Stock Market or Real Estate – Which Roller Coaster Are YOU Riding?

How Does the Stock Market Affect Real Estate? … and My BIG TIP.

Has the stock market peaked?

Is it time to cash out?

Where do you put the money?

Historically, the stock market and real estate market were regulated separately and investors would go back and forth in the markets. When the real estate market peaked out, investors moved their profits into the stock market which had been fairly flat the past couple years. Then when real estate profits peaked, they moved back into the stock market.

In the past decade, rather than riding one roller coaster to top, getting off and jumping on the other roller coaster at the bottom, both markets were combined into a giant twisty-twirly roller coaster.

In 1999, deregulation signed by President Clinton, allowed banks (banksters) into the stock market, and stock traders into real estate. Not quite so simply or directly, but through bonds witch-like secret potions called derivatives.

Greenspan said, “I’m a math guy, and even I don’t understand derivatives.” He then went on to say, “The markets will regulate themselves.”

“We need to find more ways to get people into houses,” said President Bush.

Previously, banks were allowed to give out mortgages on funds limited by their cash holdings and government-backed programs such as FHA, Fannie Mae and Freddie Mac. Wall Street genius traders recognized deregulation as the new Wild-Wild West with the opportunity to create more money for real estate loans, packaging them into bonds and many new security devices to sell to the world. This flooded the real estate buying market with loose money for loans.

Real estate values are base on the simple premise of supply and demand. High demand and low supply creates higher value.

With lack of regulation, lack of responsibility, lack of accountability … basically legalizing corruption … the stock market created a huge demand by buyers on a limited supply of real estate, resulting in the crazy appreciation of the early last decade. Lenders, recognizing the end had come, halted their lending  resulting in instant elimination of demand, dropping-off-the cliff of real estate values, then massive loan defaults, foreclosures, short sales, and the collapse of many banks and financial institutions. gave me an award for “Online Marketing Excellence” in 2009 for my viral article “Real Estate Hangover 2009” — sort of like sharks awarding the sheriff in “Jaws” for posting “Shark Warning” signs on the beach. They knew no one would read the signs, and by this time the roller coaster rides had crashed into the shark-infested water.

So now, rather than the historic see-saw of investors moving back and forth from stocks to real estate roller coasters, the financial markets have become blurred.

Financial bloggers debate:

“Stock market investors are fearful of a correction and will return to the safe harbor of real estate.”

“Sellers, recognizing they have recovered losses of the last decade and the frail economy, may want to move their equity into smaller and safer investments.”

“Buyers will hold off on real estate purchases weary of their job security.”

“Concerned the real estate values have peaked, interest rate increases will chase buyers away, and a weak economy will prevent buyers from buying, sellers are asking if it is the time to sell.”

“The younger generation watched the destruction of their parents retirement do to the real estate crash. They want nothing to do with real estate, happy to be renters and simply enjoy their lives.”

“The new generation has seasoned stock options and investments. Worried over the safety of these investments, they will return to the traditions of real estate.

“Sellers will hold onto to their property as of buyers continues to drive prices up.”

My BIG TIP? Don’t take stock tips or any short cuts with your future. Do your own homework. Use a calculator. It doesn’t matter who is to blame. Your life is based on your decisions. Make decisions based on financial common sense. Stocks have many indicators – ignore them and say hello to the sharks. Buy a house to call home, a place of your own, to be in control over your housing expenses, to raise kids and for them to call ‘home,’ flowers, pets, a place to use in your retirement. Stop pretending to be and investor or speculator, and be a home owner.

You may ask the common question about your real estate holdings: should I stay or should I go? Please look for the next article I am working on called: “Real Estate Roller Coaster.”

Is real estate safe?

Will real estate continue to go up?

Will real estate go down?

Should I sell my house now?


“Why fool around with realtors that don’t understand the complexities of Marin real estate. Mike’s experience can make a big difference when buying and selling. He has smart clients who rely on his expertise and trust his advice. He has made a lot of money for a lot of people.” L. Nibbi, Investor/developer

When asked who he works for, people are expecting him to say a real estate company. Michael Williamsen’s patent answer: “I work for my clients, the company I associate with works for me.”

Would YOU like a no-cost, free, no commitment or obligation chat about YOUR real estate thoughts with Michael Williamsen? YOU can reach him at

Michael Williamsen, Real Estate Broker # 00839110

415-713-2223 cell

Real Estate Hangover 2009


By Michael Williamsen — Published by Pro/Agent Magazine June, 2009

Real estate values are in a free fall, Wall Street icons are crashing, banks are imploding, businesses and jobs are disappearing. New subdivisions sit like ghost towns while REO’s and short sales compose most of the real estate market. Realtors are hiring homeless people to babysit their vacant REO’s in high crime areas. How could this happen to the American Dream? Let’s look at the basics.

Supply. Demand. Value. A simple economic balance, but it certainly applies to real estate. High demand and low supply yield higher prices. Low demand and high supply result in lower prices. Not exactly that simple when the balance gets messed up.

The Cycle of Real Estate Life. As paychecks and family sizes increase, so does the demand for bigger and better housing. Higher demand pushes up prices. Watching friends make money in real estate, new buyers jump into the market greedy for a piece of the appreciation and fearful to lose this opportunity. Prices shoot up and exceed the sanity level. The media announces a “real estate crash.” Values correct back to a sensible level, and there is balance once again.

To Regulate, or Not To Regulate.

Not Too Long Ago to Forget. Banks loaned their depositors’ money to help homebuyers. The government printed money but was limited to the gold standard: one dollar of paper money for every dollar in gold reserves.

Cure For Depression: Government Regulation. 1933 – Responding to the Great Depression, the Feds created the Glass-Steagall Act and the FDIC to regulate the financial markets. Maybe leaving the money of the naïve and greedy public in the hands of the greedy and ambitious financial industry wasn’t such a good idea.

In One Pocket and Out The Other. 1938 – The government created the secondary loan market and FNMA (Fannie Mae) which buys up bundles of real estate loans, then sells them to investors on Wall Street in the form of mortgage backed securities. Great! Now homebuyers don’t have to stop buying just because the banks are out of money.

More Is Always Better. Out of the 1970 Emergency Home Finance Act sprung the FHLMC, Freddie Mac, a new secondary mortgage market for conventional loans. The act also opened up conventional loans to FNMA. In 1971, the US government unshackled itself from the confinement of the gold standard. The printing press is a limitless source of money.

Don’t Try This At Home Kids. Towards the end of the 70’s, interest rates went ballistic. To stimulate demand, the real estate industry came up with a wonderful solution: creative financing. Owner financing and silent seconds up to, and over 100% of the sales price, helped buyers with down payment woes. Savings and Loans got real aggressive with new loan programs. Remember the RTC, (Resolution Trust Corp), the government organization that liquidated foreclosures from the failed S&L’s?

Don’t Need No Stinkin’ Regulation. 1986 – The Feds start repealing bank regulation. In 1999 – President Clinton signs the Gramm-Leach-Bliley Financial Modernization Act which virtually wipe out the regulation imposed in the 1930’s.

“We Have a Problem” President Bush said in 2002. “Too many Americans don’t own a home.” Greenspan said “We need more options to the fixed loan.”

Subprime Feeding Frenzy. Wall Street can’t resist the huge unregulated mortgage industry inhaling mortgage backed securities. Loan brokerages, getting paid on volume regardless of quality, and with non-licensed, un-trained mortgage consultants, sign up any homebuyer with a social security number, and shovel off the loans to Wall Street. Financial Engineers create collateralized debt obligations (CDO’s) which Wall Street sells off to the world. The world is hungry for the high returns secured on the forever appreciating “American Dream” and with the investment grade AAA stamp from the rating agencies. The rating agencies vie for Wall Street’s business and fees by competitively reducing their standards for the AAA rating.

The Inventory of Intoxication

Roll With It Baby. Fixed loans require long term bank investment forcing interest rates to remain high. Fluctuating rates of variable loans, mean less risk for banks, and lower initial rates.

Be Anything You Want To Be. Stated income loans, now dubbed “Liar Loans”, allow the self-employed, and hard-to-document income earners to simply their state income without verification. Requiring 20% down payment reduces lenders’ risk.

No Cover Charge. Would-be buyers with great income and good credit but no down payment are offered zero-down loans. Banks rely on verifiable jobs and good credit.

Just A Quick Fix To Get by. Re-financing and equity lines of credit allow homeowners to take advantage of all that unused appreciation.

Party Now, Pay Later. Negative amortization loans are available for buyers who simply can’t afford the house they want. The homeowner can simply borrow some more money to make their payments and add the advance to the loan balance. Appreciation will protect their equity, right?

Just Try A Little At First. Teaser rates offer drastically lowered interest rates for the first six months or so. Buyers can qualify at the lower introduction rate to get into more house than they can afford. They can just re-fi into another teaser rate loan.

NINJA LOANS – No Income, No Job, No Assets. Everyone is making tons of money, why stop now? No reason. Buyers can buy property on stated incomes, AND no down payment, AND forget the credit scores and security. Throw in teaser rates, just to be safe.


De-Regulation Gone Wild

The Party That Never Ends. First time buyers come out of everywhere. Move-up buyers up-grade with their hyper-inflated equity. Home buyers buy as much as twice the house they canrealistically afford. The market over-saturates with under-qualified buyers pumping up demand well beyond a normal real estate cycle.

I Promise I’ll Never Party Like This Again. A market correction is long overdue. Wild appreciation stops. Rates adjust up. Homeowners can’t make their payments – and don’t. The banks freak and stop making new loans, turning off the fuel for any demand. Wall Street sees not only their portfolios evaporate, but their companies. Credit-based spending strangles itself, businesses disappear, and jobs everywhere vanish. The housing supply floods, drowning demand, as buyers wait to see the bottom through the murk. Without bank loans, even willing buyers are not capable. Values plummet far below where they should have leveled out.

Real Estate Rehab.What about all the poor people who are now losing their homes? Most of those ‘poor people’ speculated on real estate valued much more than they could afford, without any of their own money, risked bank money with little accountability for failure, and certainly wouldn’t have complained if appreciation had made them a small fortune. For their mistake, they are offered a bailout through a loan modification or short sale, while their neighbor who actually could afford their home and put up some cash gets no favors. And what about all the profits sellers made selling at the top of the market? When the balance of supply and demand gets out of whack, so do values, and the distribution of value.

So why didn’t anyone see this and stop it? Economic prophets predicted the real estate crash. The SEC thought the banks would regulate themselves. Analysts knew this wouldn’t last forever. The big blinder was AIG who gave everyone the excuse that these investments were insured. All the research persistently pointed the finger at one word: greed. Greenspan said regulation wouldn’t have, and won’t save us next time – greed is just part of human nature.

Where do we go from here? FHA is offering loans with 3.5% down. Tax credits of $8k are being offered to first time home buyers. Cities are offering interest free loans to reduce the liability of so many vacant houses. Jumbo lenders are tip-toeing back into the market requiring solid down payments, good credit, verified income, just like the old days of a balanced market. Will the real estate industry get carried away again with the white-out? Maybe the question should simply be “when”. Certainly future real estate and economics books will have a new chapter about these times.

Follow-up media publicized videos:

Former Countrywide Whistleblower: Mortgage Fraud — Huffington Post December, 2011

The Fed Grants $7.77 Trillion in Secret Bank Loan – Now Do You Understand Occupy Wall Street?

Foreclosure Fraud – MSNBC w/ Cenk & Matt Taibb

60 Minutes, April 2011 : The Next Housing Shock

“Why fool around with realtors that don’t understand the complexities of Marin real estate. Mike’s experience can make a big difference when buying and selling. He has smart clients who rely on his expertise and trust his advice. He has made a lot of money for a lot of people.” Len N. Investor/developer

When asked who he works for, people are expecting him to say a real estate company. His patent answer: “I work for my clients, the company I associate with works for me.”

Would YOU like a no-cost, free, no commitment or obligation chat about YOUR real estate thoughts with Michael Williamsen? YOU can reach him at


Michael Williamsen, Broker Agent Magazine Agent of the Month

By Shannon Hartsoe August,2008 in Broker/Agent Magazine

With his trademark sense of humor, Michael Williamsen jokes that he doesn’t care if you misspell his name with an s-o-n instead of s-e-n, he’ll still cash the check. He favors himself as an old school gentleman, holding doors open for other people, and helping others load plywood into their truck in the hardware store parking lot. “I like to leave a smile on everyone I meet.”

Having represented buyers and sellers in several hundred transactions and several dozen on his own account since 1982 you might think he would feel comfortable in knowing the business. Williamsen has a bachelor’s degree in Information Management Systems from the University of San Francisco. “I try to keep technology tamed so my clients can make informed decisions.” Williamsen takes numerous classes each year in marketing, sales, and legal aspects of real estate – always on the prowl for new ideas. “I don’t believe in perfection, but the pursuit of perfection. That keeps me going beyond what used to be ‘perfection’.”

Shunning the traditional coat and tie in favor of blue jeans and print shirts, he doesn’t appear to be a typical real estate professional. “My philosophy on investing is 1) make the money, 2) keep the money, and 3) make the money make money for you.” Williamsen says. “My clients are more concerned with the quality of their investment, profit, safety, and reduced risk and stress than my fancy suits.”

The Foundation

  Williamsen’s Alaskan childhood summers were consumed by hard work and baseball. He spent his mornings working with his father salvaging old buildings, and pulling up the halibut skates or crab pots. Afternoons on the baseball field taught him the rewards of hard work and persistence — twice helping his Little League teams to the state playoffs. Though he was very shy as a child, he was extremely creative. When he introduced creative financing, his mother knew the family Monopoly Games would never be the same. It just seemed natural that he would apply his creativity in everything else he did.

“My father was a Lutheran minister,” he says. “He never judged me, but I could always sense his approval or disappointment. I learned a lot from him. Even now I still sense his presence and strive to earn his respect. His belief in everlasting life really made the trials and setbacks in his life seem insignificant. It’s an amazing perspective.”

A family move put him in a small farming town in Eastern Washington. As the new kid in town, it was baseball that gave him instant acceptance with many new friends. Knowing him now, it’s tempting to think that it was Williamsen’s determination and persistence helped give his team the state high school baseball championship two years. But he begs to differ and says it was baseball that helped him gain self confidence, determination and persistence.

Williamsen went on to work in a variety of jobs including his own lawn mowing business at age 14, working in the hay fields of Eastern Washington at 15-16 and clerking in grocery stores from ages 16-22. The common denominator? “I learned the meaning of hard work and customer service. I always keep in mind who I work for; I work for my client, my company works for me.” While living in Washington, he had his first taste of investing success — purchasing a “fixer upper” for $11,000, renovating it almost entirely on his own, and then selling it for $29,500!

Turning Dirt Into Gold

In 1977 Williamsen moved to California and quickly got into buying property, and helping his friends get into their first homes. In 1982 Williamsen took the next natural step and got his real estate license.

Once Williamsen had his license, there was no stopping him. Quickly, he built a reputation as the one to turn to when results were critical, surprising everyone, it seems, but himself. Though residential properties make up more than 80% of his business, he is also something of a land guru. Connecting particularly well with the local builders, he began to help them find, develop and sell projects, then re-invest into the next project, earning him the nick-name the “Lot Guy” of Marin County. And for good reason; since the 1980’s, Michael Williamsen has had his fingers in a large percentage of Marin’s land deals. “I love the creativity of the deal and the design and development of new homes.” In 2006 Mike was awarded the RE/MAX Hall of Fame. “I actually earned it in 2004 – I was just busy to notice that I had qualified.”

His clients have grown accustomed to “the smile.” It happens when someone tells him that something can’t be done. “I have a nose for finding overlooked deals,” he says with a laugh. “Some of my clients have made a fortune on deals that others said couldn’t be done.” But, though he is creative, he’s anything but careless. His depth of experience in the purchase, development and sales of not only homes, but fixer uppers, spec houses, as well as commercial and land acquisition has often netted his clients a higher return and with less stress. “I always look at the potential future potential of a property. It’s the single biggest investment most people make so it’s a good idea to do it wisely. I am quite analytical. If I sense that it’s not a good deal, I tell them.” Rob Fitzgerald, one of Williamsen’s long-time clients, agrees. “The best deals I have ever made were the deals that I didn’t do. Mike Williamsen has kept me out of those disastrous deals.”

The Man, the Legend, and the Future

Though Williamsen’s real estate success is undeniable, he describes the true measure of his success by what he gives back. “I get a kick out of helping clients accomplish things they didn’t know they could.”  Out of the dozens of awards he has earned, the older ones that actually found space on his wall are now covered with pictures of his family, or the many baseball and basketball teams he has coached. “Real estate has helped me to do more of the things that I enjoy.  My son’s trophies mean a lot more to me than my own.” Williamsen says “I’ve always lived life on the playing field rather than in the bleachers.”

What are his latest favorite achievements? “I have spent several years developing a website to provide information and services to my clients. It is going so well, it is taking on a life of its own!” His son, Bryan, now 12, is his continued inspiration. “He’s smarter than I am, keeps me challenged, and he trusts me.” And, he adds with a laugh. “He already pitches faster than I do!” He recently added a new hobby. “I told my friends I was thinking about writing a screenplay. They all said I couldn’t do it.” Williamsen just finished his first screenplay and has started his second. Asked what will Williamsen do after real estate? “What do you mean? I am just getting started.”

Michael Williamsen

California Real Estate Broker # 00839110

851 Irwin St, San Rafael, CA 94901


Seven Sins of Dirt Deals

So many prospective land-buyer inquiries had the same few misconceptions, this this article was written as a letter to  as a warning to what they were considering. It became so popular, it was published in a real estate trade magazine, and Michael was invited to participate in radio talk shows.



by Michael Williamsen

Common Mistakes in Buying, Selling, and Owning Land

Published in Pro/Agent Magazine

March 2009

Becoming the “Lot Guy” or the “Dirt Demon” or the “Duke of Dirt” was even less glamorous as it sounds. I chased infill lots, the deals with the smallest paychecks, the longest escrows, the least chance of closing, and the strongest potential for getting sued. But hey, I could wear jeans and tennis shoes. The spec builders promised that if I found them a good lot, they would give me the golden pot at the end of the development rainbow, the listing on the house. Rarely did they. I always believed that I would get the ‘next one.’ But the lot buyer that really gave me anxiety, forcing me to turn to writing as therapy, was the ‘wanna-be-builder/owner’ or as we call them the ‘retail buyer.’ I would babysit these buyers through development school only to have them go buy a 40 year old condo from their newly licensed cousin. I soon began recognizing the tell-tale signs of these dreaded buyers. These are my favorite with my responses:

1)  “I want to build to build my dream home.” My standard reply: “Sure, you can buy a lot, you may be able to build a house, but it ain’t gonna be no dream.” Zoning limitations, setbacks, height restrictions, building ordinances, size limitations, deed restrictions, building moratoriums, design review boards, planning commissions, city councils, appeal processes, neighborhood opposition all may just turn your dream into a nightmare. Be flexible. The ego of having everything your own way will be expensive in both approvals and construction, and, unlikely to happen.

2) “I found a lot I really like.” What you see is usually not what you get. Roads, fences, neighboring houses aren’t necessarily indicators of property lines. The property will rarely start at the edge of the road, or the sidewalk, or your guess of the day. You may need to bridge across a down slope gap, or excavate a hillside just to get to your property. Easements or encroachments can give others the right to use your property, or prevent your use of the property. Utilities may not be available or very expensive to get.

3) “I want to hold land as an investment.” Sure, property values go up, but so do building costs and fees, often faster than values. You won’t get any income from land to help pay the mortgage. You probably won’t get any tax benefits. The value of land is determined by its potential use. Zoning changes and limitations may greatly decrease your land’s potential. Long term holding of land is not investing – it is speculation. Go to Vegas.

4) “I can save money by building myself.” Cities, neighbors, utility companies, and many other entities which have a say in your project all want to cure their problems with your checkbook. Surveys, soils engineers, architects, designers, application fees – here a fee, there a fee, everywhere a fee-fee. Then after you get your design approved there are structural drawings, working drawings, energy calculations, and of course more fees. Water meter fees, sewer fees, service fees, hook-up fees, school fees, traffic mitigation fees, park fees, and on and on and on. One local town came up with “Non-Specific Mitigation Fees” just to be safe they didn’t leave any coins in your pocket. Then there is the construction loan with more fees, points, and appraisals. Building costs have likely gone up since you started this project. Each delay releases your subcontractors from their time commitments and each change opens negotiations of their original bid. A big financial “OUCH!”

5) “I will borrow money to buy a lot.”   Land financing is not like regular house financing. Down payment and qualification requirements, points, fees, interest rates, due dates are very different. There are basically three stages of financing: land advance/purchase, construction, and take-out financing (when the home is completed). Each stage has its own requirements and costs, and risks. Owner financing has risks for both seller and buyer, and agents – judges think we are supposed to know this stuff.

6) “What’s the rule of thumb for ….” There is one rule of thumb in land development: If you rely on rules of thumbs, you will get eaten alive. There is no easy way to get away from doing your home work right in the first place. Check out all your costs up front. Leave yourself room for error. Check out comparable sales of similar finished homes to make sure your project will justify the costs. It usually won’t. Get very specific with all the details. Don’t be afraid to walk away from losing money, and saving yourself to go through this again.

7) “I’ll represent myself.” You may be in and out of escrow several times with those “dream home” buyers while they get their education on the first six sins above. Also, there are the spec builders. These guys are real pros, the sharks that feed on the flesh of naïve land sellers. They like to “make my profit going into the deal.” You may save a real estate commission, but an experienced land agent will greatly reduce your stress and risk and increase your net profit.

Land sales are the wild, wild, west of real estate. Land contracts and disclosures are completely different than in homes sales. Land buyers and sellers are treated as sophisticated investors. As with any investment, keep your eyes open and insist that your buyers do their homework well themselves. Don’t get caught telling them what you heard from city hall, or from the utility company, or you will be writing the next article on dirt deals.

            Michael Williamsen is a real estate broker in San Rafael. Licensed in 1982, Michael has become known as “the Lot Guy.” Michael has represented buyers and sellers in well over a hundred development transactions and many projects as a principle. He has consulted on many development projects including single family, multiple family projects, sub-divisions, and remodels. Currently involved in a local neighborhood association as the chairman of the development committee, Michael’s goal is to provide affordable housing that enhances the neighborhood and supports neighborhood safety, traffic, and parking.

“The best development deals I have ever done, were the ones I didn’t do. You only have one chance to go bust. Mike Williamsen puts deals together that make me money.” R. Fitzgerald, Developer

Mike’s advice is always direct and to the point, never self serving.” L. Nibbi, Novato, Investor/Developer

Would YOU like a no-cost, free, no commitment or obligation chat about YOUR real estate thoughts with Michael Williamsen? YOU can reach him at