April 09, 2007

A HousingPANIC Message for the REALTORS (ramen-eating real estate clerks) of America

I'm baaaaccckkk... Now where do I even begin? Here's one for starters, a thought for our real estate clerk friends.


Dear REALTORS of America,

It has come to our attention that unsold home inventory is at record levels, with more and more homes are being put on the market every week, and we're just getting started. This is called "exploding supply".

It also appears that home sales velocity has plummeted, as people have come to realize that you and the NAR were lying, and that real estate values can fall. People aren't buying anymore (even if they could - thank you subprime implosion), since the smart people know the same house will be cheaper next month or next year. This is called "plummeting demand".

Now, when supply is rocketing, and demand is cratering, there's this third variable called "price" that gets impacted. For homes to sell, the prices will need to come down. Drastically. And this is your job now, to help Desperate Homedebtors understand that nobody wants their home anymore, especially at last year's price.

So, it's time to do the unimaginable. It's time for you, REALTORS of America, to embrace HousingPANIC. Make HP your friend, not your enemy.

Send your sellers the link to HP. Help them understand that the game is up, homes are insanely overvalued, the fundamentals do matter, and if they want out from under their debt trap, they're gonna have to cut the price, cut it bigtime, and cut it now. And if they don't it'll get even worse tomorrow. Trust us.

Then send your prospective buyers the link to HP. Help them understand that now is a great time to buy - at 50% off. Teach them all about foreclosures, lowballing, and Desperate Homedebtors. Then get out there and lowball!

Finally, listen to the HP community when it comes to The Corrupt David Lereah, the NAR, and the usual REALTOR spin. At your next REALTOR gathering, be the one who calls for TCDL's resignation. Next time the media interviews you, or you blog, write about what a joke the NAR, your fellow REALTORS, and TCDL have become. And try telling the truth for a change - it can only help at this point. Yes, telling the truth is against your normal business model, but times have changed.

I know the idea of embracing HP is like eating glass to many of you. But at least you'd be eating something! Good luck out there. Now get those prices down - they're gonna crash anyway, so wouldn't you rather it be sooner rather than later?

21 comments:

Anonymous said...

Thanks for telling it as it is.... you are the voice of reason.

Anonymous said...

WASHINGTON (Map, News) - The White House says the economic surge that began five and a half years ago on President Bush's watch is more robust than the much-touted expansion during the Clinton administration.


"This is a much stronger expansion in a lot of ways," White House spokesman Tony Fratto told The Examiner. "It's much deeper and more measured."

Markus Arelius said...

That...was AWESOME!

Anonymous said...

Realtors are too stupid to understand logic

Anonymous said...

Hate to break it to you, but in my development, they're selling like hotcakes. Our builder is going to be cutting off all subsidies for purchases by memorial day. I agree there's collusion on the parts of the realtors/appraisers/banks, but that's the american way. Inflation is about to sky-rocket, so the prices paid even at the peak will seem tame by comparison in a few years - at least, when you consider the absurd interest rates coming down the pipe. ;)

Anonymous said...

Anonymous said...
WASHINGTON (Map, News) - The White House says the economic surge that began five and a half years ago on President Bush's watch is more robust than the much-touted expansion during the Clinton administration.


"This is a much stronger expansion in a lot of ways," White House spokesman Tony Fratto told The Examiner. "It's much deeper and more measured."

April 09, 2007 1:58 PM
-----------
This is an expansion based upon two things & only two things:

1-massive liquidity that's artifically reduced the cost of credit making a credit/mortgage bubble in the form of RE prices that are uncoupled from fundamentals that will take years to revert to the mean (i.e. require a substantial contraction).

2-Out of control gov't spending (supported by BORROWING at the same artifically contrived low rates that are causing a housing/credit bubble) on the military industrial complex for a contrived conflict that we will be paying for decades in the form of interst payments on the debt and billions in health care for all the injured veterans.

This is the SHALLOWEST expansion/recovery ever for the above reasons. The Clinton expansion was also based upon an artifical bubble in the form of the dot.com/bomb/gone bubble. But at least it was in the face of declining national/gov't debt/spending. When you spend 4-5 trillions of other pepole's money in a 6-8 year time frame you're going to stimulate the economy. But when you've got to pay it back you will dampen the economy.

The coombination of a post Bush Administration/Military Conflict contract in gov't spending in combination with a post RE/Credit bubble burst will result in the deeper and stronger contraction than the US economy has ever seen.

Mark my words.

FlyingMonkeyWarrior said...

Keith, your time traveling inspired you.

So, the obvious question according to the Orlando Sentinal Blog Guy:

How much is a house really worth these days?

Keith?

AML said...

Oooh, I can tell I'm going to like this blog. Tell it like it is!!

I'm sick of agents only being about the almighty dollar and makin' their cut. Ok, to be fair, there are agents out there who still care about customer service and helping their clients, but that's becoming a rarity. It's time for them to start being HONEST with people - I think in the long run, clients appreciate blunt, to the point honesty more so than inflated promises.

I used to work for a company that provided free home value information to homeowners looking to buy or sell - and then on the other side, we hooked these homeowners up with agents in their area. It would amaze me how many agents would turn down leads b/c "that's in a bad part of town" or "that house is only worth this much, it's not worth my time."

I mean, DAYUM, you're supposed to be providing a SERVICE for people - of course you need to earn your living, but if you're willing to take the listing no one else would, don't you think that homeowner is going to have GOOD things to say about you?

I could rant for a while on this topic, but suffice to say, I can tell this blog is going to keep my attention.

Anonymous said...

Well ... in my development area - Southern California - coastal properites are sitting like cold cakes.

There are many "For Sale" signs out there, but no one is even looking, let alone buying.

Being curious I took a look at one of these properties, 2mil asking price! It has no yard, no "nice views" (even though it's across from the beach) and sits about 1-foot on either side from two other bowling-alley style properties.

This property will sit until the price comes down ALOT, along with the other properties in the area.

Here's something some folks don't know about - the underlying facia material on these places is often made from foam!

Let's be honest now ... most homes during this boom have been built VERY cheaply as well as priced WAY to high.

If houses are selling like hot cakes in your area as you state, then I suggest waiting a few years when you can pick up 4 for the price of one.

"Hate to break it to you, but in my development, they're selling like hotcakes. Our builder is going to be cutting off all subsidies for purchases by memorial day. I agree there's collusion on the parts of the realtors/appraisers/banks, but that's the american way. Inflation is about to sky-rocket, so the prices paid even at the peak will seem tame by comparison in a few years - at least, when you consider the absurd interest rates coming down the pipe. ;)"

AML said...

Just wanted to add to my previous comment a blog entry that you may or may not appreciate: Realtor 101: Be Brutally Honest With Your Clients

Actually, the whole blog is pretty interesting - the guys are realtors/mortgage brokers themselves, and have no problem calling agents out on being lazy, scared or stupid - you might want to peek over the site, see if you get anything out of it.

Hey, at least they're calling for some honesty! They may not take it as far as you, but it's a start!

keith said...

Can you think of ramen noodles anymore without thinking of realtors?

LauraVella said...

Anon said:"Here's something some folks don't know about - the underlying facia material on these places is often made from foam"!

Yes, I have seen it with my own eyes! A good friend of mind bought a condo in Walnut Creek CA 8 months ago. I was visiting her 2 weeks ago, and while I was out on her deck I noticed small pieces of white stuff all over and even floating in the air. I asked her about this- she pointed to the roofline where decorative cordels lined the eves, and to my horror, I saw all of them had round holes punched through by Sparlings making nests inside these stucco-sprayed styrofoam corbels. This condo cost her 489K and the HOA's are $600.00 a month at Rossmoor...

What other shortcuts did the developers use?? Maybe the walls are styrofoam too....

I would never buy a brand new house for this very reason. During boom times, they take shortcuts and use substandard materials to increase their profit margins. This is going to be a serious problem as the bubble bursts.

a little more kool-aid please said...

Yo Keith,

Take a look at the numbers coming out of Bend, OR regarding the RE bubble a town with the population of about 75k. This town is absolutely waiting to be crushed they have spent the last 5 years marketing their red hot development instead of courting good businesses to bring in good paying jobs. NO JOKE, I bet 50% of the residents of this Kool-Aid comatose town are tied to the building trade. I would venture a guess that there are actually more raman eating kool-aid guzzling clerks than there are lawyers in this town has that ever happened before in history? I digress :-) I know this is a little market but I bet our problem is on par with that of Phoenix or Las Vegas...?
http://davidfoster.biz/Market/index.html

Anonymous said...

Some good recipe information for realty clerks.


How to spice up ramen noodles on a college student's budget
Kimberly Foli
Issue date: 3/22/07 Section: The Scene
PrintEmail Article Tools Page 1 of 2 next > "We understand the noodle better than anyone," is the promise of Nissin Foods, one of the makers of ramen noodles. While I'm sure they do understand the noodle, I personally believe no one understands ramen noodles better than college students.
The other day, I was talking to my older brother, John Foli, about ramen noodles. As a recently graduated ETSU student, he can recall many instances when these noodles were the meal of choice. As many college students know, eating ramen noodles can become a monotonous part of your daily routine. Sometimes it takes a little creativity to spice up this dish and make it more enjoyable. I asked my brother if there are any methods he learned on how to spice up these meals. "Sometimes I use the stray mac and cheese powder. Sometimes I use Lowery's seasoning with a bit of pepper. Other times we used whatever we could find to mix in! Once we cooked about 10 packs, fried some beef, threw in some cheese, and crumbled Doritos on it! Dang that was good!" he said. It was basically Hamburger Helper on a college student's budget.
This made me slightly curious, and I began asking different students around ETSU what they like to mix in with their ramen noodles. Josh Grooms likes "mixing two kinds together, like beef and shrimp. Or drain all the water out and mix shredded beef jerky in with them." Eric Hickman said he likes to use "salt, seasoned salt, and a little bit of Texas Pete." Austin Carter likes to eat his like soup by "adding the powder and then dishing the pot, leaving the juice just like its chicken noodle soup." Other people have told me they like to mix in spaghetti sauce, making a cheaper spaghetti dinner.
Most people like to add cheese to their noodles and I've even heard people say that they add cayenne pepper. Chili is another alternative to simply adding the flavor packets that come with the noodles. For a somewhat healthier alternative, try adding a can of mixed vegetables. Get creative with your ramen! Don't be afraid to try something new. For 14 cents a pack, if it tastes awful you can just discard it and start again.

sinis said...

Here in Tucson, AZ REO's are up. SUV's are being sold all over the place with the increase in gas. Go to the stores and not a whole lot of people (especially illegal mexicans, with their twenty kids running all over). Contractors knocking down doors in neighborhoods asking/begging people for work.

All of this stems from the fact that the economy is contracting. After 9/11 Bush stimulated the economy the only way he knew how and that was to sell cheap credit and tell everyone to go BUY something, anything. There is no sustainability in this type of economy. What do states do, especially AZ when 7 out of every ten jobs created in the last 5 years are linked to housing? This whole run up in house prices was an artificial, non-price factor, demand. Way too much liquidity in the markets, false numbers for supposed "wealth" and "income". The early 21st century will be known as the century that rewarded lazy slugs...

Anonymous said...

As that old commercial used to say WHERE'S THE CRASH?

You are 100% right that realtors are hurting. But SFW? Unless you are one or are married to one, who cares?

What I care about are home prices now whether or not realtors make money. And home prices despite all the doom and gloom talk are still astronomically high. Every realtor could starve to death or make $10,000,000 a year, it doesn't affect me one bit.

Anonymous said...

WAIT UNTIL THE WATERS RUN DRY IN THE SOUTHWEST, AND PLACES LIKE LAS VEGAS, SAN DIEGO, L.A., AND PHOENIX STRUGGLE TO EXIST . WE HAVEN'T SEEN ANYTHING YET. MARK MY WORDS.

Frank said...

Keith, I really hope I can eat ramen noodles without thinking of realtors, because I like ramen noodles! They're awesome with a lovely dose of siriachi sauce!!! Stop ragging on them!!!!

To the "selling like hotcakes" idiot, here in my development in Newport Beach, houses that went for $1.2M at the peak are going for $700k now and falling. Of course a bunch of desperate homedebtors are still asking $1.2M but those houses have been on the market for months & months. Sales are few and far between and the few that happen are in the $700k range.

Now that artificial credit is no longer available, figure around $400k for those same houses soon.

www.scottsdale-sucks.com

keith said...

frank - give us the address of a house on your street so we can zillow. even I have a tough time believing any house has fallen from 1.2 to 700k

1.2 to 1.0, sure...

Anonymous said...

frank you are full of shit

LauraVella said...

Anon said:"WAIT UNTIL THE WATERS RUN DRY IN THE SOUTHWEST, AND PLACES LIKE LAS VEGAS, SAN DIEGO, L.A., AND PHOENIX STRUGGLE TO EXIST . WE HAVEN'T SEEN ANYTHING YET. MARK MY WORDS".


Here in Reno, the snow pack was WAY DOWN this year. Squaw already shut down for the season this past weekend. No snow at any of the resorts this year. The restaurants too are suffering in and around Lake Tahoe.

Two of my favorite restaurants closed down - Captain Johns & Petite Pier closed down more than 6 months ago. Petite Pier has been on the lake since the 1970's.

Lake Tahoe is starting to look like a ghost town. And it's going be a ugly summer without water.