A Room With a View

 

JOURNAL

A Room With a View

Bill Barksdale, Columnist

I was out thinning my apple tree today.  Last year neither apple tree made apples after an abundant year before.  This year they’re loaded with very young baby apples, way too many.  When this happens I’ve learned it’s necessary to go to each cluster and thin them out to 2 or 3.  There are often 8 or 10 of these young apples in a cluster but a simple light tug and the ones that aren’t going to make it just fall in my hand.  The others I thin-back.

Recently some folks with two young children bought the house behind ours.  As I was out pruning the tree I could hear the kids playing outside with Mom & Dad doing something and you could tell from the exchange between kids & parents that these people love their children.  There was a lightness, a supportive loving exchange.  It made me so happy to listen to this chatter. 

So many kids grow up in houses with substance abuse or cold parents who seem to have no idea how to hug and encourage their children.  Many folks have emotional issues.  It’s quite common, as we all know.    It’s likely they’re just apeing the behavior they grew up with.  Abuse often gets passed from one generation to the next.  What to do?

 Sexual Assault - Project Sanctuary serves Mendocino County with many domestic issues.  In Ukiah they are at (707) 462-9196, and in Ft Bragg at (707) 961-1507.  There’s also help for veterans & their families at a Project Sanctuary in Colorado.  Vets are a very high-risk group for suicide and domestic abuse.  Call them at 855-838-8255.  There’s also the Mendocino County “Warm Line” for people who just need to talk about depression & such, 24/7 Free.  Not a medical phone line, but some help.  They’re at 1-855-838-0404.  Linea de Crisis Llamada Gratis 24/7, 1-855-838-0404.

 The other evening we were watching the wonderful 1985 film version of British writer, E.M. Forster’s novel A Room With A View.  Ruth Prawer Jhabvla wrote a brilliant screen play and the film became a surprise big hit in that year.  It’s a film about making the right choice for yourself and not being bullied into ignoring your intuition. 

 E.M. Forster who lived 1879-1970, had seen WW 1, WW2 and the comings and goings of many authoritarian and fascist states in the world, just as we do today.  In an old interview he once said, “I do not believe in belief.  This is an age of faith and there are so many militant creeds that, in self-defense one has to form a creed of one’s own.  Tolerance, good-temper and sympathy are no longer enough in a world which is rent by religious and racial persecution, in a world where ignorance rules and science, who ought to have rule, is a subservient pimp.  Tolerance, good temper and sympathy – they are not matter really, and if the human race is not to collapse, they must come to the forefront before long.”

 Such profound words of wisdom that still apply today, perhaps more now than ever. 

 I love hearing those children laughing and playing with their loving parents across the back fence.  I enjoy seeing more young parents in Willits with their children.  For a while it almost seemed like Willits was aging faster and young families were leaving.  But now I’m seeing families stay, and even others move into the area.  Perhaps one important thing Covid-19 has shown us is that one doesn’t have to live in a big city.  A small town has many gifts to offer.

 I grew up in small towns, then I left for New York City and later San Francisco for about 20 years.  They were exciting and I’m eternally grateful for the cultural abundance those places shared with me, but now I love our small town.  I realize that many small businesses struggle.  I admire the business owners that somehow make a go of it – their tenacity.  They too, love this small town.  It goes without saying that if you can support our small businesses, you are making this a better place to live, and a better place for old and young alike to live and thrive. 

 As wise old E.M. Forster said - tolerance, good-temper and sympathy are qualities humans must embrace in order to survive.  It’s easy to get lost in the news of the day.  Mass media has overloaded our lives with every bad thing that happens in this world, with precious little about the beauty, kindness and blessed solitude that exists.  Those things don’t ‘sell soap’, as the old saying goes.  Fear is a big-seller.  Corporations, political parties and many religious organizations have known that for centuries. 

 “I do not believe in belief.”  Unless those beliefs bring me a feeling of joy inside.  You might say, “That’s OK for you!”  That would be correct, for belief is an individual thing.  Each of us chooses what to believe.  Sometimes I choose well, sometimes not so. There’s always that march to a “different drummer” saying ‘This way is much happier.  Try this way’.  That’s intuition speaking.  We’re taught to ignore it, but try listening.  I’m still learning, still trying.     

 Bill Barksdale was inducted into the 2016 Realtor® Hall of Fame, and served as Chair of the County of Mendocino Assessment Appeals Board settling property tax disputes between the County Assessor & citizens and businesses.  Read more of Bill’s columns on his blog at www.bbarksdale.com

 

 

Home Loan Interest Rates and Related Stuff

 

Home Loan Interest Rates and Related Stuff

Bill Barksdale, Columnist

This is a very complex, volatile topic that even economic experts, which I am not, have written long studies about.  My observations do not constitute expert advice and you should not base your financial decisions on what I have to say.  If you need financial advice it is essential that you consult a qualified expert.  So here I go with my opinions and observations.

As a society we are still riding the wave of the devastating financial economic collapse that began in 2006 as big financial institutions began to play Russian roulette with the economy.  It made markets nervous and there’s still some nervousness from that disaster. 

 In 2007 the huge banking institution Lehman Brothers, had been packaging so called subprime loans, which were home loans made to people who didn’t actually have the income to make the payments.  They became known as “liar loans” because unethical lenders encouraged borrowers to lie about their incomes and those incomes were purposefully not verified by the many lenders that made them because those lenders were making huge profits and knew that the Federal Government would pick up the tab i.e. U.S. taxpayers.  Well anyway in 2007 Lehman Brothers dumped their toxic loans into the financial markets and in 2008 declared bankruptcy! 

By the end of 2007 at the tail end of the George W. Bush administration, the U.S. economy began to be unstable.  The Lehman Brothers failure triggered a domino effect and many crooked financial institutions began to fail.  President Obama took office as the economy was in free-fall.  He must have had nerves of steel!

As a real estate agent I can tell you it was breathtaking to watch the real estate market turn around in weeks as home prices dropped dramatically.  The effect began to cause wholesale, widespread foreclosures on home owners whose home values dropped.  They found themselves “upside down”, meaning they owed much more than their homes were worth.

At the time, home interest rates for well-qualified best buyers were around 6.25%.  Many factors go into what your home purchase interest rate will be.  Among them are your credit rating - based on your personal history of how you manage money.  Do you pay bills on time?  Have you had the same job for at least 2 years?  Does your income match what you, and your family if you have one, need to live on?  How much have you saved to make a down payment?  Lots of stuff.  If your rating is low, say below 680, you will pay a higher interest rate for the risk the lender is taking on you.  Insurability of the property is a factor.  Also, location-location-location.  Is the property in a desirable location?

Other factors include: is there enough housing stock to supply demand?  Answer - There’s not.  Inflation is often caused by corporate behavior.  Are corporate profit demands increasing faster than a reasonable rate of return?  Look at drug prices, medical care & fuel prices for instance.  Social conditions are factors.  Look at the instability of the January 6^th insurrection and the insecurity caused by the recent Russian war in Ukraine. Things like that make markets & their investors nervous.  These things cause economic instability. 

In January of 2021 interest rates for best-borrowers dropped to an all-time low of about 2.65%.  In 1971 they were about 7.3%.  In 1980 they were around 18%.  When I began my real estate career people were rushing to refinance at the bargain rate of 9.5%!  Today, as I write this, a home loan with 20% down payment - 740 credit score is about 5% + 1% of the loan amount for loan points.  Lenders are raising their rates regardless of what the Federal Reserve is doing.  Per loan officer, Debbie Mirabelli, the Feds are no longer buying mortgage-back securities, so insurance companies and other investors are now taking that investment risk and they want a higher rate of return.  My opinion, it looks pretty certain that rates are quickly headed to around 6%, fairly soon.

Home prices have risen to unsustainable highs in most markets.  The demand exceeds supply.  That causes inflated prices – INFLATION!  As one control on inflation, interest rates rise.  As interest rates rise, home prices normally fall because more of the borrower’s dollar goes to paying interest instead of the principle they owe on the loan.  Thus, the borrower qualifies for a lower loan amount and home prices fall.  People need a place to live so until there’s more housing created, or population falls, prices may remain somewhat inflated.  We’ll see how much pain buyers can handle. 

Normally reasonable housing expense should be no more than about 40% of your household income.  Many buyers spend more than that.  Fuel prices and a declining supply of truck drivers are rapidly increasing the cost of goods, including food.  The need for renewable, non-fossil fuel energy is rapidly becoming an imperative.  Lower heath care expense has to be lowered as it is in every other developed country.  Huge disparities in what the super-wealthy & regular people pay in taxes must be corrected.  Money for increased housing & living expense needs to come from somewhere.  Somethings got to give. 

Still with me?  Congratulations!

Bill Barksdale was inducted into the 2016 Realtor® Hall of Fame, and served as Chair of the County of Mendocino Assessment Appeals Board settling property tax disputes between the County Assessor & citizens and businesses.  Read more of Bill’s columns on his blog at www.bbarksdale.com