If you were to look at the prices of homes in 1890 you will learn that with an adjustment made for inflation homes in 1990 were the same price. Home prices from 1997 to 2006 were the biggest on record. True that land is becoming more and more limited as populations grow but continued desire to live or invest has still found it possible to squeeze in high rise condos along our beaches and other areas.

Florida’s high rise condo market was a major player in the state’s boom and now its bust. In greater Miami recently there were 40,000 condominiums being built. It is estimated that it will take roughly seven  years to work through this inventory. There are just too many variables to tell. It will be a good buyers market.

In many parts of the country prices of real estate have seen little decreases. People buy locally and not nationally after all. In Seattle and Portland prices are actually still rising although a slower pace. In Dallas, Charlotte and Atlanta prices did not soar as they did in California so there is not the decline of the west.

Internationally in Europe, Australia, South Africa and China prices have been rising sharply. In 2004 and 2005 the U.K. saw prices decline a bit but then recover. In the United States there was so much creative and subprime financing that in has shaken other parts of the world. Perhaps the United States will experience a quicker recovery then feared but that of course is the million dollar quesition.

An increase in the conforming and FHA loan limits will mean much lower interest rates that will be historically low, enabling buyers to afford more therefore, demand should increase.  The increase in the FHA Loan limit is important because it will allow borrowers to borrow up to 97% of the value of a home with a higher level of credit risk.  This increase should ease the loss of sub-prime loans.  The FHA is more capable of managing financially risky consumers due to its years of experience doing so.  We have now learned that sub-prime loans do need regulation with the FHA now stepping in to begin change.   Consumers will refinance their sub-prime loans and should save many of them from losing their homes.  Not all the foreclosures we are seeing are because of home depreciation it is because many homeowners just cannot afford their payments. This should be an opportunity to obtain new lower rate loans or experience loans that will reset themselves.  It is hoped that assistance from the federal government will provide a much needed shot in our real estate arm.   Recently, the detached home supply has dropped from 15.14 months to 11.96 months. The Condominium market dropped from 14.27 months to 13.47 months. With spring just around the corner we should see examples of an upswing soon.  As a buyer, consider how future interest rates in comparison to current lower rates will affect your future house payments and borrowing ability.  For example: 

• Home at $625,000 with a 20% down at 5.5% interest rate will mean a monthly payment of $2,839.  

• If prices dropped another 10% for this year, but rates were to increase to 6.5%, the $625,000 home now become $562,500 but the monthly payment would remain at $2,844, slightly higher. 

• If rates were to increase to 8%, to the same rate as it was in 2000, the payment would then increase to $3,302, an increase of $463 per month. 

• If rates rise to 10%, the same rate as it was in 1990, the increase in payment would be $1,110 per month! 

The California housing market has always been a terrific long term investment but you must be able to look at the whole picture over the life of your loan and be able to ride out any bumps in the road.

I remember when I was 15 years old I was talking about driving one day with my dad. I could feel my excitement grow as I described my future car, where my first drive would be and the kind of music I would play on my radio. When I waited for a response from my dad he said “when I was young I worked and paid for my own car”. My dreams then ceased to exist thinking I would not get a car until I slaved for years leaving me some where around 21 years old. I understood since my dad was a great example of a honest hard working man but… oh my gosh.

Sometime past and I got the deal of a life time, if I paid for part of a car I would get one with help from my dad! Before I knew it I was saving money and participating in my first incentive program. As a manager or business owner you too have a need to create an incentive program to motivate and continually remind your customers and employees about goals or products.  

We understand the incentive market and how people respond to diverse programs. The Travel Industry Association confirms that trips are wonderful incentives because of the bragging rights that come from a great vacation. A vacation that is earned or won paid by their employer and now their employer is actually telling them to go on vacation.

Cash is not king in an incentive program. It is short lived and often spent on bills.  Let’s see, a dreamy white sand beach on a tropical island vs. paying your Visa bill. Hmm, I will take the island vacation. A 2003 study sponsored by the Incentive Federation demonstrated the following results:

• 4 out of 5 responders believed that travel and merchandise awards are savored longer than cash.
• 2/3 felt that cash awards were remembered for the shortest length of time.
• 3/4 agreed that excitement grew with thoughts of a free vacation.

Employees and customers also share their enthusiasm and excitement with friends and family before and during a incentive contest.

1. Create an obtainable goal.
2. Create a plan complete with easy to follow steps for success.
3. Select a variation of incentive trips, merchandise and restaurant vouchers for different levels of success during the same program.
4. Market your plan and incentive with lively flyers that can be shared at home, posters and a fun filled kick off meeting.
5. Keep them producing by keeping the momentum up with progress meetings and exciting emails to share with those that are at a distance.

It IS possible to have success during any economy. Sow today what you will reap tomorrow. Incentive plans are more important now than ever before. Reward success and reward your customers for their business. By rewarding others you are part of what your company needs to have happen. Put your plan together using a cost-effective advertising tool. 

Act to attract, what is your incentive?  

We live in a world of mass media with crafted sound-bites that intrigue us keeping us asking for more. We digest these sound-bites deciding to file them in our factual do something about it file or our to be shredded. Lately, there have been factual warnings of a possible recession. What to do? What to do?

Small business owners worry with all this news. The hottest topic these days should be what we should being doing to speed up for a turnaround and how to prepare for more business. If you were broke and just won the lottery it is now more important to plan and invest than before. More lottery winners end up in the same situation they were in before they won.  

Companies such as software providers offering solutions for money merge accounts, or business cost cutting are actually making money. As a business owner take action by networking more. There are many sources to find networking groups in your area such as Meet Up.Com and your local newspaper’s business section. I was amazed to find so many variations of business and interests groups.

Discounted business is better than a lack luster business. Remember the coupon? They are back in style more than ever this season. Offering discounts or enhanced customer services will not only keep your important existing customers happy, it will bring in new ones!

Join committees, school and church groups. Many churches today offer networking opportunities for their members. A big local church, Saddleback Church in Orange County, California offers a monthly networking groups with many members finding terrific success.

Enrich your relationships with your customers and your friends. Well established relationships not only cement your business with them, they are a key to future referrals. You must promote yourself, your business and invest in incentives for your employees. Your good employees are your walking billboards. They value their jobs and understand the benefits of a prosperous business.

Survey your customers and employees identifying key areas needing improvement or learn about a possible new product or service your customers are interested in. Work for the future attracting the positive. If you look back some years ago you will find that companies that kept looking forward, offered incentives and kept key development employees being  prepared for a boom in business. Many of the companies who prepared for growth grew quicker than their competitors who may have  focused on the negative sound-bites.

Prepare to win. Deliver more than you promise your customers. Use knowledge as part of your power. Hire people that understand the dream and work earnestly for quality improvement. Take your vitamins and have fun!