Ben Stein "Were Not in a Recession...They Sell Fear!"

Ben Stein, an economist and the son of an economist who coined the phrase "Voodoo Economics" which you may recall hearing in the way he's better known to some, as the economics teacher in "Ferris Bueller's Day Off" repeating, "Bueller, Bueller!"

This time Ben Stein is trying to wake consumers with some key points:
1) Were not in a recession! (per it's definition of 2 quarters of negative growth)

2) Weak dollar is driving a boom in U.S. exports.

3) The growing economies of China & India are really beginning to drive the world economy.

4) It would be rare for commodities demand to be rising and other services falling at the same time.

5) Inflation is hedged by purchasing "REAL ASSETS"... like Real Estate!















Ben Stein:
Buy Index Funds, Real Estate
Wednesday, July 9, 2008 4:26 PM

Economist and commentator Ben Stein has some calming words of advice: By any serious definition, we're just not in a recession. And we might not enter one, either, regardless of the stock market right now, Stein writes in his online column.

Investors should pretty much ignore all the media talk about bear markets and instead keep investing, particularly through index funds and depressed assets like real estate, he says. Stein points out that bear markets are fairly common. We've had nine by one count since the mid-1960s. But just five actual recessions happened in that same time span. So, a bear market now doesn't mean recession is a done deal, Stein argues.

"That is to say, the stock market predicts 10 out of five recessions. Not such a great record," says Stein.

"The truth is that while the economy is clearly slowing down, we are not yet in a recession."

Stein cites the general rule of two consecutive negative quarters signaling a recession — which hasn’t happened yet, and might not. The U.S. has churned out very, very low growth, but it has stayed positive so far.

"As I keep saying, if anyone can call anything a recession, the whole subject loses all intellectual or factual meaning. This too could happen — a real recession — but it has not happened yet."

Stein says there are plenty of sectors of the economy that show surprising strength, despite the horrid picture painted by the collapse of financials, U.S. automakers, and the airlines.

The weak dollar has helped U.S. exports boom. Mining and agriculture are getting a lift from high commodity prices. Healthcare and the public sector are chugging along. Military spending is likely to be sustained.

"The government is running an immense deficit, and this is stimulative," Stein says.

But it's the larger world — the growing economies of China, India and elsewhere — that is beginning to really drive things. "It would be extremely rare for there to be a spectacular worldwide demand for commodities along with a serious fall in demand for other factors in an economy," Stein says.

"That is, it would be rare for demand to be both rising and falling at the same time. It could happen, but it would be rare."

As for what to do next, Stein says buy. Broad indexes of stocks are a good strategy, and keeping plenty of cash on hand, too. "None of us can control the economy. Thus, we just have to keep swimming in the roiled waters," Stein says.

Economies go through cycles, as always. The headlines will be positive again, soon enough. Buying indexes means investors can ride out the bad news and profit when things turn up.

As for cash, the risk is inflation, Stein warns. In that case, it's better to get into a real asset that’s depressed and thus likely to appreciate.

For instance, insurance giant Prudential has reportedly sold the Chrysler Building in New York to a sovereign wealth fund controlled by the government of Abu Dhabi. The price, according to Bloomberg News, was likely $800 million. Prudential acquired the building when it took control of an Atlanta, Ga. real estate fund, TMW Real Estate Group. That fund bought the Manhattan landmark in 2001 for $300 million.
Prudential's investors have seen a 20 percent return after taxes on this and other real estate sales in recent years, according to a spokesperson for the company. That gain is despite the decline in New York real estate from last year's peak.

"The best bet usually is what has gone down the most, and that, for now, is real estate," Stein writes. Where people fail in real estate, is in failing to buy, he says, citing money manager and friend Phil DeMuth.

Meanwhile, understanding your own reaction to fear — made worse by the media — is the key. "Know that the headline writers want to whip you up and make you crazy about the economy," Stein says. "They sell fear. Stay calm and stay well to do."
© 2008 Newsmax. All rights reserved.

See the full article on MoneyNews.com Click Here

Garren Grup, REALTOR

Delivering Information with Noteworthy Results!

2nd Quarter Update of Sales & Prices

I wanted to remind people with a photograph of what we all come to Southwest Florida for before providing some information on the market.

...Weather, Beaches, Boating & Sunsets!

This is just a hip shot of the make up of the BN/ES and NA MLS Inventory as of today, July 1st, 2008!

Very interesting numbers for both buyers & sellers!

Total number of listings as of this morning in Bonita/Estero and Naples, all residential types = 13,552

Total number of closed sales over the last 12 months in BN/ES, NA, resid. = 5,362

Current YRS/MNTHS of Inventory in BN/ES and NA, Residential = 2.52 yrs/30.3 mths


Market MakeUp Within Price Ranges BN/ES and NA, All Residential Types

0-250K 4,131 or 30% of the entire inventory

250-350 2,572 or 19% of the entire inventory

350-500 2,282 or 17% of the entire inventory

500-750 1,826 or 13% of the entire inventory

750-1M 992 or 7% of the entire inventory

1M-2M 1,135 or 8% of the entire inventory

2M-3M 442 or 3% of the entire inventory

3M-5M 219 or less than 2%

5M-10M 113 or less than 1%

10M 18 or not that much, in fact as a bonus if you are looking over 10 million we can do it all in a day or two.


Pending sales 2nd Qtr of 07 vs. 2nd Qtr of 08 are up 35%, that is BN/ES and NA, all residential areas.

So 66% of the inventory is below 500k, and a whopping 49% is below 350k.

These are some pretty interesting numbers for those that know the Naples & Bonita Springs market and think prices are still too high.

Hopefully these numbers provide an update on how we stand as of July 1st and further my commitment to providing the most up to date statistics and market news Naples, Bonita Springs & Estero southwest Florida market.

Delivering Noteworthy Results!

Garren Grup, REALTOR

Further Evidence of a Normal Market Return

The May market analysis continues to support the views of many that the Southwest Florida market is steadily improving and has returned to what is considered a “Historical Norm”. It was quite obvious to many that the supply had exceeded demand in Southwest Florida which elevated prices beyond fair market value in 2004 & 2005. In many communities current prices are now below “replacement cost” as some analysts have begun predicting that the credit crunch and negative national housing news is now causing an over correction on the downside in the same way the bubble drove prices up.

See some of my “Property Search Links” on the top right and discover why this is an Award Winning website in the entire state of Florida. It’s always up-to-date, easy to use and interactive for your own preferences.

Additional notes regarding May Market Stats Report:

Average number of closings for the month of May for all years 2000 – 2008 (excluding 2004 and 2005) is 611. May 2008 closings (617) continue to support the theory that the market is returning to historical norms.

May closed sales up 2% over May 2007. JRW closed sales for May up 29%.

In April we reported that YTD pended sales were approximately even with YTD April 2007. In May YTD pended sales jumped ahead of prior year by approximately 6%. JRW YTD May pended sales are up 28% over 2007. We anticipate that the market will continue to gain over 2007 throughout the remainder of the year and will carefully monitor this trend over the summer season.

JRW listings continue to outsell those of other brokers. Through May 2008, 363 JRW listings have closed (through MLS) compared to: Downing Frye 329; Coldwell Banker 256; Premier 229 and Prudential 152.

JRW agents continue to significantly outperform other agents in both average units and average volume produced per agent. There are some very good reasons why this happens and some corresponding benefits to our clients and customers:

(1) JRW employs only full-time, career oriented professionals. Adherence to the highest ethical and professional standards is a condition for continued affiliation. Advantage to clients and customers: Knowledgeable professionals, equipped with the most current information and technology, are actively involved in helping to guide buying and selling decisions.

(2) JRW provides in-house training and professional development opportunities unequalled in the market. Advantage to clients and customers: From the highly experienced to the novice agent, on-going education is provided at all levels. Changes in the market, legal requirements, technology, and marketing all have an impact on the successful sales effort. Our programs continually address all of these areas and more.

(3) JRW professionals have access to the most current market data and statistics. Advantage to clients and customers: The ability to benefit from current, factual information about the market today as well as historical comparisons. Buying and selling decisions can be made based on facts and their relevance to a particular individual situation, rather than on hype or one person’s opinion.

See the exact numbers by clicking here.

Keep up the great Team, and have a Sizzling Summer Selling!!!

Commentary provided by Dorothy D. Babcock, John R. Wood C.O.O.

I look forward to receiving any comments or questions regarding anything on my blog below!

Analysis of differences in home-price reports

A point that I've been adamant about when speaking to clients over the last few months has begun to gain some traction in articles online, in the paper and on NBC-2.com locally as well as CNBC.com. That is, the market here is improving and has probably over corrected for the most part and also that all real estate is local and you need to educate yourself on what is going on in that market. That is not to say nothing else effects it, but how it effects it can be very different. Just because the Midwest is mostly in a slump due to manufacturing their are and will always be people that have the desire and means to purchase in Southwest Florida (Naples, Bonita Springs, Estero, Fort Myers, etc). Opportunity in resort markets and the stock market is often clouded by avarice (or greed). It seems when the market was good the sellers were unreasonable and the buyers were eager to bend to the terms. Since the downturn in the market it now seems to have turned around and many buyers are not only looking for a great buy but they are specifically seeking "blood in the water" to squeezer out every last bit of value. In either respect when was getting what was perceived as a "good value" not enough?

In terms of the difference in housing numbers being reported, A recent article by Matt Carter of Inman News analyzes the differences between the housing numbers reported by OFHEO (Office of Federal Housing Enterprise Oversight), NAR (the National Association of Realtors) and the numbers reported by the S & P/Case-Shiller index. In short, Carter summarizes that their differences are easily explained, and they boil down to this:

1) Case-Shiller and OFHEO look at repeat purchases and exclude new-home purchases, but OFHEO also throws in appraisals that are generated when people refinance their homes. As we have all become very cognizant of lately, what a house will appraise for and what a house will actually sell for on the market can be very different things.

2) OFHEO doesn't consider transactions involving loans that are too big or too risky to be guaranteed by Fannie and Freddie, and acknowledges that homes with these mortgages on the upper and lower price ranges are seeing bigger price declines than the homes it tracks.

3) NAR looks at sales of existing homes listed by MLSs, and reports median home prices, which reduces the impact of price volatility in upper price ranges.

The result is that the Case-Shiller index can show more extreme swings in price -- both up and down -- than NAR or OFHEO's numbers.

Read the entire article : Click Here

Refer Garren & Expect Noteworthy Results!

Markets Stabilize in Southwest Florida

I’ve heard a number of negative comments lately about some of the positive news that has recently been circling on the news and in various articles, some of which are below. I think the best way to respond to those that believe the news media is being over stated is with hard data and figures.

I believe many outside the real estate industry would be surprised to learn that the Naples & Bonita Springs market have seen significant sales over the past 5 months! In the over $1 million market there were 203 single family homes that sold in the first 5 months of this year at an average price just under $2.2 million. At the same time there were 165 condos over $1 million that sold for an average price of $1.8 million. This accounts for nearly $740 million in sales in just the over $1 million price point with the most expensive home selling at $12.9 million and the most expensive condo selling at $9 million. There are certainly both homes and condos that are significantly less that $1 million, but I thought this would illustrate that there are a significant number of sales happening in this market in contrast to many that believe nothing is going on! Also of note was the fact that on average(both single family and condo) properties sold at 89% of their asking price, so on a $2.2 million asking price the property was actually selling at just under $2 million, a $200,000 discount.

The Fort Myers-Cape Coral area has been a little slower in rebounding but home sales spiked in April 2008, up 41% over April 2007, so we are definitely seeing a market improvement.

Prices have been coming down in both markets and this is certainly a big reason for the surge in sales. As you can see above though, the majority of sellers have lowered their asking prices and buyers on average are paying within 11% of asking price. Those seeking to pick up a property at a significant discount over 2005 pricing is possible now as the majority of sellers have lowered their prices to reflect the current market.

There are sales taking place and those in the market to purchase should begin to look and take advantage of the best buys in terms of location, view and designer finishes.

Southwest Florida is the southern most point in the United States with easy access to I-75 and Southwest Florida International Airport. As the mildest climate in the peak winter months it will continue to be a sought after destination. Let me assist you in finding the best buys relative to the current market values and your desires, before the prime properties are picked over.

Warm Regards,

Garren Grup, REALTOR

Click Here for a list of my featured Homes on www.BuyUpNaples.com

Positive News or Media Hype?

Quite a bit of attention has been focused on the national real estate market in the last few years by both the news media and consumers as we saw prices run up and then come back down. Somewhere along the way, many of us, including those in the real estate business, lost sight of the most important fact. That is, “All Real Estate is local!”
Sure, you have heard that before and the national market certainly has some effect on local real estate. Tuning in to the right information and tuning out the information that really does not apply is increasingly difficult in today’s society when we are bombarded by sooooo many messages. There have been some positive articles both locally and nationally on the Naples real estate market lately. By no means is the market back to the way it was at the peak of the market, nor would any of us want it to be! Sure we want the economy to be better, our homes and vacation properties to be worth more and gas prices to be less.

During the run-up in prices many buyers in this market refused to buy because they couldn’t find what they wanted(lack of inventory) at the “right” price which really meant they wanted to spend less and get more. We all want more for less, it’s just human nature and of course “consumer behavior”. Many of those buyers waited and waited to purchase and watched prices climb out of reach over the past 6 years. Now that we have seen an average decline in prices of 10%-30% sales are on the upswing again as noted in the news (and my previous blogs below). What many don’t realize is that many of the prices in today’s market are actually below the construction cost while still being nearly 30% above where they were in 2002.

Let’s apply a little e logic in our decision making and consider the following. Even if you could duplicate the building today it would cost more than the current prices. Inflation and the growth of emerging economies has strained resources around the world as we’ve all witnessed first-hand at the grocery store and gas pump.
Just as we certainly overshot the prices on the way up, we have now overshot on the way down. Many buyers today refuse to accept that this is possible and waiting on prices to decline with the hope they will continue to defy market economics because of what they are hearing about national housing market. On the other hand many have realized that the abundance of opportunities in the market given that we have significantly more inventory than we did a few years ago. It’s now much easier to find the right property with a great view and location at a reasonable price.

Now back to my original reason for writing this blog. The Naples & Bonita Springs market is primarily a 2nd home market. Those with the desire and means to purchase should be entering the market over the next several months. Those that want a vacation home and are still sitting on the sidelines are making a big gamble with very poor odds. With interest rates expected to rise 1% over the next year due to inflation any further price decline (that some are waiting for) is almost certain to be wiped out by an increase in interest rates. For example the payment on a $300,000 property at 6% interest(30yr) is $1,800. If you were waiting for another $30,000 decrease (10% decline) but the interest rate went up even .5% you only saved $90 per month. Is the risk/reward of losing a property that you really want and is currently available worth the cost of waiting? Only the buyer can answer that question but in these terms it defies the logic of those that remain on the sidelines trying to time when the market has really bottomed out. You can’t time any market, just like the top or bottom of the stock market. All you can do is decide if you have the means and ability to pay for it and if the price is “fair”.

Let me bring some of the logic and statistics above to your real estate transaction and allow me to filter out some of the media hype that is designed to trigger emotions in all of us!
All good real estate consultants analyze the current market based on the past trends (which are the best indicators), what is currently happening in terms of price on comparable properties and what best represents your desires. My loyalty is in providing you with the hard numbers and statistics as well as their interpretation to best inform you so you can make the best decision possible.

I look forward to hearing from you when you’re ready to seek the services of a professional. I welcome any comments and thoughts you have below in the mean time.

Garren Grup, REALTOR

Achieving your real estate desires through technology with Noteworthy Results!

Mortgage rates rise, topping 6%

As expected, and as I have been informing buyers of for a number of months, mortgage rates are expected to rise over the next 12 to 18 months. This is actually expected to happen on TWO different fronts. An increase in inflation (which we’ve all been seeing in gas and food prices) with “no action” by the FED will cause mortgage rates to rise all by themselves as commodity and gas prices climb with the stock market. An additional increase is also expected by the FED in its efforts to keep inflation down and increase the value of the dollar. The FED would be increasing the base rates while the financial markets would need to be increasing the yield to make up for rising inflation. You can read more below in the article or see it on CNNMoney.com.

Freddie Mac says that rates on 30 year fixed mortgages are up on growing concerns about inflation.
Last Updated: May 29, 2008: 12:26 PM EDT


(CNNMoney.com) -- Rates on 30-year mortgages were pushed up this week above 6 percent amid growing concerns about inflation, mortgage backer Freddie Mac said Thursday.
Freddie Mac said 30-year fixed-rate mortgages averaged 6.08% with an average of 0.6 points, up from 5.98% last week. Last year at this time, the 30-year loan averaged 6.42%.
"Mortgage rates drifted up this week over market concerns that the Federal Reserve Board may raise short-term rates later this year," said Frank Nothaft, Freddie Mac vice president and chief economist, in a statement.
"Indeed," Nothaft added, "market inflation expectations increased over the last few weeks and the federal funds futures market now has a 25 basis point rate hike priced in by the end of the year."
Rising prices
Fanning the concerns about inflation are skyrocketing food and energy prices. On Thursday the average price for a gallon of gas passed $4 per gallon in 11 states, while oil prices rebounded to about $130 a barrel as supplies fell sharply. Also on Thursday, a report from the Labor Department showed that new applications for unemployment insurance rose last week.
And the housing market continues to deteriorate. A report on Tuesday showed that US home prices fell 14.1% in the first quarter, the sharpest decline in 20 years. Additionally, a Census Bureau report out this week found that new home sales remain near a 17-year low.
Rates on five-year adjustable-rate mortgages (ARMs) averaged 5.62 percent this week, with an average 0.5 point, up slightly from last week when it averaged 5.61 percent. A year ago, the 5-year ARM averaged 6.19 percent.
The rate for one-year ARMs averaged 5.22 percent this week with an average 0.6 point, down slightly from last week when it was 5.24 percent. At this time last year, the 1-year ARM averaged 5.57 percent.


To your Success,

Garren Grup, REALTOR

www.BuyUpNaples.com for the most up-to-date list of Homes available in Southwest Florida. **Listings are updated every 4 hours on this website!

Great Deals? YES! ...Short Sale vs. Foreclosure = Too long a wait for many!

There are most certainly great deals to be had in Southwest Florida! The key is going to be deciding how patient you want to be after finding that right property. Both Sellers and Buyers of "Short Sale" and "Foreclosure" properties need to exercise diligence and patience as well as locate professionals to assist them in expediting the process. Much to the surprise of many, banks are slow, seem disorganized and lack the expertise to properly handle the volume of requests that are coming in from throughout the nation. The article below details some of the problems to expect if you're dealing with one of these short sales or foreclosures.


Banks miss an easy housing fix
Lenders say they want to help troubled homeowners, but they are delaying deals that could save everyone - including the lenders themselves - a lot of time and money.

By Les Christie, CNNMoney.com staff writer
Last Updated: May 28, 2008: 11:16 AM EDT


NEW YORK (CNNMoney.com) -- Banks say they want to help troubled homeowners, but they are delaying deals that could save everyone - including the lenders themselves - a lot of time and money.
Lenders are taking much longer than necessary to approve short sales, according to Duane LeGate, of House Buyers Network, a short sale specialist.

In a short sale, a homeowner who cannot keep up with their loan asks the lender to take a dollar amount less than what is owed on a home's mortgage, and forgive the remainder of the unpaid debt.

So if a borrower has a mortgage balance of $100,000 and finds a buyer who will pay $95,000 for the house, the lender agrees to accept that $95,000 and close out the loan.
"There was a much greater chance of success with these in the past," said LeGate
Ideally in a short sale, everyone wins. Borrowers avoid the ugly foreclosure process that destroys their credit, while lenders recoup more of their costs than they would by spending the time and money it takes to kick an owner out and resell the property.

Lenders typically lose about 19% of a mortgage's value in a short sale, according to Clayton Holdings, a Conn.-based, provider of loan analytics, while they lose an average of 40% on loans that go into foreclosure.

Coldwell Banker CEO Jim Gillespie agrees that short sales are taking too long to complete. And he speaks from firsthand experience; a short-sale offer he made on a house in Marin County, Calif. in late fall didn't win approval until April.
But most buyers can't, or won't, wait that long."That's been our biggest challenge - keeping the buyers interested long enough as we wait and wait for an answer," said Jeff Morrell, a Colorado Springs real estate agent who specializes in short sales.
Running out the clock
John Fitzmorris, a short-sale expediter in East Stroudsburg, Pa., was working with Robson and Laura Pereira, who were behind on their mortgage.
"She worked, but he had a construction business that went defunct," said Fitzmorris. "That put them in trouble."
Falling home prices in the area made a normal sale impossible; the couple was upside-down in their mortgage, owing more on the property than it was worth on the current market.
After they fell behind on their payments, Laura Pereira said, her bank, HSBC (HBC), sent her a letter asking her to call for help. "I called them four or five times and they never got back to me," she said. "We had three [short sale] offers on the house at the time." Later, the loan was sold to First American.
Fitzmorris, who has been doing short sales for more than 20 years, contacted First American (FAF, Fortune 500) about a short sale well before the foreclosure date.
But after three months, the bank still hadn't approved the short sale, and the Pereira's property went to sheriff's sale. (First American declined to comment on specific cases.)
"The offer we sent to the bank was $129,500," said Fitzmorris. "But another investor, TM Builders, bought the property at the sheriff's sale for $100,265."
In the end, the bank lost $60,000 on the loan, when it could have lost $30,000 by doing a short sale.
Ironically, TM Builders flipped the home to Fitzmorris's buyer for the $129,500 short-sale price, money the bank would have gotten had it acted more quickly.
"The sellers did what they could to mitigate the problem but the bank didn't respond, which hurt both the sellers - with an unnecessary foreclosure permanently impacting their credit - and the bank," said Fitzmorris.
Usual suspect
The difficulty in getting short sales approved stems from the same hurdles facing all the other foreclosure prevention efforts. The fact that the majority of mortgages are pooled and securitized makes it hard to get approval to change the terms of the mortgages.
"It has to do with who owns the loan," said LeGate. "If a mortgage is stuck in a pool somewhere, when something goes wrong, no one knows who the actual owner of the note is."
Additionally, the volume of troubled borrowers makes it hard for lenders to keep up. The housing crisis has put an enormous burden on mortgage servicers, the companies that manage loans for securities investors.
At many servicers, said LeGate, "There's no one really skilled at loss mitigation, and these guys have more work than they were prepared to do."
And with foreclosure filings breaking new records each month, there's no sign that this problem will ease any time soon.
Says Laura Pereira, "I feel the bank really let us down."


To make sure your real estate transaction is a smooth and successful one contact a professional that can walk you though the pitfalls as well as provide suggestions on how to expedite the process. A team of experts in the local market will boost your confidence and ease you thorough the process. Let me help you today!

To your Success,

Garren Grup at www.BuyUpNaples.com

Fort Myers, FL: April Home Sales Up 32% From Last Year

Inventory of unsold homes declining


We have continued to see an increase in sales and the amount of positive press about the local real estate market in Southwest Florida over the past few weeks as new sales data has come in. I think the most interesting statistic to come out is the current absorption of inventory which I think has been under publicized and provides both buyers and sellers with a more comprehensive view of the market. The most current absorption rate for single family homes is 9.9 months considerably lower than the 23 months of inventory that we saw in December 2007.

Special to Florida Weekly-
The Realtor Association of Greater Fort Myers & the Beach (which includes Bonita Springs & Estero) reports that a total of 684 existing single family houses were sold in April. That's a 32 percent increase in the number of single family houses sold compared to last April. In addition, 1176 single family homes are pending, reflecting a 47.2 percent upswing since April, 2007. Most encouraging are the absorption(supply in months) rates, as the current absorption rate for single family homes is 9.9 months, well below December 2007 when there was nearly 23 months of inventory up for sale.

The median sales price is $180,000, up 21 percent from 2003 levels, but down from year ago by 16 percent. Moderately priced inventories are moving as buyers are taking advantage of the lower interest rates and the affordable property values in the market. Based on the 4-month trend, it is anticipated that existing single family home sales will out-pace 2007 sales by 30 percent. "It is apparent that buyers are seeing the value of homes in Southwest Florida and are entering the market at increasing numbers."

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