What would you think of a baseball team that only won 19 games last season?

What would you think of a major university where only 15% of its students graduated? Would you want to send your kids there?

What would you think of a brand of automobile if 9 out of every 10 sold broke down beyond repair in the first two years? You probably wouldn’t rush right out and buy one, would you?

So how do you choose a real estate agent when 85% of all the people entering that industry — smart people, college-educated, mature adults — fail miserably in their first two years, in spite of investing thousands of dollars in their education, skills training, and tools?

Those are the odds for success of new agents entering into real estate brokerage.

And given the current state of the economy and many real estate markets, even seasoned professionals are getting out of the business.

Combine that with the fact that 63% of people select the first agent that they talk to and only 19% even interview 2 agents, and you have a recipe for disaster.

The Society of Industrial and Office Realtors in its SIOR Commercial Real Estate Index, a survey of more than 700 local market experts, suggests a flattening level of business activity in upcoming quarters with 55 percent of members expecting the market to improve in the second quarter.

The SIOR index rose 0.2 percentage point to 35.5 in the fourth quarter, compared with a level of 100 that represents a balanced marketplace. This is the first gain following 11 consecutive quarterly declines. Although some indicators show that a decline in commercial property values is beginning to flatten, 86 percent of respondents report prices are below replacement costs.”

Many of us have been waiting for the “other shoe” to drop (problems with refinancing commercial properties) in CRE. For now, it seems, the on-going problems in this sector are already broadly known and recognized, and fully discounted in financial markets. The second half of this year will be critical.

Zillow. com has just released its forth quarter report that shows that Denver and its suburbs recorded the biggest dollar gain in home values of any metro area in the country in 2009.

According to the report, Denver home values rose by $7.87 billion in 2009. Denver homes lost $20 billion in 2008.

This could be met with some skepticism because, as many of you know, Zillow valuates homes using public records, which aren’t as precise as an appraisal; or sold prices. Still, I guess one could argue that it’s still relatively accurate by virtue of being equally wrong all over the country.

Zillow said that in Denver, the variation between what they estimate a home is worth and what it actually sells for averages 11.2 percent in metro Denver.

They went on to list certain neighborhoods in Denver that they say may be in for a “double dip” in values. Before anyone sees their neighborhood listed and wigs out, rest assured our affiliate Realtors are telling us the exact opposite. Most of those neighborhoods are doing just fine.

On the other hand, a couple of the neighborhoods they listed as having the highest price increases had those increases as a direct result of foreclosure sales. And those areas are still in trouble. It just goes to show you the value of getting reliable, local information.

In a related story, a report from Metrolist, also released this Tuesday, said the median price for Denver homes sold fell 5 percent in January from December. Hang on boys and girls, it’s not over yet.

The best time to pick your Realtor is sooner rather than later - period.

Here is why. Most agents realize you could be 3, 6 or even 12 months out from being ready to take action to purchase your property. They also realize that, given the number of agents you may contact between now and then, that their chances of becoming your agent are slim.

Therefore, they probably won’t devote the time and effort required to seriously help you at this point. And that is unfortunate because this is exactly when you need the help of an experienced, professional Realtor the most.

Most likely they will have their assistant, or worse, a “virtual” assistant service, continue to “feed” you with a drip email program and newsletters until such time as the agent feels their time can be justified to help you.

This has been proven not to be in your best interests for several reasons. At this stage of your process, the help, guidance and resources of a great agent can pay huge dividends later in the transaction.

Picking the right Realtor early in the game can:

1. Streamline and shorten the sales cycle by getting the resources you need

available now

2. Create clarity of your goals and trust with the Realtor best suited to help you

3. Eliminate problems with agents maneuvering for “control” of your transaction

4. Eliminate privacy concerns if 4, 5 or even more agents have your personal

information

5. Result in your eventually saving much time, effort and probably money

You will get the service and attention you deserve up front because your Realtor will realize he or she is not just “spec-ing” their time with you. They will realize you are more sophisticated than 95% of the prospects who contact them. Your Realtor will make the commitment of time and effort upfront because there is a much higher probability of their getting paid.

It is in your best interest – and the Realtor’s best interest – to establish an agency relationship early in the property buying process.

Just make sure you have the right Realtor.

Here are the pros and cons.

Pros:

1. Selection of available properties (inventory) is up.

2. Interest rates are low

3. Many properties now make economic sense – that is, incomes are greater than expenses

4. Current prices favor long term appreciation and equity creation through mortgage reduction

5. Sellers are becoming more realistic about market prices

Cons:

1. Prices (values) are still falling in many markets. This is spooking cash buyers.

2. Uncertainty in credit markets

3. Commercial properties are finding refinancing basically unavailable at reasonable costs

4. Occupancy rates continuing to fall during our jobless recovery

5. Difficult workout situations on commercial properties becoming more common.

There; glad I was able to clear that up for you so you could see the logical answer!

Pssst! Hey buddy….want to buy some REIT stocks? Look at these dividends!

Everyone is doing their predictions for this year; so not to be left out, here are mine for the 2010 Denver Real Estate market.

1. There will still be high volatility.

2. Government intervention (“help”) has only brought future sales forward and will now contribute to future weakness.

3. Mortgage rates will rise to 6%

4. “Dark Inventory” will hit the market and keep prices from going up significantly.

5. Many private (small) mortgage brokers will be pushed out by increased government paperwork (bureaucracy) and large banks.

6. Unless something is done to bring jumbo loan rates closer to conventional (conforming) rates, sales of homes in the upper price points will languish.

7. We will wait for “the other shoe to drop” in the commercial markets as building owners and developers try to restructure (with limited success) their loans.

8. High unemployment will keep a lid on future demand nationwide. Denver, with its better employment situation, will be affected less by this one.

Sorry. Wish I could be more optimistic. But until the bureaucratic pinheads in Washington quit meddling and “fixing” things…..the overall housing market will not be able to pull us out of this recession.

Glad the Denver economy is improving and that we don’t have it as bad as many markets in the country.

Denver had a record drop in sales of existing homes in 2009. But inventory has declined considerably and prices have stabilized or even gone up slightly in some markets.

Metrolist data released Thursday that sales of existing homes had dropped 12% - a new record. The biggest percentage drop previously was a 4 percent decline from 2007 to 2008.

The Median price of homes sold was about the same at $219,000.

I expect the sales decline to continue sales of homes above the $600,000 price point will continue to be sluggish until people start to feel more secure with their jobs.

It could be worse if Colorado’s job market wasn’t doing fairly well. Colorado’s unemployment rate hovered around 7 percent in 2009, while the national rate was about 10 percent.

Metro Denver ended 2009 with 16,456 unsold homes on the market, a 16% improvement over a year ago.

On a bright note, Metro Denver home prices ranked at the top of the most recent Standard & Poor’s/Case-Shiller Home Price Index.

We did not do too badly, especially compared to many other parts of the country. Here is a quick, easy read, recap.

The debt situation was a problem for residential and commercial markets. Lenders were being told by the government to lend more but federal regulators were telling lenders to keep higher cash margins.

Residential sales in higher price brackets were slow. The $8000 federal government’s first-time homebuyer tax credit did nothing but bring future sales forward. That combined with low interest rates created most home sales.

Colorado had a record 12,468 home foreclosure filings in the third quarter, according to the Colorado Division of Housing and more home foreclosures will occur in 2010 as adjustable-rate mortgages come due.

Sales of high-end homes at price points above $600,000 should be about the same or slightly improve in Denver for 2010.

In the commercial real estate arena, most tenants stayed put because of instability in the job market and the overall economy.

There were few sales of office buildings and strip centers with property values down and most brokers advised property owners not to sell unless absolutely mandatory.

2010 should be a challenge for commercial real estate as many loans come due this year.

Fewer than 5% (10,000) of homeowners who completed trial periods as of October had their mortgage payments permanently lowered to more affordable levels. It appears the Obama administration’s mortgage relief plan may be stalled do to bureaucratic factors.

Only one in three homeowners who have signed up for the Obama administration’s program plan have actually sent back the necessary paperwork.

The program was does not appear to be working and foreclosures continue to rise. More than 14% of homeowners with a mortgage are either late on their payments or in foreclosure.

The program provides financial incentives for mortgage companies and investors to reduce loan payments to affordable levels for financially troubled borrowers. But it often provides little relief to borrowers who have lost their jobs or who owe far more than their homes are worth.

Obama administration officials said they are working with state and local groups to assist borrowers with the paperwork.

Mortgage industry executives say homeowners simply are not complying with the program’s requirements, despite their best efforts to reach out.