Recession, Inverted Yield Curve and real estate continues to be strong

 There have been 17 Inflation Periods since the 1970's when interest rates were increased by the FED. to combat inflation  All but THREE led to a Recession.  From a statistical and probabilities standpoint the bet is on RECESSION!

That is a tough pill to swallow as we are just getting out of the Pandemic era, still facing continued reinfection by various variants of Covid.

The FED is ramping up rate increases and the reduction of their $9 T bond portfolio.  The first to go in the bond portfolio is the MBS, mortgage backed securities, sector.  There are ample buyers in the banks.  It appears their portfolio composition are light in this sector.  

At a present mortgage rate of 4.75% and the historic average maturity of a mortgage in the MBS portfolio is 7-10 years.  To a bank, as an investor, 4.75% is far better than the 2.8% on present 10-year T-Bonds.  That indicates that there will be a faster redemption within the bond portfolio.  Further indicating that banks believe that home sales will increase from the present level.  Homes will sell, mortgages will be paid off and the average age of the MBS will decline.  This will allow the banks to re-invest at higher interest rates.

Going onto home sales, we are still seeing less homes for sale than demand requires.  When will that end?  That will go to the point of loan commitment letters.  Generally speaking they are good for 90 days.  At the end a new letter and a new rate is committed upon.  At present the rates expiring are in the upper 2% level.   "What to do"?  Buy a house fast, forget about if the color of the interior is not to the liking of the buyer, the kitchen is old, the floors need finishing.  All can be done with out the cost of increased loan payments based upon a present commitment of 4.75%, and very possibly over 5% when the FED increases rates in May.  The belief is the rate increase will be 1/2%.

On a monthly basis, commitments will drop off and new ones will be created.  With those increases in rates adjustments of buyers must be recognized.  The alternatives are 1. buy a smaller and less expensive home, 2. offer a price that is below list but equal to affordability,  3. make offer contingent upon appraisal and financing, 4. wait for home prices to drop, 5. MOVE to a more affordable area.

The last two are the least likely and acceptable to home buyers.   

Silicon Valley is unique to the rest of the country.  We have a wealth of Venture Capital firms looking and willing to invest in new businesses.  We have a wealth in well trained and highly educated workers.  What we do lack is a Service Industry who can afford to live here!  This is the real challenge of the Venture Capital Business.  How to develop a replacement to clerks, cooks and waiters.  Then there are the Fire and Police, Teachers, Health Care workers who are stuck here and we can't replace.

Inflation is 8% on an annual basis.  Where does it go from here?  Historically it does not stop on a line in the sand.  Supply must increase or demand decrease.  That seems difficult as it means investment by farmers, miners and oil companies and borrowing when interest rates are increasing.  Supply does not turn on like a faucet.  Drought and rain can cause issues for crops.  Finding oil and gas takes time.  Processing all of the above take time.  While time is being taken interest rates keep rising until.  The economy CHOKES!

Where does this process affect home prices?  That is a BIG Question.  In the 70's we had Stagflation.  A stagnant economy and inflation.  Interest rates were increased by the FED.  Bond prices declined.  The stock market declined too!  The irony of the 70's was residential housing was active and prices rose.  People did have money and jobs.  They did not invest in stocks and bonds to lose their investment.  They bought a home!  Yes there were foreclosures as some lost jobs.  The foreclosures sold at lower prices and there was always an eager buyer for a willing seller.   Professional traders and investors always made money in their investments.  It was the average "American" who stopped buying mutual funds and long term bonds that went to real estate.

Slowly we should see a real estate "sellers market" turn into an "balanced market".  The Month of March Report on Housing in the Bay Area is out.  Santa Clara County Luxury Homes declined for the second month in a row.  The average list price of $5,493,329 was down 3.69% from the proceeding month.  In San Mateo County, it too declined the second month in a row, the average list of $10,367,196 was down 3.69% from the preceding month.  The average sale of $7,155,493 is down 1.12% for the preceding month.  Whereas, single family homes continued to increase in both list price and sale price with shorter days on the market.  This further indicates to me the upper end of the market who do not buy with a mortgage sense a slow down.  Those who buy with a mortgage are buying before their commitment letter expires.

It all stops when the FED stops. Let's hope we have Putin solved by then and supply returns to the market.

Stagflation?

 From what I read and listen to on Podcasts, You Tube and the like; there is a majority of opinion of a CRASH.  A CRASH is expected, it is not a Black Swan.  What makes a Black Swan is the unexpected happens.  In the case of a Crash not occurring but a revival and continued economic growth, that unexpected is called a White Swan.  A good event that is prosperous.  Instead of a Crash we have a continued upward movement in the economy.  The Silver lining that is not being considered is the expansion is wages or earnings.  The increase in earnings can offset the inflationary pressures.  Higher oil prices do not necessarily mean it will affect all.  Cars are more economical,  more cars are EV or a combination thereof than in the past.  People have public transportation and car pools.  All are coming back to work in offices and the cities as the Pandemic is gone and the variants are more a severe cold.  

The commodity prices of Wheat, Corn, Soybeans and meat products which are created from the grains will go up.  With the increase in prices farmers and drilling companies will created more supply.  While the pressures will be near term the adjustment process is a potential political disaster for the Democrats in November  The talk of "green" will soon go on the back burner as the need for natural gas and oil take over to offset the Russian embargo on oil and the Ukraine situations.  The embargoes will stay!  When Putin goes things will change but up until then we live in the present world.

The Balance of payments will turn to a positive as America sells more oil and natural gas to the world.  America buys its oil from Canada and that makes the Trans-Canada pipeline a must.  Sell our oil and buy cheaper Canadian Oil is a great Arbitrage.  Canadian Oil is a heavier oil and our refiners are heavy oil refineries.  The new Frack Oil is a lighter oil and better to sell than convert our refineries.  That means a stronger dollar.

Basic Industries will be in revival.  Basic Industries as a group have lagged in the past Bull Market in stocks.  The stock portfolio asset mix will change and the FAANG stocks will change in dominance.  That then brings up a question for Silicon Valley.  Silicon Valley has grown on the growth stocks and FAANG stock dominance.  Will we see prices weaken or stabilize?  That will need to be answered in the Baby Boomers and their willingness to sell.  They are getting into their 70's and age does have its issues.  The wealth of most of them is in their homes.  When they need medical help or must need 24/7 care the funds must come from savings and or the sale of their homes.  I will venture to say we will see more inventory as rates increase and Silicon Valley slows down.

The Federal Reserve (FED) raised interest rates for the first time since 2018 by 1/4%, not the 1/2% as expected.  FED chairman Powell said 7 more to come.  10-year Treasury bonds are at 2.1%+.  Mortgage rates are at 4%+.  The increase of seven 1/4% rate increases will take the 10-year to 4% and mortgage rates to 6%.  Will that stop buyers?  Now that, to me, puts to question the increase in wages argument.  Wages increase earnings decrease is simple business accounting.  Earnings decrease, stock prices decrease, less stock buy backs and less dividend increases.  That seems more recessionary.  It is highly improbable to me, that wages will increase equally or more than inflationary increases.  That then puts pressure on buyer affordability and prices to become competitive.  In the area of consumer products there is always technological advances to create savings.  A house is built as it stands, the only give up is in price to the buyer.

The answer to the economic direction of our country will come in November when the House and Senate elections occur.  A shift to GOP will tell Mr Biden his days are limited.  Will Biden become more forceful with Putin?  That will also tell us more about the physiological being of Americans and Silicon Valley.  If this war gets nasty.  The outlook for higher rates and recession may be out of the question.  I do not think Putin will back down.  He is too much a KGB Colonel in mind set to Back Down.  I am reminded of a Colonel who taught Military History in college.  "Offer a Russian a finger nail, they will take your arm".  Putin got his finger nail in Crimea, Syria, and now it is time for the arm.  Will Mr. Biden be up to the challenge of WWIII?  I doubt Putin is insane, but the threat of nuclear is always a tough bluff to call.  If it happens he losses everything. Is he mentally disturbed; if so, a bullet will solve that.  His loyal backers do not want to loose everything and go back to the Soviet Days.

Locally we are in a market of transition.  The older 50's houses are either updated or demolished and new up-to-date homes replace them. Therein lies a fallacy of the increase in home prices.  Homes are bought a year ago and fixed and flipped by Professionals.  The increase is not an increase in appreciation, but a manufactured increase.  I cannot speak for the rest of the country, but from my experience locally.  How long will this continue?  It will continue until buyers stop buying based on economics.  The economics have not changed to date.  So, if you are a buyer, buy now. If you are considering selling do the same as where ever you go prices will increase, accordingly.

Comments of Gary McKae not eXp Realty of California

Ukraine, Inflation and Stock market volatility on Home Prices

 It is hard for me to believe that the Stock Market's volatility and the upward pressure on inflation from the Ukrainian situation will not affect home prices.

Saturday, March 5th weekend Wall Street Journal had some sobering comments on source of funds that support our housing market.  $1.17 billion in Initial Public Offerings have been pulled from market issuance in February.  IPO's, as they are referred to, have been a source of funds that have fueled our real estate market all through the  stock "Bull Market".  Now the stock market is officially in a "Bear Market" there is a question on how much exuberance will continue to carry over into buying frenzy.  I still do not believe that our real estate market is on the verge or even near the end.  At most, the market should settle down to an even buyer and seller situation of equal representation.  I have already seen so in some recent price cuts.  $110 million listing in Woodside has been cut $26 million in one month time!  It seems rather soon, to me, that would have occurred without some stimulus externally.

As I look at the overall real estate market in the 5 county area, there is a clear sign that listings have increased substantially, in my opinion, and sales have come down to list prices.  

A recent report shows that the Luxury high end side of the market a disturbing indicator.  In Santa Clara County the average list price of a Luxury Home has declined in the past 30 days as of February 25, 2022 by 11.95% and average sale price decline of 5.11%.  In San Mateo County the average list price is down 12.8% and average sale price is down 20.61%.  

When I look at that same report, counties outside of our area it gives me a good indication of where buyers are going to.  In Alameda County Luxury listing prices were up 2.6% and sale prices up 6%.  Contra Costa County high end Luxury listing prices are up 6.9% and sale prices are up 14.66%.  Monterey is different, Luxury listing prices are down 10.89% with sales not available.  Santa Cruz County the Luxury high end listing prices are down 24.29% and sale prices are up 2.9%.

On a daily basis I look at the MLS survey of our Silicon Valley Communities and see an over weighting of new listings to pending and sold properties..  We are now into the best season of home sales. The results going forward will be a good indication of where prices are going.  Listing are well outdistancing pending sales and sold properties to date.

Inflation has been taken over by the Ukrainian conflict with oil prices at a new high, taking along with it gasoline prices.  Foodstuff are dramatically increasing as Ukraine is a major wheat producer.  Future prices of wheat are at a new high taking with it corn and soybeans.  Those foodstuffs are what make meat prices go higher as the cost of feeding livestock increases.

The most difficult situation is interest rates and what affect raising interest rates will have upon inflation now after Ukraine.  From my observation the increase in commodities is a supply/demand situation instigated by fear and greed.  I cannot see how an increase in interest rates will affect the supply of wheat, corn and soybeans when a major world supplier is taken out of the supply equation.  Do not fail to realize that oil is a  major component in the production of foodstuffs.

Then to, I find it hard to believe that an issuance of a state ruling to expand property limitations to allow multiple family units will solve the housing issue.  As I see it, it is the cost of housing, not the supply, is the real issue.  Once the income factor is addressed the ability to buy homes is partially addressed.  Then the supply of houses can be a useful solution,

Just my opinion, not eXp's opinion.

Interest Rates, Inflation & Real Estate

" Breaking Up is Hard To Do", a 60's, or so, song from Neil Sadaka is a song for our era.  Just like our first love, things were going so smooth and then BANG.  What happened, everything was going so well?  Interest rates were declining, stocks were alway going up and every dip we bought more, home values kept moving up, we made unbelievable money with a thing called Crypto.  Then all of a sudden we had Covid, things came back and went higher, people shifted home searches away to areas were they could work remotely and have a better lifestyle at a lower cost of living.

A buyer prospect backed away from a purchase recently, he lost over a $million in Crypto....he is sick.  The happy smiling guy is gone.  FAANG Stocks are down so much people hate looking at their statement on line.  Yet....home prices keep going up.  Los Altos Hills is up 37% in the month of January and the entry home there is $4+ million.

Yahoo Finance says..."How will the economy and markets handle hikes? Clearly risk assets are vulnerable. One way to view the recent stock market correction is that with the Fed no longer in deep denial, markets have caught on to the idea that inflation is a problem and the Fed is going to do something about it. As the Fed pivot continues-and the bond market prices in more hikes, we could see more volatility," said Bank of America's head of global economics Ethan Harris. 

‌Harris — who is now calling for seven rate increases and only 3.6% GDP growth in 2022 — will be on Yahoo Finance Live this morning. If you own stock, this is a must watch interview.

‌

"Rates — seven or eight increases — may also shock the economy. And that could possibly even cause a recession," Stifel's long-time CEO Ron Kruszewski told Yahoo Finance Live.  

When I reflect on our situation both domestically and internationally I think about my first decade out of college, the Jimmy Carter Presidency.  Iran took our Embassy, Allies were cautious with us, Nam took some of friends and never gave them back!  Inflation was crazy, gas lines, food prices escalating.  Through it all housing prices were strong.   Why?  I guess if you bought stocks you lost money, if you bought bonds you lost money and if you bought real estate it stayed firm and went up.  Inflation stayed with us for some time until finally it broke with 14% T-Bills.  My first mortgage on a flat in Pacific Heights was 14.5% for a 3 bedroom at $265,000.  My newly wed wife and I spent after work and on weekends cleaning up old door knobs and shining brass.  Sold it in a year for $395,000 and bought a home in Woodside for $425,000 and never looked back.  Real estate did so much better than stock.

Today's inflation is a bit of an enigma.  When I look at the Census reports there is something wrong with the report.  7.5% inflation seems out of reality.  Gas at Costco keeps going up, my wife comes home after shopping and complains about the price of milk and bread.  When I look at the Census reports there is a calculation of 7.5% .  Fuel oil +9.5% for January with 46.5% year over year.  overall energy costs +25% on the year.

Two interest rate increases for 2022 when to 4 then 5 and now to 7 before rate increases with a 1/2% increase among the1/4% increases.  The 10-year T-bond is 2.022%, a big jump after the recent CPI figures.  The 10-year is most important because it sets mortgage rates, credit card rates and most other borrowing rates.4 increases in 2022 could take the 10 year to 3% and mortgage rates to close to 5%

The real estate markets most vulnerable will be the lower end or starter homes.  That market is where budgets are tight.  The next target is the "Fix & Flip" market where margins are tight and lenders quick to pull the trigger if sales are not fast.  A pull back in that market will cause a hesitation across the board.

So far, we have not had a FED rate increase.  The mortgage rate has remained steady and starter homes have maintained value.  That should be enough for buyers to get out and buy before the FED starts increasing interest rates.

Seller, should not be so cocky.  When rates pinch pocket books of buyers in the starter and move up market,  price cuts in listing and sales prices will be expected to cover their budgets.

The biggest challenge in forecasting presently is the workers not being tied to desks and working remotely.  

The next challenge is the return home of manufacturing.  Russia and China are back in the Cold War Syndrome.  Asian work place will find better conditions in Texas, Arizona and Nevada and States of the south east close to ports.  The energy industry will see a come back as oil, and gas will be needed in Europe to supplement the lost Russian gas.

I can foresee a FDR type program to take care of the homeless and unemployed  sleeping in tents and cars.  All tied to massive building programs.  The talk of subdividing Woodside properties will cease and people will be able to afford the higher costs of living.

OPTIMISTIC?  No just following the Playbook of Pericles of Athens, about 450 BC, and FDR.

Zillow Back on Front Burner, Black Swans and Other Things

 Zillow spent last year aggressively expanding a home-flipping operation designed to make the $2 trillion U.S. Real Estate Market better for consumers, until a bad bet on home prices shut it down.

To sell the thousands of homes a little known truth about the business, called "iBuying" popped up.  "Institutional Buyers" were the biggest names in global finance.

Bloomberg News analysts came up with more than 100,000 property records show that Zillow and the other buyers, Opendoor and Offerpad were selling thousand of homes to the new landlords on the block: KKR, Cerebus, Blackstone and many other large hedge funds and institutions.  Those properties were never listed.  That caused the squeezing out of average buyers in the competitive housing market.

Two out of 10 homes on average in the US went to iBuyers, double that in Sun Belt and Metropolitan areas and EVEN GREATER in communities of color! A diverse range of political voices from the Biden Administration to Conservative talk show host Tucker Carlson have blamed institutional landlords of crowding out regular families.

iBuyers have resonated well during the Pandemic: no showings, no open houses, no waiting for lender approval or appraisal, all cash and quick closes.  All have created a new off the grid market for sales the average buyer is left out of.

FED TAKES AWAY THE CANDY BOWL    

The Federal Reserve has decided that the economy is too hot, inflation too high and employment tight.  So they are reducing and eliminating bond purchases and raising interest rtes.  At first the forecast was for Two rate increases in 2022, then Goldman Sachs forecasted Four rate increases in 2022.  Assets sales will occur as the $8-9 trillion balance sheet matures, with sales a surety in the future.  That will tighten money supply and expected raise in the 10-year Treasury to 2% or higher raising mortgages and credit card rates and the cost of borrowing across all sectors of the economy (What will a 4% mortgage do to the housing market?).  The US$ will rise creating higher costs for our exports which leads to slowing international sales and a slowing down in the economy.  Speculation will stop or slow down and the unique asset plays as Bitcoin, NFTs, SPACs and the like will certainly see less speculative buyers (SELL,  sell to who, you were the only buyers.  Don't worry there is always a buyer looking to catch a falling knife).  Stocks with higher dividends and money market funds will compete with little or no risk of capital.  It is already being seen in the decline in SPACs below their IPO prices and the 20% drop in Bitcoin.

No this is not a Black Swan!  The Back Swan is an event not in the news, so Putin, China, interest rates and the economy are not Black Swans.

A Black Swan is an unknown and unexpected event, so keep your cash reserves high.  Black Swans occur when markets go to excesses beyond averages or standard deviations.  Boy have we been on a run for the past several years.  Then BANG, A Black Swan.  Myron Scholes and Robert Merton came up with a financial formula that won them a  Nobel Prize in Economics.  They created a fund, Long Term Capital, that made 21%, 43% and 41% in the first three years then lost $4.6 billion in less than 3 months and put the financial markets world-wide on the edge of a precipice.  Again the Federal Reserve Calvary came to the save with 14 banks and $3.65 billion to liquidate the fund.

REMOTE WORK FROM HOME

Remote work is changing the labor market and the housing market in numerous ways.  It is considered the largest change in American working and living conditions since WWII.

The latest job report had payrolls gaining 199,000 missed expectations of 249,000. The big surprise came as millions of workers voluntarily left their jobs.  The Great Resignation is ON!  Return to the office?  No I quit!  Work from home for the past two years without a drop in productivity.  Jobs specified as remote get 300% more applications than jobs that are not.

Since people can work from any where the move is on to. affordable locations.

In the top 50 of move to states are: Wisconsin, Florida, Nevada, North Carolina, South Carolina, Idaho, Florida to just name a few.  In the top Move From is California!

2021: Lessons from the Pandemic

On this day December 31, 2021, the last day of 2021 it seems prudent to look back and determine the lessons we have learned from the experiences in 2021.  Lord Toynbee stated that History Repeats Itself.  So then, as the Lessons below should be a guide to what will repeat in 2022.

I.   70% of buyers have been younger consumers.  This was reflected in their financial ability to escape from metropolitan or highly populated areas.  Covid 19 and the mutants had an impact on future lifestyles.  Superior homes with large spaces and multiple rooms that gave authenticity to their life styles and provided a positive environment for the "work-at-home" attitude.

II.  Location and property types and sizes were no longer the only consideration.  An increased knowledge on the importance of achieving more well-being, deeper consciousness, and cultural relevance, that would ultimately empower buyers to make ethical decisions, were important motivations.

    This was clearly reflected in the demand and absorption rate of homes that offered more sustainable, environmental, and wellness functionality of interiors and exteriors.  Properties fitting those parameters sold within days, subject to multiple offers and over asking prices.

III.  Buyers that moved to rural communities decided to stay, finding that the quieter and smaller communities suited the new lifestyles.  The suburbs provided an alternative to rural living with easy commuting when it was necessary.

    There was an uptick in families becoming more involved in their newly adopted local communities, not from a social aspect, but more importantly from sustainability and a diversification context.  The new buyers recognized to refocus their values and adapt with a changing societal landscape.  One of the most significant trends in 2021 was the world of interactive innovations; the growth and diversity of technology. 

IV.  The youth led the online market in product purchases, while the purchase of homes, especially Luxury Homes, was and is still controlled by Gen-X and Baby Boomers.  Interestingly many of the purchases were completed remotely. The Pandemic accelerated the trend, digital processes already in place have now become the norm; rather than, the exception. A recent study states that 40% of the global buyers polled would now purchase a home without physically visiting it first.

V.  Technology and platforms made the process efficient and effective; as well as, interactive.  Both are now very much part of the real estate experience.  While technology is important, 87% stated, and 8% were unsure, they would use a real estate professional to guide them through the process.  Personal service, local knowledge, industry contacts and the art of negotiation were ultimately the most important aspects of buying or selling a property that could not be replaced by a digital platform.

 VI.  2021 may not have been the easiest year.  the world still faces uncertainties from the Pandemic and its environmental, economic and domestic/international political issues.  People are recognizing the need for social and environmental change.

CONCLUSION:  The art of selling and buying in this market needs a critical and analytical approach, understanding the realities and setting expectations accordingly will ensure that goals are achieved.  For home owners looking to buy or sell in today's market working with a realtor that can capitalize on the preferences, trends, and demands in they dynamic and evolving environment is essential.

HAPPY NEW YEAR!  MAY WE LIVE IN A CHANGING WORLD AND SURVIVE, ADJUST  AND PROSPER

* SOURCES: PERSONAL OBSERVATIONS,  DECEMBER LUXURY MARKET REPORT INSTITUTE FOR LUXURY HOME MARKETING. 

In Hoc Anno Domini

 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: GARY MCKAE, LISA GOULARTE & EVELING ALVAREZ