Manfred Keil…
…Live, presented by the Risk Management Association, Inland Empire. Attached is the pdf with the link to register for an economic update by Manfred Keil, a very well regarded professor from Claremont McKenna College with a focus on the IE. It is Thursday, February 24 at Heroes Restaurant and Brewhouse (the old New York Grill) in Ontario. They have a private room on the second floor that makes for a nice venue. Beverages at 4:30, economic discussion at 5:30. $65. Click here to register.
So, what’s keeping you up at night?
Oddly enough, the same five things that keep the CEOs of Fortune 500 companies up at night too.
The following five items are the external factors that chief executives say will have the greatest impact on their business this year.
COVID related disruptions
rising inflation
labor shortages
supply chain disruptions
changes in consumer behavior
So basically what this survey said is that the CEO of a 15 person company has the same issues that a CEO of a 500,000 employee company has.
Time to give yourself a raise. Or at least a pat on the back.
What is going on with housing??!!
A lot. But it’s mostly a supply and demand thing. However, supply is getting squeezed and demand is getting a little juiced. In my opinion. How?
Two ways.
There are FinTech’s (there goes the ‘F’ word again) - not banks, I promise you – that will look at the property you are selling, determine the equity in that property and then give you a check up to a certain amount that lets you buy your new house just like you were a cash buyer. Knock is one of them; that is to say, Knock is the name of the company.
When your former home sells, they then use the proceeds to refinance the house you just bought, using the funds as a down payment.
This gives the buyer more flexibility, basically eliminating any conditions to close.
You no longer have to open escrow contingent on your previous property selling – you are basically a cash buyer, even if you are not.
And then there are outfits like Opendoor. Let’s use a real example:
They will offer an over-market price to buy the house for cash, “with a few provisos, a couple of quid pro quos”.
If the property can get $540,000 to $560,000 on the open market, meaning it gets listed, you work with your real estate agent, and you have to drop $8000 for new floor coverings, paint, and minor repairs.
Then it sells for $540,000 to $560,000 you hope.
Opendoor offered $600,000 for a 3 bed, 2 bath house in Arizona. Nice! However, at the close of escrow:
The seller pays them a $9,618.41 Repair Credit.
The seller also pays them a $30,020 Opendoor Service Charge.
So, what does this mean?
It means you are selling your house for $560,062 – that was on the high end of what you are expecting. Everyone’s a winner, so who cares?
The neighbors love it, because it just upped the sales comparisons by $40,000. So now the same house down the street is worth $600,000.
The deed that is recorded doesn’t say what the net proceeds were, it just states what the property sold for - $600,000.
If Opendoor then sells it for $600,000, they just made a $30,000 gain through no influence from the marketplace, just through their own market impact – or is manipulation a better word?
I don’t think it creates a bubble, but it could for that neighborhood. This will be interesting to see how this plays out. This has to be irritating to the average lender. Like a bank.
More Rising Prices
Well, the news keeps getting worse. Inflation is up to 7.5%.
Three years ago, you could go down to Beverly Hills and pick up a Chanel small flap handbag for $5,200. This year? $8,200. I’m not making that up.
This is a problem for Valentine’s Day.
Instead of getting both a super bowl ticket and the handbag for about $10,000, You’re just going to have to pick one and boy, she is going to be disappointed when you tell her how good the game was to see in person.
Who are Lindsey Jacobellis and Nick Baumgartner?
She is the Olympian Snowboarder to get the first gold medal for the USA at the Beijing games.
He teamed up with her to get the gold for the mixed team snowboard cross.
Her event? Women's snowboard cross.
They are both motivational posters for perseverance.
Sixteen years after falling in the homestretch while in the lead of the inaugural Olympic snowboard cross race at the 2006 Games in Torino, Jacobellis, 36, became the oldest snowboarder to medal at the Olympics. That was her second medal in five Olympics and her first gold.
Two days later, Nick joined Lindsey in the mixed team and won his first medal, a gold one, at the age of 40, becoming the oldest snowboarder to medal at the Olympics.
I say this because when you are pursuing that key account for your business, you don’t give up after the first, second, third or sixth phone call, drop-in, voicemail, email attempt. If it is worth it, you pursue it.
Just like Lindsey Jacobellis and Nick Baumgartner.
And getting the account will get you the gold.
Happy Valentine’s Day!!
