4 lessons from a 97-year-old real-estate agent
More than 7 decades in the business have given him wisdom; he shares a few gems.
Buy a house today if you can, but don't sell one if you don't have to, says George W. Johnson, a 97-year-old real-estate agent who has been working the Seattle market since 1936.
Johnson, who is reluctant to call himself America's oldest real-estate agent — he says he just learned of a 99-year-old broker in Florida — has seen his share of housing booms and busts since he hung his first real-estate shingle 74 years ago.
"I've been through a lot of these ups and downs," he says, remembering the property boom that followed World War II, as well as the deep downturn in the 1970s when Seattle's biggest employer, Boeing, laid off thousands of workers.
Through it all, Johnson says he has learned many enduring lessons. Chief among them: After every housing recession, the market has "gone higher than the one before." You have to have the stomach to hang on through all of the twists and turns, he says.
This market a 'baby' compared to days past
Johnson wasn't always a real-estate guy. He was born to a farming family in South Dakota on Dec. 22, 1912, and moved to Seattle at the height of the Great Depression to attend college and pursue a teaching career. To make ends meet, Johnson juggled three jobs at one time. He delivered milk for a while. "Whatever you could do to get by with, you did it."
Then, in 1936, he started dabbling in real estate. Unemployment hovered around 30%, soup lines stretched around blocks, homelessness was rampant.
"You could have bought the best house in (the Seattle neighborhood of) Ballard for $3,500." Times were tough. The current real-estate market, Johnson says, is "a baby" by comparison.
"In addition to the Depression, we had the drought at the same period, so it was just compounded. You wouldn't believe the things that happened during that period."
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Johnson, a natty dresser who drives himself to work every day — including Saturdays – managed to carve out a niche as a service-oriented agent. When the economy turned at the end of World War II, he opened up his own shop in Ballard, north of downtown. He and his sons have run George W. Johnson Realtors ever since, weathering the ups and downs in the market with confidence that profits are there for the making.
"I've lost a lot of money in a lot of things, but I've never lost in real estate," Johnson says. He remembers selling his first house in the 1930s for about $1,500. "It's probably worth $300,000 now."
4 real-estate tips from Johnson
You can't thrive in the real-estate industry for this long without learning some useful lessons along the way. Here are some of Johnson's pearls of wisdom:
Beware one-company towns: Cities dependent on a single company or industry are more vulnerable to jarring downturns if the economy goes south. The Rust Belt's old factory towns have made that abundantly clear.
The Seattle market turned particularly grim in the late 1960s and early '70s when Boeing, the aerospace giant, laid off more than 60,000 people in the Seattle area. "Boeing was about the only major company we had other than (the University of Washington)," he recalls. "Now we've got a much broader base to help out … it is altogether a different proposition."
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Johnson counsels homebuyers to look beyond real-estate values and investigate an area's fundamental economy before making a purchase.
Don't get greedy. Johnson blames "plain old greed" for the latest real-estate downturn — people got caught up in the enthusiasm of the moment and banks egged them on with cheap loans.
"Everybody was out to buy a house, raise the price, double it and make a quick buck," he says, shaking his head. "People signed up for stuff that they knew they shouldn't have and they couldn't pay (for) and of course the banks helped them."
Johnson is old-school in that way. At the heart of his real-estate philosophy is his fundamental belief in personal responsibility. "You've got to be able to hang onto a house until conditions are such that you can make a little money," he says, emphasizing that each and every potential homebuyer should make an honest assessment of his or her financial potential and should be wary of offers that seem too good to be true.
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"People aren't as dumb as the media is making them out to be. They knew what they were getting into," he says.
But he is compassionate for those who have run into honest trouble. "It's tough on people who lost their jobs and are now losing their homes and that type of thing. It always is," he says.
Their pain, however, is the buyers' gain.
Timing is everything. "In this market, any young person that hasn't bought a house ought to buy one," Johnson says. "A buyers market doesn't come along that often … you just can hardly help but make money on whatever you buy today at the prices they are."
Johnson says rates are only going to go up over the long term, so borrowing will cost more. (Check local interest rates.)
If you don't have to sell, hang on. Unfortunately, Johnson expects sellers to continue to suffer, at least for now. Buyers, on the other hand, "know it's a buyers market – they are going to come in with offers below what we've appraised it at just because they know a lot of people have to sell," he says.
Despite the continued housing-market struggles, Johnson is confident that the latest downtrend is largely over. "We are headed up," he says, "but like I said, I think it is going to be slow. It will take a year or two at least."
And as the market heads up, Johnson hopes to be there helping his customers buy and sell homes just as he has for most of his life – out of a small, family office dedicated to service with a smile.
"We've done a good job," he says of his business. "We've been careful and honest and thorough and it's been good service, and I think that will always produce, no matter what business you're in."
Wouldn't you just love to have this guy as your grandpa?
Every advice he gives is sound. Homes are on an absolute fire sale. I bought a house earlier for 230k. When I went to buy insurance the lowest that I could find was 800. I asked every single one of them and they said the reason was the cost of replacement which they said was based on slightly below average cost of building per square foot. I still persisted, and one of those companies actually put me in contact with their contract estimator who produced 3 estimates. I have since come to believe that the local contractors are charging about what the estimator told me. It's real. Bottom line, just to replace the house in case of fire, contractors would charge about 350,000. But a house is more than just the building. It include also the land, the permits, the appliances. The homes that you can buy today cost you less than just the cost of the building, in some cases about half. The homes are below their real values. I'm not even talking about the perceived value such as the location premium, because the 350,000 for this home does not even include the cost of the land (thus the location). It would cost that much to build the same house in the middle the desert where the land is cheap. This equation is not going to change unless the cost of labor and material goes 40-50 percent below what it is today for the going price of homes to equal the cost of construction. The law of economics dictate that sooner or later market forces will require the real price of homes to be paid, not the fire sales that are going on because of the unusual times.
A few years ago the feeding frenzy caused the home prices go way above their real value. Now the reverse has happened and those prices have fallen way below the real value. Get yourself a house and hang on to it. It may take 5 years or more, but you can't go wrong.
"You've got to be able to hang onto a house..."
Who is the editor here? This sentence should read, "You've got to be able to hang on to a house..."
Ditto keepeurheads... and I think tons of intelligent Americans are in full agreement with us, but don't expect our liberal press to weigh in on reality here.
BTW it's Plano, a nice Texas town near Dallas. I barely play the radio.
I was born and raised in the Berkshires, Western Massachusetts, so let me tell you 150 miles may as well be the other side of the earth when discussing Taxachusetts politics. Barney baby's constituency are about as dysfunctional a gaggle of parasites as can be found on this planet.
exactly piano dude.
the sad and frustrating thing about those facts is how alot of americans actually realize it and they know it but still will not be brought up on any charges and they even still have their jobs as they and all of the wallstreet crooks sit back and laugh at every hardworking taxpaying american.
No accountability for government officials and hired leaders who continue with their selfish agendas working 100% against who they were voted in by to serve and protect.
Barney Frank just won his primary with no contest ???
some of u are too funny with all the democrats/republican/bush/obama blaming nonsense.
understand that bad politicians and leadership with little or no moral courage have been in power as a whole for way too long and have all contributed to the downfall and weakening of this country.
This democrats vs replcans party circus is all confusion by design. and only designed to divide, confuse and frustrate all of us turkeys into hopelessness and ignorance.
Greed , lack of common sense (laziness) and responsibility of most americans have all greatly contributed in this era of instant gratifiication.
Mr Johnson I believe is certainly right about the good ole fundamentals of Greed being the root cause on everyones part for this as well as his other insights.
This country has been too dominated by the orientation of making sales for the now without wanting or caring to look at any of the long-term consequences or planning.
It has carried over into seemingly everything in this countrys products and services.
However, Id be interested to know what the average income of americans was back in the great depression era and earlier 1900's in relation to what the average house cost back then as he made reference that homes back then sold for about $1500.00.
The inflation of housing in the last decade just before the bust is probably alot higher than it was then.
I dont see this market turning around anytime soon strictly because of the large amounts of unemeployment still upon us and the time it will also take for alot of people to get back on their feet again and have confidence to make those kinds of financial commitments.
I think alot of people have taken too much of a loss this time around that has totally changed too many lives and standards of living.
Maybe Mr Johnson is better off now then he was back then, but I think alot of people now are not as hard working and beleive in working harder to get themselves out of the temporary hard times like the way americans did back then.
Our government and society as a whole are alot different from those times and thats why I believe its a worse economic situation for americans now than any other time in history.
We all bought far more than we could have ever afforded. But that's not just in real estate,..we did it to everything and no one told us "no" Big cars, big TV's, 2nd homes,
exotic vacations, new kitchens with mindlessly expensive cabinets with stainless steel appliances, bathrooms with whirlpool tubs and marble counters with his and her master baths. I could go one for an hour but you get the picture. And unfortunately, most of it was paid for with Home Equity Loans, using the home as an ATM machine.
Johnson says rates are only going to go up over the long term, so borrowing will cost more.
True, but when its costs more to borrow, prices go down. Your average home buyer is not saying "I can afford $250,000." Instead, they think "I can afford $1,750 per month." It doesn't matter if that $1,750 is the payment on $365,000 at 4.0% or $115,000 at 18.0%. This is true for the lenders these days as well. They do not look at what you can afford, they lend based on what payments you can make.
I mention this because Johnson seems confident that housing prices are going to go up. It seems to me that rates have no where to go but up as well. If earning power in the area stays the same, and if rates go up, prices have to fall. I think the best we can hope for is that employment will rise, wages will rise, and they will not be outpaced by rising interest rates, which means housing prices will stay about the same.
Did you sustain a shell fragment to the head during the war? All of your numbers are off by a factor of 10 in favor of Bush (he racked up $5 TRILLION in debt) and a factor of 10 in disfavor of Obama (he has racked up $1.3 TRILLION so far).
If you are going to rant, at least get the figures right!
And, feel free to return all of your Social Security and Veteran benefits. It would help diminish the national deficit. And, I am tired of paying more in payroll taxes per year than you made in total earnings per year when you still worked.
I agree with all of Johnson's comments, but here's the reason the housing market collapsed...
we strayed from requiring every buyer to put 30% cash down and to finance the rest with fixed rate loans, preferably 30 year. All the "zero down", variable interest loans, and balloon payments were stupidity, forced upon banks by the Barney Frank and Cris Dodd social engineers, along with meek, bespectacled, no clue joke Fed Chairman, Alan Greenspan.