State of the Real Estate Market 2007

I was in New York last week and had the opportunity to ask the woman who created the best-known real estate company in New York City how the residential real estate market in New York is doing.

Barbara Corcoran, who founded the Corcoran Group, sold her company several years ago. But she hasn't taken her eye off the New York City real estate. And she surprised me by how optimistic she is about prices.

In a year where the average price of condo in New York shot up again at a double-digit rate, she's optimistic that in the coming years, real estate prices in Manhattan are going to skyrocket.

She says it's simply about supply and demand. Manhattan is full of really rich people and there aren't enough luxury homes for them to buy.

I've heard this before, from my friend Richard, who sold $75 million in real estate in Manhattan last year. Unfortunately, the rest of the country has much more supply and a lot less demand right now.

Social Networking for Kids – Is This A Good Idea?

My friend's son spends all his free time playing games with his friends. They connect from their own bedrooms across the Internet.

Social networking is all the rage and today's digital kids now hang in one of many worlds online, separate but together.

(As an aside, it's funny to see our kids going online as we, their parents, flock to the corner Starbucks to reconnect with our friends.)

From MySpace.com to Club Penguin, there are thousands of places kids can go online to hang out, play games, learn things and make friends.

Some sites are free. Club Penguin charges $5.95 per month to maintain what it calls is an award-winning advertising-free environment. That's nearly one-quarter of my son Alex's allowance.

You shouldn't have to spend money to make friends – at least not when you're 11. Spending 25 percent of his allowance on a game site may not faze your child. But it should. And your job as a parent is to make sure the message goes through loud and clear.

Foreclosures rising fast as is consumer debt

The news came in this week and it isn't pretty – foreclosure rates soared 146 percent last year, compared to 2005.

If you're been watching the real estate market start to falter, the overuse of exotic mortgages, and the increase in mortgage fraud, none of this comes as any surprise.

It's just sad.

As the foreclosure rate has risen – in Tennessee, one out of every 67 homes is being foreclosed on – so has the amount of personal debt the average family is carrying.

In addition to a mortgage and car loan, the average family is now carrying nearly $10,000 in credit card debt.

When home values were rising quickly, and interest rates were cheaper, you could simply write a check from your home equity line of credit to pay off your debt.

Not any more. Now you've got to do two simple things – stop the spending and figure out a way to bring in more income.

Expensive birthday parties and How You Can Do It For Less

Parents everywhere know that kids' parties can be expensive. Shelling out for a room and a clown or a science guy and pizza can run $200. Some parents spend a whole lot more.

But just because junior is invited to something splashy doesn't mean you have to take out a home equity loan to celebrate. Instead, a little creativity can go a long way.

First, limit the number of kids to one for every year of life. So, my 9-year old would ideally have 9 kids at his party. Next, think outside the box. Buying a family membership to a museum will often give you free guest passes. Or, take the kids to a local ice rink. For little kids, try an art party, where you help the kids make something cool followed by book time and cake. We gave my son Alex a sleepover and tye-dye party.

What parents often forget is that for kids, it isn't about the money. It's about the memory.

Chasing the January Blues Away

At the end of January, I gave a party that I call the January Blues Party. We don't play blues, nor do we paint the house. The party is designed to make everyone feel happier, no matter what the weather outside.

This year, we chose to make Italian food. Almost all of it was vegetarian, from the grilled vegetable tray to the eggplant parmesan, and what struck me is how inexpensively you can throw a fun party if you're willing to be a little creative.

What's nice about Italian food is that pasta is cheap and so are vegetables. You can shop the sales for your soda and liquor or, if your friends ask what they can bring, ask them to bring a bottle of wine from their favorite region of Italy. I made cupcakes for dessert and we ate them with store-bought gelato.

I had some leftovers the next day, which spread out the cost and gave me a chance to relive one of my favorite nights of the year.