Most agree that everyone’s perception is their reality.  Along those lines, the media (without exception) TV, Cable, Newspapers, Radio, et al are certain to create a recession that otherwise may not occur.  What else can we perceive from the news these days… 

The incessant news commentary about: the war, politics, the sub-prime meltdown, the worst financial crisis in over 2 decades, crime,  housing correction, record foreclosure numbers, housing affordability, poverty, retail year over year sales comparisons,  job growth,…the list goes on and on. 

The perception as a result has caused consumer sentiment to be at a very low rating…the lowest in years….  Does anyone wonder why?  Maybe if the Media stopped clubbing people over the head with 24/7 commentary and rhetoric about reports and statistics we could make our own comparisons and move along with the Holiday Season…and our lives.  And by the way, there are great things happening everywhere…you won’t have to look far to find them (but don’t expect to find them in or on the news).  Stay positive.  Merry Christmas everyone! 

We’d love to hear your comments…please drop us an email in between your holiday shopping. 

Thank you.

 Michael Caruso 



A recent news release indicated that in a survey, new homeowners were asked which item they would rather give up if they had to…their home ~ or their car?


Do you believe that the overwhelming response was: the Home?? The rationale was that they ‘could live with family or a friend, but needed a car to get to work and get around’.

Come on America…we live in a disposable era, but this is incredulous!  We have got to take some responsibility when we sign on the dotted line.  Perhaps Nordstrom started this fad with their famous ‘return it, no questions asked’ posture.  Great for retail clothing, but a home???

When the going gets tough you just can’t hand the keys back to the bank with a home…or can you?

We’d love your feedback on this topic…please drop us an email if you have a moment.

Thank you.

Michael Caruso

What Would Mr. Greenspan Have Done?


Regardless of how you felt about good old Mr. Greenspan – like or dislike, one thing is for sure…we all feared him and the world watched and listened to his ‘Greenspeak’  announcements  which made most of us quiver, shiver, or cheer.


December 11th, Mr. Bernanke might have moved us one step closer to recession with a negligible ¼ point drop in Fed Funds rate.  Then, yesterday the Fed announced a new global effort with other central banks and unveiled a plan to sell billions in loans in order to create more liquidity in the mortgage markets.  Let’s face it, the banks don’t trust each other any more, so this could be a welcome avenue to create liquidity which would allow lenders to make loans again!!  Analysts and Wall Street professionals think yesterday’s announcement is brilliant…

But I can’t help to think…What would Mr. Greenspan have done?  And I think he would have dropped the Fed Funds rate by ½ point to try and get ahead of the mess we’re in.  No doubt that when the 4th quarter earnings are reported by major banks in January it will be ‘confession time’ again with more write-off’s and more discord on Wall Street. 

The Fed might be just too hawkish on inflation here and we are perhaps at the tipping point!   Please Mr. Bernanke …have an egg-nog with Mr. Greenspan over the holidays and get this economy going again. 

We’d love to hear your feedback on this topic.  Drop us an email when you have a moment.

Thank You.

Michael Caruso  

Real Estate Hurt by Media Spin

michael-sm.jpgI am so tired of the negative media constantly ranting about how horrible everything is in our business.  It’s time for our industry to fight back against these psychic vampires who seek to suck every bit of hope and optimism out of us just to build their circulation. 

Newspaper headlines and buzzwords abound, such as:  “Two million people will lose their homes in foreclosure in the next two years!”  “Sub prime Fiasco!” and “Mortgage Meltdown.” 

These are the headlines we hear every day, yet where is the positive news about the real estate market?  The answer is, buried in statistics on page 18 of section 5 of your newspaper, provided you can find them at all. 

A September news article ends with the negative media’s favorite theme for scaring their readers and/or listeners:  “Two million people will face foreclosure in the next two years.” Here are the numbers that the negative media did NOT report from that article: 

1)       Thirty-five percent of the homes in the U.S. do NOT have a mortgage. 

2)       Some 94.88 percent of the loans ARE performing. 

3)       The foreclosure problem in this country is really a story about seven states. 

4)       The biggest foreclosure problems are in Michigan, Ohio and Indiana.  These are manufacturing states that had horrible job losses.  Since 2001, Michigan has lost 300,000 jobs.  These states would probably have had problems no matter what the market was doing. 

5)       The other four states — California, Florida, Nevada and Arizona — experienced significant overbuilding.  Twenty-five percent of the foreclosures in these states are on properties that are held by investors who were speculating. 

6)       Only 25 percent of all mortgages are sub prime, and of these, 75 percent are performing. 

7)       In the other 43 states, foreclosures have fallen in 2007 from 2006 (data from Michael Clawson, vice president, Central Texas Mortgage). Furthermore, buyers who are waiting to purchase when the so-called bubble pops in California’s major metropolitan areas are going to be sitting on the sidelines, according to the latest data from the C.A.R. Realtor group. According to Leslie Appleton Young, chief economist for the California Association of Realtors, the areas being hardest hit in California are the outlying areas where there has been overbuilding.  The resale market in California’s major markets continues to be strong.  In fact, the closer you are to a metropolitan area, the better the sales are.  In the million-dollar-plus price range, there has been essentially no change from 2006 to 2007. 

There’s no question about the fact that there is bad news in some markets.  What upsets me is that there is also a lot of good news that is either being buried or is not being reported at all.

Did Government “Ride to the Rescue ” for Homeowners?

michaelsupersmall.jpgYesterday, the government announced it’s plan to assist those homeowners suffering from sub-prime loans and interest rate re-sets.

Did they do enough?

Did they do too much?

Email us your thoughts after reading this overview….

President Bush unstrapped a plan on 12/6/2007 that offers foreclosure relief to potentially 1.2M homeowners.  It includes a temporary freeze on low, introductory mortgage-interest rates that could otherwise increase dramatically in the next few years.

But the plan has some restrictions…do you think they are good or bad?  Email us your opinions….read on.

The plan excludes anyone more than 30 days late at the time the mortgage would be modified or anyone who has been more than 60 days late at any time within the previous 12 months.  According to reports, it also covers borrowers with adjustable rate mortgages (ARMS) resetting in 2008 and leaves out any who are judged capable of continuing to make mortgage payments at the higher reset rates.

But you should know that there are 2.2M borrowers  with sub-prime ARMS that are expected to reset through the end of 2008.  According to an analysis made by Barclays Capital, only 240,000 of those 2.2M loans would be covered  by this plan.

Some industry experts called this “a step in the right direction” and President Bush said “there is no perfect solution”.

The plan applies to loans originated between Jan.1, 2005 and July 31, 2007 that reset between Jan.1, 2008 and July 31, 2010.  But the aid will only come to those who ask for it.

Congress could also help by acting quicker on passing mortgage relief legislation, including the FHA Modernization bill, the change in tax code and a bill enabling local and state governments to issue bonds to finance mortgage refinancings.  All of these bills have been held up in Senate for weeks or months…shame shame!!

Please send us your thoughts…..

Is the Sky Falling for Orange County Real Estate?



The real estate market has dominated press headlines for the last two years.  For most of 2006, OC Register headlines resounded “O.C. weekly median hits a record” and “Existing home sales and prices rise dramatically” on an almost daily basis.  Now, with headlines in 2007 bringing us the news that “O.C. home market ’07 starts with slowest pace in 11 years” and “O.C. house prices down again”, many claim the sky is falling on the Orange County real estate market and that foreclosures will skyrocket, home prices will plunge, and with it our economy may be pulled into a recession.


Where is the truth in all this?

Orange County’s economy is located at the heart of one of the world’s best, highest growth markets: Southern California.  We consistently have one of the lowest unemployment rates in the nation and highest levels of job creation among U.S. metro areas.  According to the Milken Institute, we have the most diversified high-tech economy in the nation.  Finally, if we were a country, Orange County’s economy would rank 37th–larger than Israel, Singapore, and the Czech Republic.

Numerous studies and reports have also placed Orange County at the top in terms of quality of life among U.S. metro areas.  We have objective numbers to confirm this.  According to the FBI, Orange County has the lowest crime statistics in California.  Orange County’s infrastructure systems are the envy of surrounding counties, and residents rate their quality of life and arts opportunities very highly.  Last but not least, climate and access to recreational opportunities such as the beach and ocean are second to none.

Whatever the day to day headlines say about home prices, few places, if any, can offer what Orange County has:  both great quality of life and real opportunity to advance and prosper economically.  Even those who bought during the last dip in real estate values of the early 1990’s, and temporarily saw real estate values slip slightly, were doing very well even five years later.  History has proven time and again that an investment in Orange County real estate is one of the best investments a person one can make.   This time is no different.