What is the real estate market and the U.S. economy going to do in 2012?  Here is my read on the real estate market and the the economy for 2012.  In terms of credibility in writing an article on the economics of both the real estate market and the U.S. Economy, just for your information, I have a degree in economics (with an emphasis on monetary policy), a degree in teaching, a doctorate in law, and 37 years as a business owner, lawyer, registered financial adviser, certified estate planner, business consultant, and real estate broker.  While that certainly doesn’t guarantee anything about the accuracy of my perspective, the so-called experts and talking heads on T.V. have been wrong far more than they’ve been right since 2005.  The odds are my prediction will be more accurate than the talking heads who never warned us of the impending doom until after the fact.

The Real Estate Market

There are economic cycles and patterns that tend to repeat themselves over time, but these past five years have seen variables thrown into the mix that no economic model has ever had to include in the predictive programming.  No Ph.D.  has ever lived through such times with so many variables and so many potentially complex outcomes.  The John Keynes economists have blown a fuse trying to figure out how to run fiscal spending and taxation models and not run the country over the cliff.  The Milton Friedman economists believe monetary policy is running amok and has been hijacked by social terrorists.

The truth is the politicians have no clue how to solve the problems they got us into.  While we are on the brink of defaulting on our debt, and Europe has sprung such large leaks they can’t seem to bail water fast enough, the truth is no one knows what will happen in 2012.  No one knows precisely because there are literally thousands of economic variables at play.  Governments all around the world now control many of these variables, and business owners who are the engine of employment, are at the mercy of politicians and government agencies calling all the shots.  Free enterprise is no longer functioning as the economic engine of the greatest laissez faire system the world has ever seen.  (more…)

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Are you retiring in Sequim and planning to start a business?  You may have heard the expression, “The answers you get are only as good as the questions you ask.”  Today I thought I would both ask the questions and answer them for you.  The questions that some retirees may not ask, but should consider, are questions like these:

1. Does the business I want to start have a high probability of success or a low probability of success?  Some businesses do, in fact, have very high statistical probabilities of failure.  New restaurants fall in this category, as well as antique shops, used bookstores, specialty stores, clothing stores, small toy stores, art and photography shops, some personal service businesses (accounting, bookkeeping, tax preparation), and there are others.
2. Does the business have high overhead or high fixed and variable costs?  Entrepreneurs are infamous for over estimating sales and income.  In Sequim and in Port Angeles, I have watched for 18 years as businesses come and go for this reason.
3. Will the business be very labor intensive?  A B&B (bed and breakfast) is very labor intensive.  It may sound fun, and I’m sure it can be, but a recent B&B owner told me if she had any idea it would have been so consuming, she would never had done it.
4. Will the business be consistent with your personal interests and passions, or are you considering it just because friends or family have told you, “You should get your real estate license.  You would be so good.”  This is just an example, but many retirees have gotten their real estate licenses only to wish they had never bothered. 
5. What will you actually do in your business everyday?  Many small businesses sound good at first, but later the owner realizes that what they thought they would be doing is not at all what they had to do everyday in the business.
6. Would you start a business because you need to make money, or because you want to accomplish something else?  The answer to that question will have a huge impact on how you develop your business model?

These are just some of the questions worth asking if you are thinking about moving to Sequim and planning to start a business in your retirement years.  Your retirement should be some of the best years of your life, and the last thing you and your spouse need in retirement is a financial and stressful nightmare.  Right?

I share this because I worked with hundreds of business owners as a lawyer over two decades, and I learned more from the mistakes and failures of business owners than I did from those who succeeded.  If you buy a home and make me your Sequim Buyer’s Agent, I would consider it a privilege to share anything I’ve learned about businesses, legal entities, separation of liabilities, asset protection, estate planning, business succession, and marketing on the Internet.  It might also be helpful to know what businesses have succeeded and failed in Sequim and what locations tend to be good and bad for business, if you’re going to have a bricks-and-mortar.  I’d be glad to share what I’ve observed.

By the way, some retirees are working out of their homes and using the Internet to sell their products or services.  It’s a brave new world, and there are many unique business opportunities today that we didn’t have 10 or 20 years ago.  As a hobby, I’ve started a home business apart from my full time real estate brokerage, which involves health and nutrition products (consistent with my own desire to lose weight and get healthier).  I’ve always wanted to build a passive or residual income, and this business will do that too.  I did my due diligence to find a company with outstanding products and with integrity from the top to the bottom.  You can learn more about this company and their products at Sequim Home Business.

Whatever business you might be looking at, you can always email or call me and ask questions as you do your due diligence.

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Logging on the Olympic Peninsula has been an important part of the economic activity, just as fishing was once a major force.  Logging has a fascinating history revealed in these old photographs.

It’s hard to imagine handling such massive trees and logs with such primitive equipment, but they did it.

The size of these huge trees boggles the mind, since we so so few large trees today, even among our old growth forests in the Olympic National Park.

Logging on the Olympic Peninsula with axes and hand saws and sleds just seems overwhelmingly difficult.  We have some great museums in the area with more photos and stories about logging in the old days.

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I spent time yesterday with an 84-year old homeowner (Bill), and we had a delightful conversation.  Bill and his wife of a lifetime, Delores, purchased their home in 1962 for $45,000, and even at that time it was a great price.  We sat and talked in the living room of their gorgeous home.  Today this home is probably worth over a half million dollars.  The water view alone is stunning.  The home sits on over an acre and is beautifully landscaped, but Bill confessed to me that his gardening and landscaping activities have slowed down a little at his age.  At 57 sometimes I think I’m over the hill and getting old(er), but Bill assured me that I am still a kid.  I like Bill.

I often joke with my clients by saying that, “all my clients are smarter than me,” but there’s no doubt that most of my clients are more experienced and wiser than me, and I love learning about their lives and experiences.  I thought you might enjoy hearing what an 84-year old gentleman thinks about many of the issues of today.  Consider this.  Bill grew up before residential mortgages were invented, before checking accounts, before credit cards, before televisions, while the U.S. Dollar was still based on the gold standard, and before Fidel Castro got into politics.  Bill has seen history.

We talked about economics.  Bill said he had never lived through such a prolonged and difficult economic time.  Bill said we are in a depression.  He dismissed the professional economists’ erudite explanations that we are in a minor recession as poppycock.  Bill counted off on his fingers the reasons we are in a depression, including unemployment around the country, small businesses going out of business, large corporations faltering and taking business overseas, and in his own industry (real estate brokerage), he is seeing brokerages file bankruptcy, consolidate, and close their doors.  He said, “we are living in very difficult times.”

We talked about politics.  Bill said it is shocking how the English language has been hijacked by politicians.  Words used to mean something, and there was a time when lies were simply unacceptable.  Today, Bill argues, politicians say anything and constantly promote larger and larger government.  He talked about basic financial rules he learned growing up.  Bill was two years old when the market crashed in 1929, and while he doesn’t remember those early years, he certainly grew up in a generation where personal financial responsibility was paramount, and you only spent money you actually had.  Bill pointed out that we now have a Federal government that does not live by the rules of math or fundamental financial accounting principles.   Bill still believes that one plus one is two and that everyone, including the government, should live by the rules.  His common sense is refreshing.  I asked him if he would run for President.

We talked about real estate.  Bill was the youngest Seattle hotel manager in 1955 at 28 years old.  As he says with a smile on his face, “Seattle has changed a lot since 1955.”  Bill has had an illustrious career as a real estate broker, and has personally known some of the big names in real estate.  He has an ability to see a longer history of real estate cycles than the rest of us, and he has been an analytical student of real estate brokerage all this time.  He sees the traditional brokerage as dying.  He said the overhead is just killing them.  And at 84, it was a delight to hear Bill talk so enthusiastically about the power of the Internet in the real estate business.  He predicted that the future of real estate will be based on the Internet.

Bill was full of wisdom and gentle conversation as he reminisced about his years in business and in real estate.  Bill’s wife, Delores, recently “went home” as he says, and Bill openly shared that these past few months have been months of grieving, but he smiles as he talks about his future and life.  He believes he still has more to do, and he embraces the challenges as he makes plans for this next phase in his life.  I admire Bill.  What a privilege it was for me to spend the day with him.

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Today I take a detour of sorts on this real estate blog.  Normally you will find a daily post about some aspect of buying real estate, some negotiating tactic or an inspection issue, or a market analysis of prices or days on market.  But today I’ll talk about life, hence the title, “Life Happens.”  There will be no search engine optimization of this post, nor any glitzy photographs.  Just a true story.

I sold a home to an incredible couple from Georgia, and with tremendous excitement they moved their four boys and five truck loads all the way to Sequim.  They just got moved into their new home about two weeks ago.  I really have grown to love this couple as dear friends, and I identify with their family, because like me, they have four kids.  I had three boys and one girl.  They have four boys, ages 11, 15, 17, and 20.  Last weekend their 15 year old boy died after a seizure.

We all suffer loss during this life.  We just don’t know when it will happen.  I attended a memorial service last night for Dakota, and it was very hard to maintain.  Perhaps it was too close for me.  I lost my son four years ago, and I know how hard it was and continues to be for everyone in the family.  I saw how hard it was for my two other sons and my daughter (who is 15 now and also a friend of Dakota).  There are still hard days when one of us needs to pick up the phone and just talk.  We loved Jesse so much, losing him seemed almost unbearable.  And so it is for Dakota’s family now.

I am deeply grateful that Sequim has already surrounded this family with outpourings of love and support.  The Sequim High School kids filled a large banner 15 feet long with personal handwritten notes of love.  The family’s neighborhood has rallied to provide food and support night and day.  Local Churches have asked if they can help.

I am also grateful that Dakota’s parents, Larry and April, have each other, and that the boys, Zack, Austin, and Quinn are such fine young men devoted to each other and that they have their faith to lean on.

Life is unpredictable, and that’s why I titled this article, “Life Happens.”  Life doesn’t always happen according to our plans.  In fact, it almost certainly will take some detours along the way.  In this case, the loss of a beautiful young man who was handsome and athletic, who had the kind of moral standards and good character we could only wish for all our children, is almost overwhelming.  It just breaks the heart.

One thing for sure.  There are many who love this family, and we will rally around them and lift them up every day for as long as it takes.

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Sequim WA News is full of interesting, exciting, and politically intriguing events and local news.  I don’t normally include news directly from the local newspapers, but I thought you would like to be aware of the two local newspapers, and both have online versions of the news.  Here is a sample of some recent headlines, and you can click on these headlines and go directly to their online newspapers.  This is another great way to keep up with Sequim WA news.

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