Well, here we all sit, confident, comfortable and cruising as the real estate market pushes ever upward. Our armor plated market seems almost impenetrable by those nasty negative influences we hear are affecting 'other' markets. But wait a minute. I seem to remember another period of such euphoria. Now when was that? Oh yes, now I've got it, winter '89 ' Spring '90 and we all know what happened after that, la bomba.

Don't get me wrong, now is not then, these are not those times and this is not that market, but it is important to remember that real estate is cyclical and we've been riding this horse for a long time now. Are we due for a change? Is the market already changing? The answer to both is a resounding yup.

To start this article we'll cover some things that will and are having an impact on us and a general overview. The second subject we'll address is something that makes the hairs on the back of my neck stand up, which is so important that you must resist the urge to stop reading, because it could mean 10's of thousands of dollars to you! Nope, not tellin yet. And finally we'll have the Gold River numbers.

Our real estate market is going through changes. Slowly - yes, subtly ' maybe (unless your selling a home above $800,000), but the changes are in place and will start to dictate market direction.

Remember when considering the following information: Anything under a 6 month supply is a "sellers market" and anything over a 6 month supply is a "buyer's market". The further you get from a 6 month supply in either direction the more severe the market. I.E. a 1 month supply of homes = severe inventory shortage, a 12 month supply = glut. The supply is come to by dividing the number of homes available in a price range by the number of homes in that range which will sell in 1 month (absorption rate).

The upper end homes market has slowed to a crawl, a creeping crawl. In the greater Sacramento Area, there is now an 11.5 month supply of homes over $800,000, for homes over $1,000,000 there is a 14.7 month supply and get this, for homes above $2,000,000..........there is a whopping 72 month supply.......wow. Ya think prices are gonna come down in this market? Uh-Huh.

Conversely, the low end of the market, homes priced under $300,000, is sizzling. There is currently only a 3 WEEK supply of homes ' severe shortage and forget about finding one of these prices in Gold River, Granite Bay, Folsom and the like. Ya think prices are going up in this market? Uh-Huh.

In the middle of the market we have a mixed bag with some areas like Gold River showing strong sales, some with a balanced market and some moving to a buyers market.

How does Gold River stack up you ask? With continued strong demand in our neighborhood, there is only a 1 month supply of available properties.

And this brings to the first of our market's future mitigating factors ' affordability. Imagine being a first time buyer or newlyweds looking for that new home and having to come to grips with a $300,000+++ price tag. As home prices become less affordable, buyers are priced out of some neighborhoods, areas and/or any homes in general, which will make the market slow so the economy can catch up with prices. Also, affordability is one of the keys that bring companies here from the Bay Area amongst others. Take away that and they start looking at staying put or a trek to Texas or Nevada. On the bright side, our local economy has been producing and retaining lots of well paying jobs.

Another change coming down the pipeline is in the rental/ investment property arena. As I've mentioned in past articles, investment property prices have skyrocketed over the last couple of years and the market is still hot. So even though rents have increased substantially, they've not kept pace with price increases, which means bigger and bigger negative cash flows for investors. At the same time, builders have been busy building many more rental units, scheduled to come on line in the near future and lots of past renters have become new homeowners due to high rental rates and low interest rates. Rental inventories are already up. All these point to a flattening of rental rates and investment property prices. Is investing in real estate still a good idea? Yes, of course, the best, but the quick buck heady days of yore will fade, bringing good fundamental decisions back in vogue.

Interest rates should remain low for a while and really shouldn't impact the market unless they go above 7.5%. However jumps in the rate at any level, if they occur, will have a bigger affect on the low end homes and first time buyers, which affects move up sales, which affects.....

All we're saying here is that the market will continue to slow from it's supercharged pace gradually. The difference between then (1990) and now? Then, we had a deer run out in road and had to slam on the breaks to avoid a wreck. Now, we're coming to the peak of the hill, ready to come back down after a long climb and need to take our foot off the gas to coast for a while, before we rev it up again.

Now I know you're wondering (or maybe not), what is the other subject that makes the hair on my neck stand up and can mean 10's of thousands of dollars to you. At the risk of ruffling a few real estate agents feathers and maybe sounding a little self serving, I'm going to give you Realtor 101. The good, the bad and the ugly about agents and what you might want to consider when hiring one.

You..........that's right you right over there, what could you possibly have been thinking when you hired that person to represent you in this transaction? That's the thought that often runs through my head and it's one of the most frustrating facets of my profession.

As with doctors, lawyers, mushroom growers (?) or any other profession, there are really good ones and many really bad ones. But what sometimes amazes me is the randomness and criteria (or lack of criteria) that some use when choosing their Realtor. 'He is my Aunt's nephew', 'she answered the phone when I called XYZ Realty' or the dagger in my heart, 'they gave me a discount'. We're talking about one of, if not the, biggest investments many people have, with thousands of your dollars at stake, in addition to time, future plans, potential lawsuits and yes, your peace of mind and the job is given to Aunt's Jennie's nephew Johnny who answered the phone at XYZ Realty and gave me a discount? Where is the sanity?

One of the big problems with the real estate industry and one which many Realtors are trying to change is the lack of education and training necessary to get a license. Any would-be agent can spend some money to take an accelerated real estate principles class, then some more money to take a 'how to pass the test' class and a few months later you're ready to face the real estate world...........not.......not even close. If an agent does not have at least 2 years of solid results (note I didn't say experience) under their belt, they are not good enough to be your or anyone else's Realtor ' period. It is waaaaaaaaay too easy to become an agent and waaaaaaaay too many consumers don't take the time to weed out unqualified agents.

Inevitably, every time we get into 'hot' real estate market, the number of agents in the area doubles from say 2500 to 5000. Too often these new agents are in it for the wrong reason ' an easy quick buck and too often, after selling 1 property in a year, they find that it's not easy or quick with not a lot of bucks. After the hot market slows, the number of agents dwindles to pre-hot levels, but left in the wake are unsatisfied homeowners who experienced a bad deal or (even worse) those who didn't even know they had a bad deal.

Whether it's in negotiations, looking at MLS information or just talking to a novice agent, a professional Realtor can see and will take advantage of poor agents, which translates to big losses for that agent's clients. Equally as bad, a missed clause, poorly worded contract or misrepresentation opens the doors to more unforeseen losses or (gulp) lawsuits.

Notice above that I said poor agent instead of inexperienced agent. A rookie agent with no experience is a poor agent because of lack of knowledge, but could be a great future professional in training (you should know after 2 years), but some of the worst agents are the ones who hype their experience. Having a license for 6 years does not necessarily mean experience. Many agents I've seen might represent 1 or 2 deals a year, don't keep up with training and technology, don't know the market and quite simply don't care. Warning, warning Will Robinson, these are the really dangerous ones.

Here's just a couple of my recent real time experiences to chew on (the self serving part):

1- Unskilled, 'experienced' agent lists an investment property 'as is' for $350,000 and doesn't prep the property. Seeing the missed value I submit and force a quick acceptance of a full priced offer for my clients. During escrow I negotiate for $17,000 in seller paid repairs. Escrow closes, my clients do approx $4,000-$5,000 in work and sell 4 months later for $470,000. ($115,000 profit)

2- Relocating seller needs to sell and gets 3 agent presentations (one from the agent who sold them the property) with sales estimates between a low of $505,000 and high of $529,900 based on neighborhood sales (which didn't apply). I recommend an asking price of $589,000 and a $585,000 price is accepted and closed weeks later. ($55,000)

3- Relocating seller needs to sell and gets 2 agent presentations, including mine. 1 new agent presents an evaluation of $770,000 and mine is a stretch based on market at $749,500. They list with new agent and property doesn't sell, reduces to $760,000, then months later to $ 750,000. 'Shop worn' and still not sold months later. Loss ???

Here's the scoop. Good Realtors are worth and earn every dime. Poor agents aren't. And speaking of discount agents: Most offer nothing to very in little in the way of service, expertise, skills and caring. Why pay them a penny when you get little to nothing in return? Think about it. If you hire an agent who reduces their pay by $2,000, but because of poor representation you loose -$10,000, $55,000, $105,000 or (?), what is your loss? You may never know.

Here in Gold River you are fortunate. Although there are a few mediocre agents who work in the area, there are several outstanding professionals who will represent you well. Search them out and interview a few.

What should you look for in a real estate professional? - A long and consistent track record of proven results. - Letters and referrals from past clients. - Ongoing training. Designations such as the sought after CRS (Counsel of Residential Specialist), 'Broker' instead of agent and CCIM can show commitment to professionalism and excellence. - Good Reputation. - A clear, creative, comprehensive, written and well presented marketing plan or buyers plan/ package. - Able to articulate and justify a position or answers to tough questions from you, such as: How was price determined? How are they different or what makes them good? etc. Be creative. - Ask to talk with present and/ or clients of recent sales. - The Realtors contacts (contractors, inspectors, handymen, mortgage brokers, discount materials or supplies, etc) which can potentially save you thousands.

Choose your Realtor wisely. It'll pay off in many ways.