Ken Skillern

Just sharing some thoughts here. Our economy is usually in about a 10 year cycle: Growth, Peak, Decline, Trough, etc. I think we are in the "Decline" phase. The last occurred in 2001-2002, so this may have been a bit shorter than usual. This has implications for all capital markets including real estate. If one were to use the assumption that the trough is next, and that we are in mid-Decline, one may surmise that 2010-2014 will be Growth years. One could also conclude that until then, residential resale real estate prices as a whole, excluding certain local markets, are in for more decline. There are events that may alleviate the pain, however. The lowering of interest rates has an effect of lowering mortgage rates, which in turn makes it easier for a borrower to obtain money to buy a house. However, with a massive supply of homes on the market, it makes sellers lower prices to attract those buyers until we work through this massive inventory. The number of baby boomers retiring in the next five years is enormous. And many baby boomers want to downsize by selling their large, expensive homes and buying smaller, less expensive homes. This competition has a downward effect on the price of a home for sale. There are upward forces on the prices of homes as well, but currently they are not very strong.

Rule of Thumb: Plan on 1 month on market for every $100K of price. Subtract or add a month for every 10% you are below or above the true market value for your home. Thus, if your home's true market value was $800,000 and you listed at $880,000, plan on about 9 months to sell your home. Now, in reality, it may take less, but this is just a planning figure to give you something with which to tentatively plan your life.

The decision to sell or keep your home is a tough one, and involves tax, legal, social and other financial considerations that only you can weigh. But if you are trying to make a decision based solely on market timing, I think that this market will bottom sometime between 2009 and 2010. Until then, we are likely to see a gradual decline in the prices of residential resale real estate. If I had to guess, I'd predict about another 15% decline for some real estate markets, including Albuquerque.

Hope these thoughts help, but again, I'm a broker, not an economist, banker, lawyer, tax adviser or anything else, so seek professional guidance by all means. - Wed May 21 2008, 14:24

As always, there is the "legal" answer, and then there is the practical answer. Without the written consent of both parties, the only way an escrow officer is going to disburse those funds to either party is by court order. So, who's going to get the court order first? Well, first retain a lawyer, which will cost about $2,500 minimum, which will be deposited into the attorney's trust account to start the case. Plan on about 10 hours of work minimum for anywhere from $200-300/hour. If the other party also hires an attorney, prepare for a lengthy battle unless the two parties can settle their differences about the disbursement of the earnest monies in escrow. If it was a significant sum of money, then perhaps this course of action is desirable, but I don't think that anyone could predict beforehand which way either an arbitrator, judge, or worst case, a jury, would sway without a lot more facts. If the amount of earnest money is modest, the Seller might just consider making a deal with the Buyer to release most if not all of the money back to the Buyer for an agreement to terminate the Purchase Agreement and close the escrow account. Perhaps the Seller should negotiate actual expenses incurred be withheld, which may be seen as reasonable. This will avoid attorney's fees and more quickly resolve this matter. The point is to find a qualified and willing buyer for your property as soon as possible. Just a disclaimer here: I'm not an attorney, only a real estate broker, and you should always seeks appropriate professional help where necessary...Good luck! - Wed May 14 2008, 21:54

In my humble opinion (not legal advice), here's what to do: First, read your purchase agreement carefully, especially any parts about financing contingencies. Second, talk to the Seller. Explain your situation, justify your concerns based upon your understanding of your contract, and ask that the agreement be terminated and earnest money be refunded. If that is not successful, then you only have two viable options, which are to consult an attorney or just walk away, either of which may cost you. Good luck!!! - Wed May 7 2008, 12:12

We moved here from the Bay Area in California about 4 years ago. We have absolutely loved it! We also looked at Portland by visiting, drivng around, etc. before deciding on ABQ. I feel we made a good choice. Your money goes further in ABQ than it does in Portland. As for Palm Springs, which I have also visited, I think the the climate in ABQ is a bit milder, as our high in the summer usually doesn't break 100F. How is that, you say? Well, the summer monsoon season brings afternoon clouds and rain that cools everything off. That's why my family usually eats outside on the patio just about every night during the late spring, summer and fall. Winters are comparable to Portland as well, just a little snow here and there, but usually doesn't stay long. If you need a mortgage broker here in town, call Mace at 505-897-4900. Talk to Janice and she'll put you through to Mace. I've known him since 4th grade and can attest to his good nature, honesty, and thoroughness. And he attends every closing. Good luck in making the move!!! - Tue May 6 2008, 10:45

Talk to Mace at Anchor Mortgage at 505-897-4900. He's a good man and is in the mortgage business up here in Albuquerque, but may have some information for you. Or visit his website at http://anchormortgagehome.com/ for more information.

Best Regards & Good Luck!

Ken - Mon Mar 10 2008, 20:19