HousingPANIC Stupid Question of the Day

Did you ever in your wildest dreams think you would care this much about ECONOMICS? I mean really, boring, dry, wonkish ECONOMICS?

This was supposed to be some really boring sh*t. And then these guys got hold of it, and we all know how that turned out.

Bloomberg columnist's message to homedebtors looking to sell: Enough with the balloons, open houses and incentives - just cut the damn price

The whole world is going HousingPANIC now, wouldn't you say?

What took so long?

HP adds one piece of advice to this: Cut the price BIG TIME. Shock yourself at how far and how fast your home's value plummeted. If you want out from under your debt-trap, you're gonna have to shock your neighbors with the new comp on the street.

Or you could hang on, watch your home rot on the MLS for another few months or years, and watch it sell for even less down the road than you could have gotten for it today.

Housing party over. Get out. Now.

Housing Market's Stench Means Cut Price to Sell

ov. 19 (Bloomberg) -- Raffles, festive balloons, open houses, car giveaways. Will any of these incentives sell houses? Not at the moment.

You don't have to be particularly creative in a market glutted with homes for sale. The painful reality is that homes are commodities. There are more than 4 million of them sitting out there unsold and more coming on the market every day due to foreclosures. If you really need to sell a house, price is the one lever that will move a property.

Almost everywhere your competition is abundant while buyers are waiting for prices to fall even more. U.S. existing-home prices are expected to drop almost 2 percent this year nationally, according to the National Association of Realtors, and are likely to fall further in areas oversaturated with homes for sale.

``Buyers just want price,'' says Mike Morgan, a Stuart, Florida-based lawyer, real-estate broker and consultant who researches property markets for hedge funds and financial institutions. ``Buyers have become educated and they can easily cut through the fluffy incentives.''

Housing Speculation - it happened around the world. Now we pay the price.

The US housing market is crashing in such a fantastic and historic way, you'd think nobody could top it.

Just wait. The Brits ("get on the housing ladder!") were even more housing-speculation obsessed than the Americans. And they polluted all of Western and Eastern Europe with their get-rich-quick schemes.

But now, the Great European Housing Crash begins.

It's strange moving from US-housing-bubble-central Arizona to Worldwide-housing-bubble-central England. If only you could see what I've seen.

You live in historic times HP'ers. Tulip Bubble, South Sea Bubble, NASDAQ Bubble, Worldwide Housing Bubble. This one will be studied for thousands of years.

Oh, the folly of man. Will we never learn?

When does it really get messy? When existing homedebtors realize they have to Mark to Market, the new prices set by the homebuilders

We all know in places like Phoenix, Las Vegas, San Diego, Miami, Tampa, Washington D.C., Boston, Sacramento and more, that new homebuilders have taken prices down big-time - either posted price or through the use of massive incentives.

Yet in those markets, stubborn existing homedebtors, less in tune with the market or Econ 101, and still under the illusion that 2005 prices are real, haven't adjusted their prices to the new market reality - or Marked to Market (yes, there's those three words again).

So what's happening in those markets and more? New homes are selling moderately well at the new prices as homebuilders take the haircut, slash the prices, and move the inventory, yet existing homes continue to not sell, and pile up like tumbleweed on a windy western day.

Eventually, some existing homedebtors will have to sell - or have the house sold for them via foreclosure. This starts the rush for the exits, the first ones out the door will be best off, then the real mess starts.

Note to existing homedebtors - 2005 prices are a joke. 2006 prices are a joke. 2007 prices are a joke. If you want to sell, just look at what true new home prices are at in your neighborhood (posted price less incentives), and price accordingly.

Here's a quick tidbit on this from CNBC's Diana Olick yesterday. Not only are prices going to come down, but when they do, watch for even more blood in the streets with the lenders.

I spoke to Nishu Sood, an analyst over at Deutsche Bank today, and he makes an interesting point. The big home builders have lowered their prices in the hot markets, like Las Vegas, down 25%, but the existing home owners have not dropped as far.

He expects to see existing home owners start to drop prices more dramatically in the second half of this year. If prices really start to hit the skids in these big markets--which are where all those speculator investors lived and breathed--then you can expect all those adjustable rate mortgages they used to really kick into high gear default.

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?