I think someone needs to tell all the other Phoenix real estate clerks that things have changed. All those big dreams, those millions and millions you were going to make in real estate?
Poof.
Get ready for the used car lots full of repossessed Boxters and BMW's (again), get ready for declining sales at Tommy Bahama, and get ready for a rush on ramen noodles at Safeway.
(Note - that's a real picture of the real estate clerk goober interviewed in the article)
If Christopher Guest ever films a mockumentary about real estate agents, he could do worse than to make the trip to Phoenix and get a load of Brett Barry. With a George Michael beard, bleach-white teeth, perma-tan and a smattering of gold jewelry, Barry darts around his office in a strip mall, his face lighting up whenever another human comes within shouting distance.
Specializing in a planned community near Scottsdale, Barry lords over his territory in a canary-yellow Porsche Boxster whose vanity plate reads SAYSOLD. "It's a realtor thing," he says, half apologizing for, half drawing attention to his chariot. Locals tell me today is the coldest day of the year in Phoenix, but that doesn't dampen Barry's enthusiasm. "Let's put the top down!" he calls out as we get in the sports car for a tour of his domain.
Barry is skeptical of Zillow's valuations, especially in a market like Phoenix, where so many properties are languishing. If the Zestimates are based on sales, then Zillow is missing a whole lot of data. He points at a stack of pages from the MLS (for Multiple Listing Service, the nationwide database of properties for sale). "Look, 213 days, 353 days, 529 days," he says, referring to how long each house has been available. "There's a lot of fat in the market. Prices are still too high."
For any homeowner looking to sell, it's a gloomy message: These are the worst of times. Not long ago, Phoenix was the nation's fastest-growing market. The median price rose 55 percent in 2005. Agents were closing deals on the hoods of cars; investors flipped homes without ever moving in.
Fast-forward to early 2007: Throw a rock in any direction, and it'll bounce off a FOR SALE sign. "There are 45,000 listings in the Phoenix MLS, and that number hasn't changed in six months," Barry says as we cruise among lookalike stucco homes. With every passing week, the number of houses on the market rises, increasing the downward pricing pressure. "It's like a freeway pileup."
"You look out on the street and see five to ten houses for sale, but many people still don't believe things have changed," he says, shaking his head at a dirty carpet. "The average seller says, 'I need to get this much out of our house to move up.' But the market doesn't care."
Specializing in a planned community near Scottsdale, Barry lords over his territory in a canary-yellow Porsche Boxster whose vanity plate reads SAYSOLD. "It's a realtor thing," he says, half apologizing for, half drawing attention to his chariot. Locals tell me today is the coldest day of the year in Phoenix, but that doesn't dampen Barry's enthusiasm. "Let's put the top down!" he calls out as we get in the sports car for a tour of his domain.
Barry is skeptical of Zillow's valuations, especially in a market like Phoenix, where so many properties are languishing. If the Zestimates are based on sales, then Zillow is missing a whole lot of data. He points at a stack of pages from the MLS (for Multiple Listing Service, the nationwide database of properties for sale). "Look, 213 days, 353 days, 529 days," he says, referring to how long each house has been available. "There's a lot of fat in the market. Prices are still too high."
For any homeowner looking to sell, it's a gloomy message: These are the worst of times. Not long ago, Phoenix was the nation's fastest-growing market. The median price rose 55 percent in 2005. Agents were closing deals on the hoods of cars; investors flipped homes without ever moving in.
Fast-forward to early 2007: Throw a rock in any direction, and it'll bounce off a FOR SALE sign. "There are 45,000 listings in the Phoenix MLS, and that number hasn't changed in six months," Barry says as we cruise among lookalike stucco homes. With every passing week, the number of houses on the market rises, increasing the downward pricing pressure. "It's like a freeway pileup."
"You look out on the street and see five to ten houses for sale, but many people still don't believe things have changed," he says, shaking his head at a dirty carpet. "The average seller says, 'I need to get this much out of our house to move up.' But the market doesn't care."
44 comments:
I hate Tommy Bahama!
Can Swann be more noveau riche white trash?
"For now, our earning goal is $1,000 a day, each, call it $700,000 a year, gross. Obviously our expenses are huge, as are our taxes (grr!). Worse yet, we’re not hitting that goal yet. And to put things in perspective, Russell Shaw’s annual broadcast advertising spend approaches our total earning goal.
In the near term, I think we can double our numbers to something like $1.5 million a year, before taxes and expenses. From there, with a couple of assistants each, we might be able to push things to that amount, gross, each. In other words, without growing our head-count very much, we might be able to knock down $3 million a year in gross commission income. The net from that might not be all that great, considering, but it will still be a lot of money."
nice picture!
Record numbers of homes are sitting vacant awaiting buyers in the United States. An estimated 2.1 million empty houses were listed for sale during October, November and December. That's about 62 percent more than usual, according to U.S. Census Bureau statistics.
The glut of vacant houses is readily apparent throughout the Northern San Joaquin Valley, as bank foreclosures and former rental homes flood the for-sale market. Empty houses cause hardship for owners, who often struggle to pay mortgages and upkeep costs on property they can't sell.
For 10 months, Harold and Donna Suender have tried to sell their empty Salida house. When they put the 2,305-square-foot home on the market in April, they priced it at $515,000. But the slumping real estate market has forced them to repeatedly lower their price. This week, they dropped it again to $399,996.
"I've never seen anything like this," said Harold Suender, who bought a new home in Riverbank before the market turned. "That (near 20 percent price reduction) is a lot of money, but we have to get it sold. We can't cover two house payments forever."
http://www.modbee.com/business/story/13300377p-13929065c.html
You can't make this stuff up!
http://www.buyinarizona.com/content/article.html?id=953721
Brett grew up in Los Angeles, and graduated from Beverly Hills High School in 1983 (yep, 90210). At that time there actually was a JJ Newbury store and FAO Scwartz store in town, along with the original Brown Derby restaurant. Some of the famous classmates that Brett went to school with at the time were singer Lenny Kravitz, actor Nick Cage, and CNN Anchor Daryn Kagen among others. Brett attended Emerson College in Boston, MA and received a Bachelors degree in speech (BSSP) in 1988.
Brett's first job out of college was working as a personal assistant to Hollywood producer Norman Lear.
Brett started in the Real Estate business in Seattle, WA in 1991. He worked for John L. Scott Real Estate, and specialized in the Kent and Renton suburbs of Seattle. Brett and his wife Lise decided to "get out of the rain," and they moved to Arizona while Lise was pregnant with their first daughter in late 1996. Brett holds an Associate Broker's license, which is like a masters degree in Real Estate. 99% of the other Realtors out there are not brokers.
"Normal Market" all is well in Phoenix:
Finally a normal market. Don't believe all of the gloom and doom you here in the media about the housing market. We are coming out of a necessary correction to an incredible run up in housing cost that was fueled by low interest rates, local job growth & investors (who accounted for about 25% of the homes sold in 2005). Sales are still taking place at what would be considered near record pace if not compared to 2005. Inventory is starting to shrink as serious sellers are falling back on the basics of marketing there property. If the home looks good, smells good & is priced good it will sell. Call me to find out more about the Phoenix market.
http://realtytimes.com/rtmcrcond/Arizona~Phoenix~kevindempsey
Yup, "normal" market in Phoenix the real estate clerks are reporting
Man, how dumb do these people think we are?
February 2007 is looking to be a good month for the local Real Estate market. People are out there buying homes now.
There are several factors that help make this a normal market: 1. Interest rates are low and banks want to lend money to qualified borrowers; 2. The unemployment rate is low; 3. AZ is a great place to live and work; 4. There is a limited amount of land for new housing, keeping pressure on the demand for re-sale homes.
http://realtytimes.com/rtmcrcond/Arizona~Phoenix~brucefraser
OK, one more and that's it. Oh, man, realty times is a hoot!!!
Phoenix Arizona is now the 5 th largest metropolitan area in the U.S. and growing rapidly as new residents flock here for jobs, climate and lifestyle.
Our economy is diverse and seldom affected by national
trends.
Home prices are soaring to record levels (up 43% last year) as new home builders strive to keep up with the demand
http://realtytimes.com/rtmcrcond/Arizona~Phoenix~davidoliverson
A con man will never admit he's lying. He'll just disappear before that happens.
"But the market doesn't care."
He's not as stupid as he looks.
"Greg Swann doesn't know his head from his ass"
He makes a living out of swindling little old ladies out of their homes.
Things have changed, and the word if finally getting out.
Last night on the 11pm Reno news there was a segment about house prices. The news mentioned how many homes were sitting empty on the market here in Reno. The reporter just came out and said directly to us TV viewers: If its not selling, the price is too high.
Like Chinese water torture, it takes awhile to sink in.
Sellers will get it eventually.
Realty Times sounds a little separated from reality.
Keith, the next big housing blowup, it'll be time for you to post a screen shot of Robert Duvall from Apocalypse Now where he says "I love the smell of napalm in the morning!!!"
Brett's site is poorly written. It reminds me of that movie "Idiocracy".
Bloodhound's real estate investing advice would have worked 10 years ago. Not today, he's playing Polish roulette with a fully loaded automatic handgun.
Typical realtor groupspeak nonsense.....say a bunch of general positive comments without backing it up with evidence, or offer positive evidence that doesn't apply to the current market (i.e. report statistics that happened in 2005). These people must have a shrine dedicated to David Lereah in their garages.
P.S.: Hey Keith -- no comment about what Bank of America is doing with credit card applications (i.e. illegals can sign up at will, borrow the money, then escape back to Mexico)? I thought you would be all over that one.
New home sellers such as kb and pulte are undercutting the existing home market big time around here.It is was cheaper to buy new.Existing sellers are chaseing the market down, oh well.
I don't get it. Here's a Realtor quoted in the Phx newspaper echoing the HP theme, and nobody acknowledges that. Instead we get more savagery of Greg Swann (enough already).
Yes, the RE market is inefficient, and yes, the transaction costs are too high, and yes the biggest transaction cost by far is the agent's commission. But the role of the broker is apparently still necessary. FSBO.com has been in business since 1994. They have 118 homes for sale throughout Arizona. The Phoenix MLS alone has 45,000 listings. Still want to bet on disintermediation?
And MLS is not a monopoly, contrary to what some of you keep saying. The discount brokers have had unfettered access to MLS for years. They have had some success, but they certainly don't dominate the brokerage industry.
I'm a bubblehead too, but Keith and his acolytes are way over the top sometimes.
P.S.: Hey Keith -- no comment about what Bank of America is doing with credit card applications
This is even better. I got an email from a major bank for a Visa offer that carried with it a $20 dollar gift certificate from a well-known retailer. Use the card once; get the gift certificate in the mail. I figured what the hell; use it once to make a minor purchase that I was going to anyway, and then cut it up. I did, they did.
Well, I keep getting emails for the same identical offer. Again I figured what the hell, the promo ad says nowhere that currant cardholders are exempt or can’t re-apply. I do this (5) five more times, fill out the forms honestly and identically, get five more Visas for a total of 6. Use them all to make a minor purchase that I was going to anyway, presto, get five more $20 dollar gift certificates in the mail, and then I cut up the damn cards!
So now I figure its time for the wife to start establishing her credit, always a good idea anyway. Apply to the same email using her name and work information. Same deal, all forms filled out honestly and identically, no disclaimer anywhere saying you cant make more than one application, she gets (7) seven Visa cards of her own! Same deal, use once to make a small purchase you were going to anyway, get gift certificates in the mail, cut up cards.
We took the $260 worth of blank, useable by anybody, gift cards and went for an enjoyable evening last night.
Nothing like spending free money.
I am tempted to keep this up if only to see how long before the idiots at the bank finally connect the dots. Again, nowhere in the promo ad does it say that you cant re-apply if you already have their card, or have taken advantage of the offer once before. In fact, I was amazed at how little information they wanted online to send me a standard no annual fee, $5,000 limit major credit card. Everything was on my own say-so. This major bank must be getting desperately hungry?
There is an old saying: The right hand doesn’t know what the left hand is doing.
I wonder if a separate subcontractor company that is reimbursed on a “per sucker reeled in” basis does the credit card solicitations.
Has anybody else tried this?
Say what you will about his personal style, Brett's a market realist. That makes him smarter than most of the other people in his industry, the majority of the press, and Alan Greenspan.
If I see that yellow Porsche, I'll wave.
Brent must be wearing Red Rubie Slippers!
i'm leaving phoenix, because prices here are now like they were in california 4-5 years ago. I would live in an RV before i'd ever pay these sky high prices for houses or condos. phoenix is not california. if i ever spent 500k on a house it would not be here, i'd go to greece or some other foreign destination. this is a fools paradise! but, with the growth i would doubt a serious collapse in prices although i'd love to see it happen. Can you believe these california fools pay 150-200k for old apartments that are now wonderful condos. hope the walls are thicker than my last 4-5 apartments, because you buy the neighbors too!
New homes are selling for the same or lower prices than resales. Never buy a resale that has been sitting empty for too long. There will be foundation, plumbing problems etc due to lack of watering and usage through the winter/summer. Ask for an extra $30K off whatever lowball price you were going to offer to fix those issues that will come down the road. They might as well tear down any houses that have been sitting empty for 3 or more years.
It's not true unless it's on the Drudgereport.
How to punish realtor :
URL="http://video.tinypic.com/player.php?v=2l9lgkg"]View My Video[/URL]
Pitsaman
The point of the post was two-fold
1) Phoenix realtors need to listen to this real estate clerk and wake the F up - "things have changed!". No more BS, no more spin, the crash is here. Why real estate clerks don't just embrace the truth and deal with it I can't figure out. It's in their best interests to get the truth out so homedebtors price their debt-traps appropriately
2) The real estate clerk pictured and quoted is such a realtor. If you know what I mean
Keith, will you marry me?
people really have hair like that?
Put a fork in the Arizona market. On 97.1, a local LA station they have a real estate show on Saturdays. Today, a caller asked about investing in Arizona and both host responded "let's not talk about Arizona." These douche bags were touting Arizona last year.
Change with the tide I guess.
Dr. Housing Bubble
I understand they are putting the realty clerks in tubes and freezing them (cryonetics) in Scottsdale. They hope to thaw them out in the spring when sales are booming.
Better get your slice of the mortgage fraud pie, they'll be tightening up standards in another year or two. You can borrow as much as you want and you never have to pay it back. Ask Casey. Sweet deal.
Keith's Quote
"Phoenix realtors need to listen to this real estate clerk and wake the F up
- "things have changed!". No more BS, no more spin,
the crash is here.
Why real estate clerks don't just embrace the truth and deal with it I can't figure out."
What they can't figure out is the same thing that economists can't figure out, as in when you print up too much money you end up with inflation, or what a city council and a mayor can't figure out, as in when you raise taxes people pack up and move away.
Why they can't figure it out is due to the loss of common sense, the loss of thinking "what is the worst that could happen" and planning accordingly to prepare for the worst.
The worst is happening, falling prices or slow sales, but the realtors never prepared for the worst case scenario.
I think Negative Cognizance is the term we are looking for,
being so locked into one idea or one answer, that any other answer is considered impossible.
Yet, when that idea or answer turns out not to be accurate, or turns out to be completely wrong, those suffering from negative cognizance fight to defend their idea and answer even if they are dead wrong. (Example, when Galileo's idea of the earth going around the sun was introduced, the majority refused to believe him)
Those in real estate just can't or won't grasp that housing is going down, much to their dismay and sorrow.
I appreciate Brett's honesty. Unlike a lot of his colleagues at least Brett understands that it is the volume of transactions and/or deal flow that pays his Porsche bills. And like any sophisticated market participant Brett knows that if you can't make it on price you make it on volume.
Why are realtrolls so angry at the thought of homes being affordable to the average American family?
HP'ers are the righteous ones. If we get our wishes, middle class Americans will not have to take out suicide loans to live in a house
I happen to have some buddies who are real estate brokers in Phx. Very successful and they're still doing pretty well in this market.
They are talking about the demographics of boomers and how great the Phx market will be.
BUT. One sold his Hummer and Porsche and bought a truck.
Another is putting his home up for sale.
Actions vs. words
I have been reminding my RE buddies that it's a volume game. Who cares about the price? Talk your sellers into lower prices and get things moving!
To Anon at 4:37pm,
The problem is when you need to cancel the 13 accounts between you and your wife... your credit score will take a major hit. So you need to wait 6-12 months to make a big purchase after that or you won't get the best rates.
That's why most people don't do this... the hassle isn't worth $260.
-Big Cheese
Another slick lookin SOB got the cell to the ear, the hair, the cheesy grin, slits for eyes...kinda like a snake (except for the cell and the hair)
id dread the 2008 taxes in phx with california prices and new york taxes
lol, Brett...
Emerson college is *not exactly* a top school, and in the mid-80's, small colleges like Emerson were practically begging for students.
Yes, he was in Boston (probably partying). No, I'm not impressed. Emerson is one of those safety schools for "C" students.
Goober the clerk here...Who gives a crap what kind of grades I got at Emerson college? I never claimed to be an "A" student, and if I was I would be a rocket scientist, not a Realtor (er clerk!).
I'm tired of everyone hyping the real estate market. I've helped people for 15+ years, before the real estate market became the new domain of day traders and nerdy bloggers who have nothing better to do at 3AM - get a life.
Consumers should buy homes to enjoy, raise their families, and expect a reasonable rate of appreciation over the years.
Much of what we "clerks" do is manager the emotions of sellers and buyers, and 90% of that work happens AFTER the actual sale. Selling & marketing the home is the easy stuff.
The sky isn't falling here in Phoenix geeky blogger - we are experiencing a much needed correction, and it will be at least 12+ months before we are back to anything close to normal.
I suggest the day traders go find something real to do - like get a job. By the way, loved the photo you snagged off my site. Not the best photo, but I can see why it's worth a giggle or two! Enjoy!
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