The earth rotates around the sun once every 365 and about 1/4 days. So, by adding an extra day every four years, we get mighty close to keeping the calendar consistent with the earth's annual trip around the sun. And to be very precise, the earth orbits the sun every 365.242190 days. So, on years ending in "00", (except those not divisible by 400) we skip Leap Year and Leap Day.   This is leap year and we get our extra day on February 29^th.

If your birthday is on Leap Day, congratulations, you finally get to celebrate your birthday on your birth date. Only about one in 1461 people celebrates birthdays on February 29.  So, if you were born on this day, consider yourself very, very special. 

This is an excerpt of Julie’s Newsletter for February.  If you are not on the mail list and would like to receive a copy please visit my newsletter page at jalone.com or fill out this quick form.  There are no obligations to receive this entertaining newsletter. 

In the past week I have had two posts about the recent Federal Reserve lowering key interest rates and have indicated this was good news for our struggling Sacramento real estate market.  I received a comment on one of these posts asking why I was cheerleading low interest rates when it was cheap money that got us to this point. 

That reader’s comment made me ask if it was low rates that drove prices up to a point where very few could afford to buy.  Although I am not an economist and may not fully understand the relationship between rates and fund availability I think, think we need more than low rates to spur any long lasting recovery.  Check out my column over at Rocklin and Roseville Today, “Sacramento area sellers need more than low interest rates” or at jalone.com on my news page.

BTW, thank you Brad, Will, Traci, Jim and others who have seen the article about me in Broker Agent magazine and took the time to call or email me.  Being the broker agent of the month for the Sacramento region is a wonderful honor and I am very appreciative to those who nominated me. 

From Realtor.org: Susanne Cannon, the director of the Real Estate Center at DePaul University, says that at a conference this month with other academics who specialize in housing, the consensus was that many buyers have been waiting on the sidelines until the market hits bottom and then plan to make their move.

Now that lower rates are a factor, Cannon says, the question becomes: At what point will buyers be compelled to act, thinking they are getting a price they can live with and a rate they do not want to miss out on?

Otha Greer, an associate with Coldwell Banker in Jackson, Miss., says the drop in rates ''has lit the fire in my business. I actually had an investor that called yesterday and she's interested in buying five homes.''

Not everybody is persuaded the turnaround has come. A Merrill Lynch report this week said housing prices were ''likely to remain in free fall.'' The report predicted a drop of 15 percent this year, 10 percent next year, and ''more depreciation likely beyond the forecast period'' — despite an expected series of rate cuts.

But Jim Klinge, an associate in San Diego, was closing his fifth deal this month, a decided improvement from the 16 houses he sold in all of 2007.  ''It's very hard to find the right house at the right price,'' he says, ''but there's a strong undercurrent of very healthy demand.''

One of caveats to the above story is that many markets across the US did not experience the correction we have felt in the Sacramento area and may already be showing signs of recovery.  In the Sacramento real estate market the consensus still appears to be another year, if not more, of depreciating values.  Having lower interest rates will help but we still need to work through a huge amount of inventory before any sort of recovery can begin. 

Freddie Mac reports that interest on 30-year, fixed loans fell for the fourth straight week, landing at their lowest level in nearly four years.  Rates averaged 5.48 percent for the week ended Jan. 24 -- down from 5.69 percent a week ago.  This drop was driven by the Federal Reserve’s biggest cut in 20 years to fed fund rate.  Freddie Mac also reports that rates on 15-year mortgages declined to 4.95 percent from 5.21 percent, rates on five-year adjustable-rate mortgages dropped to 5.13 percent from 5.4 percent, and rates on one-year ARMs slipped to 4.99 percent from 5.26 percent.

Housing industry observers are hopeful that the recent decline in mortgage rates will lead to a recovery in the market.

The National Association of Realtors has lost a great deal of credibility when it comes to making forecasts and maybe the beginning of this disturbing trend started back at the beginning of this downturn (August 2005) when their chief economist at the time, David Lereah said, “All of the doom and gloom forecasts of a housing debacle are not only irresponsible, but also downright wrong.”   There is a great deal of good work being done by the NAR but, in my opinion they should exit the forecast and “spin” business and concentrate on helping to improve the image of Realtors.   

On the other hand, after two plus years of downward real estate trends, there are now industry professionals who have gone in the other direction and seem to pride themselves on how “gloomy” they can make the market appear.  I didn’t attend but got a report from a title company sales officer that Mike Lyon of Lyon Real Estate made such a “gloom and doom” forecast yesterday in Roseville.  My contact is a sale person; he makes his living selling his company’s service to real estate agents.  He told me the Lyon talk was so depressing he had to leave. 

I know there are agents out there who are struggling with this slower market and new agents who are just starting to build their business.  I encourage you to listen and pay attention to what is happening in the market, you will need this information to best serve your clients but do NOT let it chase you away.  It is only one of many variables that will determine your success or failure in this industry.

The real estate market is the real estate market.  It can be like it was in the early 2000’s or like it is now.  Regardless there will always be buyers and sellers who need your experience and expertise.  Today there are fewer sales which only mean the competition for those transactions is higher.  Good Realtors who manage their business by placing their clients’ needs ahead of their commissions and build long term relationships will always be successful.