Forgot to post this the other day - here's a letter to the Arizona Republic editor (from a guy who has four houses currently for sale) telling them to stop it! after they published that "Phoenix housing is crashing" front page story:
Real estate reports hurt economy
Regarding "How low will it go?" (Republic, Sunday):
The real estate market is bad enough in Phoenix without The Arizona Republic publishing articles like this.
The articles are doing nothing but fueling the idea that prices are going to drop and further scaring the few buyers that exist into waiting to buy because of what they read in the paper.
These articles are harmful to our economy.
- Stephen Pauken, Gilbert
July 09, 2006
If the media would just stop reporting the housing bubble burst, the Great Ponzi Scheme could continue, goshdarnit!
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Is it desirable to have schoolteachers, fighterfighters, etc priced out of a market that has risen to excessive heights on the backs of greed and speculation?
Prices need to come down to restore the dream of homeownership to average-income Americans. If newspapers do the bidding of the real estate industry paymasters and keep hyping the bubble, they are failing their readers and the communities they serve.
Out where we live, the newspapaer has columnists who regularly carry water for the RE industry. They talk about how swell things are in this never-been-better housing market and how we'll see blue skies forever and ever, because THIS TIME IT'S DIFFERENT!
Do you all think it might have something to do with advertising dollars?
The real question is: WHO WILL BE BLAMED???
Will the forthcoming (within a year) Senate hearings on the housing bubble blame the media or CountryWide Mortgage, etc. for the meltdown. . .right now, Big Ben is getting blamed for higher rates, but sooner or later there will be hell to pay when "middle class" voters are evicted for non-payment of mortgages. . .I think the finger will go to "creative mortgage industry."
There will be plenty of blame assigned, but with absolutely zero accountability, none of the guilty parties will pay a dime. The same bankers, shady dealers, and pols who made big money on the way up will "help" our Uncle Sam unwind this mess, and cash in on the resolution. Remember the Resolution Trust Corporation?
LOL! LOL!
-Stephen Pauken, Realtor
Everyone's to blame, absolutely everyone. Buyers, sellers, bankers, the media, even my mom has had a hand in making housing what it is today.
If you didn't buy, if you did buy, if you sold, or held out, you had an effect on the market. If you bought MBS or shorted the HBs you were part of the scheme.
Come on, people; who's to blame?
We have seen the enemy and he is us.
he probably thinks the NYT lost the Vietnam War and is doing the same to the war on terror/Iraq War/
the guy is a moron, is this like publish the mentally handicapped, an affirmative action program.
Classic ... pure CLASSIC!
Stephen Pauken is not a Realtor.
He does, however, own 4 homes in Gilbert & Mesa.
He also happens to have 2 for sale.
One he purchased 9/00 for $270k, currently for sale for $700k.
The other he purchased 11/04 for $130k, listed at $390k, w/price reduced $35k.
hmmm 4 houses? I'm sure he is putting his entire family up in them so he really needs 4 houses while Suzy school teacher can't even find a 1 bd room to buy.
If I could write a rebuttal to Stephen Pauken, I would probably tell him that people's views like his own are actually more harmful to the economy than any housing articles in the media.
RELAX EVERYBODY ...
Even during the crashes, housing bounced back. Big bounce back.
People are complaining about Riverside, San Diego, etc.
Those places are bigger than ever now.
So what are you worried about? Relax, enjoy your summer, drink some beer, spend some time with your family.
Stop worrying about Real Estate.
ultimately, It doesn't matter what the newspaper, realtors, mortgage brokers or this website for that matter say....The bottom line is that with higher mortgage rates and the national median household income at about $50K the bubble will burst (or at least deflate) because prices are simply not affordable. According the income statistics published by the US Census Bureau, roughly 70% of American households bring in less the $65K. If there's 50,000 plus homes for sale in the greater Phoenix market right now and the investors have split, where are the reasonably qualified buyers coming from?
Prices are going to drop, maybe 50-80%, to not publish the facts would not be honest.
Dont be fooled by the income statistics. I couple years ago I stumbled on a satistical report on housing in California and according to it, most people earned WAY below whats necessary to own a home here. And that was based on older data - before prices skyrocketed. Let's face it, there's ALOT of people ( from all backgrounds - I'm not a racist) who aren't reporting their true incomes. Business owmers, illegals, etc....between the loop holes and getting paid cash, the statistics are just not accurate.
Then figure in all the people who have extended families living with them and contributing to the payment. I'm not saying there isn't a bubble, but I don't think its gonna be a crash landing. Its gonna be regionalized. The crash will be in areas that investors and builders ran up. What's hurting alot of people right now is the halt of growing equity. Lots of people got spoiled using their house as an ATM. Its going to be very hard to change their spending habits. And as far as blame, blame the gov't for keeoing rates too low too long; blame the subprime "creative" lenders, and why not, blame realtors since they're overpaid anyway. BUT, I'd also blame the Clinton admin for removing the capital gains tax after 2yrs of ownership. It sounded like a good idea but I guess it backfired in alot of ways.
The paid media's Great American Romance with the Creative Loan Waltz WILL become a two step dance shortly as Bankruptcy and Foreclosure STAND IN the DOORWAY and All the LOVE goes OUT the nearest WINDOW.
anon at 4AM, which site are you looking at to find the owner's properties?
keith, great pic!
"I'm not saying there isn't a bubble, but I don't think its gonna be a crash landing. Its gonna be regionalized. The crash will be in areas that investors and builders ran up."
You forget one thing, most mortgages today are bundled and sold as securities. These CMBS are used by hedge funds and in derivatives contracts, often at ridiculous leverage ratios. If even 5% of mortgages go bad, it could have tremendous financial implications world wide. There isn't enough liquidity in the system to cover even a small fraction of the derivatives if they start to unwind.
http://www.cmbs.org/
Here's more on the letter writer - you can't make this stuff up - from http://www.bisbeemarquee.com/bb/viewtopic.php?t=833&
Frederick’s former administrator walked away with $38,871 from the town when the board of trustees asked him to resign in January.
Trustees asked Steve Pauken to resign after his affair with Town Clerk Jacque McConnell came to light.
When they asked him to resign, Pauken’s severance package became active, forcing the town to fork over the money, Frederick Mayor Eric Doering said.
The total cost to the town was $50,837, which included six months’ salary and payment of all sick and vacation time, Doering said.
more on the letter writer from http://www.heidelberg.edu/fallentimbers/PressArchives/FTBlade09-28-96.html
In a sharply worded letter, Mayor Finkbeiner has accused Maumee Mayor Stephen Pauken of "highly inappropriate" actions involving Toledo-owned land linked to the 1794 battle site.
Mr. Pauken wants up to 185 acres of Toledo-owned land in the Maumee area preserved as a national historic site, affiliated with the National Park Service.
That would be made possible under legislation introduced earlier this week by U.S. Sen. Mike DeWine (R, O.). Rep. Marcy Kaptur (D., Toledo) introduced a companion House bill.
Mr. Finkbeiner opposes Senator DeWine's legislation, though he is willing to donate about 15 acres of Toledo-owned land in the area for a historical memorial.
He said his position is clear on the rest of the land: "I feel that it is necessary that I obtain the highest reasonable price possible..."
"Your campaign to take this land from the city of Toledo through a basically political process without consultation with the city of Toledo is a most adversarial approach," Mr. Finkbeiner told Mr. Pauken in a letter this week.
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