I received an irate call from my father, Bob Michelson, this morning.

He, a calm and decorated veteran and pilot of three wars, was fit to be tied. In addition to following the stock market closely, he tracks world events with the eyes of a falcon.

“GM’s stock price is at an all-time low and Citibank is sitting at a 10-year low,” growled the Colonel. “Meanwhile the world scowls at us as we slurp up 25 percent of its oil supply and contribute to worldwide spikes in fuel prices–and yet refuse to drill for oil in our own backyard.”

And why can’t Congress get mobilizing legislation into gear? Because the legislation isn’t quite…perfect.

And so our elected leaders dismiss themselves for a patriotic holiday–as their fellow Americans and constituents drain their assets at the gas pumps this summer.

I join this veteran in his complaint–and wish we had reason to celebrate decisive action from our elected leaders this 4th of July.

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This is a market that sometimes brings out the creative forces in real estate. And more and more, real estate exchanges are making lots of sense in the luxury real estate market.

Earlier this evening, I had an interesting conversation with a Sotheby’s real estate agent in Northern California.

It seems he is interested in exchanging his exquisite 104 acre property just outside Carmel for a luxury home in Rancho Santa Fe, just outside San Diego. His acreage offers 380 organic citrus trees that supply local restaurants, two greenhouses that produce basil for Whole Foods markets, Zinfandel grape vines that go you-know-where, and a number of fat and field-fed Angus cattle. He also has plans for an exquisite Tuscan villa that might be built for $1.5 million.

He is seeking to move to Southern California, and to Rancho Santa Fe in particular. And knowing that Rancho Santa Fe property owners love privacy, space and quiet, he thought that perhaps an easy and compatible exchange might be accomplished.

The numbers are certainly workable. He owes less than $800,000 on this parcel, in which he has invested nearly $3 million. He is seeking a Rancho Santa Fe home valued at $1.5 to $2.8 million–and may or may not be accomplishing the transaction via a 1031 exchange.

Quite simply, Northern California landowner wishes to relocate to Rancho Santa Fe and figures that some homeowner there would love the opportunity to exchange properties with him.

Makes sense to me.
So, if you have a Rancho Santa Fe home and have dreams of a bucolic life outside Carmel and California’s premier wine country, please let me know and I’ll arrange for a proper introduction. Just give us a call at 877-818-81979 or 760-402-9101.

And if you have an unusual luxury home exchange proposal of any sort, we’d also like to hear from you!

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Zillow founder Rich Barton loves placing industries inside glass houses (most notably in real estate), and may now become the cause of painful overexposure (or welcome relief) for industry executives.

It seems he just unveiled GlassDoor, which will reveal salary reports, compensation figures and reviews from employees.

GlassDoor, based in Sausalito, CA, currently has around 2,000 salary reports from over 250 companies along with a current reports from around 1300 employees of these companies. In order to lure the curious, the site is offering free peeks into salaries and employee reviews for Google, Inc., Yahoo, Inc, Microsoft, and Cisco Systems, Inc.

I don’t yet know whether the site will remain free or become one based on paid subscriptions. We might imagine that if GlassDoor is sticky enough and has a gazillion visitors, advertising might pay its way.

According to the San Jose Business Journal, who released the story, GlassDoor will be reviewing salaries and reports prior to posting.

Current spotlight?

Eric Schmidt, Google CEO, has an employee approval rating of 83 percent, while Cisco CEO John Chambers scores 93 percent. This may prove to be one of the hottest water coolers around.

Kudos for the coup, Rich Barton!

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Forecl—–

It’s a word softly whispered when luxury homeowners in luxe communities like Palm Beach (33480), Beverly Hills (90210), Greenwich (06831) and Rancho Santa Fe (92067) discuss their local real estate markets.

Real estate prices have been declining in many of these markets throughout the country, and some of the heavily mortgage homes are ending up as foreclosure sales. The most prominent foreclosure victim of late is Ed McMahon, whose $5 million Beverly Hills mansion was recently lost to foreclosure.

This morning, CNNMoney reports that three of the richest US zip codes saw nasty declines in home prices for the three-month period ending April 30, when compared with the prior three months. The three biggest losers?

1. Palm Beach, Fla saw a 38 percent decline in median home prices during that period, while

2. Wayzata, Minn (55391) slid 28 percent, and

3. Greenwich, Conn. dropped 15 percent.

Much of the price decline can be attributed to inflated mortgage fallout, but another transition is also contributing to the declines: Downsizing. Many of the large luxury residence owners are baby boomers who are seeking to downsize into a more convenient and connected urban lifestyle–and are doing so in growing numbers.

Not all luxury zip codes and communities are in the tank, though, according to the CNN article. For the 12 month period ending March 31, prices actually rose 18 percent in the upscale Kenilworth (60043) communiity, just outside Chicago. Other ritzy gainers included Medina, WA (home to Bill Gates just outside Seattle) with a 9 percent increase, and a 5 percent climb for Atherton, one of Silicon Valley’s suburban crown jewels.

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I really want to talk about the effect petroleum costs will have on real estate, but first wish to tell a little story:

My grandgather, Adolph Michelson emigrated at the age of 7 with his family from Norway to Deadwood, South Dakota. It required a long, hard journey by steamship. train and wagon to arrive at their eventual home in the steep hills above Deadwood. It was there that they lived with other immigrants and Indians, sharing magnificent views and boot camp workouts as they trudged up and down that steep, steep hill to get to town for work, school, food and other supplies.

Views be damned. This was where the poor people lived.

As soon as the Michelson family could afford to do so, they moved their big family into a home in town, where shopping, school and employment were within easy walking distance. Their decision to move was not based on home features, the quality of the stove, or the number of closets–or even neighborhood amenities. It was based on that single and most basic real estate dynamic:

LOCATION

It is only since the advent of sprawling suburbias and each family having multiple automobiles that we strayed from distinct town and country living. The wealthy may have had homes in both locations, but the average family lived near employment . There were no school buses (or video games because kids had to hike through miles of rain and snow to get to school each day) and gasoline stations were pretty rare at the turn of the that other century. Which all leads me to wonder….

What might be the top priority for the home of the future when gas prices reach $6, $8, $10 or even $12 per gallon?

How about the radical choice of living walking-close to employment, shopping and schools? Or living near a bus stop or transit center where one can commute for work, school and fun?

I am eying real estate differently these days–and am coming around to my ancestor’s way of thinking. Location trumps views, walkable sidewalks trump big back yards and a bicycle pump beats a gas pump–at least for kids who drive or are driven to school (ever seen the long lines of mini vans idling outside our schools at arrival and departure times–or high school parking lots?). Might a more urban lifestyle offer some solutions that would allow for a saner lifestyle?

I am also wondering if Carol Lloyd’s prediction of suburbs turning into Slumburbia might also come true–sooner rather than later due to rising fuel costs? In her SF Gate article, she notes, “In Europe, where the cities never died, the suburbs have long been the homes of last resort for the poor and the marginalized.” This is already occurring in and around sprawling urban centers like Houston, where home prices in and close to downtown Houston are selling at a premium, while homes in once-affluent suburbs are selling at prices far below replacement costs. It is a scenario being repeated all over the country, with slightly different configurations along the coasts.

In San Diego County, where I live and work, we are anecdotally seeing a surge of buyers seeking to live within walking distance of restaurants, theaters, dry cleaners and food or farmer’s markets. They no longer want to battle freeway gridlock, and would happily trade their road warrior status for the peace of riding a train to work. They are also seeking more open communities, where neighbors stroll by and greet one another, where not so much of life is lived in and for cars–or behind mortgaged garage doors.

I am so, so tempted to join them….

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It of course answers endless questions and sends curious clients my way, but also handles my email, documents, maps, spreadsheets, instant chat, and more. And when I want to check traffic conditions, I can do it with another Google real time mapping application on the Blackberry.

Just when I have to count both fingers and toes to list all the very cool Google applications, they surprise us with another:

GOOGLE REAL TIME STOCK QUOTES

Now, we can all get real time stock quotes and financial news about our favorite stocks. No more delayed quotes from Yahoo or other financial sites. If Google had any shortcoming, it has been in the financial arena. For stock quotes and financial news, son and sometimes-trader Scott has always championed Yahoo Financial News for quick quotes and relevant company news.

No more. When life moves quickly (and it does), consider the importance of twenty minutes–and all the things that can happen in that short time frame.

Yahoo! to Google (and a thousand balloons) for transporting real time stock quotes from the traders to the people. This is major financial news–and one I’ll also be able to put on my Blackberry.

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Call this a geeky rant. Call it a blonde tirade. Call it what you want, but I just don’t know what to do about diverse databases.

I think I have them coming out the Wazoo.

If you came here seeking luxury news, you may want to click away and come back tomorrow. Right now, I am trying to sort out a database problem that honestly keeps me awake at night.

You see, I have been collecting names, addresses, email addresses and property preferences from people for centuries. And if there were a way my databases of information could talk to each other, I could be the supreme Yentl of real estate in Southern California–or the whole world.

My problem? SOAR Solutions, which for years reliably sent property information to hundreds of clients, was sold to HouseValues, who ostensibly does the same thing but charges a king’s ransom to do so. At the same time, clients who signed into SearchPoint with my ancient Realigent site, are listed there and are also receiving property updates from me.

Then there was Top Producer, which held all the contact information for existing clients–along with their birthdays and wine preferences. And now I have an account with 1ParkPlace, which also sends out listing information to clients and maintains another database.

The real problem?

None of these databases talk to one another–and I think it’s a deliberate conspiracy, HouseValues will release only the client’s name, address, telephone and email address. Forget about search parameters. They hold that information hostage and continue to charge me out the yingyang for the privilege of doing so. I would like to migrate this information to 1ParkPlace, but no can do.

Guess those tasks will have to be done one by one, keystroke by keystroke.

Then there’s the database sitting over at Realigent that is fully 8 years old. Many of these searchers have been with me since the last century. Those, too, will have to be migrated one by one, keystroke by keystroke.

The problem could probably be solved if I were an enterprise level business doing gazillions of transactions per day. If that were the case, I would just call the database gurus at ANTs Software and they could use their cool plugin and make databases like Oracle, IBM, Sybase and Microsoft relate, talk and migrate to one or the other. The Ants Compatibility Server (ACS), fortunately and unfortunately, is whizbang technology for the big guys and ANTs will probably rule the world of databases some day, but are of little help to me now.

In the meantime, I think someone could make a modest royal ransom if they could solve the Realtor’s dilemma with databases and set us free from those vendors who hold us hostage. If software could be written that would encompass not only basic information, but also our real estate client’s search parameters and wine preferences, the world’s real estate crisis might be solved.

And just for grins, remember this classic Super Bowl 2000 Commercial?

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It appears that even the luxury real estate market will not fully escape the financial ravages that are taking down less-expensive neighborhoods.

Housing Wire asks: Has REO gone jumbo? To find out, they consulted with Integrated Asset Services, LLC in Colorado to see if foreclosures are moving up the real estate food chain. And though not all properties with loans in excess of the the conforming $417,000 are luxury homes, it appears that an increasing number of residences in that loftier lending arena are heading to short sale or foreclosure. In California, for example, IAS and Housing Wire saw 102 REO’s sell for more than $417,000 during April, compared to just 13 in April, 2007.

Anecdotally, we have seen a spike this past year in San Diego luxury homes that are closing as short sales (where more is owed on the property than what it is worth), or which end up as foreclosures and REO’s (real estate owned bank properties). We have also seen that it takes lenders far longer to reach an agreeable sales price compared to smaller loans–and that may be understandable.

On one hand, more money is at stake and greater care must be taken in reaching a fair valuation; on the other, carrying costs (taxes, insurance, maintenance, security and HOA fees) run far higher than ordinary REO’s. And that those are bills most lenders and services do not want to shoulder.

In a recent transaction in coastal Encinitas Ranch, Washington Mutual required two appraisals and took almost four months processing time before reaching an agreed-upon sales price. And during that time, foreclosure sale was delayed twice. The original loan amount was $1.2 million and the final sales price was $880,000. It was a major hit for the lender/investor , but costs would surely have been greater if this Encinitas home had gone to foreclosure.

We are currently involved with two other sellers who have loans exceeding $1 million and whose custom homes could end up as foreclosures if Countrywide and First Franklin investors cannot come up with pricing that reflects current San Diego market realities. Neither home is coastal (which would help prop up valuation) and neither have area comparable sales that would support pricing anywhere near what is owed on these homes.

Outside of our San Diego real estate practice with Villa Sotheby’s International Realty in Del Mar, we are hearing whispers that there will be more luxury short sales and REO’s before the real estate market recovers. And out of the confusion and delays in disposing of these luxury properties will be opportunities that luxury investors have been long awaiting.

And even the ultra-luxury real estate market appears to be experiencing some correction. In 2006, we wrote about Donald Trump’s luxury estate in Palm Beach being offered at $125 million. Recent reports say it sold at just $100 million.

What may have been painful for The Donald would have been a coup for the lucky buyer. I guess every market has silver linings–for someone.

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Upon first seeing these beautifully-designed solar panels, I couldn’t help but imagine other applications and modifications for the green lifestyle–whether it be in the luxury home, a school yard, a country club or off-the-grid project.

Imagine these cobra-shaped shades as swiveling solar panels that take the place of outdoor umbrellas around the pool. Or as bus stop shelters or airport curbside check-in. The possibilities are endless and scalable.

And these VEIL Solar Shades are interactive to boot. Indicators on the base show which positions will yield the maximum energy collection at given times of the day. And underneath the shade is an LED feedback system that indicates whether the shade is getting enough sunlight or not–and whether the shade should be turned.

Designed by the Australian design firm Büro North and the the Victorian Eco-Innovation Lab, the VEIL Solar Shades blend form and function elegantly.

Your ideas for implementation?

Tip of the top hat to Josh Spear.

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