Tom Kunz has been president and chief executive officer of Century 21 Real Estate LLC since June 2004.
The New Jersey firm claims to be the world's largest residential real estate sales organization with 149,000 agents in 60 countries.
Kunz stopped by Thursday for a conversation about the housing market.
Q: Year-over-year sales are up in the Sacramento area for the first time in three years. What might that signify?
A: A lot of that is because you have seen some decline in pricing. That has opened the marketplace to more buyers, both first-time buyers and move-up buyers. I think that's a good sign. I don't declare victory in any way, shape or form yet. I think we're not going to see an absolute V in the market. We're going to see somewhat of an elongated U. We're going to bounce around there for awhile.
Q: Prices have fallen a lot the last year. What should buyers be thinking about before they buy?
A: I think first of all you have to look at your job and make sure you feel somewhat secure in the job that you have. That's what's going to produce the income you're going to need to make the payment on the house.
I think for a move-up buyer, what they're going to find if they work with a professional … is that they can probably buy what they thought was going to be a third or fourth home. They may be able to make that leap now and still be in the payment range they can afford to do. That's just because of the way prices have fallen here.
Q: Our readers are often cynical when a real estate agent says now is a good time to buy.
A: I'm not saying now is a good time to buy. You just heard me say investigate and find out. What I am saying is I think this marketplace offers opportunities that most people have never been able to see before. I can't make that decision if now is a good time to buy for you. You can only make that decision.
Q: Foreclosures are really hammering this market. Should government or lenders do more to keep people in their homes?
A: I think people who are in their houses ought to be doing more. The last report from the Mortgage Bankers Association said something like 80 percent of people have never contacted their lender or answered phone calls from their lender before foreclosure takes place. What I would say to folks who find themselves in that position is pick up the phone. Call somebody, and if you don't like the first person you talk to, keep calling, call somebody else.
Tell them I live at this address, I have a job, I want to stay in my house. Most institutions will try to help you make that happen.
Q: Now the tough question. What's with Century 21's gold jackets?
A: It's a marketing tool. That's all it really is. When Century 21 was founded in California in 1972, some of the competition in the marketplace was a company by the name of Red Carpet. And they had a red coat. So at the time it was kind of the thing to have. Our original colors were maroon and brown.
It was something that set us apart, and because we marketed it so well for many years, it still stands out. It's our Nike swoosh.
Assessing blame
Are too many people economically naive when it comes to buying houses? Yes, says Northeastern University finance professor Wesley W. Marple.
But does that make Countrywide Financial Corp. the big villain as suggested by lawsuits filed Wednesday by California and Illinois? Probably not, Marple says.
The Boston academic believes that people are more naive about money and finances than they were years ago.
"In an earlier day, you worked on the family farm and had to contend with market forces," he said. Everyone in a family understood the basics of money and, more important, the risks. Today, people depend on their employers to handle all that, he said.
"My observation is that people are removed from economic reality in a way they weren't earlier," Marple said. That means that many weren't equipped to evaluate the market when it came time to buy, he said.
"People unrealistically paid for their properties, hoping that prices would continue to rise and not decline," he said. They also hoped their incomes would be adequate to support the mortgage without reading the fine print that rates would go up, he said.
Marple finds equal fault with financial investors who thought too little about the risk in the mortgage-backed securities packaged by Countrywide. And he's not too keen on the ratings agencies that were involved, too.
"Understand," he said, "it all took place in an atmosphere of excess liquidity."
Yet at the core is his thesis about widespread naiveté and money. That's something bigger, he said, than Countrywide.
Mortgage rates up
The rear view mirror is looking rosy for people who bought houses earlier this year with loans below 6 percent. Mortgage rates nationally have been on an upward climb for five weeks, hitting 6.45 percent this week for 30-year fixed-rate loans, according to government-backed mortgage buyer Freddie Mac.
That's up from 6.42 percent last week. The last time rates were higher for the benchmark loan was the week of Aug. 23, 2007, when rates were 6.52 percent.
Call The Bee's Jim Wasserman, (916) 321-1102. Read his Home Front blog at www.sacbee.com/blogs.
