October 24, 2006

2004 - 2005: Realtors tell everyone prices can't go down, real estate always goes up, and "are you missing the boom". 2006's message? You're F'd.

Blood-sucking leaches do OK as long as the host keeps living. But in this case, the millions of realtor blood-suckers may be in a spot of trouble, as homedebtors go bankrupt if they sell.

Homes ain't sellin' = realtors ain't gettin' paid. Suzanne ain't eatin' anymore.

So what do they do? A full 180 - and now they're out there (led by the corrupt David Lereah and the NAR) telling homedebtors to sell at any price, get real, and forget everything they told them in 2004 and 2005. Oopsie!

We're in full crash mode now - so drop that price 'til it hurts and let's move some dead inventory (and make our commission and Lexus payment)!!!

At a recent meeting with her Las Vegas real estate firm's 200 agents, Joanne Levy told them they needed to deliver a stark message to clients. They would tell them that unsold homes are at a record level and sellers need to lower their prices.

In other words: the boom is over.

"They want the 2004, 2005 market," Levy said of today's clients. "We don't have that."

With stubborn sellers refusing to relent on asking prices, many prospective buyers have kept their hands in their pockets.

Some industry observers fear that bull-headed home sellers could worsen a downturn by driving up the inventory of homes for sale and running off would-be buyers.

"There is a lag period between sellers' expectations and the reality of the marketplace," he said, and shaking them out of their high-price fantasy "is more psychology than science."

But cold facts are staring some homeowners in the face.

Despite these truths, real estate agents say, many sellers continue to overreach on their asking prices.

"I try not to list those properties," California Association of Realtors President Vince Malta said of the overpriced homes.

In the meantime, many agents say they are in a difficult state of flux.

23 comments:

keith said...

poll from oc register. vote here:

http://blogs.ocregister.com/lansner/

Which way will O.C. home prices go in 2007?

Up dramatically (10%+) 1 %
Up a bit (2-10%) 10 %
Essentially flat (-2% to 2%) 11 %
Down a bit (-2% to -10%) 35 %
Down dramatically (-10%+) 44 %

real estate 101 said...

The only way to avoid or delay a downturn in bubble markets is to flood the economy with cheap money. Affordability then becomes the issue.

At some point, the consumer can no longer bear the burden of an increasing debt load. The debt bubble is the real bubble bursting. Housing is only part of the equation. The credit cards, helocs and installment loans are the monster that eats sheeple. Got debt?

Shakster said...

The Trolls are blaming the BUYER?and seller now? That was an obvious overlooked scenario.If trolls think the current buyers ,and sellers are bad ,wait'll ya getta load-a-me.
HP and others like it will make buyers so savvy.Savvy to the point where Agents are no longer required.

SMARTER THAN KEITH said...

Shakster- Love ya man
aahat a great idea. We need to publish a front page story on Time Magazine. But funny thing is that most sellers are still in total denial.

fish said...

"....But once-hot housing markets in states like Nevada, California and Florida have more homeowners who just do not want to yield on their asking prices....."

Or can't yield on their prices! Without getting hosed on the deal.....remember bad things only happen to the other guy!

life of riley said...

My broker in West Los Angeles, Beverly Hills and Santa Monica says sellers are trying to holding on until after new year. It seems 2007 could be the real beginning of the end for housing. Sellers are holding on to the 2005 dream until they have no choice but to dump.

Anonymous said...

$600K for a house. Where the F**k is the housing bubble? Any idiots here care to comment?

O.C. MEDIAN PRICE
$619,000
For sales of all residences in 22 business days ended October 5th
Change from year ago: +1.3%
Source: DataQuick

Anonymous said...

Hey sorry sack of sh$$ anono boy
Just keep thinking like that, turn around and hold out your hand----
Now I will drop my pants and you will feel something warm, but don't worry about that everything is just fine as in OC.

Shakster said...

Smarter than kieth-I get carried away sometimes.In my dreams I picture myself taking over a billboard company with boards going for hundreds of miles with elementary lessons and secrets revealed along the way,and of course a few nekked chicks.

Mammoth said...

real estate 101 said:
“The debt bubble is the real bubble bursting. Housing is only part of the equation. The credit cards, helocs and installment loans are the monster that eats sheeple. Got debt?”
-------------------
When posters on this blog recommend getting out of debt, does it mean:

a. Pay off your house as fast as you can, even if it is your only debt and you need to raid your 401k to do so?

or

b. Pay off your HELOC, credit cards and other debt?

or

c. a + b?

Why? Please justify.


Thank you,

- Mammoth

Todd Tarson said...

>>The Trolls are blaming the BUYER?and seller now?

Nope

>>If trolls think the current buyers ,and sellers are bad ,wait'll ya getta load-a-me.

You are too smart to hire a troll... arent' you??

>>HP and others like it will make buyers so savvy.Savvy to the point where Agents are no longer required.

Agents have never been 'required'. Agents merely provide an optional service for a fee. You don't NEED a realtor... but I figured you already knew that.

cabbiesouth said...

leave the c a b out of this.

Shakster said...

Got me there Todd,and yes I did know that.Should have said," Not even required for deaf,dumb ,and blind.The lazy will even be motivated to forget the RE Agent ,and Broker.Screw the Fee,thats not the big savings,Lets Lowball for fun ,and for Profit.Here's a Question for you, TODD,Why the hell does anyone need TITLE INSURANCE?

Westchesterchick said...

I don't care how the prices get down there as long as they do - I'm all for letting realtors drive it down even if they do speak out of both sides. Anyway, there's a place for realtors in the commercial and rental markets. What I don't get is how people can still be so greedy in this stagnant market? Most people in hot markets can slash $100K and still make a tidy profit. Sell now before it's too late!

Anonymous said...

ATTENTION PROGNOSTICATORS:

What do you suppose would be the outcome if I sent out 100 offers to 90+ day listings on $ 250K-$300K vacant homes in the Phx metro area... at 50% of asking price...

and was willing "go up to" 60% of asking price?

Anybody's crystal ball have an answer?

Thanks!

Paul E. Math said...

This is pretty funny to have such conflicting stories coming out of the same people. When they are talking to buyers, realtors are still saying that real estate is the best investment in the world, prices never come down and you better get in now before you're priced out of the market forever. When realtors talk to sellers they say you better drop that price or it's not going to sell - what, did you think this was an investment or something where you buy it, wait a little while and then sell it for profit?

I don't think all realtors are deliberately deceitful, mind you. Believe it or not, some of them are stupid enough to not see the inherent contradiction in their advice to buyers and sellers. I know, it's unbelievable to think that someone would be that stupid but remember, these are realtors. They are that stupid.

Anonymous said...

On page 2 of that article:

"If the homeowner believes the house is worth a lot and refuses to budge, it could become a self-defeating prophesy," she said.

In the end, stubborn sellers could lose more home value the longer they delay.

But Madon says they will accept reality eventually and yield to market pressures.

HAHAHAAHHAHAHA I already feel sacred for them. Awesome! Cant wait!

Anonymous said...

Down dramatically (-10%+) 44 %

Tuesday, October 24, 2006 11:01:38 PM

reality speaking, 10% is nothing.

Anonymous said...

Anonymous said...
$600K for a house. Where the F**k is the housing bubble? Any idiots here care to comment?

O.C. MEDIAN PRICE
$619,000
For sales of all residences in 22 business days ended October 5th
Change from year ago: +1.3%
Source: DataQuick

Wednesday, October 25, 2006 12:12:59 AM
---------------------

The traditional paradigm has u spending 3x ur income for your housing. so for a husband and wife, they each need to make $100,000+ to JUST afford the MORTGAGE!!!

Who are these people????

Anonymous said...

O.C. MEDIAN PRICE
$619,000
For sales of all residences in 22 business days ended October 5th
Change from year ago: +1.3%
Source: DataQuick

----------------------------

Well, 1.3% is less than the rate of inflation (even the heavily manipulated CPI), and much less than M3 growth, so it's a price decline in real terms. Furthermore, it's only the beginning of a multi-year slide in housing prices, and most certainly does not include all kinds of stealth discounts like "free" upgrades, cash back at closing, "free" car/Hawaiian vacation with purchase, etc...

Todd Tarson said...

>>Here's a Question for you, TODD,Why the hell does anyone need TITLE INSURANCE?

I don't know. I'm not in the title insurance business.

I think that is a question better suited for lawyers.

Todd Tarson said...

>>When they are talking to buyers, realtors are still saying that real estate is the best investment in the world, prices never come down and you better get in now before you're priced out of the market forever.

This is just horrible advice, it's wrong, and anyone with two neurons to rub together can see through it. Especially all the fine contributors to this site.

Anonymous said...

TODD,Why the hell does anyone need TITLE INSURANCE?

As I recall from my real estate law class in college:

All parcels of land have claims against them. When you purchase a house (in most cases) you are really paying someone to transfer their claim over the parcel of land to you.

Your TITLE in that land, is only as good as the SELLER'S claim over the parcel being transfered to you.

WHAT CAN GO WRONG? Lots of things. First, the seller may not be the sole owner of the land. Second, dower rights of a seporated spouse may attach to all the land of the seller (meaning that if such spouse fails to sign a waiver of such rights upon the sale to you- that spouse may be able to force the sale of the property after you buy it and be legally entitled to 33% of the proceeds.

In a nutshell, TITLE Insurance guarantees that you the BUYER will not be damaged by any such defect in title (up to the amount of such insurance). IN FACT, its near impossible to get a mortgage without title insurance because the lender wants protection against potential clouds on the title which could damage the lenders interest in the property.

ON A PERSONAL NOTE: I know how to perform a title search (the proceedure to look through government records to find any such problems with the title).
HOWEVER, even when I am buying a new parcel for cash (no mortgage); I allways get the title insurance just in case of some title defect which doesn't appear in the official record.