November 26, 2006

You'll see below a stupid homebuilder trying to sucker homedebtors into buying a debt bomb with a pizza. What should they be offering?

You're the marketing director for a desperate Phoenix homebuilder with tons of dead inventory sitting there now that your cancellation rate has soared to 50% and you're still finishing up the houses you can't stop.

So, here's your marketing budget per home - what do you offer to try to sucker someone into buying your mistake? Assume the original list price was $300,000.

A: $10
B: $1,000

C: $10,000
D: $100,000

My answers:

A: $10 in McDonald's coupons for the realtor to buy some food - they haven't eaten in awhile

B: Free Botox injections for the realtor - you're going to start to see some really sad cases as realtors won't be able to keep up their injection schedules anymore. Housing may be falling but now so will realtor faces

C: $10,000 worth of free gas - since you're trying to sell a house 50 miles out of Phoenix in Maricopa, that homedebtor is gonna have to get there somehow, but won't be able to afford gas even with the no-down, no-doc you'll put him into

D: Sit at home and watch TV on us!! "We'll pay you a $100,000 salary for a year" incentive for the last sucker in

Anyone see the problem with these incentives? All they're really doing is spending the homedebtor's own money, while keeping the year over year comparisons and "comps" looking good in those NAR and government reports. And they allow the realtor to earn their commission on the full price, vs. the true discounted price. Shameful.


Anonymous said...

$10,000 in gift cards for Free Christmas Gifts

Frocco said...

They should offer them a $10,000 gift certificate to the local liquer store so the sucker will be able to drown thier sorrows after buying a debt trap!!

Anonymous said...

$10 - a pack of condoms so when the new homedebtor is taking it up the *** he'll at least be protected there

Anonymous said...

That is a real incentive program.

bubble_watcher said...

And they allow the realtor to earn their commission on the full price, vs. the true discounted price. Shameful.

I agree. However, very soon now, these realtors are going to have to endure zero monthly sales..

Anonymous said...

Pizza ain't gonna cut it with me. I wanna be a straw buyer bay bee! $100k in used small denomination bills with each house I, er, purchase, yeah, purchase, that's the ticket! Where do I sign?

Anonymous said...

"C: ... since you're trying to sell a house 50 miles out of Phoenix in Maricopa, that homedebtor is gonna have to get there somehow..."

Actually, it's 34 miles from Maricopa to downtown Phoenix. About half that to the southern part of Phoenix. 17 miles really isn't all that far in a city this size. And 3/4's of it's Interstate, so "getting there" really isn't all that tricky or time consuming.

But hey, why state an easily verifiable fact if if makes your story look worse? Might as well just make up the mileage just like many other "facts" that are fabricated here. The made up data sure helps spread your hopes of doom and gloom.

And before someone pops off with "50 miles, 34 miles, whatever." Consider how you'd torch a Realtor who came here spouting stats that were off by 32%...

Anonymous said...

Jay, that's the stupidest post in HP history. Congrats.

Ever drive from West Phoenix to Maricopa? Did Keith say "city center to city center"

Idiot. Go back to your cave.

Anonymous said...

Hey this is not a pizza… if you want a really good one, the best in the world actually, just buy this Italian castle here and the pizza is just across it’s gardens:

For details, and some Photos to give you an idea

Anonymous said...

From Jays blog:

Single Family Homes ONLY:
Active Listings: 37,932 (39,451 of 9/9/2006)
Nov Closings to Date: 3,093

He is encouraged that inventory is down from the peak. Wait til next spring, Jay, see if inventories don't set a new record. BTW, that is over a years worth of houses at that rate.

Active Listings: 10,930
AWC Listings: 30
Nov 2006 Closings to Date: 160

A mere 68 months to clear all lots at that rate. Friggin' meltdown, condition critical! How many lenders and builders will go belly up next year Jay? Five, fifty, a hundred?

Anonymous said...

Oh, BTW, sorry about the flame earlier anon, once that blow torch is lit there's no telling who might get singed.

BubbleShanker said...

Hey Jay,

They city will be bulldozing those crap boxes on the side of the 10, weather it's 34 or 50 miles away does not matter.

Anonymous said...

Buzz Saw proclaimed: "He is encouraged that inventory is down from the peak."

And just where did I say that?? I merely reported the data, I never said I was encouraged, discouraged or anywhere in between. I posted the numbers, that is all. Nothing more, nothing less. Please stop putting words in my mouth.

"How many lenders and builders will go belly up next year Jay? Five, fifty, a hundred?"

Beats me. I have no crystal ball, and never claimed to. Neither do you.

Yet another "anonymous" poster said: "Jay, that's the stupidest post in HP history. Congrats.

Ever drive from West Phoenix to Maricopa? Did Keith say "city center to city center"

Idiot. Go back to your cave."

Whatever. Personally I think calling someone a "dick" and spouting the drivel that's so prevalent here is far more "stupid", but each to their own opinion.

And yes, I've driven all over the Valley on multiple occasions. And no, Keith didn't say "city center to city center". Clearly Maricopa is 50 miles from SOMEWHERE. And it's just as clear Keith and others spout whatever "data" best fits their story and whatever "data" the minions will blindly follow. When you say "Maricopa is 50 miles from Phoenix", any reasonable person will assume you're talking center-to-center, not Maricopa to some random spot in West Phoenix. But then again, reason certainly doesn't seem to prevail here.

Nest of luck to anyone here in whatever it is that trips your triggers. If you want to live the Chicken Little attitude of pending economic collapse, more power too you. You may even be right. But you may also be wrong. Only time will tell. Personally, I prefer to keep a more positive attitude toward life than others here. Again, to each his/her own.

It's been fun, in a sick/twisted sort of way.

Anonymous said...

Hahahahaha. Realtors have "injection schedules" for their Botox.

I like it.

Anonymous said...

Y'all miss the real point...Regardless of the mileage, the fact're living in Maricopa, Arizona...that alone is reason enough to put your head in the nearest oven.

Anonymous said...

The $10 door mat and pizza is pretty hard to beat. They should have thrown in a box of twinkees too though.

For $10,000 they should provide a life time supply of snickers.

For $100,000 they should give a lifetime of pizza, twinkees and snickers.

This way they can appeal to all of the fat lazy doormats.

Anonymous said...

This city is a f'ing joke. I have never seen such a bunch of fat stupid lazy people in t-shirts. Regarding the houses on I-10 yeah I flipped two to some FB. But I did three flips in Las Vegas. At least Vegas has the gambling and something interesting. Phoenix is just one spread out crappy roasting hot Shi*hole. Yep hope you enjoy your $300 electric bill this summer, on top of your new ARM payment.
Also Jay you fing idiot ever try to drive in Phoenix it is worse than CA you jackass.

Anonymous said...

Hey Jay,
Why don't u post your W-2 or 1099 on this site for this year. We all need a good laugh.

Anonymous said...

Hi Jay, Well I for one tend to agree with you. I know that the people on this blog are not concerned with petty things like "the facts". I want to briefly highlight a few of those pesky facts.
1. Phoenix may be a Sh*Hole as one blogger so elequently put it, but it seems to be a Sh*Hole that many, many people want to live in. Look up some of the census figures for the last 20 years, quite interesting. These are not just investors my friend.
2. I wonder if the so called "investor" that claimed to have flipped in Maricopa and Vegas knows anything about economic forecasts and employment figures. I think he was one of those weekend warriors you see on HGTV that try and flip. He just got lucky. If he knew anything about the economic base of a city, he would know that Vegas - economically speaking is a one horse town. Gambling - Period. Everything in Vegas is indirectly or directly based on Gambling.
3. The Phoenix and Tucson area has been classified as a "MegaPlex" by the US Government due to the projected growth rate of the two cities by 2030. Now, if I am an investor, I think that may just jump on the radar that something may be going on here.
4. If you consider that a real monthly house payment is only part of the total monthly cost of a home, you may want to rethink your position. The real cost of a home to a family or "homedebtor" as you put it, consists of 3 things. One - Mortgage payment Two - Insurance payment Three - Property tax payment. Now for those nasty facts again. Phoenix has some of the lowest property tax rates per $1000.00 of home value AND insurance rates in the nation. So when you take the REAL cost of a monthly house payment in consideration, Phoenix is still a good value as apposed to other cities of comparable size. The only other states that are close are Nevada and New Mexico. Neither of which have close to the economic base of Phoenix. Hawaii has the lowest, but has no economic base other than tourism - and amazinlgy the median home price is in the 500's. Before I get flamed as a Realtor, let me just say, I am not. Also, I am not pumping anything, I am simply stating the facts that are put out by both the GAO, Census Bureau, and many other organizations that have nothing to do with housing or the NAR. I do agree that RE agents and Mortgage brokers were crooked throughout the boom, but the ones that were are being dealt with by the market, and are slowly going back to their previous positions at McDonalds and Airport Security. The quality, experienced Brokers and RE agents are still around, and will be for many cycles to come.

One last thing. I think it is funny that if you research RE Articles in the papers during the last few RE cycles in the early 90's and 80's, you had the same type of gloom and doom talk just as much as the boom talk, but if you became a "housedebtor" during the doom and gloom talk of the last cycle - you would be sitting back, laughing at this time around, sitting on financial independence, while the bubbleheads are renting from you.....think about it....