Harry Potter Christmas Eve: The best Christmas themed Harry Potter music...

Year End Greetings

 When Saul of Tarsus set out on his journey to Damascus the whole known world lay in bondage.  There was one state, and it was Rome.  There was one master for it all, and he was Tiberius Caesar.

Everywhere there was civil order, for the arm of the Roman law was long.  Everywhere there was stability, in government and in society, for the centurions saw that it was so.

But everywhere there was something else, too.  There was oppression for those who were not friends of Tiberius Caesar.  There was the tax gatherer to take the grain from the fields and the flax from the spindle to feed the legions or fill the hungry treasury from which divine Caesar gave largess to the people.  There was the impressor to find recruits for the circuses.  There were executioners to quiet those whom the Emperor proscribed.  What was a man for but to serve Caesar?

There was persecution of men who dared think differently, who heard strange voices or read strange manuscripts.  There was enslavement of men whose tribes came not from Rome, disdain for those who did not have the familiar visage.  And most of all, there was everywhere a contempt for human life.  What, to the strong, was one more man more or less in a crowded world? 

Then, of a sudden, there was a light in the world, and a man from Galilee saying,  Render unto Caesar the things which are Caesar's and unto God the things that are God's.

And the voice from Galilee, which would defy Caesar, offered a new Kingdom in which each man could walk upright and bow to none but his God.  Inasmuch as ye have done it onto one of the least of my brethren, ye have done it unto me.  And he sent this gospel to the Kingdom of Man into the uttermost ends of the earth.

So the light came into the world and the men who lived in darkness were afraid, and they tried to lower the curtain so that man would still believe salvation lay with the leaders.

But it came to pass for a while in divers places that the truth did set man free, although the men in darkness were offended and they tried to put out the light.  The voice said, Haste ye.  Walk while you have the light, less darkness come upon you, for he that walketh in darkness knoweth not whither he goeth.

Along the road to Damascus the light shone brightly.  But afterward Paul of Tarsus too, was sore afraid.  He feared that other Caesars, other prophets, might one day persuade men that man was nothing save a servant unto them, that men might yield up their birthright from God for pottage and walk no more in freedom.

Then might in come to pass that darkness would settle again over the lands and there would be burning of books and men would think only of what they should eat and what they should wear, and would give heed only to new Caesars and to false prophets.  Then might it come to pass that men would not look upward to see winter's star in the East, and once more, there would be no light at all in, the darkness.

And so Paul , the apostle of the Son of Man, spoke unto his brethren, the Galatians, the words he would have us remember afterward in each of the years of his Lord:

Stand fast therefore in the liberty wherewith Christ has made us free and be not entangled again with the yoke of bondage.

Page 1-16 Friday December 24, 2021 Wall Street Journal Opinion , Review & Outlook, editorial written in 1949 by the late Vermont Royster and has been published annually  since.

MERRY CHRISTMAS FROM THE MCKAE PROPERTIES TEAM

The Problems are The Path: Year End Opportunities

It has always been my contention that the end of the year is the best buying opportunities for assets; due to the fact, they are under pressure by year end selling.  Whether it was stocks and bonds, when I was in the Securities Industry, or now in the Real Estate Industry.  

Assets; such as, stocks and real estate are not like a pound of coffee with a set price per pound.  They are open to negotiation.  A set price, an offer price, will be given and  a bid below the set offer could be accepted.  Why, emotions, taxes, leverage or just tired of carrying a position.

Real Estate has gone through a Down Hill Slide this past year and a half.  I saw the potential some time ago when rates went ridiculously low with over $9 trillion added to money supply.  The speculation that occurred was in asset values; along with, the creation of new investments without any reason of fundamental value; other than, demand.  ECON 101 Supply Demand Curve is always in play.  Lack of supply and demand creates higher prices until supply is created. Now if the supply is from a computer formula the supply is unending and can be manipulated.  

This is not the case in fundamental assets.  There are only so many shares outstanding, bonds issued and real estate built, and vacant land is limited to the pure and simple fact that only a volcano can create land.

The Money Supply has shrunk since it hit over $9 Trillion to just below $9 Trillion.  During that time of shrinking slightly, the cost of money, say Mortgage Rates as an example, has gone from under 3% in March to over 7% in November.  Now consider that it has taken 22 years for mortgage rates to decline from over 8% to under 3%, this increase is traumatic!

I have reiterated Elon Musks comment that the FED is after Asset Inflation.  The other inflation we incur is in the supply of goods and services.  If the price of gas is high, then drill and create refiners to supply cheaper sources of fuel.  If the price of meat or grain is high plow more fields and raise more cattle, poultry and meat product sources. 

Now let's look at Real Estate, that is why you are reading this dispatch, blog or newsletter.  Demand for real estate has not diminished!  Yes, prices offered and prices of the end product sale have declined.  Those that have bought in the past year may not be able to sell at the price they bought at.  That has nothing to do with where you live, where you come home to at night and how you raise your family.  The house you own is not a pound of coffee or shares in Sales Force or Meta.

Here is the recent market survey in our area.

Housing Inventory Snapshot				November 30, 2022
	Average List Price	30 Day Trend	Average Sold Price	30 Day Trend	Average DOM: active/sold	30 Day Trend	Number of Active Listings	30 Day Trend
Santa Clara County, CA
Single Family	$1,662,607	-0.03%	$1,604,598	-0.52%	64 / 25	14 / 0	545	-96
Luxury Single Family	$6,112,576	+1.32%	$4,009,515	-5.26%	94 / 22	23 / -7	166	-35
Condo/Townhome	$833,336	+4.03%	$836,513	+4.17%	64 / 36	15 / 10	243	-70
Luxury Condo/Townhome	$1,752,901	+5.17%	$1,525,764	-1.57%	61 / 22	12 / -8	79	-23
San Mateo County, CA
Single Family	$2,020,002	+2.50%	$1,877,099	-1.74%	60 / 23	16 / 0	319	-76
Luxury Single Family	$9,460,324	+12.87%	$7,888,042	+13.79%	116 / 30	25 / -5	103	-28
Condo/Townhome	$823,741	-0.08%	$834,009	-6.90%	94 / 43	18 / 12	122	-18
Luxury Condo/Townhome	$1,764,565	+0.40%	$1,739,770	+7.84%	69 / 57	19 / 26	37	-9
Santa Cruz County, CA
Single Family	$1,248,956	-0.80%	$1,200,800	-3.48%	80 / 35	16 / 5	157	-35
Luxury Single Family	$3,783,000	-2.31%	$2,763,270	-15.85%	104 / 14	7 / -29	50	-9
Condo/Townhome	$695,946	-4.02%	$828,675	+11.44%	123 / 15	21 / -27	21	-9
Monterey County, CA
Single Family	$980,174	+5.14%	$896,542	-1.96%	74 / 43	13 / 15	245	-9
Luxury Single Family	$7,114,145	-1.42%	$8,841,111	N/A	128 / 105	9 / 43	75	-5
Condo/Townhome	$692,621	+3.76%	$620,665	+12.93%	51 / 34	12 / 6	28	-2
Contra Costa County, CA
Single Family	$779,621	-2.46%	$788,829	-0.64%	58 / 35	8 / 1	722	-158
Luxury Single Family	$2,660,086	+0.16%	$1,980,510	-2.37%	70 / 24	16 / -7	236	-53
Condo/Townhome	$529,713	+1.20%	$490,914	-6.58%	53 / 32	8 / 6	189	-34
Luxury Condo/Townhome	$1,266,745	+2.57%	$1,306,849	+16.47%	43 / 22	-2 / -2	59	-11
Alameda County, CA
Single Family	$960,625	-3.76%	$1,032,679	-1.68%	57 / 30	15 / -1	588	-253
Luxury Single Family	$2,790,735	+4.26%	$2,099,827	-4.64%	67 / 27	18 / 2	195	-69
Condo/Townhome	$635,130	+2.94%	$624,694	-0.66%	62 / 38	10 / 3	262	-68
Luxury Condo/Townhome	$1,204,352	+3.53%	$1,082,671	-4.88%	58 / 23	16 / -2	83	-29

Nothing looks horrific, does it?

Fidelity Title gives me a regular analysis of our markets.  Fidelity does have access to the county records and can provide a clear picture of our real estate market's health.

Atherton has a Slight Buyer's Market

Los Altos has a Strong Seller's Market

Menlo Park has a Strong Seller's Market

Palo Alto has a Slight Seller's Market

Portola Valley has a Slight Seller's Advantage

Redwood City is a Strong Sellers Market

Woodside has a Slight Buyer's Advantage

What is this telling you?  It tells me that the price declines are giving opportunity to buyers to buy when price declines occur.  It gives buyers an opportunity to buy without competing offers and the need to over bid.  The Seller's Real Advantage is their property sells.  

The Federal Reserve tells me that the almost $9 Trillion in Money Supply has not been taken away and buyers can afford to buy a home irrespective of interest rates.  It tells me that the layoffs in the Technology Industry are on a wide spread basis over the United States and not localized in the Bay Area.

Could interest rates go higher?  Probably, but I feel we have seen the severity of the increase.  The only adjustments will be minor.  Banks and mortgage companies will go back to the old form of lending.  They will create mortgages that buyers can afford in monthly payments.  The other side is those with cash can adjust their asset allocation from stocks, bonds and esoteric investments that express volatility and doubt of value for real estate which they can touch, feel and live in and off of.  IT IS YOUR REAL ESTATE!

HAPPY HOLIDAYS TO ALL AND TO ALL A GOOD NIGHT!