ReLeafed From Gas Prices

I am not the "greenest" guy on earth. I am not a vegetarian. I am not a tree hugger (even though I went to UC Berkeley). I don't have a position on global warming. But I recently decided to buy an all electric car, the Nissan LEAF. I charge it every night and drive it judiciously the next day. The maximum range on the car is 100 miles, but flip on the a/c, depress the gas pedal, and watch, literally the range drop to 60 or 70 miles. For most people this is not the appropriate car. If your commute to work is more than 30 miles, and if you don't have access to a charger during the day, the daily commute would be a daily experience of range anxiety. But my commute to work is 3 miles, and during the day, I have access to electricity at the office, and our average trip for real estate and property management is no more than 20 miles. The cost for the "fuel" for this car should run $30 a month (I expect to travel 1,000 miles a month). No more $300 a month putting premium fuel in my SUV. So other than not feeding OPEC any more of my cash, here is what I have enjoyed so far about this car: 1) No maintenance. Since there is no engine, no oil and no gas, the only wear on the car are the tires. 2) Total silence. Once again, no engine so no sound. It is like driving in the libary except when I blast the stereo. 3) With the heavy battery in the middle of the car, there is a low center of gravity and great steering. 4) The car has instant torque (think of a really big golf cart). Hit the peddle and the wheels screech.

I no longer fear higher gas prices or a visit to my mechanic. Now, if there is a brownout, I am really up the creek.

The Bright Light at the End of the Tunnel

I was at the PWR Tech Fest on Saturday and spent 30 minutes listening to an economist talk about the house market for the next 5 years. After 5 years wallowing in the bloodbath that was the last 5 years of the housing market, I was prepared for the worst. Just the opposite...it was all good, but still sobering news. The bottom line: starting in earnest next year, we will have home appreciation, and by 2015, it may be double digit. What will cause this?

1) Home inventory has peaked. Starting the 3rd quarter of this year, fewer homes will be coming on the market.,

2) REOs and short sales have peaked. Technically they peaked in 2010, but each year from this point on, they will decrease 20% a year. Right now they comprise over 40% of the market, in 2012 it will be 30%, in 2013 22%, 2014 15%, 2015 10%...

3) The economic recovery of SoCal has already begun. It will be in full swing in 2012.

4) New home starts will rise, rates may rise (but consumers will opt for adjustables) and optimism will build.

5) By 2014 we will have equilibrium in the market and there will actually be a "seller's market".

The fundamentals are there and we have languished for over 5 years in this misery. I look forward to my agents and myself going on listing appointments with good news and sellers selling because they choose to, not because they have to.