Home buyers in Southern California, Preparing for the rebound?

Are you waiting for signs the time is right? I can tell you that I'm constantly on the lookout for signs that will help me conjure the foresight to know when to buy. I could act as a walking, talking Zillow service for my local zip code.

Frankly, I don't care (as much) if home prices stabilize or if we're looking down the barrel of another 36 months of declining prices, so long as I know which happens to be the course. I am not a physic and frankly I don't invest much in others crystal balls either, but I can tell you that if you watch the basics you should be fine. I listed a few things that I've applied that might help you out in your search too.

The largest US lender, Countrywide, CEO Angelo Mozilo says his gut is telling him that housing will remain sluggish through the rest of this year, next year, and begin to "head in the right direction" in 2009. believes the decline will last until late 2008, and not to expect a rebound before then.

So, here's what I think you can do. Research - and guess what - a little more research. A few metrics I'm using as guiding principles:

1. Home inventory. This is the supply. How long would the homes on market take to sell at the rate they're selling? A good indication of oversupply is 9+ months, an under supply is less than 90 days.
2. Watch the days on market. This is the demand. How long is it taking the average home to sell? Is this decreasing?
   
   ...And then watch a couple things that require a bit more research and gut feeling.
3. Ask, what do the experts think? A good resource for this is RealtyTimes.com.
4. Watch for whether sellers are acting desperate. Keeping an eye on the homes for sale in your area, and through the sale, can be the best way to measure this.

Now, perhaps a bit overdue, here's a bit of background on my situation. My wife and I have been looking for a place to live for about a year. It's hard to look and not take things very seriously, for a couple reasons. First, today's market conditions are more encouraging for home buyers, more so anyway than at any point in the past few years. Considering that we need a place to call home, it feels like we're looking at brand name merchandise on the discount rack. The obvious problem is we don't know how long the store will keep it on the rack. Second, the analytical side of me is telling saying all this window-shopping we're doing is really just research, and I don't have enough data to make a decision. The fact is, I'll never have enough data to not feel a little uncomfortable entering into such a large purchase.

We're looking for a place to call home, and while we do own a house, the reality is that we aren't your traditional homeowner. Reason is, we can't live in the house that we do own and while we rent a decent two-bedroom condo, and it's just the two of us living in it, we're looking for more to call the home we can live in for the next 5+ years.

We have a few things working for us. There's some equity in the house in Arizona which should help leverage a purchase here in California. Second, we have a little saved away, stable jobs, decent income, and our credit is pretty good. I think the last inquiry on the FICA scale registered around 750. With lenders clamping up on their requirements this may still be, just enough.

Honeymoon in Hawaii!

Yes, our Honeymoon in Hawaii has come and gone! I recapped some of the highlights of our trip and activities, hopefully this will give you some ideas for your upcoming trip. We were in Hawaii from July 22-30, and stayed in Ko Olina (on the west side of the island) the first 5 nights and in Waikiki the remainder of our time at the Outrigger.

Below is our trip at a glance, click the Day link to read on more and see pictures.

Arrival (22nd)
Day 1 - Resort arrival, sunset Yoga, and Azul Restaurant.
Day 2 - Resort Spa, Aqua class, and a full day in the sun
Day 3 - Aloha Stadium swap meet, Dole plantation, Matsimoto's and the Dinner buffet at the Ihilani
Day 4 - Hanging out at the Lagoon followed by the Paradise Cove Luau
Day 5 - Checked in to Outrigger, window shopping on Kalakaua Avenue and the International Marketplace followed by dinner at Chuck's Steakhouse
Day 6 - Kuoaloa Ranch, Sushi dinner at San Sei in Waikiki
Day 7 - Surf competition, Cheeseburger in Paradise, and dinner in Kapolei with Family
Departing Honolulu (28th)

Honeymoon in Hawaii, Day seven

We will remember dinner at SanSei for a while. Good atmosphere, food, and service. Here's what one of our Sushi dishes looked like.

On our last whole day left in Hawaii, we planned to rent a car and take it up to Diamond Head and parasail. Seemed like a good plan, problem was Waikiki had very few available cars, and I didn't want to spend $150 to rent a Crossfire for a half day.

Based on our experiences the past couple days, Waikiki is just a bit too busy for us. Going from the resort lifestyle to Waikiki required too much adjusting. I'm sure we'll consider spending time on another island next time, either Maui or maybe Hawaii, the big island.

We ended up coming back to the Outrigger, which by the way was quite disappointing last night in terms of noise level. The paper thin walls and poorly designed plumbing from adjacent rooms kills any chance of getting quality rest at night. Our plan: to get on the sail boat tour, or take surf lessons. Guess what, surf lessons were sold out and the sail boat we planned to tour on was reserved for a private party until much later in the day. Things weren't going our way, but we weren't going to let it get us down so we rented a couple inflatable rafts (for about $10, nothing is cheap) and drifted on the ocean for a couple hours. That ended up being quite relaxing for both of us.

After dinner with family, we're now packing up for a 8:45 departure from the hotel tomorrow morning. It's quite sad, yes, but we had a great time.

Honeymoon in Hawaii, day six.

Dinner at Chuck's was good last night, but not how I remembered it. I guess since my last visit I've been spoiled with nicer Steakhouses like Mastro's, Fleming's, and Morton's. In any case, I felt as if I was coming down with a cold, so that might partially to blame. The atmosphere was great, the company even better (my new wife), but the food just didn't make it on my favorite-5 list. It ended up being a short night, right after dinner we headed back to the room to get some rest.

This morning we headed to the Moana Surfrider Resort, next door to the Outrigger Waikiki to be picked up for Kualoa Ranch. The name of the company, named after the mountain on which the ranch sits, is Hawaiian for "long back" which was given to the mountain for its distinct shape. We decided on a half day tour, which included any two 90-minute (or so) activities, which worked out perfect since it started raining just before lunch (on our Ocean Voyeuge).

This activity came highly recommended, and I would say that goes well deserved. Kualoa itself is really a natural wonder. It's apparent though that Hollywood has taken advantage of this phenomenon of a place, and not that I'm one to talk but between the movie props left in place and the explosives that have permanently disfigured the land, it's obvious this is no state park.

A couple impressions I left with. First, American, English speaking, tourists are far outnumbered by Japanese here. In fact, for each activity we were split based on Nationality (actually for the tongue the tour guide spoke in). And second, though convenient (and especially so after a long day I would imagine), the provided tranportation is a bit of a hassle if you're use to being in charge of your schedule. I would recommend driving and avoiding the package that includes lunch. While lunch isn't bad, it's not great either, and we finished about an hour ahead of schedule meaning we were waiting for the bus.

This is a neat place, and it's obvious there's a lot to Kualoa, and more than what you might remember from Jurassic Park.

We're off to satisfy our sushi craving at San Sei in the Waikiki Marriott.

Honeymoon in Hawaii, day five.

We checked out of the Marriott Ihilani today. This was part of our planned course for this trip. The idea was we'd get to experience the night life in Waikiki, and we'd stay in the Outrigger Waikiki which we've stayed at once before (on a previous trip about three years ago).

We spent most of the day doing the hotel move and returning our rental car. In the process we walked a good mile or so down one of the main streets here, Kalakaua Avenue. We traversed the streets and the homeless begging for cash. Definately much different than Ko Olina. We spent a little bit on the beach outside our hotel and I tried to catch some waves on a boogie board I rented. Good thing it was only five bucks, no luck with the waves.

We're headed shortly to our much anticipated dinner at Chuck's Steakhouse. Trouble is they don't take reservations we're probably going to end up waiting for a while. Who do they think they are, the Cheesecake Factory?

Ever wonder how much the Brand name Coca-Cola is worth? Maybe Google?

Below is the top 10 from the 2007 list published by Interbrand.

rank brand country of origin sector 2007 brand value ($m) change in value
coca-cola us beverages 65,324 (%-3)
microsoft us computer 58,709 (%3)
Ibm us computer 57,091 (%2)
ge us diversifi 51,569 (5%)
nokia finland consumer 33,696 (12%)
toyota Japan automotive 32,070 (%15)
Intel us computer 30,954 (-%4)
mcdonald’s us restaurants 29,398 (%7)
disney us media 29,210 (%5)
mercedes germany automotive 23,568 (8%)

I heard yesterday on a local radio station that Coca-Cola was again pronounced the most valuable brand name, topping the charts at a worth estimated over $65 billion. Frankly I was surprised Google wasn't closer, rated 20th on the list with an estimated brand worth of over $20 billion. This is an interesting metric and got me thinking. How actively are these companies managing their brand?

First, I did a bit of research on what actually goes in to the measuring of a brand name. The company that extrapolates the data and formulates this brand "worth" (btw, the company that does this is Interbrand) uses publicly available information such as company financials, as well as other market data. Companies like Proctor & Gamble that are holding company conglomerates as a whole aren't looked at.

Not surprisingly, brand value drives market position in a number of ways. A good brand name means more than making it to the top 100 list that Interbrand puts out. It means the company name has come to life in the mind of consumers, in some cases brands become verbs that we use in our day to day speech. Names draw consumers, talent to the company, and ultimately the name is a value generator for the business and is treated as an asset.

You can also find that published here:http://www.ourfishbowl.com/images/surveys/Interbrand_BGB_2007.pdf)

United Airlines and Orion

As you might have noticed, I recently went on my Honeymoon. We decided to take our chances upgrading to 1st class with frequent flyer miles and not purchase the upgrade up-front, to save some cash. Fortunately we had enough points (30k), which we recieved for some travel earlier in the year as well as a gift. We applied the miles to our itinerary about three weeks prior to the big day.

So, I expected that if seats were available (and that I knew I could check that much in today's Internet age) we would land them. Wrong. Miles upgrades are treated very differently than cash, and we got waitlisted. Waitlisted until we got to the terminal and then if was clear that we were in a game. About twenty minutes into our wait (at the terminal), it became clear there was a lot of seat shuffling, and the counter attendant actually offered $400 for people to move off of our flight. It was clear they had overbooked, and fortunately for us, quite motivated to free two seats in 1st class so fill ours. They did, which was a great thing and I'm very thankful.

But that got me thinking. What happened, and what an interesting business this is. I know the airlines have been deregulated since the 1970's, but I'm really surprised the level of sophistication that surrounds the sale of seats, at it just smells funny. Turns out, Orion is the system making these decisions (in my case, as I flew United Airlines) and I really don't have any person to blame for the confusion (or frustration in the case of my waitlisted-1st class seats). Orion is the system measures demand and compares competitors rates, as well as performs all of the time factoring.

Take for example the last minute bookers. The airlines like these folks because they usually pay a premium for booking late and if kept happy can be loyal customers. So the airlines keep a bucket of seats available just for them. Sounds smart, and it probably is, but it was this that kept me wondering if we'd make our upgrade. Read more about it here: http://www.slate.com/id/2154261/

Thanks Orion.