Vow Page

Presentation Basics

I create a website for each property that I market.
See SOLD below for a typical slide show presentation that I create.

For my clients who are looking to purchase properties, I will also take photos of the properties that we see together.  I will post these reference photos to the web so that we can discuss physical details of the property. See http://www.flickr.com/photos/32254069@N06/sets/72157628405168199 as an example. This property needed a lot of work and the photos documented the work before the purchase.

SOLD
This is 53 North Central St., Peabody, MA

This Folk Victorian is a great three bedroom single family house that has been meticulously
maintained. It has a wonderful deck and spacious yard.  This house is located near the end 
of a long dead-end street yet is only a mile from the Rt 114 entrance to Rt 128.  It is quiet
yet convenient to the North Shore and Liberty Tree Malls as well as cultural activities in
Salem.






The sale of this property was completed as a short sale on April 29, 2011 for $236,000.

I posted this bit of writing elsewhere on the web.  Since it is about housing and housing markets I thought I would post it here as well.

For some time I had been meaning to read the article, “200 Million Empty Apartments? China's Complex Property Market” in EconomyWatch.com.  The latest article "China Housing Inequality: Ordos - Wealthy Mongolian Ghost Town" also in EconomyWatch.com provided the link that reminded me to read the original article.

As someone who has faced business life and death while navigating the twists and turns of the real estate market for the last 30 years, I find the assumptions about real estate markets in this article to be consistently faulty.  Clearly the author has never done a market survey of housing buyers to really determine what drives their buying decisions.  And also the author confuses where the demand comes from and why. 

Put simply,

1. People spend what they can afford to.  If they can afford ten homes they will buy ten homes.   When analysts said demand for TV’s would dry up when every household had one, they made the same mistake that underlies this author’s reasoning.
2. Household formation is never a steady rate in either the short run of a few years and sometimes not even for a generation.  Household formation follows the economy not the population growth.  Household formation in fact has historically varied by the generation and is driven more by the ability in any era to accumulate wealth rather than by population growth.  Even population growth does not happen at a steady rate, the baby boom generation being the obvious example of just one surge.
3. Increases in housing supply, always responds after the fact to demand.  Housing is not like consumer disposables where a second shift instantly meets demand.  While the Chinese urban builders are much quicker than US urban builders to bring supply to the market due to looser regulations, it still takes time.  When savings rates are steady, demand is steady and when demand is steady supply keeps on increasing.  It is only wild increases in consumer debt that leads to housing booms and busts.
4. There is no mention in this article that on average Chinese pay cash for their housing and they do not typically have mortgages, the way we in the US do.   Excessive debt leads to crashes.
5. Chinese consumers do not have debt though Chinese businesses and governments incur debt to produce housing.  This is a crucial factor.  The Chinese central government is business friendly but ignores or curtails the consumer.  They look askance on consumers taking on debt but support businesses with generous loan terms.  This has all led to massive increases of wealth for a segment of the population in China that dwarfs the same population size in the US.  As a broker I see the effects of this with overseas Chinese buying real estate in downtown markets in the US and always paying cash.  I have read about this same thing going on in downtown London and even in Italy.
6. With two hundred million poorly housed migrants who all work their tails off and are great savers and only sixty million “excess” units, I would say that China still has a shortage of housing.
7. A home that is paid for is a way to store wealth.  A home with a mortgage is one job loss away from being one more anchor pulling the housing market down.  Comparing housing markets around the world requires a careful look at consumer credit availability and savings rates as well as regulatory limitations on the supply.  Ignoring this as this article does in its analysis is foolish.    

The Chinese real estate market looks terribly normal to me and is not abnormal as this article states.  The Chinese real estate market is best compared to downtown markets in capitals around the world where the surrounding real estate markets are in chaos.  In downtown markets for the best properties in my experience, eighty percent of buyers are all cash buyers and property values have been immune for the most part to the declining values of the surrounding devastation that we have seen in debt ridden suburbs and poor inner city neighborhoods.

Lastly I want to say that I find most fault with “this disturbing analysis in Caixin Online” which is the basis of the Economy Watch article.  With David Caploe, the EconomyWatch.com author, I disagree mainly on the role of the exchange rate between the US dollar and the Chinese Yuan.  I believe that the exchange rate is misaligned by several hundred percent and in fact is distorting both US and Chinese job and housing markets and I think that David believes otherwise.

Thomas J Costagliola

December 29, 2010


Salem, MA                        Why I love living here - View from my window.                        Summer 2010

Saturday December 4, 2010

I am off to my farm in Douglas today. 

 
How would you like a New England country home built in stone?  Talk to me, I have plans and the land!