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EDITOR'S NOTE: Bob Endsley, founder of Endsley & Associates Real Estate in Turlock, was interviewed recently by the Work & Money staff.

QUESTION: You started your own real estate company in Turlock in 1977?

ENDSLEY: Yes, January of 1977.

Q: You have seen a few changes in real estate in this region. Can you tell us about your business experience and your company?.

ENDSLEY: It wasn't my goal to become a real estate company. I really enjoyed selling and being involved in the investment market, but Al Buchanan (a Turlock developer) asked me to represent him in subdivision homes he was building. Because of some circumstances, it required me to get my brokers license and work out of his construction office. Subsequent to that I would have people ask me if they could come into my office and work with me, not that I was trying to grow or anything else. I had never advertised for for agents, they just all had come and asked to come into the office. It just very slowly grew over the last 30 years. It did change a little in February when I bought out my competition (Coldwell Banker Action Realtors). It has just been really a fun business. When I got into real estate, I just couldn't believe how much enjoyment I was getting. I was 34 when I started real estate, and I am very fortunate to have been in one of those areas that some of us are lucky enough to find and are happy with for the rest of their lives.

Q: How many people in your office?

ENDSLEY: We have about 90 now. We have two offices (the main office in downtown Turlock and one on Geer Road). We did have three offices, but then the competition became available. We bought that in February so we had four (offices) but we combined the Monte Vista office we had opened three years ago with the Geer Road office. But the market is changing, as you all know, so it requires adjustment. We weren't in Patterson long enough to really become established there (and closed that office). When it did start slowing down, that area accelerated quicker than anyplace else.

Q: You have been in the business for 30 years in this area and have seen some ups and downs in the market. Does the current slowdown make you nervous?

ENDSLEY: No, in September of '79 is when it went down for the first time that I was in business. I started in July of '74. In '79 rates started going up and by '82, they were up to 19 percent, and things were really slow. It never went down really quickly. It's kind of accelerated this time, but it's not as dramatic in my mind, at least not at this point as it has been.

Q: So people shouldn't panic about a decline in the value of their homes?

ENDSLEY: Well there could be. Anytime you are in real estate, if you can control when you need to sell, I think you will always wind up benefitting. If you have to sell, and it could be in a down market here this winter, and you bought it a year ago, you might have to lose a few bucks on that. But if you wait, you know, the way normal home owners do, (you'll be OK). It's not an investment entirely by itself; it's a place to live. So if they wait for another couple of years, then they would come out (OK) again. When you buy and sell is what makes the difference. If you control that, then you will always come out in good shape.

Q: If you are a consumer who is coming into this market right now, what do you need to keep in mind?

ENDSLEY: Well, certainly looking at the level of pricing and the particular home that you are looking at. There are a lot of ways we evaluate homes that are priced per square foot. If you have a neighborhood that is of similar value, you can equalize things by their square footages and get it down to price per square foot. If you have several neighborhoods you can be certain you are getting a good value.

Yes, the market might trend downward just a little bit in another two, three, four months. It's really hard to accurately predict, but as I said, if you stick around, over time - and not over a long period of time, just over a period of time - you are going to come out ahead. You can't always pick the exact peak of the market or the trough. So you try to get the best information available and you go to professional people to give it to you. Your article in the paper showed the values in the last year have only gone down a few percent in a couple of counties, not every county and its only gone about 2 or 3 percent. That is really not a biggie when you look at what will happen if you own that same home for another five years; it will likely go up 50 to 75 percent.

When I first started selling these homes on Buchanan, on Geer Road behind McDonald's, the price range was from about $25,000 to just a little under $40,000. Prices were starting to go up really bad. I can remember going out and surveying all the subdivisions once a month. Then I would break it all down by price per square foot, and I would show Al. 'OK, here is where your pricing is,' and I talked him into staying with the market, not exceeding the market. You never want to exceed the market. He stayed with the market and in 12 months prices went up 15,000 dollars. People were just paranoid because now prices were $35,000 to $60,000. Those same homes now are selling for $300,000 to $350,000.

Q: With the run up in prices and value, a lot of people supposedly took money out to pay off credit cards, buy new cars and maybe purchased more expensive homes than they could really afford because of zero interest and similar types of loans. Do you get a sense that people are putting houses on the market because they are in a bind financially?

ENDSLEY: I don't think we have seen it all. Yes it is starting, it has been accelerating the last few months. It's not a surprise to me because it has happened before. There are some loans out there that are really not to the benefit of the borrower, the buyer, because they look really good to start out. There are even some that are negative amorization loans. A lot of people don't understand the impact of what that's going to do to them when the market does change, the rates go up and they see the loan on their house is more than the house is valued at. To make the payments is difficult.

I really feel like whoever is responsible for developing those kind of loan packages for our public, they were only looking for the immediate money rather than trying to have an ethical approach to it. There are some people who could benefit from those kinds of loans - short-term investors - so there are some reasons why those loans could be beneficial. But a lot of them have been sold to people who really don't understand what the long-term impact is going to be and suddenly they don't have the choice to determine when they are going to need to sell their house.

Q: If they start coming into the market in a big way, could that extend the stagnant period we are in right now and are you concerned about that?

ENDSLEY: There is the possibility this would extend it, but I think it more likely will accelerate - at least for a period of time - a dip in the market to be able to sort (out) all the product. We are having significantly, eight to 10 times, more listings on the market now than we did at this time last year. If we get more, then it just has more of an impact on the pricing - it's just a natural thing. I just really feel bad for those people who didn't really understand (their loan terms). It wasn't really explained to them what they were potentially getting themselves into, so they are going to wind up losing it. It is too bad because it enabled them to buy a more expensive home than they really should. They should have not taken a zero interest loan and bought a house that they couldn't comfortably afford.

Q: There is a lot of talk about it being a buyer's market. If you're in the market for a home what should you be thinking about right now?

ENDSLEY: I feel if you don't have a home, then you are better off to go buy a home even if it does trend downwards for a few months. If you waited a few months you might be able to buy the same house for a little less, but what if it doesn't do that? What if it starts to firm up a little bit? I don't anticipate having an increase in value like we have had for the last three or four years, but you have the tax benefits and you have got your own house. Personally, I would always want to have my house - I won't have to rent.

Q: Are you seeing a lot of interesting condos or small lots?

ENDSLEY: Not as much as I would like to see. We have had a few condos in Turlock in this last (building) cycle. They did have a good market in them, but there certainly hasn't been a significant amount built. Unfortunately there hasn't been much development of small lots. There are a few that I have seen in Turlock, specifically a 5,500-square-foot lot, 6,000-square-foot lot, but those really aren't considered small lots if you want to utilize effectively our available land resource. Perennials, I would like to see them.

Q: Do people want a big house still, or do you think they are willing to go back to 1,500 square feet?

ENDSLEY: Well, I'm not real close to that in the new home market, but in the resale market people are mostly in the 1,400- to 1,600-square-foot range, but you still see a lot of the large homes being built.

Q: One of your interests is in environmentally friendly green buildings, tell us a little of what you have planned?

ENDSLEY: Well I bought nine-tenths an acre on Hawkeye (Avenue) and the back of Hawkeye is on Christine, which is a very small one block street. I bought it for the purpose of being able to split the back off and develop some lots there with green (environmentally friendly and energy efficient) houses. What I am going to do is build two, 2,000-square-foot homes that are designed for baby boomers, which means you have 36-inch wide doors and large bathrooms to accommodate a wheelchair. No steps on the sidewalks or entry into the house. In addition to that, it will be a very environmentally friendly home in that the walls will be manufactured with a very high insulation value. The windows, tankless water-heater systems, solar-powered generation on the roof. There are some real new solar generating panels that are not near as obtrusive was what you would see on top of a house where they were all on their own framework and everything. These new ones just blend right in with the roofline and all so it doesn't show up. I have retained an architect out of Berkeley who specializes in environmentally friendly construction. Congressman Dennis Cardoza (D-Merced), one or two professors from UC Merced, several people from City Hall, Larry Weiss, general manager of TID, one professor from CSU Stanislaus, the architect Kirk Larsen, who is my builder, and myself are all meeting to put together a group to expand in the valley more consciousness about very reasonable environmental construction. It just kinda took on a life of its own. Dennis Cardoza and I are friends. I talked to him after you guys (The Bee) had covered the solar panels that he had put on his home in Atwater. I said 'Hey, I'll ask him about some ideas on how the government would benefit, from tax considerations and things like that. It just sort of grew and now we're going to have that group. I'm not expecting to make any money on the (Hawkeye) houses that I am building, because there is going to be too much innovation and new products that carry a premium because they are not high demand items.

Q: With the accelerating cost of energy do you feel like this is a good direction for valley builders and developers?

ENDSLEY: Yes, and TID is very supportive of what I'm doing. They want to be involved in what we are doing because the demand for energy is continuing to go up. Somehow we have got to start being practical about what we are doing. When you can do these things - and all they take is a little planning if we get enough building going on - then the economies scale will kick in, and it won't cost that much more to build a home that can be energy efficient. Here in our area in the valley, we really haven't embraced it yet. Not that I am looking to be the one that does it, but if I can just be a little catalyst and help push it along, to me that is worthwhile.

Q: You have seen a lot of changes in Turlock and throughout this region the last 30 years. What are some of best and worst changes?

ENDSLEY: I guess the best would be more of a community that has most of what it needs close by so you don't have to commute a long distance to get things, because we used to have to come up all the time to Modesto. If you wanted more than that you went to San Francisco. With growth and we have gotten that, a lot of the chain stores and things people like to have.

When I came here in '72, married with two children and there was about 14,000 people in the community, I said 'Oh, I want to stay here and raise my family because this is a neat town.' Looking at what the county has done, and city, it (growth) is inevitable. We have to do some very good, smart growth planning, which is what the Great Valley Center is all about. I really support what they do. We really need to be more aware of it (good planning), and I guess that is why I am doing what I am doing, hoping a lot of people will buy into it and keep talking about it so we realize it's in our best interest - in our child's best interest. I might sound weird, but I'm looking down the road. We really owe it to ourselves to not just be high consumption society.

Q: When you talk about having houses that are more environmentally and energy-friendly, do you feel there is a demand for that?

ENDSLEY: I have had a considerable amount of interest, people asking me, because one (demonstration) house I am going to move into (on Hawkeye) and another one is going to be there. I couldn't put a price on it or anything, but they said "can you keep me in mind for when you do". They were very interested in doing it. Now whether it can be a large-scale production at this point, I doubt that. But there are enough people out there that I believe if there was a developer, contractor that really specialized in it, I think there would be a market - just from the response I have gotten for what I am doing.

Q: You mentioned that when you went into this business in the '70s you wanted a job that provided a good, strong income. Do you feel that it's still a good career option?

ENDSLEY: There will still be people in my office that make a very nice income in 2006, 2007, because they have a very professional attitude - and a very frugal attitude. You can't live really high on the hog. You do things practically and build up your asset base to see you through the down times. There is not going to be a large recruitment of people in the business now because with what is going on. It is hard for people to realize that they would have to live very frugally right now to get it going. But if you learn how to survive in this kind of market, then you will do extremely well in a good market. When it gets ready to turn back down again like it is now, you'll say 'OK, well let me change horses here, and re-adjust.' This is the third one (downturn) I have been through, and I am still here. I plan on being here for another 15-20 years.

Q: Do you see a shakeout coming for real estate agents and mortgage brokers?

ENDSLEY: Quite honestly, I would say more so with mortgage brokers, because that field has just really opened up for a lot of people who got out there because of these kinds of loans that we were talking about earlier. We never had those kind of loan programs before. I would suspect that is all going to stop.

There will be a lot of Realtors that have been in the business five years or less that are not able to adjust their thought process because they have never been there (in a down cycle). If you are serious about what you are doing and want to approach it from a very professional, hard-working point of view, you can get through it. When I got into the business, I worked 24/7 almost. I literally worked 12-14 hour days, seven days a week for five years to get myself established. Many people think real estate is just a real easy job and all you gotta do is go an write an order for a house and make a ton of money. That's just not true. You really have to be focused, consistent and work at 24/7, especially where we are at right now.

But it can also be a lot of fun because you get the joy of helping people get into a home that a lot of times they don't think they can (by a home). They don't know a lot about it. But if you take the time to explain it to them, really analyze their financial position and help them get into a home, it is really rewarding.

Q: We hear that it is the buyer's market. Can buyers negotiate a better deal now than they could have a few months ago?

ENDSLEY: Yes. Relative to a few months ago, right now it is much more beneficial to the buyer. November, December and January is going to be an interesting time frame. It's going to be interesting to see what that does, its always our low point in real estate. It will be interesting to see how we go out the other side, but yes it is a buyer's market.

Q: Do you see a lot of sellers holding pretty steadfastly to their price even through the market has changed or is there more flexibility?

ENDSLEY: Those who are serious about selling have a real need. Maybe a job transfer or something like that, they are being much more realistic. If you are fishing, then you can just sit and see if there is someone that will bite the hook. There are people out there who are reluctant (to drop the price). It's probably hard for people who know that a few months ago they could have sold their house at a particular price and now its $5,000 less. Some people have a hard time internalizing that. But if you have to do it, you have to do it, and that is the nature of a business cycle.

Q: Is that is part of what you and your agents try to explain to people who have had their house on the market for a while?

ENDSLEY: Yes, and there is all kinds of statistical information out there that you can get to back it up, so that you are not just you making some kind of statement. It's easy to show that this is what you need to do if you are serious about getting something accomplished. If so, then you have got to adjust to the marketplace - over which you have no control over. I have no control over it either - that is just life.

Q: So if you are looking into Bob Endsley's crystal ball, where do you see the market going?

ENDSLEY: I think ultimately, from my experience and even reading back in the business cycle history, what went on in Southern California in the '50s and pricing there is what we have been experiencing. I think it's inherent in the business cycle that, yeah, sometime we will be back in the double digits (for appreciation). When it is, I don't know. I am business planning on an 18- to 24-month flattening of the market, that is the way my partner and I are looking at things. Having the university in Merced, Stanislaus State in Turlock, the Crows Landing Naval Air Station, there is a lot of potential here. And we have not in California built an adequate amount of homes, so we are still going through an adjustment because, from my perspective, the price got out of control. So we are getting back into a more reasonable position. It would have to take a catastrophic-type situation, I feel, that would make it a longer down-term market cycle. There are a lot of good things out there.

Q: We've covered a lot of ground today. Any other thoughts?

ENDSLEY: It is really important that we have a positive attitude about what is going on so we can have a positive impact on our children. I think one of the most important things we need to be cognizant of is encouraging our kids to continue to go on through school and be serious about it because of what is going on in China, India and a large part of the rest of the world - they are trying to catch up.

- COMPILED BY SANTIAGO CORTES, BEE NEWSROOM ASSISTANT