Well, stick a fork in it, we're done. This Fortune article, the most important published since the Economist story last year, is almost like reading 6 months of HousingPanic, put together in one article.
This, I believe, shall serve as the last nail in the coffin of the late, great housing bubble. Ding dong the witch is dead.
Welcome to the dead zone
Real estate survival guide: The great housing bubble has finally started to deflate, and the fall will be harder in some markets than others.
Five years of superheated price gains rescued America from stock market collapse, put billions in consumers' pockets, and ignited a building boom that bolstered the nation's economy.
But it's over. The great housing bubble has finally started to deflate.
FORTUNE's on-the-ground reporting - in what up to now have been some of the nation's hottest areas - paints a very different picture: Contracts are being canceled, deals are drying up, prices are starting to drop. The psychology is shifting even as thousands of new homes and condos join the for-sale listings each day - so the downward pressure will only get worse.
The prognosis is even worse in Phoenix, where only 4,500 homes sold in the first three months of 2006, vs. 6,100 for the same period last year, and in Sacramento, where new-home sales plunged 57 percent in the first quarter (compared with the first quarter of 2005). In California it now takes six months to sell a house, twice as long as a year ago.
Welcome to the dead zone
With houses hovering beyond the reach of most potential purchasers, formerly frantic markets grow eerily calm. People who rush to list their homes, hoping to grab a fat gain just before prices break, take them off the market.
Sales shrink as buyers float low-ball offers, and sellers refuse them. Realtors and mortgage brokers find other jobs. The bubble areas turn into Dead Zones.
The real losers will be those who bought recently at inflated prices and are forced to sell, usually because they're taking a job in another city or can't make the payments when their adjustable mortgage rate jumps. And speculators who bought overpriced condos in hope of a quick killing are going to get hosed.
May 05, 2006
Fortune Magazine: "It's over. The great housing bubble has finally started to deflate"
Subscribe to:
Post Comments (Atom)
66 comments:
Read this Fortune article yesterday and said, "the Bell Has Tolled (pun intended . . .see Toll Brothers report this morning). . .wait until those zero percent loans readjust to 6%!
Keith, You should be ashamed of yourself for causing this! Naughty Naughty!
Keith, why you didn't publish this part of the article?
Take a deep breath. We're not forecasting a nationwide housing collapse. For one thing, the vast expanse of America between the coasts was never touched by real estate mania and is in no danger of a meltdown. And even some overheated markets - including Manhattan, Los Angeles and California's Orange County - are still simmering.
p.s. STILL waiting to hear an answer to why you're anonymous AND haven't told us anything about your background/experience (while you throw stones at Lereah, Greenspan, and others).
osman, I've written about my background plenty of times over the past 6 months. I started HousingPanic after seeing the corruption in the real estate industrial complex first hand, when I sold my loft in Tempe Arizona.
I studied historical manias, panics and crashes, and then did my own analysis of the bubble conditions I was seeing first hand in Phoenix.
And I decided, as a US citizen, to start a blog to warn others. My civic duty. Do good, give back to society. And I put up google ads that earn about $5 a day so that my hobby, writing HP, gets me a free beer at the end of the night.
I have no connection to the real estate insustrial complex. I'm a marketing consultant, a U of Michigan grad (poly sci), a regular working professional.
I'm just someone fed up with the corruption, and someone who luckily became aware of the bubble (and it's for-certain bursting) before others, and I got out.
Good luck out there. I'd recommend a new career for you. Perhaps one where you earn an honest living, vs. screwing the people you've worked with over the years so that you could make your almighty commission. The game is over, for you and your ilk. The truth comes out. You're toast. And now America, and the world, is going to pay a hefty price.
Oh, man, is this going to all end so ugly. What a shame.
Yeap, it's over.
Does anyone know of any good blogs on how to buy homes in foreclosure? I think it's time to start educating myself on the process.
Homes in the high end of LA have lost 100k since August, RE very slow in OC, face facts, everyone who wanted a home has already bought a home, over 70% of people own their own home. There is no one left in the ponzi scheme, game over.
50% declines on the way, for everyone across the nation, housing makes up almost 20% of GDP, when we have the next slowdown, maybe in 4th quarter, all this inventory will be dumped.
Toll Brothers gives dim view of home sales
Builder's forecast seen as yet another sign of slowing housing market
here's something osman doesn't want anyone to find out about his "bubble-proof" market. and yes, boulder and denver are connected at the hip osman
The number of unsold homes on the Denver-area market hit a record 29,045 in April, according to reports released Thursday. Rising foreclosures were the driving force for the skyrocketing inventory, which is 19.2 percent higher than a year ago, experts said.”
“Buyer representatives are telling (realtor) Ed Jalowsky that about half the homes priced under $250,000 are either in foreclosure, are owned outright by a lender or the U.S. Department of Housing and Urban Development, or are selling for less than the amount owed on the mortgage.”
“Jalowsky blames rising payments on adjustable-rate
Keith,
I'm not sure how a "marketing consultant" becomes an expert on economics and housing but in any case, what I take issue with is the constant sensationalism, selective quotation, and slanderous attacks on the credibility of others while you stay perched on your anonymous pulpit.
While you claim to favor well researched, well written publications like the Economist (I'm also a long time reader), your blog is reads more like a tabloid in the checkout aisle. And you shift to whatever sensational topic is hot in order to keep up the traffic; immigration, gas prices, the war, the current account deficit.
Certainly it drives traffic. Heck, I keep coming back to see what's the latest from Chicken Little.
As for career advice, here's mine: If you're going to act like Howard Stern, don't do it while pretending to be the Economist. Wear your sensational clown outfit proudly.
Enjoy your $5 Pints.
Relax everyone.....
The Dow is 1% from hitting its six year high.....all this inspite of world tensions, high oil, and softening housing prices.
Remember, Keith is the same guy who predicted a Dow 8800 by the end of the year....he is only off by 3000 points.
Select areas are in trouble (Phx, LV, FL, SoCal).......the rest of us are going to be okay.
Anon,
I've NEVER claimed Boulder was "bubble-proof," so not sure who you're quoting.
Boulder and Denver certainly are linked but historically Boulder has been much better sheltered from the downside.
I expect April to show a slowdown in Boulder, and will publish an analysis in a few days. I need some time for the slow MLS users to update their info before I can sit down and crunch the numbers.
In the meantime, if you're interested in the Boulder market, here's last month's update with specific focus on bubble metrics.
Anon,
Here's the super secret article that I don't want anybody to know, from today's Rocky Mountain News.
Keith,
Given that we're discussing your slanderous, attacking remarks - this post from a law blog on a new defamation lawsuit seems timely. Perhaps you should read up on the issue to protect yourself.
LMAO!!! I love that piggy. It represents the RE market perfectly. Just remember that pigs get slaughtered
Osman
Rumor has it you're a gay tax-evading con artist who enjoys dressing up in hitler garb
It's called free speech sport. Get real.
from the series:
In 2004 and 2005, no less than 75 percent of all mortgages issued in the hot markets were either ARMs or exotic loans, compared with 20 percent in the late 1990s. By mid-2004, with inflation looming and demand for capital growing, the Fed started raising rates. But Greenspan's gambit had started a speculative rampage that took on a life of its own.
Homes had become America's investment vehicle of choice. Prices became totally detached from the fundamentals - chiefly rents and incomes - which were growing only modestly. It couldn't last.
Osman, You seem pretty smart in alot of areas! Why dont you start your own blog and show people the opposite of housing panic? why piggyback on someone elses blog? Or are you afraid no one will show up at your site? I'm sure theres someone who will listen to you.
What the hell is with the stock market today? Is the government really proping it up?
Is the government really proping it up?
Yep, you found it out. It's a giant conspiracy to raise the stock market and make noninvestors feel left out.
What tipped you off?
Ha! That's pretty colorful imagery Anon. But you've hit the nail on the head. Where does free speech cross the line in defamation?
Frankly, the Dutson case looks like a simple attempt at intimidation. But what Keith publishes looks alot like malicious attacks.
Let's take Keith's latest barb for example. Of yours truly, he wrote..
Perhaps one where you earn an honest living, vs. screwing the people you've worked with over the years so that you could make your almighty commission. The game is over, for you and your ilk. The truth comes out. You're toast.
According to the Electronic Frontier Foundation, the elements of defamation are...
1. a publication to one other than the person defamed; (public blog - check)
2. a false statement of fact; ("screwing clients" - check)
3. that is understood as
a. being of and concerning the plaintiff; (check) and
b. tending to harm the reputation of plaintiff. (check)
4. If the plaintiff is a public figure, he or she must also prove actual malice.
Since I'm not a public figure, the final item doesn't apply. But in the case of public figures Keith has posted on, there's a strong arguement for #4. I'm not a fan of Lereah, but even without wearing my real estate hat I see strong malicious intent when Keith calls him "bizarre, confused, corrupt and possibly psychotic"
Finally, Anon - I'm not piggybacking. I'm contributing to the dialogue. Welcome to Web 2.0. Keith should welcome my comments (and suggestion he temper his personal attacks).
Oh, and I do have a blog. It's focused on the Boulder real estate market and you're welcome to comment.
I come to this every so often to see the bs. First i was in Socal this weekend for a job interveiw as a super for low income housing apartment complex in koreatown. The lowest paid person( laborer) makes 34.71 an hour. i checked out a few places to rent in the valley. The housing market is still going up as are rents. Keith keeps reporting one side of the housing market and eventually he may be right. But i have heard people talking about the bubble since 99 when i bought my first house in socal and everyone told me i was paying to much. Good thing i didn't listen i would have 200,000 less and would not have been able to have done my next deal that made about 200,000. Now i have rentals in utah and alot of cash but i'm renting right now. renting sucks when you have kids maybe its a mental thing. i have alot of free time not having to mow the lawn or fix things or try to buy things for the house constantly just becuase. When you own a house you feel you should be at home depot every weekened blowing your money and time trying to keep up. Anyways as i have stated on this site before utah, seattle wa bainbridge, austin, maui,socal i'm not including san diego because i'm not familiar, but socal (the valley,pasadena, valencia, culver city , thousand oaks, and more area in and around still going up, the areas like utah salt lake will have double digit gains. I'm not telling you to buy but untill rates move above 8%. alot of people are making lots of money. My take on socal is prices will go up untill baby boomers retire out of there to cheaper area's to start in about 3 more years. utah will be the next phoenix and maui will be the next santa barbara, seattle will be the next san fransico. And austin will have double digit growth if they can ever pass a property tax bill.
osman - you're a realtor. all realtors by the nature of the job (working or whoring for a commission regardless of sale price) have their interests at heart (earning the commission) and not the buyer's or the seller's first.
You are part of a corrupt system, one where realtors and mortgage bankers pay off appraisers, where false and misleading information is spouted in order to gain home sales and one which will be disintermediated and structurally changed over the next few years
I don't know you personally, but I'd have to say you are guilty by association
Even if you're possibly gay and wear hitler garb like anon says
oh crap I just fed the troll. Bad blogger! bad blogger!
Osman, if you think that people see bloggers as "experts" in any area, you're more stupid than I first thought. Unless the author is a well-known public figure, a blog is simply *entertainment*. Any advice from an anonymous blogger should be taken with a grain of salt. To say that Keith is somehow posing as an expert in housing or economics is idiotic. He's voicing an opinion!
That said, I think HP is great fun. I have many bubble blogs bookmarked, but I look forward to HP the most, specifically because of the variety of topics and comments.
So Keith, "marketing consultants" are acting altruistically?
Funny, I thought marketing was about encouraging mindless consumption of stuff we don't really need.
Once again Keith, be careful where you throw those stones.
Marketing is hardly a profession saving the lives of the down trodden.
If this blog was really about your civic duty, you wouldn't be schlepping for beer money, would you?
c in abq,
The signal to noise ratio is low, but if you take the time to look, there are many expert blogs out there. While some aim for the sensational, other bloggers rightly combine excellent writing with - yes - expert level information.
Thanks for agreeing that HP isn't in that category.
p.s. the best blogs are usually not anonymous, with some notable - fully understandable - exceptions.
osman, i underplayed my cards, but since asked, I'm a former corporate executive, half with big-oil (cop), and I now own an international consulting practice, and am based out of london as everyone knows. Let's just say I do OK.
One thing I do see clearly and easily, being focused on marketing, business planning, consumer behaviour and economics, is herd mentality, illogical business fundamentals and bubble formation.
And I think you can see from the tone of this blog that yes, I am truly focused on, and worried about, the direction of America. Not just housing, but all the issues that confront us, that our leaders are not confronting.
I know this concept must be tough for a self-centered corrupt member of the real estate industrial complex to understand, but yes, there are people out there who care about their fellow man more so than their own well being.
Kind regards
Keith,
Don't attack osman just because he's realtor. Imagine your mother were realtor too. We're all part of a corrupt system. Take a marketing and commercials area. SPAM - everybody hates spam (exept spammers). So, as there is saying: Be carefool what are you wishing for. When shit hit the fan, many marketing jobs will be lost too.
Osman - final point, then I'll hopefully have the willpower to not feed the realtor troll
Spend 4 hours a day on a hobby, say learning to play the violin, or acting in a play. It's nice when you can earn something, anything, from that hobby. Helps justify the time spent.
Having my readers buy me a beer at the end of the night at the pub down the street by clicking my ads brings incredible satisfaction. Not that I'd ever notice the $5, but it's the mental satisfaction of knowing I did good work that day, served as a conduit of information and thought and then tasted a good frosty lager on the house for a job well done.
Cheers mate.
Osman, I notice you commenting alot,
You act like a little schoolgirl giggling after your hit and run posts. Obviously no ones at your site if your here all the time.
Quick, reply, sit back and giggle with your hands over your mouth.
Keith wrote, ...but yes, there are people out there who care about their fellow man more so than their own well being.
uh... ok, so what's with the pump and dump on GLD, among other picks?
As for defamation, the obvous political ramifications for Bush or other politicians to file suit far outweight the value of shutting somebody up. When the party isn't seeking public office, well.. that's another story.
Again, I simply suggested caution and temperance when it comes to malicious attacks. Hardly called Keith a whore, did I?
pump and dump on gold? I own 1000 gld shares, everyone knows that. Asking for readers advice before purchasing, and asking for their advice now that it has had a good ride, is not pump and dump. it's called dialogue.
you're weird dude
foo - I sure wish I could pump and dump on gold.
But then I'd be writing from my yacht if I could do that
Keith,
When you buy, immediately begin hyping the investment on a public forum, then sell - that's called pump and dump. By your own comments, you had your finger on the sell button only a few weeks after buying GLD.
How many shares you own is irrelevant and yes, pump and dump is more effective on thinly traded issues but that doesn't change the nature of the effort.
Foobeca,
I'm not anonymous. Osman is my real name and I've posted links to my business blog many times. My contact info is freely available.
And as for speculation, I'd argue the opposite. All speculative activity, regardless of asset class, is harmful to society. It promotes a gambler mentality as opposed to a solid work ethic. Our culture's celebration of speculation and easy money leads to a sense of entitlement and, in my opinion, is one of our fundamental problems as a society.
Consider the difference between investment and speculation.
keep typing osman, your ignorance is rising like the summer heat
the real pump and dump is buying an overpriced boulder condo from "real estate only goes up" osman, then trying to dump it before you go bankrupt!
The SEC definition doesn't mention trading volume.
After touting what a great long term investment GLD was, Keith, by his own admission had his finger on the sell button. At a minimum it's extremely self serving, not the altruism Keith proclaims. Smells like pump and dump to me.
"Pump and dump schemes often occur on the Internet where it is common to see messages posted that urge readers to buy a stock quickly or to sell before the price goes down, or a telemarketer will call using the same sort of pitch. Often the promoters will claim to have "inside" information about an impending development or to use an "infallible" combination of economic and stock market data to pick stocks"
Keith, you amaze me. You've posted about Gold 48 times to date.
Here's a recent quote where you actually admit to pumping,
Gold.
And it's still early - we've got a long, long way to run.
Yes, I'm pumping. Someone please make an argument against the yellow stuff.
That was only a few weeks ago and today you're thinking about selling. Unbelievable.
p.s. Keith, tell me where I've written "real estate only goes up."
My position is that real estate is cyclical on both an annual and long term basis. We've had a long runup in housing prices and it's unsustainable. I've been saying that for two years now. I've also been saying that not every market is set to crash/deflate.
I've said it so many times it feels like a mantra. Pay attention to secular events (interest rates, GDP, etc) but know your local market if you're thinking about real estate. Boulder isn't Miami or Phoenix.
Twib,
I agree with your assessment of this blog and Keith. While I'm not personally worried about credibility or defamation, I think Keith should be given our country's propensity for litigation and his tendency for unwarranted vitriol.
On a personal note, the value I've added online by publishing a local real estate blog is starting to pay dividends. People appreciate knowing what's happening in the local market and a voice of calm, backed by reasoned analysis, is the aim of my efforts. FYI - Another good local real estate blog worth checking out is the Seattle's Rain City Guide.
Wow, Keith! You can single-handedly pop the housing bubble AND effect the precious metals market! Marry me?
Effect and intention are not the same. You can attempt to injure without causing injury. You can attempt to manipulate the market without suceeding. It's not a difficult concept.
So every average-Joe blogger who buys a stock and types "hey guys, I got this great stock, you should get it too!" is accused of pump-and-dump/attempting to manipulate the market?
Gotta say, Osman, you're looking loonier and loonier (no offense to Canadian currency)
Osman said, tee hee, giggle giggle
How can this guy Osman get any houses sold when he us so far up Keith's blog? :P
Read itulips aritcle on the market. Stocks and homes always go to peaks right before they crash. If I had either of these, I would be selling now.
Maybe I'm not being very clear. It's a question of ethics.
Today, all equities research is accompanied by a compliance statement of brokerage/investment banking conflicts. Most published material goes further to spotlight the analyst's and his firm's individual or family ownership in the asset.
Where Keith throws spears at the ethics/agenda of others he also curiously buys stocks and then pumps them on a blog that gets thousands of hits a day. Some of his posts note his ownership interest, others don't. In either case, his purpose hardly seems altruistic.
At one point he encourages everybody to go long on GLD. A few weeks later, he talks of dumping his position.
As an owner of an international marketing firm, I not only find it amazing he has 4 hours a day (he claims) to blog but that he brazenly attacks so many others while finding so little fault in his own activities.
If that makes me a loon, so be it.
If you're going to trumpet ethics and malign others on the basis of conflicts of interest, shouldn't you ride the same horse?
KEITH AND OSMAN:
STOP CLOGGING THE BLOG!!
“Osman said...
I expect April to show a slowdown in Boulder, and will publish an analysis in a few days. I need some time for the slow MLS users to update their info before I can sit down and crunch the numbers.”….
Osman, let me guess, you’re waiting for the 10th?
You’re not crunching numbers, you’re going somewhere like here:
http://www.mris.com/reports/stats/index.cfm
and plugging it in excel, something that we’ve been doing forever…..we don’t need another realtor, we poor non-licensed types see that inventory is going up, demand is going down.
Robert,
Actually no, I'm waiting a few more days for the realtors and their assistants who use our local MLS to plug in their sales stats for April. Then I'll download the sales and inventory information from the MLS and use Excel to analyze the data.
This post from a few weeks ago summarizes some of the numbers from March. As I don't have historical inventory data for every local market, I'll use association summary data for DOM and Inventory Stats after they publish (probably around the 12th or so).
“Osman said...
......... I'll use association summary data for DOM and Inventory Stats after they publish (probably around the 12th or so).......
Osman,
Does your DOM stats take into account for re-list?
Osman,
I noticed that you also posted to the fact that there are bubble markets out there. Also, one article notices quite a few “help wanted” signs. So, all is good in your neck of the woods.
But hold on. There’s a lot of speculation of what percentage of the country is over valued. 10, 20, 30, 50 percent? I don’t know, pick a number that works for you. If the percentage is high, that means for me to move for a new job, I’d have to sell a home (maybe at a loss) and then find affordable housing in your “hot” market. If the percentage is low, I’d sell a home (for a profit) and then move to your “hot” market, where my “profit” is now just a drop in the bucket, probably wouldn’t even cover your commission.
Now Osman, have there been gains in the housing market in the last few years?...….OK, would you say record gains?........Are I/O ARM loans adjusting?.......Are interest rates climbing?..........Now, are the numbers of foreclosures going up?.......
If you said “no” to any of the questions, show me the numbers.
One last question….Do you or anyone of your colleagues, work on commission?
Robert,
Your questions seem intended to attack or provoke, but I'll still give you the benefit of the doubt.
DOM. Yes, because of the appeal of "new" listings to prospective buyers, some sellers will their listings off the market for a required duration of time and then relist. This refreshing of the listing is very easy to find and expose on an individual property but more difficult to manage when analyzing the whole dataset.
My experience with clients is that most are reluctant to "refresh" because (1) the required time their listing will be off the market and (2) the increasing perception that there is an intent to deceive buyers (again, easily revealed). Thus I believe the refresh issue is overblown. It doesn't happen as often as you might think.
In the end, DOM is a statistic. Like all numbers, it's more informative/useful when you understand the factors that influence it. The "refresh" issue and in my opinion, the even bigger issue with skew, are the primary reasons I prefer median instead of average DOM. Unfortunately, when I need to compare apples to apples (historical), most of the info available is averages.
It might be possible to dig up the number of withdrawn or expired listings in a given period. While time consuming, it might be worth doing this if the "refresh" factor is a widespread concern. What do you think?
Ok.. the other questions. I'll give you short answers. (If you want to dialogue further, email me and we'll take it offline.)
"All is good in your neck of the woods." - I never wrote that or claimed my local market was "hot." . Inventories and foreclosures are rising in Denver and its suburbs, but things are holding up much better in Boulder and neighboring communities. While our local economic base is more diverse than perhaps it's ever been, we're still exposed to secular events just like every other community.
I haven't done the homework to venture a guess as to what percentage of the country is overvalued. Your guess is as good as mine.
Gains in last 5 years - YES
Record Gains - NO
I/O and ARMS Adjusting - YES, just starting and more to come
Foreclosures Rising - YES, mostly because of the lack of lender regulation in CO
Work on Commission - YES
As for numbers, the Boulder/Denver area saw flat/mild appreciation over the past five years relative to many parts of the country, particularly the bubble markets best illustrated with HPI data. There were stronger periods of appreciation in the past than '00 to '05.
p.s. I would have written a shorter reply if I had more time.
Osman,
So, a conversation with a realtor would go something like this:
Me: How long has this home been on the market?
Realtor: It’s been listed for 5 days
When in reality, it could have been on the market for 200 days. Why is this simple question not so simple?
“In the end, DOM is a statistic. Like all numbers, it's more informative/useful when you understand the factors that influence it.”
The factors that influence it? What kind of factors can influence it? Did the property get sucked in a parallel universe in which time stands still? This home has been on the market for X numbers of days. Simple as that. But no, this simple question is answered with deceit. If this simple question WILL NOT be answered truthfully, how then can we expect any other answer to be honest?
We can not. Your commission, your goal Osman, is for the buyer to pay as much as possible for a home.
“Thus I believe the refresh issue is overblown. It doesn't happen as often as you might think.”
Osman, it’s not what I think, it’s what I know. This is not conjecture, I can point to many homes in my area that have been on the market for 180+ days, the MLS has them at much less than that. You can keep shouting “never mind than man behind the curtain”, but the curtain has been pulled down.
“Gains in last 5 years - YES
Record Gains - NO
I/O and ARMS Adjusting - YES, just starting and more to come
Foreclosures Rising - YES, mostly because of the lack of lender regulation in CO
Work on Commission – YES”
Hear that? No record gains in real estate in the last five years. No matter what you read, the numbers you crunch, what you see, real estate has not been a lucrative investment according to Osman.
We’ve had record gains in the last 5 years, loans are adjusting, foreclosures are rising, and investors are dumping/flooding the market.
Inventory is high, few are buying. Seems like the only people unwilling to say it, are the ones in witch their commission depends on it.
Robert,
1. Get yourself a good buyers agent and you'll know exactly how long that home you're interested in has been on the market. If you go to the seller's agent, he represents the owner and will collect both sides of the commission as if you had representation. It happens everyday and is one of the big misconceptions in real estate.
2. When I talk about real estate not seeing record appreciation over the past 5 years, I'm talking about my local market in Boulder, CO. I'm not talking about real estate in general.
3. What factors can influence DOM (again, specific to CO). Here's a few...
- owners who want to give their listing the appearance of being new
- buyers who think the best deals are the newest listings and don't get a buyer's agent to help them with their search.
- mean versus median (skew)
- price range
- home versus attached dwellings
The reality is that most DOM stats don't give you the detail needed to really understand it.
4. Inventories vary be locality. I'm charting inventory, among other sales statistics on my blog. Can't say it any clearer. My commission meanwhile depends on adding value for my client. We agree on what that looks like before we get started. If I don't add value, I don't get paid. It's that simple.
Osman,
“1. Get yourself a good buyers agent”
I’m currently on “buyers agent” number 4. After “buyers agent” number 2, I realized that there is no such thing as a “buyers agent”. Any agent that earns commission based on the selling price of a home does not represent the buyer. The only thing I’m getting from my current agent is data that I request.
“2. When I talk about real estate not seeing record appreciation over the past 5 years, I'm talking about my local market in Boulder, CO. I'm not talking about real estate in general.”
Then make comments on a Boulder blog, or someplace closer to home, but believe me, what happens in 50% of the nation, affects Boulder.
“3. What factors can influence DOM (again, specific to CO). Here's a few...
- owners who want to give their listing the appearance of being new
- buyers who think the best deals are the newest listings and don't get a buyer's agent to help them with their search.
- mean versus median (skew)
- price range
- home versus attached dwellings”
What the heck does price have to do with days on the market? If a home is worth over $250K and it is attached, does it automatically get a DOM “deduction” of 6 months? HOW MANY DAYS HAS THIS HOUSE BEEN ON THE MARKET??????????? C a n y o u u n d e r s t a n d t h e w o r d s c o m i n g o u t o f m y m o o u u t h?
“The reality is that most DOM stats don't give you the detail needed to really understand it.”
What’s not to understand? It’s fabricated, simple as that. If I ask “how many miles do you have on your car?” Would you subtract for highway miles, trips to the doctor, vacation trips? No, you’d look at the odometer and simply rattle off the numbers. DOM SHOULD be the same way. But just like a used car salesman, tweak, cajole, fabricate, twist, hide, lie about the truth when your commission is on the line.
Keith,
Please keep feeding the trolls. It's easier to gauge the market buy seeing how much trolls talk in circles, try to explain themselves, twist the truth, and outright lie.
Robert,
If we're talking about a whole city and looking at market stats, there's a difference between median, mean, and a host of other statistical tools. Know what you're looking at.
Do you understand?
If you've got a good agent, have them get you market stats by relevant price range, property type, and location.
Still with me?
If you want DOM for a specific property, ask your agent. No median or mean issues. DOM is DOM. Even if an agent has "refreshed" the listing, it takes all of 10 seconds to figure it out.
Do you understand??
Finally, if you don't feel like you're getting value from your agent , get another agent or do it yourself.
My point: As with any market indicator, investors should do their homework. DJIA, S&P500, Homestarts, the Prime Rate, the Discount Rate, etc... Some are lagging indicators, some are leading and the way the indicator or index is developed is critical to understanding it.
Osman,
No, I don’t understand
In one post you say:
“If you want DOM for a specific property, ask your agent. No median or mean issues. DOM is DOM.”
If that is true, then why this comment?
“3. What factors can influence DOM (again, specific to CO). Here's a few...
- owners who want to give their listing the appearance of being new
- buyers who think the best deals are the newest listings and don't get a buyer's agent to help them with their search.
- mean versus median (skew)
- price range
- home versus attached dwellings”
In one post “DOM can be influenced” any thing from price range to “appearance of being new”
In the next post “DOM is DOM” and that’s that.
So, which is it?
In the end, it matters not, because whether you have the “median, mean, or a host of other statistical tools” if those numbers are fictional/purposely skewed, the data is useless. And if a simple thing as DOM is fictional/purposely skewed, what other data that the “agent” gives you is fictional/purposely skewed?
Litmus test? If the data could support a lower selling price (therefore lowering the commission) the data will be skewed.
I'm sorry this isn't clear for you.
When I said, "DOM is DOM" I was referring to a single house. One data point.
When I said, "DOM can be influenced..." etc, I'm talking about multiple data points, in other words an analysis of a number of sales.
For example, if you are looking at last month's sales in Boulder (which by the way were down year/year) how would you describe the DOM for 80+ residential house sales? You'd need to talk about median and mean. You might talk about the extremes, given the data set is so small. You might also break it out by price range as well, to see if (for example) the high end of the market is holding up better than the low end.
Anytime you're talking about a dataset, statistics come in handy. If you understand the basics, that's a good start. It's also helpful to know what's influencing the stat, including - as you've pointed out quite emphatically - the tendency of some agents and owners to want to "refresh" their listing and skew DOM.
It's not just DOM, by the way. As I mentioned in my previous comment, it's very useful to know how an indicator/index/statistic is created. Knowing for example that GDP is strongly influenced by natural and manmande disasters, or that Unemployment doesn't count the people who've given up looking, or (back to real estate) my local MLS doesn't count private transactions is very useful info to know before basing decisions on it.
This link might help you.
p.s.
"Think about how stupid the average person is; now realise half of them are dumber than that".
- George Carlin
OK Osman, keep going, you’ve almost made it back to the top by talking in circles
“I'm sorry this isn't clear for you.
When I said, "DOM is DOM" I was referring to a single house. One data point.
When I said, "DOM can be influenced..." etc, I'm talking about multiple data points, in other words an analysis of a number of sales.”
“…….how would you describe the DOM for 80+ residential house sales? You'd need to talk about median and mean……
“………Anytime you're talking about a dataset, statistics come in handy. If you understand the basics, that's a good start……….”
“Knowing for example that GDP is strongly influenced by natural and manmande disasters, or that Unemployment doesn't count the people who've given up looking…………..”
However, it is clear.
You’ve become accustomed to dealing with the least common denominator (the greater fool). When a simple DOM discussion is tossed your way, you ramble on about statistical analysis and even throw in a web link. What’s next, least squares, Type I/II errors, regression, and how about binomial coefficient for good measure? All for (what should be) a simple “Days On The Market” discussion.
While you continue your smoke and mirrors diatribe on “what one means by DOM” remember, the potential buyer is just asking:
HOW MANY DAYS HAS THIS HOME BEEN ON THE MARKET?
And given the latest news reports/blogs and other sources of information, he’s probably done his homework. Better save Chebychev's Inequality for a different time.
Robert,
When you start from the premise that somebody is trying to confuse you, you'll probably be confused and distrustful. You've obviously got the idea in your head that I'm trying to be deceptive. I'm not.
one house = DOM
many houses = statistics/analysis. Median DOM, DOM by Price Range, Average DOM, etc.
Other than providing the exact DOM for all sales in a long string of meaningless numbers (32,20,15,29,75,45,etc..)I simply don't know a way to describe a dataset without relying on stats.
When a client asks how many days a particular home has been on the market, the answer is a simple number. Because of seller's refreshing their property, it takes a few extra seconds to double check DOM, but the answer is always a simple number.
When a clients asks me about the market in Boulder, the answer is in terms of median DOM, average DOM, or even better median/average DOM by price range and location.
If you find that misleading or "talking in circles," so be it.
Osman,
Go ahead, post it.
Robert, didn't have a clue what you were talking about till I checked my blog. No problem. I haven't got anything to hide. Your comment has been posted as well as my response.
I have been following a site now for almost 2 years and I have found it to be both reliable and profitable. They post daily and their stock trades have been beating
the indexes easily.
Take a look at Wallstreetwinnersonline.com
RickJ
Hello Friend! I just came across your blog and wanted to
drop you a note telling you how impressed I was with
the information you have posted here.
Keep up the great work, you are providing a great resource on the Internet here!
If you have a moment, please make a visit to my totally free credit report site.
Good luck in your endeavors!
Hey Fellow, you have a top-notch blog here!
If you have a moment, please have a look at my arkansas automotive engineering jobs search site.
Good luck!
Hellllllllllloooooooooo
Get Some Great Information about realtor . If your interested in finding out how the experts deal in real estate then visit http://realestate.opportunitiesinfo.com
Post a Comment