you what was in back of you, but it was much harder to judge distances.

Meanwhile, the new headrests in the third row are conspicuously taller, narrower and set further apart -- presumably to improve rear view visibility.

However, the effect is a bit like looking through field goal uprights in football.

Carnivorous Grille

Finally, Honda's designers apparently felt the need to kick up the new model's "testosterone factor"; the result is a more aggressive-looking car, full of angles and a front grille that looks like it could bite you.

All of which fools . . . exactly no one.

Honda's minivan was -- and is --a very functional, family car that's well-built and very reliable.

Which is just fine by us.

"Minnesota ESPECIALLY Nice"

Christmas & the Housing Market

There are plenty of reasons to explain why the housing market decelerates around the holidays: it's customarily a time to celebrate with one's family; take a respite from work (vacation, even!); and generally reflect on one's -- shall we say -- existential circumstances.

Plus, the weather (at least in Minnesota) is lousy.

All in all, a time for spirituality -- not commerce.

No Time for Lowball Offers

However, I'd posit that another, related factor is at work: Christmas spirit doesn't exactly go with aggressive negotiations.

Even if the market is soft and a home isn't necessarily worth the owner's asking price . . . Christmas just doesn't seem the right time to make that point (at least to a real, live human being -- vs. say, a bank).

Wishing all my readers a peaceful, happy Holiday, and a prosperous 2011!

Recipe for Multiple Offers: 1928 Fremont Ave. South

21% Over Asking Price!

Take an A+ location in Minneapolis' tony Lowry Hill neighborhood, strategically located in between Downtown Minneapolis and picturesque Lake of the Isles.

Add a huge, 4,800 square foot all-brick triplex.

Then put it on the market for $314,900 -- a whopping $351,600 below tax assessed value of $666,500.

What do you get?

Lots of Buyer interest -- and ultimately a sales price well above the asking price, or in this case, $380,547.

The deal closed last week.

And yes, it was a bank-owned foreclosure; it was first listed 3 years ago -- as a potential short sale -- for $695,000.

I discussed some of the shenanigans that took place when it first came (back) on the market in October in this post, "Hmm . . . I Wonder Where That Lockbox Key Went??"

Stolen Bread at Whole Foods

Infinite Markup?

Why is Whole Foods selling stolen bread? (and for so much, too).

And isn't announcing it to the world rather brazen?

The explanation, for fellow dyslexics, bad spellers and/or Emily Litella fans (Gilda Radner's old SNL character): that would actually be "stollen bread," a Christmas specialty (guess who celebrates Chanukah?).

Google and "Advertising Arbitrage"

Everything You Didn't Want to Know About Blog "Plumbing"

Want to know why -- amongst other reasons -- Google is a $200 billion behemoth?

Because it collects big bucks from advertisers to place their ads on millions of big and tiny Web sites, blogs, etc. (mine is decidedly in the latter camp).

Meanwhile, Google essentially auctions off the English language, one word at a time, to the highest bidder via a phenomenon called "sponsored search."

Tom Sawyer, who got paid both by the homeowner to paint their fence, and also by neighborhood kids for the privilege of actually painting it, would have been impressed.

Want to know who paid Google the most for "car?"

Type in "car" on a Google search, and you'll find out.

Raw Deal, or, "AdNonsense"

On the back end, Google promises to share some of its advertising revenue with content providers like this blog.

Through a program called "AdSense," Google software scours your online content, and "serves" ads that appear to be related.

Hence, current ads on the City Lakes Real Estate blog touting "Premium Deicing Road Salt" and "Roof Ice Melt Solution" -- thanks to my recent posts on ice dams (not to mention regularly serving ads from competing local Realtors -- something that I find especially annoying).

Call it "advertising arbitrage": charging a pretty penny for the phrase, "premium deicing road salt," while paying content providers practically nothing.

"Advertising Arbitrage"

How little?

After three years of blogging and almost 70,000 page hits, my cumulative Google ad revenue will barely buy . . . a steak dinner.

For one.

Meanwhile, the one time I signed up to buy ad words -- terms like "Twin Cities real estate blog," "Minneapolis real estate blog," etc. -- I literally had to scramble to unsubscribe after my bill tripped $100.

In less than 72 hours.

Nice business . . . for Google.

So, thanks, but no thanks.

Early in 2011 -- that would be about a week -- you'll see a brand, new-and-improved City Lakes Blog, no longer tied to Google, and with much more functionality and a slicker design, to boot.

P.S.: Kudoes to the superb Tim Elliott, Web developer par excellence, for his help with the transition ("emancipation?").

Housing Trends 2011

A Bigger Role for Home Warranties

No, this isn't a call about where housing prices are headed next year.

Rather, it's an observation that home warranties are becoming a bigger part of real estate sales.

Background

Local utility companies have offered home warranties for years now.

The basic plan typically covers the home's heating plant (forced air furnace or boiler), water heater, fridge and stove; premium coverage add the washer, a/c, dishwasher(s), etc., most often on an ala carte basis.

Such plans have also been a fixture of residential real estate transactions for at least five-plus years.

The most common situation: a home with older -- but still functioning -- mechanical's, where the owner wants to reassure a cash-tight Buyer, but also not bear the expense of preemptively purchasing several new appliances.

Instead, popping $400 or so for a home warranty has been a terrific compromise.

The appeal of such warranties has been further enhanced by the fact that payment is deferred until the home sells, when it is deducted from (buried in?) the home owner's sales proceeds; and the coverage can be assumed and renewed for subsequent years by the Buyer.

"Opting In"

As home warranties have grown in popularity, three developments have accompanied them.

One. Express mention of home warranties in the standard Minnesota purchase agreement.

So, there's now a clause, 2 years old, addressing whether or not the sale is accompanied by a home warranty, and if so, who's paying for it.

Two. More companies entering the business, and as a result, better pricing.

Locally, amongst utilities, Xcel Energy has been revving up to compete with Centerpoint Energy.

On the private contractor side, HSA, HMS, and several other companies write such policies.

"Leak" vs. "Roof" Coverage

Three. Home warranty policies are evolving and tightening up.

Until recently, private contractors offered a "deluxe" home warranty that, for an extra charge (natch), covered the home's roof and foundation.

However, such coverage was subject to both a deductible and a $2,000 ceiling, and required a private inspection.

Surprise, surprise, those limitations and caveats weren't exactly trumpeted in bold print.

To avoid misunderstandings (and lawsuits), both HSA and HMS now explicitly bill this feature as "leak coverage."

P.S.: And no, slapping a home warranty on a dilapidated home with shot mechanical's isn't a way to get new ones for cheap: all such policies are subject to strict "preexisting condition" clauses.

"Can You Sell a Home on eBay?"

That was the question my client posed to me the other week.

To answer it, I did a little investigating.

eBay Tutorial

Just navigating eBay's instructions easily consumed an hour-plus.

During that time I learned that eBay charges an "insertion fee," a "notice fee," and "picture hosting fees" – not to mention "optional feature fees" and "listing upgrade fees" -- all presented on various tables and schedules.

eBay also has a few more pages of directions explaining "auction style" vs. "fixed price" listings, reserve prices, etc.

Glorified Classified Ad

The real zinger, though, is fine print explaining that real estate properties that eBay lists for sale are ultimately really only (expensive) classified ads.

Which is probably why I found ZERO residential properties in Minnesota currently listed for sale on eBay.

In fact, there only 4 states – Florida, Michigan, Ohio, and Pennsylvania – where there are residential properties listed on eBay (you can imagine the ones in Michigan!).

Verdict?

No go.

I'll take the local MLS's forms any day!

Ice Dam First Aid

Contractor Advice

Barely two hours after my previous post on ice dams, I received a very informative email from Barak Steenlage, an up-and-coming Twin Cities general contractor (and generally good guy).

Here's what Barak's advises:

If you have ice dams on your roof, the first thing you need to do to avoid water leaks is get all the snow and ice off your roof immediately.

Once the ice dam is off your roof, you have a couple of different options to help prevent them from reforming.

One popular solution is to install warm wire cables along the edge of the roof and in your gutters. You can buy these warm wires at your local hardware store or Home Depot. If you are handy and you have the time you can install them yourself, just be sure to follow all the warnings and instructions.

To prevent the conditions which allow ice dams to form in the first place, can be a little more complicated and you may need a professional to look at your house and attic to determine the proper solution.

In general ice dams usually form from a lack of proper attic venting, sealing, and insulation. This can be corrected by clearing out the snow which can be covering up your roof ventilation vents in some cases or you may need to add more insulation and venting.

Below are a couple pictures along with a link from the U of M where you can read more information on how they are formed and how to prevent them. But in general when you do not have proper ventilation and/or and insulation your roof over your heated parts of your house become too warm which melts the snow on the main part of the roof.

Then, once the water runs to the edge of the roof eve which isn’t as warm, the water refreezes. The process continues until there is enough ice and water and it is forced back under your shingles or siding and into your attic, soffit, or wall.

http://www.extension.umn.edu/distribution/housingandclothing/dk1068.html

If you need more help than just this email, you can contact Barak at:

Barak@AnchorBuildersMN.com

"Anyone Know a Good Ice Dam Removal Company?"

In Demand: Twin Cities Ice Dam Contractors

April showers bring May flowers. --Proverb

December blizzards bring January ice dams. --Ross Kaplan

Judging by my email inbox, the Twin Cities' potentially record-setting December snowfall has been a boon for contractors specializing in ice dam removal.

If you aren't familiar with the phenomenon, ice dams occur when snow lower down on a roof -- typically over the eaves -- melts and refreezes, causing the water from melting snow higher up on the roof to back up under the roof shingles.

The result can be very expensive leaking and roof damage.

The solution is to get a professional contractor (vs. yourself, on a ladder) to remove the ice dam, then add insulation to prevent a recurrence.

The sooner, the better . . . .

Review: Foreclosures on Google Maps

Not Ready For Prime Time

I just spent 20 minutes or so checking out foreclosures on Google Maps.

My conclusion?

It's hard to escape the feeling you are an unwitting beta tester (guinea pig) -- plus, it's apparent that Google's real aim is use limited free data to goose paid subscriptions (translation: Google's business model is cable, not TV).

That is, once Google's data gets better.

Test Drive

The concept -- visually show where foreclosures are most (and least) concentrated -- is terrific.

At least for now, however, the execution is plagued by inaccurate and/or stale data, as well as purposefully incomplete information designed to get visitors to pop for the unabridged version.

To test out Google Maps, I drilled down on the neighborhood I know best: my own.

In my case, that would be Minneapolis' Sunset Gables neighborhood just south of Cedar Lake, and just to the East of Fern Hill in St. Louis Park.

Here's what I found:

Google Maps found (and mapped) ten foreclosed properties within about one mile.

So far, so good.

Of those, however, only two had specific street addresses; the other eight simply gave a street name, along with a push pin showing a specific location.

Chowen Ave Foreclosure? Where??

So, Google Maps lists "Chowen Ave S.", a 3 BR, 1.5 Bath home for $486,823.

The corresponding push pin locates the home somewhere on the 2900 block of Chowen, just north of Lake Street.

However, when you search MLS, there's nothing active on Chowen.

Instead, the closest home meeting that description is 2900 Chowen, a foreclosure that sold last July for a fraction of its $426,500 tax assessed value; see, "THAT Sure Went Fast (Too Fast??").

0-for-2

I had even less success finding "Inglewood Ave. S." in Fern Hill, which according to Google is a 3 BR/2 Bath home for $335,920 that it locates at the intersection of Inglewood and Sunset.

However, when I searched the corresponding stretches of Inglewood and Sunset on MLS, I found no listings, Active or otherwise, going back more than one year.

Which leaves me with the question,"where is Google getting its foreclosure info?," and this conclusion: 'if you can't use Google Maps to identify specific properties for sale -- which may not even be for sale -- what good is it?'

My answer: Google Maps is useful, kind of, to give a broad overview of which Twin Cities areas have the highest (and lowest) concentrations of foreclosures.

Assuming, of course, that Google's data is passably accurate -- for now, a big "If."

Try it Yourself

Want to try it yourself?

Here are the steps:

1. Punch in any US address into Google Maps.
2. Your options are Earth, Satellite, Map, Traffic and . . . More. (Select “More”)
3. The drop down menu gives you a check box option for “Real Estate.”
4. The left column will give you several options (You may have to select “Show Options”).
5. Check the box marked “Foreclosure.”

Good luck!

TNAS Over the Holidays: How Prevalent?

No Showings = 0% Chance of Selling

Home Sellers who don't want to accommodate showings over the holidays -- or any other time that's inconvenient -- can elect to switch their home's status to "TNAS," or "Temporarily Not Available for Showing."

While the "For Sale" sign in front will typically stay put, the home no longer shows "Active" on MLS, effectively putting the kibosh on showing requests.

So, how many formerly active homes are "on ice" over the holidays?

At least in MLS area #300, near the City Lakes, fewer than you might imagine.

Specifically, out of 144 single family homes currently on the market, only 11 -- less than 8% -- were TNAS.

You'd certainly guess that none of the latter were vacant.

Watch this Space: Lake Street & Knox Ave. South

New Luxury Apartments Uptown

What does it take to break ground -- in Minnesota in December, no less -- for a new commercial project in a weak economy for development?

An "A+" location, a proven concept, and access to capital (#3 follows #1 and #2).

In this case, CPM Development and Shelard Group just broke ground off the northeast corner of Lake Calhoun for what will be a $10 million, mixed use property with both 55 luxury rentals and ground-floor retail space.

The official address is 1738 West Lake Street.

The project follows in the footsteps of other, mixed use developments near the City Lakes emphasizing luxury rentals, such as The Ellipse on Excelsior (see, "Pendulum Swings Towards Rentals").

Occupancy is scheduled for Summer, 2011; no word yet on pricing or model units.

On Tour . . . Sometime in March

Huge Tour Day: January 11, 2010

Due to a screwy 2010 Holiday calendar, the next Tuesday with a sizable Broker Tour will be January 11, 2011.

Given that it will have been almost one month since the last well-attended Tour, December 14, there's likely to be a sizable backlog of new listings -- and an especially active Tour that day.

Including my new listing at 11213 Minnetonka Blvd.

"Hobby Farm in the City"

Located at the southwest corner of Hopkins Crossroad and Minnetonka Blvd, this 2 BR/1 Bath rambler has gorgeous, newly finished hardwood floors (shown off above), newer windows throughout, and an updated Kitchen.

It sits on a nearly one acre lot, with a huge, detached garage to go with the two-car tuckunder garage.

This is a great property for someone who wants country-style elbow room in the middle of the city!

P.S.: Pent-up demand also explains what typically is the busiest Sunday for open houses all year: the Sunday following Easter ("Open Houses on Easter Sunday").

My Favorite Home Improvement

Better Than Earplugs!

Good fences make good neighbors.

--proverb

No, they won't literally make your home bigger.

It'll just feel that way, especially if you have kids.

What am I referring to?

Solid core doors.

About $150 more than their hollow counterparts, solid doors are the cheapest way I know to make a home feel more private -- with the possible exception of ear plugs.

Solid doors also are a big hit with prospective Buyers, who (correctly) associate them with quality construction.

P.S.: My favorite piece of home technology? Eye hook locks for 89 cents that keep my office and master bedroom off-limits.

"Top Ten" Snowstorm Winners

Monday Night Football. Outside. Tonight.

Not everyone in the Twin Cities is put out by the second major snowstorm in barely 10 days (the Dec. 10-11 blizzard dumped up to 20 inches locally, the most in 19 years!).

Herewith is my "Top 10" list of snowstorm beneficiaries:

10. Kids who just got new sleds -- or are getting them Christmas day.
9. Local ski hills (yes, the Twin Cities has several).
8. Snow blower makers and the retailers who sell them -- several of which are reportedly sold out.
7. Restaurants, bars, and pay parking lots near TCF stadium, host to the University of Minnesota football team -- and tonight's Vikings - Bears game, thanks to the collapsed Metrodome roof.
6. Snowplow services in the Twin Cities looking for more business.
5. Chiropractors whose business has spiked treating snow-shoveling aches and pains.
4. Makers of winter clothing.
3. Outdoor ice skating rinks.
2. People who like snowball fights.
1. Lobbyists for the Minnesota Vikings, who are pressing hard for a new stadium -- presumably, an indoor one.

P.S.: #11. City tow truck operators.

"Th-th-th-that's All Folks!"

See you in 2011!
Even before today's snow, I was wavering about holding a Broker Open tomorrow for my new listing in Minnetonka.

According to my Office Administrator ("OA"), I would have been the only Realtor in the Edina Realty-City Lakes office on tour (vs. the average 4-6 new listings -- and as many as 10 -- on a busier day).

And that was on the heels of my very sparsely attended Open House in Golden Valley yesterday.

So, that's it for Open House and Broker Tours for 2010!

Don't worry, I'm not done for the year, though.

I'm still working with 3 Buyers, and getting new listings ready for after the first.

Buyer Feedback: 'Win, Place, or Show'

Category #4: 'Out of the Money'

My favorite metaphor for how close a listing is to selling is temperature ("Listings and Pots of Water").

So, a new listing starts out at room temperature, heats up as showings (and second showings) accelerate, and reaches a boiling point by the time a strong offer (or two) comes in.

I still think that that applies, but based on the feedback my listings have been getting recently, a new metaphor seems in order: horse racing.

Four Categories

Specifically, listings these days seem to fall in to one of the following four categories:

Win: The best of what's out there. Offer imminent.

Place: First or second. The Buyer's next likeliest step is a second showing, to see both homes "fresh," dig in on the Seller's Disclosure, etc.

Show: Top three. The home had many nice attributes, and the price is in the ballpark -- but it was eclipsed by the finalists being considered by the Buyer.

Out of the Money: Didn't make the cut -- no further interest.

If a home is repeatedly "out of the money," action on the Home Seller's part is indicated: that can be either reducing the price and/or enhancing the home's appeal (by addressing whatever the most consistent objections have been).

On the other hand, if the home is making Buyers' short list, "standing pat" -- i.e., waiting for the competition to sell -- can be an option (and is certainly the path of least resistance for Sellers).

However, in a Buyer's market, I wouldn't recommend it.

That's because it risks being overtaken by new, better-priced horses -- er, listings, as well as existing listings that are not standing still, and instead are aggressively improving their price and/or appeal.

Orange Juice "Sweat Equity"

Old Houses and Fresh Orange Juice

Here's how I introduced the concept of (orange juice) sweat equity to my three kids:

You can go to a restaurant and order eight ounces of fresh orange juice for $3.50.

Or, you can buy 5 pounds of fresh oranges at Target for the same price, and use your juicer to make a half gallon (retail value: $28).

(The multiples for housing sweat equity aren't quite as impressive.)

Memo to Calhoun Village Owners

"Don't Truck That Snow Away So Fast!"

One of the fringe benefits :) of pulling a couple very late nights the last week is seeing the procession of large trucks show up around 1 a.m. to clear my office parking lot of snow.

Since the blizzard that hit the Twin Cities a week ago, the Calhoun Village parking lot has shrunk to about half its usual size, while mountains of snow consumed the remainder.

Meanwhile, judging by the suddenly jammed parking lot, business at Calhoun Village the last week has never seemed better.

Hmmm . . . .

"The Scarcity Effect"

Clearly, some of the "pop" in business has to do with the calendar: the ten days or so preceding Christmas are traditionally a very busy time for the retailers, restaurants, etc. that populate Calhoun Village.

Subtract a few days for a blizzard and its aftermath, and you also create pent-up demand.

However, it's also the case that the suddenly packed parking lot has enhanced the appearance of booming business.

No Empty Seats -- or Parking Spaces

As Presidential advance teams know full well, if you book a 3,000 seat venue and 4,000 people show up, the event has "buzz."

If you instead book a 5,000 seat venue and get the exact same 4,000 people -- there are acres of empty seats and the event looks like a flop.

The same phenomenon also helps explain the cachet of Wrigley Field and Fenway Park -- both genuinely charming, historic places to watch baseball, whose allure is further enhanced by the fact that they're both undersized and therefore perpetually sold out.

Before Calhoun Village management gets the wrong idea, though, just keep in mind that the scarcity phenomenon only works to a point: restrict parking too much, and you get . . . the St. Louis Park Trader Joe's.

P.S.: Know why you've never seen an empty seat at the Oscar's, Emmy's or other big-time award shows?

"Seat fillers" immediately take the place of VIP's when they go to the restroom or otherwise take a break.

Year-End Realtor Housekeeping

Statute of Limitations
for Deals

How long do you need to retain your files for closed deals?

Barring fraud, the statute of limitations for raising a complaint following a transaction is two years.

So, it's (well past) time to chuck paperwork and notes for those 2004 sales I've been hanging on to.

The one exception to the foregoing?

Tear-downs.

When a home I've sold is subsequently torn down -- or remodeled down to the studs -- there's no reason to keep the paperwork (closing documents like the HUD-1, the Seller's Disclosure, etc. are scanned in and available in Edina Realty's online archive indefinitely).

Is the Buyer's Budget Negotiating Leverage?

Buyers Whose Eyes are Bigger Than Their Wallets

What is the Buyer counterpart to Sellers who "need" a certain price to consider selling?

Buyers whose final (first?) offer is 100% of their budget, and therefore can't go any higher.

So, the Buyer's agent will typically couch the offer in terms of, "I know this is a mediocre (or worse) offer for this house, but that's all my client can afford."

Assuming that that's true, do Sellers find that explanation compelling?

Budget Constraints

Put it this way: imagine going to a restaurant, and telling the waiter you'd like to order the $50 filet mignon, but you've only got $30.

While sympathetic, the waiter is likely to suggest ordering a cheaper cut -- or maybe trying another restaurant altogether.

Which is mostly how Sellers react.

There's nothing wrong with having a $300,000 -- or $150,000, or $800,000 -- housing budget.

After all, practically everyone is subject to budget constraints, whatever they may be.

But then, the appropriate course of action is to look for a home whose fair market value, ballpark, is . . . $300,000 or $150,000 or $800,000.

Should Renters Hire Inspectors?

Rental Repair Risks; or, Becoming an (Unpaid) Property Manager

In the history of the world, no one has ever washed a rented car.

--Thomas Friedman

Until recently, my answer to whether prospective renters should hire (and pay for) a professional inspector would have been "no."

That's because if something non-trivial breaks, most leases specify that the owner -- not the renter -- is responsible.

It's also the case that if the home is listed for sale, at least in Minnesota, the Seller is obliged to provide a detailed disclosure -- which the prospective renter should ask to see and then review carefully.

So, there already is a record of the home's condition.

Combine that with a visual inspection/home tour, and any conscientious renter would usually have a pretty good sense of the home's condition before signing a lease and moving in.

Renter Due Diligence

Usually, but not always.

After moving into a rental home this Fall, a (selling) client of mine has been dealing with a cascade of problems, both big and small, that were nowhere to be found on the Seller's Minnesota disclosure.

Some of the problems, like a non-functioning Bedroom radiator, were new; others were more in the realm of fallout from previous "do-it yourself" electrical and plumbing repairs, plus issues with the home's construction quality generally.

And even though the owner picked up the repairs bills, the inconvenience was borne by the renters.

Oxymoron: "Out-of-State Property Management"

In that spirit, my new advice to prospective renters is to consider paying for a $300- $400 home inspection if one or more of the following apply to your situation:

--You are contemplating a multi-year rental.

--The cost of an inspection is small relative to the rent you'll be paying (say, more than $2,000 a month).

--The rental home is older and bigger (more than 3,000 square feet, and built before 1960).

--The owner is out-of-state, and doing the property management themselves.

As my clients have discovered, there is no such thing as "out-of-state property management."

Rather, they are doing the property management -- getting quotes, meeting contractors, etc. -- and the owner is simply writing the checks.

December Discounts the Deepest?

Weighing 8/10 of a Bird in the Hand

It's always tougher for a Seller to reject an offer when the alternative is . . . nothing.

That's never more true in the housing market than in the waning days of December, with the holidays upon us and Buyer activity slowing to a crawl.

So, instead of representing the proverbial "bird in the hand," at least some Buyers try to snatch properties by dangling 9/10 of a bird, or even 8/10.

And every year, some home Sellers -- suffering from market fatigue, and worried about competing, new inventory after the 1st -- surprise Buyers by accepting.

Attention! Business Opportunity

"Striking While the Iron is . . uh . . Hot"

I'm not in the Twin Cities snow shoveling business, but if I were -- and was good, reliable, etc. -- I'd be racing to put out a big marketing piece right about now.

Why's that?

In the aftermath of the Twin Cities' weekend blizzard, there apparently are A LOT of folks dissatisfied with their existing services, and looking for replacements.

Or, contemplating hiring a service (after their aching backs and legs recuperate).

To be fair to the snow shovelers, it's awfully hard to keep up with 16" - 20" of blowing snow and subzero temp's.

Our service shoveled us out -- the first time -- around 1 p.m. Saturday, and an hour later you couldn't even see their footprints in the snow.

P.S.: And whoever you use, better brace for some hefty surcharges on your Dec. bill!

Advantages of a Big Broker

"Who Ya Gonna Call?"

What do you do if your client wants to know about good public schools near Mounds View, and you don't have a clue?

If you're a solo Realtor, I suppose you pick up the phone, and start making phone calls.

Lots and lots of phone calls.

Good Connections

On the other hand, if you're with Edina Realty -- the Twin Cities' biggest broker by number of Realtors, and with the most local branches -- you make one phone call.

In this case, to the co-manager of Edina Realty's nearby Roseville office, Patti Jo Fitzpatrick.

After explaining why I was calling, Patti Jo said she'd be more than happy to educate my client about local schools.

Then, I called my client to pass along Patti Jo's contact info.

Thanks, Patti Jo!

P.S.: And how long does it take to send an email "thank you" to the other Realtor?

If they're in same online company directory, you start typing "F-I-T-Z-P . . . " and it autofills the right name.

Elapsed time: about 2 seconds.

Snowstorm Aftermath: City Streets as Bobsled Run

Nowhere to Put it All

After the 1989 earthquake that rocked the Bay Area, multiple friends independently reported the same phenomenon: people on the freeway pulled over to check what appeared to be four, simultaneous flat tires (such was the shaking).

Three days after the biggest Twin Cities snowstorm in 20 years, I can report that driving area streets feels like being in one big, bobsled run.

Tunnel Vision

That's because the snow is piled so high on the side of the roads -- I'd estimate anywhere from 6' to 12' -- that there is a tunnel effect on all but the widest streets.

Unfortunately, the roads are about as icy as a bobsled run, too: the below zero temps are cold enough that "black ice" -- car exhaust that freezes on the road, invisibly -- is forming in some places, which only adds to the driving challenges.

Crash helmets, anyone?

"First Come, First . . . Wait??"

Can Bank-Sellers Be Choosers?

Days 0-7: No offers considered. 8-12: Offers considered on property ONLY from NSP buyers, municipalities, non-profit organizations & owner occupant. 13+: All offers considered from all buyers.

--Excerpt, foreclosure on MLS

With the caveat that I don't specialize in foreclosures, this is the 4th time in as many weeks that I've seen a variation of the language shown above ("NSP" refers to "Neighborhood Stabilization Program").

What's going on?

Typically used in conjunction with a deeply discounted price, the bank's strategy appears to be two-fold: 1) accumulate multiple offers; and 2) segment prospective offers by "more" and "less" preferred categories.

"First Come, First . . . Wait"

If so, it's going against the grain of how real estate is normally sold -- namely, "first come, first served."

Put it this way: a significant percentage of the time in real estate, the first Buyer is the best buyer.

In this case, however, the bank-owner is explicitly telling that Buyer -- at least if they show up in the first week -- that they need to cool their heels while other prospective Buyers (possibly) join the fun.

I can imagine at least a few such Buyers responding, "No, thanks."

At the very least, it's hard to imagine any sane Buyer submitting an offer before Day 7, when they risk having it shopped to other Buyers.

From the bank's perspective, the ultimate test of such a strategy is whether it actually increases what the property sells for.

I suppose if more foreclosures start popping up with this language . . . the banks think the answer is "yes."

P.S.: Is is kosher (legal) for the banks to define which Buyers they'll consider offers from -- and when?

As long as they're not discriminating against protected classes (race, religion, etc.), I would assume that they can.

Exaggerated Square Footage

Too Much of a Good Thing

If you were a 5' 6" man, would you try to pass yourself off as 5' 9"?

I wouldn't condone it -- but I'd at least understand it.

But why would a 6' 5" man say he was 6' 9" -- unless, perhaps, he was an NBA player?

In a nutshell, that was my reaction showing a Plymouth home earlier today that appeared to be well below its stated 4,600 finished square feet (to my eye, at least 15% below).

Not only does such an . . . . uh, exaggeration hurt the Seller's credibility with prospective Buyers, it actually limits the pool of such Buyers.

That's because there are a lot more people in the market for a 3,800 square foot house than a 4,600 square foot house.

P.S.: The one exception I'm aware of to pro basketball players tending to pad their height is Bill Walton, the former UCLA and NBA great.

Self-conscious about being so tall, he reportedly gave his height as 6' 11" instead of the 7'-plus he really is.

At least, that's the story I heard when I was a Stanford undergrad, and Walton was at the Law School (I'd see him on campus occasionally, and he certainly looked 7'-plus. More often, I'd just see his gigantic bike in front of the Law School).

The "Too Precise Price": Exhibit A

Why Not $145,403.14?

This South Minneapolis home, located at 44xx 15th Avenue South, dropped from $149,900 to $145,403 yesterday.

What's magic about $145,403? (vs. $145,729? Or why not $145,403.14, if you really want to be precise?).

The answer is, nothing.

Rather, the owner and their Realtor are trying to avail themselves of two things: 1) Buyers' presumption that exact prices are more scientifically arrived at -- and therefore somehow firmer; and 2) in an ocean of homes listed at $144,900, $149,900, etc., the reality is that oddly priced homes stand out.

Reason #1 is pure myth.

As for Reason #2: the price change got my attention (and now, yours!).

P.S.: The reason not to use a funky asking price is that experienced Realtors understand it to be a gimmick, and (rightfully) brace for lots more to come -- which is often the case.

Cold Weather: Minnesotans vs . . . Everyone Else

"Cold (and Snowy) 'Nuff Fer 'Ya?"

With (mostly) stoic Minnesotans recovering from a one-two punch of 16" of snow and subzero windchill, I thought now would be an opportune time to recycle an email I got a couple years ago (sorry, don't remember the source).

Enjoy.

50 above zero:

Californians shiver uncontrollably.
People in Duluth sunbathe.

20 above zero:

Floridians wear coats, thermal underwear, gloves and wool hats.
People in Minnesota throw on a flannel shirt.

Zero:

People in Miami all die.
People in Minnesota close the windows.

25 below zero:

Hollywood disintegrates.
The Girl Scouts in Minnesota are selling cookies door to door.

460 below:

All atomic motion stops.
People in Minnesota start saying . . ."Cold 'nuff fer ya?"

One last one, kind of in the same vein:

What do Minnesota Jews call themselves?

"The frozen chosen."

"TNAS" or "PNAS?"

Is Six Months "Temporary"?

I tripped across this Minnetonka home in the course of doing a CMA ("Comparative Market Analysis") for an upcoming listing.

Originally listed on June 28 last Summer, it was switched to "TNAS" ("Temporarily Not Available for Showing") five days later -- and has remained there ever since.

Maybe that should now be "Permanently Not Available for Showing."

What appears to be going on (or not) is that the Seller is an owner-agent, and is relying on the For Sale sign -- on busy Hopkins Crossroad -- to generate drive-by interest (there's no indication on the sign that the home is "temporarily" not available for showing).

While that limits the home's marketing exposure, it also reduces the odds that the owner-agent will have to share any sales commission with a Buyer's agent.

How "Temporary" is Temporary?

Of course, that's not how TNAS is supposed to be used.

Rather, that status is intended for short-term situations like a home repair; family illness, hosting guests, or some other occasion that interferes with showings; or even a Buyer's inspection.

However, the reality is that if no one complains about a listed home being TNAS indefinitely, there's no reportable offense.

Between the lines, you'd infer that there hasn't been a ton of interest in this home.

In fact, the literature box in front is empty, and the current asking price (per a neighbor) apparently is $199,900, not the $225,000 listed on MLS.

P.S.: The most obscure MLS status? That would be "COMP."

Commonly thought to be a truncated "Comparable," it actually stands for "Came on Market Pending."

That can happen when a deal is done privately, but one of the parties is a Realtor, and wants marketing credit on MLS (as does their broker).

Pre-Blizzard "To Do" List

The Sound of No Snowplows

How do you prepare for the biggest forecasted blizzard in years? (Now upon as, just as predicted*).

Stocked up on groceries?

Check.

Gas tank full?

Check.

DVD's for the kids?

Got 'em.

Wash the car?

Wash the car??

Rescuing the Rescuers

Actually, one of the longer lines I was in yesterday was at the car wash.

With temperatures forecast to be subzero, the window for washing your car will effectively be closed for several days.

Plus, the subzero temps mean that the new snow will be light and dry (vs. sticky and wet), which means that your just-washed car will stay clean.

*How do you know you're in the midst of a snow storm of epic proportions in Minnesota -- which is really saying something?

Instead of sending out the snowplows, Mn/DOT (the Minnesota Department of Transportation) calls them back in, as they apparently are now doing.

That's because: a) with much more snow (and wind) on the way, plowing now won't accomplish anything; and b) if the drivers get stranded in near-whiteout conditions, there'll be no one to rescue the rescuers.

Blizzard this Weekend?

Twin Cities Weekend Weather Forecast

Normally, I check when the Vikings are playing before I schedule my Sunday open house(s).

However, this weekend, that's trumped by a forecasted blizzard developing tonight and intensifying Saturday.

Conditions are supposed to improve Sunday -- but the high temperature then is only supposed to reach zero.

All in all, not exactly ideal conditions for Sunday open houses.

Weather Wipeouts

If the forecast is right, this will be the second Sunday in just a few weeks that's been a weather wipeout; the first was Nov. 21, when an ice storm shut down most of the city.

And that's on top of the weekend before that, when the season's first really big storm slowed things to a crawl (on Sat., Nov. 13).

Three (partial) weekend wipeouts just so far is actually a lot for a Twin Cities Winter -- er, Fall (technically true, for 11 more days).

P.S.: It takes relatively less severe weather early in the season to suppress open house traffic then it does later.

By February, when everyone's used to winter (and suffering from cabin fever), a subzero Sunday won't faze as many people.

Revisting 1415 June Ave.

Want to Sell This One?
Help Defray Property Taxes

I originally posted about 1415 June Ave. -- in Golden Valley's South Tyrol Hills neighborhood -- last Summer ("$700k Below Tax Value").

At the time, the asking price was $799,900 -- against a tax assessed value of $1.504 million.

Thanks to that latter number, the home carries an almost $24,000 annual property tax bill.

Which likely explains why it's still unsold almost six months later -- and the asking price is now $784,900.

Unsolicited Advice

You'd certainly expect the property tax bill to drop dramatically once the home sells so far below its assessed value.

However, it's not a slam dunk.

That's because tax assessors consider foreclosures to be distress sales (true), and therefore not necessarily reflective of fair market value (patently false).

Put it this way: if anyone thought 1415 June was worth more than $784,900 . . . . they've now had almost two years to snatch it up (the home originally came on the market in March, 2009, at an asking price of $1.679 million).

To entice Buyers who can afford the home but not the attendant property taxes, here's my advice to the bank-owner: pick up some or all of the property tax bill for a period of time.

Sellers now routinely pay up to 3% of Buyer's closing costs.

In this case, what the Buyer really needs help with -- at least temporarily -- are the property taxes.

Calling Sun Country's Bluff

"What Makes You Think We Want to Sit Next to Our Kids??"

So, I just logged off Sun Country's Web site, having booked tickets to AZ this winter to visit my parents (and get some relief from MN winter weather).

The fare was $75 per seat less than Delta -- a no brainer for a family on a budget.

However, the always-annoying process now has a few, extra wrinkles.

Like:

--A field for you to enter your "DHS redress #."

I suppose that that's a tip-off that the new airport search regime is ruffling not a few feathers.

--Frequent Flyer miles.

I thought discount airlines didn't have frequent flyer miles (that was always one of the things I liked about them).

Well, now Sun Country has "U Fly" rewards, which effectively are the same thing.

--A fee(!) to pre-select your seats: in this case, $8 per.

That one's also a no-brainer: we 'ain't paying it.

If Sun Country wants to disperse my -- shall we say -- "travel-challenged" 11, 8, and 6 year-old kids amongst a flight-full of strangers . . . my wife and I will be eternally grateful to them (maybe then I can catch up on my reading).

Year-End Pick-Up in Activity

The Limits of Statistics
in Valuing Homes

It's only Wednesday, and I've already fielded three calls this week from appraisers wanting "scoop" on recent, closed sales that I've handled.

A year-end pick-up in deals?

Well, that, too.

However, in each case the appraiser was working on a refinancing application.

To approve the new loan, the lender needed to establish current market value, which in turn means performing an appraisal and identifying/analyzing the Comp's -- just like they would for a sale.

The fact that appraisers need to talk to actual, live Realtors -- who can fill them in on floor plans, updates (or not), and other home features not otherwise captured in statistics -- should give anyone relying on Trulia, Zillow, etc. for home values pause.

P.S.: Time permitting, I'm happy to talk to appraisers. Often times, something I know can be the difference between a deal (or refinancing) happening -- or not.

In an environment where banks are looking for any excuse to shoot down a deal, as a plugged-in, on-the-ground expert, I'm ideally positioned to serve as a counter-balance.

Of course, a healthier, more active market benefits everyone.

"Market Crash on 12/31!?"

"Well, It'll be the End of SOME Month"

Just a quick housekeeping note:

As I've mentioned recently, I'm working on a new-and-improved blog design for 2011; amongst other things, the upgraded version will let me better the control the ads that appear around the periphery of this site.

In the meantime, I (you) have to put up with an especially annoying series of ads posing the question, "Market Crash on 12/31?"

If you're new to this blog, earlier versions of the ad substituted 9/30, 10/31, 11/30, etc.

Identifying with Felix Hernandez

2010 Year in Review -- Realtor's Version

Looking back over 2010, a lot of Realtors had years like Felix Hernandez -- minus the accolades.

Felix who?

Felix Hernandez is the Seattle Mariners' pitcher who just won the AL Cy Young award, despite only having a measly 13 wins (he also had 232 strikeouts and a league-leading 2.27 ERA).

Stellar Performance in a Tough Market

What made those statistics award-winning is that Hernandez compiled them for a last-place team, the 61-101 Mariners.

Similarly, many Realtors have done stellar, tireless work this year marketing and showing homes, educating their clients about the process, writing offers, etc.

However, due to a slow housing market and still-recovering economy, they have few decisions (closed deals) to show for it.

(Real estate really should -- but doesn't -- have something analogous to baseball's ERA, or earned run average.)

Why Are Retail Investors Skeptical?

It's Supposed to Work in the Midwest, at Least

One of the all-time high school pranks growing up -- at least according to urban legend -- was going to the mall and acting like you lost a contact lens.

Step 2: a couple confederates join your "search."

What's supposed to happen next is, clueless passersby join the search while the perpetrators withdraw to the sidelines and watch (and suppress their snide laughs).

The Bernanke Stock Market

Having seen two bubbles -- in tech stocks and then housing -- in the last decade, not to mention the predations of Goldman Sachs, Angelo Mozilo and scores of others, my guess is that "retail investors" (you and me) are now asking themselves two things:

One. Is there really a contact lens in the middle of that growing crowd (read, the now-advancing stock market)?

Two. How expensive is it going to be -- this time -- to find out?

To paraphrase that expression, "fool me twice, shame on you. Fool me three times, shame on me."

P.S.: I can already answer question #3: 'Will anything happen to those responsible?' Answer: 'Nope.'