“Even Price Reductions Are Not Making A Difference”
Myrtle Beach Online reports from South Carolina. “Skyrocketing insurance premiums and steadily growing inventory have sent real estate sales tumbling on the Grand Strand. Single-family home sales dropped 20 percent to 428 in October from 538 in October 2005, according to the MLS for Horry and Georgetown counties.”
“Condominium sales dropped 34 percent to 423 from 640 last October. ‘In my opinion, that’s going to be a continuing trend,’ said (broker) Greg Harrelson.”
“Most real estate agents say prices are being cut in certain segments of the home and condo market and motivated sellers are offering big incentives. The market has completely ‘done a 180-degree turn from a year ago,’ so large sales drops aren’t surprising, said (broker) Dale Johnson.”
“‘Last year, there was still a tremendous amount of investor interest in the Myrtle Beach area [in October]. But this year, the investor has totally left the market,’ Johnson said.”
“Some condominium owners are having to pay as much as seven times the amount of insurance that they paid a year ago. ‘I give insurance a lot of blame for the condo market,’ said Tom Maeser, market analyst. Indeed, insurance rates are going to lead to foreclosures, Johnson said. ‘If they can’t get insurance, they won’t buy,’ he said.”
“Harrelson said agents need to be prudent about what price they’re listing homes and condos at. Many sellers are just listing property at a high price to see if it will sell, he said.”
“‘I tell my agents, ‘Let’s not take overpriced listings. It hurts the real estate agent, the real estate company, and it hurts the consumer. It oversaturates the market. If we took those [units] off, supply levels would go down,’ he said.”
“Johnson said even price reductions as much as 30 percent are not necessarily making a difference to buyers. ‘I just think that everybody is waiting. The only people buying and selling are those that have to,’ he said.”
From TC Palm in Florida. “Levitt Corp., the parent company of Tradition builder Core Communities, reported that orders companywide for new homes decreased 19.3 percent in the recently completed third quarter from the same period in 2005.”
“‘This remains one of the most difficult periods for the U.S. housing market in over a decade and Levitt’s results reflect the challenges of the current operating environment,’ Levitt CEO Alan Levan said. ‘The homebuilding trends in Florida, where most of our inventory is concentrated, continues to be severely impacted as evidenced by slowing demand, declining new orders, lower conversion rates, and an increase in forfeited deposits on homes under contract.’”
“Despite the concerns from Levitt, the company is looking positively at the future of its Tradition communities. Core Communities has recently broken ground for the 9,500 home Tradition South Carolina, near Hilton Head.”
The Herald Tribune. “Some might view the timing as classic: coming to town to inspire depressed real estate agents just as your mortgage company’s stock drops to a near-52-week low on poor earnings results complicated by Florida’s sagging real estate fortunes.”
“Ike Reighard, HomeBanc’s executive VP and ‘chief people officer.’ HomeBanc has been active in Sarasota for about three years, employing 26.”
“In an unusual mix of marketing, motivation and timing, Reighard visited Sarasota on Wednesday to speak to several hundred real estate professionals. His Atlanta-based HomeBanc, meanwhile, said that next year it would no longer operate as a real estate investment trust, or REIT, because of adverse market conditions.”
“He told the audience at downtown Sarasota’s University Club that he was there developing relationships for HomeBanc and to ‘breathe life into your dreams.’ Reighard offered tips to ‘exchange ordinary living into an extraordinary life,’ through ‘big hairy audacious goal setting.’ ‘Negative people suck the life out of me,’ he said.”
“Some analysts on Wall Street this week might have fit that description for Reighard. Analyst David C. Stumpf downgraded HomeBanc’s stock. The decision to ‘de-REIT’ would allow the company, Stumpf said, to ’significantly cut or possibly eliminate its dividend next year in an effort to preserve capital until the operating environment improves.’”
“Analyst Andrew Wessel said that the company’s heavy exposure to Florida means a recovery in origination volumes will not happen any time soon.”
‘South Carolina officials put a dent in Horry County’s mortgage fraud problems this year when they permanently revoked sales licenses for five manufactured home sellers, the state’s top regulator said last week. The state’s investigations were sparked by a series of reports in The Sun News this past year that showed some manufactured home dealers regularly falsify financial information to sell homes to people with credit problems or low incomes that otherwise would disqualify them from getting mortgages. Bennett said the combination of a sales slump, a large number of repossessed homes and a backlog of homes on dealers’ lots probably contributed to this area’s mortgage fraud problems in recent years. ‘When business gets tight, some people will do whatever they can to make sure their business survives,’ Bennett said.’
‘Local sales have decreased in recent years, and Bennett said one reason is that finance companies have stopped making many of the high-risk or subprime loans that dealers used during the boom and in the few years afterward to get unqualified buyers into homes. ‘The lending got too tight, and people couldn’t get loans on the houses like they used to,’ he said. Finance companies tightened their lending practices, in part, because of growing instances of dealers helping unqualified buyers get loans they couldn’t afford. By the time the foreclosures occurred, finance companies learned that some homes had been sold for inflated prices that dealers justified with misleading appraisals. Finance companies took huge losses on many foreclosures because the homes were worth less than the amount of the loans.’
Price it right and it will sell. Days of 10k a month price increases are gone, poof. The pool of buyers dried up and the only way to get more people in the market is to lower the price.Do not chase the market down as you will lose in the end. Homes are selling great here where I’m at in az but they are priced in the high 100’s so there are more people who can afford this. Have watched a home sit on the market for a year in gilbert. Originally listed at 285k as fsbo, then 265 w/ realtor, now at 234900 and still nothing for months. Nice newer house but overpriced.
Not with manufactured homes. These people took production ease and scale and used it to create levels of inventory that the market is not prepared to absorb at any price. They need to learn the more basic lessons of learning a factory, such as never to use it to build up inventory that is not selling. Houses are not magic, especially not manufactured ones, they are just depreciating commodities.
I understand teh rational economic argument, but why does it seem that there is a negative sentiment towards supply.
I for one, wish that builders would have kept increasing supply at breakneck rates. The more supply that is piled onto the existing inventory, the more prices can fall later when true equilibrium is reached.
I think that negative sentiment towards supply typically develops when you view houses in terms of homes and neighborhoods rather than pure economics.
When developers add too much supply, it impacts neighborhoods in a negative way. Instead of living in vibrant communities, you end up living in ghost towns. Also, the mere fact that people are not buying the supply means that it must be undesireable in some way. Perhaps it is because of inflated prices. But maybe it’s also because the developer designed the houses and communities more for investors than for occupants. The types of houses that are not selling may be the types of houses that are undesireable to live in and/or undesireable to live near. If car makers produced an oversupply of SUV’s, but you were really looking for inexpensive sports car, the oversupply of SUV’s is not helpful to you even if it causes SUV prices to plummet. At its roots, I think the negative sentiment toward oversupply is really just sentiment against developers who produce a product that does not meet the market’s needs.
Excellent post! I would add that the SUV houses seemed much more attractive when their prices were going up by 10% per year than they do now that prices are falling.
I still just can’t understand how these insurance companies are raising insurance prmiums 7-fold. Was there that much damage in SC? Isn’t this gouging? There’s simply no way I would pay them. The insurance business will gouge itself into oblivion and all policies will be somehow ‘outsourced’ or whatever just like automobiles, electronics, tech, tech support , and now legal advise and soon brokerage , and hopefully , somehow , realtors. etc etc etc.
Closer to the truth is that coastal properties were always grossly UNDERPRICED in terms of RISK. Historically, wealthy owners of beach front properties have been given the same rates as inland property owners. The average guy was paying for damages to the million dollar playhouses of the wealthier members of the community. The OLD system was unfair. This adjustment more closely puts the risk vs. price into proper perspective.
Also, a good portion of the price increases are from new inflated assessments based on the 5 year mania we are always taking about.
And, in case you didn’t know it, most RE-insurance companies are foreign, already. A large portion of the RE-insurers are Swiss and German. I toured the Biloxi coast with a group from Swiss-RE, with offices in NYC.
They did not like what they saw.
The insurance companies are gouging based on sales price or loan amount verses true replacement cost IMHO .To many deductibles written in for different parts of the house structure/ type of disaster , and to many loopholes against risks that insurance companies know are the major claim areas .
Housing wizard is not a spelling wizard
to, too and two sound the same but aren’t
45 north , you can be the spelling wizard ok .
Sorry, not buying into the ‘need’ for 7 fold increases in condo insurance in Myrtle. It doesn’t mention whether or not he was beachfront or further inland , but I guess most the condos are on the beach. Still , something smells.
Seen on this blog plenty of other people in FL , other areas , never had a claim in 40 years , nowhere near the water , see their rates shoot up 3 ,4 , 5 fold in the last year or two.
Seems to me either they are subsidizing the damage to other areas of the county simply because they are near the ocean too , or something else. I find it hard to believe that multinational Insurance companies could have been so negligent in their due dilligence as to have charged these people, for years, just 15% of what is the real cost/value of their policy.
It’s called “pooled insurance” not “self insurance.” Myrtle (and Venice where my mom lives, etc) suffer from at least five insurance shock factors. Cyclical storm periodicity increasing. Asset price appreciation. Fixed investment margins narrowing. Asymetric inflation. Inadequate loan loss reserves due in part to competition.
It doesn’t matter if you should have been paying 10% more the last 10 years or 300% more this year the math is the same.
Expect more and more like my mom to self insure and make matters worse for the bagholders. Don’t blame her. Oh, and don’t blame me. I’m in Kalifornia and don’t have earthquake insurance for many of the same reasons. And let us not forget the effect of taxes. Relly, 7x increase may honestly be necessary for private insurance to go forward and conform to State requirements.
The insurance companies are pricing in global climate change and a likley increase in high intensity hurricanes over the next decades. They are listening to scientists who predict that we are going to see more big hurricanes. Of course, no one can be sure, but if the insurance companys take the optimistic point of view and are wrong, they will go bankrupt. Also, they can’t afford one big one every few years without big increases in rates, especially with increased building along the coast. One important question is how much people with homes at much less risk further inland should subsidize the high risk building near the coast. Insurers need to take a long term view. They are even bailing out of Long Island, which has not received a big hit in a long time. The problems is, with all of the building in recent decades, a “perfect storm” would cause unsustainable damage to insurance companies.
Interesting that the corporations who would actually take a financial hit from global climate change accept the evidence, while those (like Exxon Mobile) who would take a hit from doing something about it deny it.
The market is speaking. Funny a lot of “free-market conservatives” don’t seem to be listening.
Insurance companies are developing strategies against global warming because they have expertise and vested interest in approaching the problem from the perspective of probability/impact analysis. The probability may be small (none of the evidence is irrefutable), but the potential impact could be huge, so it makes sense to avoid the impact even at siginficant cost. Evaluating probability of occurrence vs. potential impact is what the insurance industry does for a living. In my opinion, this is the most rational way to evaluate the global warming risk.
Unfortunately, the political debate about global warming is not framed in this way. Both sides of the debate seems to think that we need irrefutable evidence in this matter before we take any precautions. This is a highly irrational position. We do not need irrefutable evidence that our house will catch on fire before we buy fire insurance. The relatively low cost of fire insurance, compared to the potential cost of a fire, makes it rational to buy the insurance even though the probability of a fire is very low.
What if global warming is caused by changes in sun spot activity? Something we can do nothing about?
As it stands now, the predictions of increases are about 1 degree over the next thirty years. You do know that global temperatures have fluctuated greatly within the last 500 years, don’t you? Greater than just a degree or two as well. So why do we need to do anything economically drastic to forestall something relatively small, historically unpredictible and something that may be occuring completely beyond our ability to affect (unless you want to pollute more to block the sun’s radiation).
Consensus isn’t fact. Hypothesis isn’t fact. Theory is theory until proven. Whether you want to acknowledge it or not, the billions being spent on “global warming” already consitute a pretty good INCENTIVE to continue alarming people. The history of science isn’t pristine in this reqard, they’ve gotta eat too.
Besides, in the 70s the threat was a new “Ice Age”…..I don’t recall any scientists explaining what they got wrong back then and why we should drop everything now and believe this new theory anymore than the last.
Agreed, jag. I’ll take the GW computer models 30 to 100 years out a little more seriously when they can accurately predict the weather 1 month out. Global warming has become the closest thing to a scientific cult that I’ve ever seen, more based on peer pressure and dogma than a true scientific search for truth.
I dislike dogma of any stripe and think evidence and calm rational debate should be used to convince people rather than scare tactics, personal attacks on people’s character, and the repetition of some make believe consensus to try to stifle doubt.
It’s really an engineering problem. If at reasonable cost something can be done, then do it. But it has not been scientifically proven, only suggested, that GW is caused by humans and that it can be reversed at any cost, let alone a reasonable cost. China and India will never go along with strict carbon limits. If a Kyoto type deal is enacted there will be more cheating than with OPEC, but the US will feel the need to live up to its agreement and hurt the economy.
Bjorn Lomborg in The Skeptical Environmentalist puts forth a reasonable way of looking at things, but instead of rational debate he and others like him are subject to character assassination. This is the way supposed religious primitives respond to a heresy, not a calm, cool, and rational search for scientific truth.
There is no room for rational debate in the halls of science — it is all about faith in the views supported by one’s own research program and the constituents who fund it.
Is it that the insurance companies accept the evidence, or that they see the widespread belief in it as a good excuse to increase profits and reduce risk. Business ain’t charity.
There was a big flap last year that many million dollar beach front properties were being insured by ‘Citizens Ins.’ and paying less than people who Insured with private co’s. The state finally took action but only after the public outcry. …the responsible were subsidizing the idiots,and flippers that build on the beach.
One of the primary requirements at Citizens is that their Ins. be the highest priced in the market. If there was an instance where this was not the case. They raised the rates as soon as the policy came due.
“The problems is, with all of the building in recent decades, a “perfect storm” would cause unsustainable damage to insurance companies.”
Because there is so much development along the coasts the chances of a “perfect storm” increase because there are more targets. In years past many of the storms would come ashore in relatively unpopulated areas and damage would be less severe. Now, there’s nowhere for the storms to come ashore where there’s no development.
Unqualified buyers and inflated appraisals seem to walk hand and hand . Either its a fraud or the buyers that don’t really qualify for the loans will buy anything at any price just to get into the housing boom . You just can picture these crooks sending the mailers out saying “,bad credit ,no job ,don’t let that keep you from winning by real estate investments .”
Unqualified buyers and inflated appraisals seem to walk hand and hand
It’s amazing the price someone will sell themselves for.
Hey, hey…sell your integrity to the low bidder.
The hacks who are rubber stamping the numbers for these deals are probably makin’ fifty to a hundred bucks on a fee split.
So much for the POS FED Appraisal Standards Board.
The worthless shits who composed this joke should be drawn and quartered before a congressional hearings committee.
“Either its a fraud or the buyers that don’t really qualify for the loans will buy anything at any price just to get into the housing boom.”
I think you’ve hit on something here. When we purchased our first house, we worked the math for a couple of years before finally signing the mortgage papers. What else could we do? It took us that long to save the downpayment.
In contrast, during the recent mortgage feeding frenzy with zero-down and teaser rates, buyers spent no time at all saving (and thinking and doing math). So yes, they really were willing to purchase anything at any price just to get in on the boom. They were that uneduated.
If nothing else, being forced to save for a downpayment gives all but the laziest of home buyers the chance, quite literally, to figure out what they’re getting themselves into when they sign on the dotted line.
Re. saving for a downpayment:
One of the biggest problems during this bubble was that prices shot up so fast for so many years (while salaries remained pretty flat) that many people literally did not have *time* to save for a downpayment, increasing the overall frenzy. Your money simply became worth less and less with each year that you saved.
A perfect set- up really for screwing people into debt/serfdom.
Myrtle Beach like the rest of our coast here in South Carolina went nuts. It will take a very long time to absorb all the Condos. Hilton Head home sales have really fallen off, over 60% from this time last year. I know of three RE agents that have bailed from the area. There will be no spring bounce here, more like a lead ballon. Locals can not afford it and are moving father and farther inland. I have one family member that sold due to their insurence bill heading sky ward with no end insight. We have a lot of pain ahead. Lowering lending rates will not change the outcome, to many other factors involved.
“Johnson said even price reductions as much as 30 percent are not necessarily making a difference to buyers. ‘I just think that everybody is waiting. The only people buying and selling are those that have to,’ he said.”
Seller’s (and homebuilders’) conumdrum:
- Keep the price high and price out all the buyers forever;
- Drop the price and try to sell a falling knife.
conundrum, not conumdrum (spell checker on the fritz again!)
sellers’ not seller’s (punctuation on the fritz again!)
From TC Palm in Florida. “Levitt Corp., the parent company of Tradition builder Core Communities, reported that orders companywide for new homes decreased 19.3 percent in the recently completed third quarter from the same period in 2005.”
Core Communities are located in Port St. Lucie and the huge Traditions project is on the western side of the city. Looking at the number of vacant homes, price drops, and plunging building permit applications in Port St. Lucie, I find it hard to believe they only had a 19.3 percent order decrease. It just doesn’t seem to add up with the county data that is being reported. I wonder if somebody is cooking the books - a lot?
The numbers are probably truthful.
What is missing is the disconnect between orders and construction.
While, lately, most all builders claim they are only building on “firm orders”, we all know that last year and 2 to 3 years prior they were building on spec.
If last year they had 1000 orders and built 2000 houses in anticipation of more sales, then a 20% drop in orders would really represent a 40% overbuild.
Like all salesmen, they are giving us the best picture they can.
Actually, that was poor math.
If they had orders for 800 and built 2000, they went from 100% overbuild to 150% overbuild, with a 20% decline.
“…orders companywide for new homes decreased 19.3 percent..”
Minus 40 pct of remaining orders (.6 * 80 = 48) to factor in cancellations and everything will make sense.
Big hairy audacious goal setting? Why doesn’t HomeBanc just hire Tony Robbins? Then again, maybe if Chris Farley was still alive he could perform his “Matt Foley” routine, and convince Sarasota real estate agents to list his van down by the river.
“Big hairy audacious goal setting”
Quick, hand me the depilatory!
“to ‘breathe life into your dreams.’ Reighard offered tips to ‘exchange ordinary living into an extraordinary life,’”
Thanks, Ike. Now quit hogging the bong and shut your pie hole.
” ” I tell my agents ,”Lets not take overpriced listings .’ ”
The realtors/agents/lenders could of went a long way toward curbing the mania by having a policy like the above 3 years ago . The realtors priced themselves out of a job by supporting the mania . Make hay while the sun shines I guess .
Now that the real estate industry has exhausted any greater fools they could get in 2006 , so now is the time to control the down trend by ousting and banning the FB’s and overpriced listings . Don’t they remember they told the buyers and sellers that 2007 was the year of the bounce back market and real estate has hit bottom?
Why would a seller reduce when they think they are just 6 months away from the uptick market ? All the lies from the NAR come back to haunt them .
How are the realtors going to control the inventory suppy problem especially when there are about a million vacant homes not sold ?
Anyway , the new attempts to control the over supply problem make me want to puke . The industry already got a bunch of FB’s to take their houses off the market / getting them to rent by promising a better market in 2007.
Control freaks …..It won’t work …the problem is to big …….
Our carpenter’s realtor-wife had 31 listings at the end of August. My husband asked ‘how’s it going’ and he replied that she told ALL of them that if they were not willing to lower their price she could no longer continue to list as the marketing/advertising costs were not going to bring in a sale. She now has 5 listings. Guess the rest will wait until spring to get their “price.”
So the real carnage really will start next summer.
I was going to make a joke that not taking overpriced listings would cut 75% of the customers… But (31-5)/31= 83.8%. Wow!
What happened is the customers were shifted “to the left” on a timeline basis. In cars, discounts are known to pull customers from future quarters to the present quarter. Well, this happened in real estate. Customers bought in prior quarter thinking that future quarters would be far more expensive.
The second quarter of 2007 is going to be brutal. It will be the start of the true carnage.
Neil
Neil, I always like your analysis and anecdotal evidence. Just curious what you’re basing your forecast on for 2Q2007. It seems like a good guess to me, but I was just curious if you’re basing it on any particular fundamentals, psychology, or other factors, or if it’s just a best guess. Thanks.
Guess so
“….she told ALL of them that if they were not willing to lower their price she could no longer continue to list as the marketing/advertising costs….”
Perhaps she should send a memo to the NAR describing the situation on the ground. Apparently, the people at headquarters just launched a national ad campaign labeled ‘it’s a great time to buy or sell.’ As a result, more and more ‘unqualified’ sellers will be calling your carpenter’s wife.
Yes , that’s right mrktMaven Fl ,the NAR said it’s a good time to buy or sell didn’t they in their ads ? Maybe they should say “it’s a good time to buy and a good time to sell if you cut your price. ”
The only time it’s a good time to buy and sell is in a totally balanced market .Very rare that the advantage is that level in the housing market and it certainly those market conditions don’t exist right now . I think people really know this . Face it , everybody is waiting to see what the Feds do and see if the sellers crack .
NAR wants you to buy or sell. RE agents make money either way, just like stock brokers and commodity brokers. All brokers want volume of sales.
No one really has to buy, but some have to sell (job loss, new job, devorce, illness).
Homes were selling at the ask price, now they are selling at the bid price. Sellers better get use to it.
“Homes were selling at the ask price, now they are selling at the bid price. Sellers better get use to it.”
Homes were selling above the ask price. Now they are selling at the bid price, in the rare instance that a bidder is even forthcoming. Most used home sellers set their wishing prices at a level which discourages anyone from even making an offer, given that they can buy new for less with goodies on the side.
In baseball, you’re out after three strikes. But Florida has FOUR strikes against it- excessively high prices, excessive supply due to speculative building, unreal insurance costs, and very high property taxes.
BTW, Hilton Head is on the coast just like Myrtle Beach. Aren’t they seeing rising insurance premiums as well?
Well at least they have Jeb Bush.
Not much longer. Jeb is leaving office, to be replaced by one of his anointed, Charlie Crist, who will make some token gesture and then stand by sympathetically while Florida tanks. I don’t have a clue how people can’t see what happened to Florida under Jeb (who in his other life is a developer, BTW). Look at Bill’s post above. All those strikes that Florida has are largely due to Jeb’s actions or inactions, although speculation probably would have occurred no matter who was governor. The best thing I can say about Jeb is that Florida was lucky to have him during the GW presidency. We got payback from GW during the hurricanes that no other state got. If we’d had some other governor, Florida would have been toast a lot sooner. On the other hand, maybe that wasn’t such a good thing. Part of Florida’s insanity was that we got hit by four hurricanes during the bubble and what happens? Construction on the coast mushrooms! Go figure.
Homeowners in the Golden Isles (GA islands) have had insurance increases. Hilton Head shares the same airport as these islands. My guess is that insurance premiums have also increased in Hilton Head.
from my email box this am:
NEWS FLASH, INDY MAC BANK ELIMINATES BANKRUPTCY SEASONING!
That’s right!!! You can now offer borrowers NonPrime level 1++ financing 1 day out of bankruptcy!!!! Here’s an example of the difference in rates/pricing:
$250,000 Purchase price with a 550 mid Fico
Full Doc, Standard PPP, with 1pt back to seller!!!
BK discharge date of 1 month ago
Old Pricing: 70% LTV…loan amount of $170K…10.750% with a payment of $1635
New Pricing: 90% LTV…loan amount of $225K…8.375% with a payment of $1710!!!
This is live RIGHT NOW in QuickPricer and e-MITS!!! Check it out!!!
Translation: instead of requiring a 30% down payment and getting the appropriate risk yield, we are now bending over an giving this stiff 90% at prime.
Yikes, they must be desparate.
U*F*B
Well they deserve what they’ll get!
U*F*B is right. How can this be possible?
If they’re not getting shut down (read encore, option one, acoustic, etc.) they are being told produce or die. It’s ugly out here in mortgage land.
‘Negative people suck the life out of me,’ he said.”
This reminds me of an old motivational cassette tape I used to have by Zig Zigler trying to pitch Amway. He used to say “If you put a flea in a jar and close the lid, the flea will jump and hit it’s head. After a while it will be trained to only jump so high so it won’t hit it’s head. Don’t become a flea. Learn to jump out of the jar!”
‘Negative people suck the life out of me,’ he said.”
Translation: “People who talk about facts and reality just suck the life out of my fantasy world.”
Negative people suck the life out of you.
Negative equity sucks the life out of people.
Negative cash flow sucks the life out of the company whose houses it sold to the people who now have negative equity.
Personal observtion on my street in Mira Mesa (San Diego). A stucco box down the street was sold about 6 mos ago after some rehab. Parked outside of 1400 sq ft ranch are: A new Lexus, a boat, a new Ford F-250 to haul the boat. 2 weeks ago, a for sale sign pops up in front of the house. This week, the sign was to “For Rent”.
So what do you think is going on there?
Guy decided to live in his car because he can’t drive his house
He’s an aspiring landlord. Rent out this box and buy another in Arizona or somewhere he “heard” things are booming. It either won’t rent, will rent for negative cash flow (loss) or he is stuck, assuming he can afford the payment after all those car payments, property taxes, insurance, etc. Probably an option ARM that will re-set next year. I know many people in this situation and all are headed for foreclosure very soon.
“…Reighard offered tips to ‘exchange ordinary living into an extraordinary life,’ through ‘big hairy audacious goal setting.’ ‘Negative people suck the life out of me,’ he said.”
LMAO! Ha! Ha! That’s what they all say when they get their a$$e$ handed to them. After living in la la land for so long reality just does not compute. Stop whining u sob. Take it like a man and walk it off.
That was the funniest thing I’ve read in days.
Mr. Reighard: “OK, so no one is buying what you sell, you have not seen a commission check in months, your clients are pissed because they have not sold yet, your mortgage on your investment propereties just adjusted up, and you can’t dump them. In a couple of months you face either BK of foreclosure, and there is no end in site for the downturn…
“Congratulations! You have exchanged an ordinary life for an extraordinary one!
“Now quit whining, you’re sucking the life out of me”
I must have an extraordinary life because, I have zero debt, plenty of cash in the bank, 800+ credit score, and no personal problems. All this on my 40k/year job. I think I’ll keep it that way by not listening to fools.
I’m told by our insurance agent that the main reason Florida rates have spiked is that the large insurance companies have formed separate corporations for just Florida. Florida is the primary strike zone of hurricanes. We’re on our own.
Here are the 5 bubbles that are about to burst..It is a PDF file but worth the read.
http://www.americasbubbleeconomy.com/ABEspecialReport100306.pdf
Yep. Another voice in the inflation chorus.
Also: Bank of England Raises Key Rate to 5-Year High
Nov. 9 (Bloomberg) — The Bank of England raised interest rates to a five-year high, saying quicker economic growth risks driving inflation further above its target.
The author shows his ignorance in #2 by comparing the change in the DJIA over a long period of time to the change in real earnings and then saying that this proves a bubble. Although stocks tend to perform better during periods of declining inflation than increasing inflation, any stock average is a NOMINAL price and therefore over long periods stock prices tend to track and of course must be compared to nominal rather than real prices (or wages, or income, etc.)
“‘I tell my agents, ‘Let’s not take overpriced listings. It hurts the real estate agent, the real estate company, and it hurts the consumer. It oversaturates the market. If we took those [units] off, supply levels would go down,’ he said.”
yea? where was that rationality just 1 year ago when the markets were booming? WHy didnt you tell ur agents that back then, BEFORE the damage could have been done
‘I just think that everybody is waiting. The only people buying and selling are those that have to,’ he said.”
Since when does someone have to buy, sell yes but not buy!
My wife’s friend is a newbie realtor (VERY late to the game) here in SoCal and they spoke last night. Here’s how converstaiuon went:
W: “So have you sold any homes?”
R: “No, everybody is just waiting to buy when prices go down, but prices aren’t going to go down anymore.”
W: “Really? My husband says they are going to go down a LOT more.”
R: “Well even if they do, if you don’t plan to move, it will go up again someday.”
W: “Nobody plans to move. People get divorced, lose jobs and so forth. I think you should look for a real job where you can actually make money.”
R: ………….(silence)……………
“W: ‘Nobody plans to move.’”
Exactly.
Don’t get me wrong…love the conversation and for the most part I agree with the wife. but.
W: “Nobody plans to move. People get divorced, lose jobs and so forth. I think you should look for a real job where you can actually make money.”
Actually, a lot of people “plan to move” and have done so quite often in the past several years. A lot of people like to “move up” from the house they have today. What is happening now, beyond just builder supply run ups and investors trying to leave the house market is the situation I am in. I would love to sell our house and buy a new home. Our family is growing, twin babies earlier this year. We are fine now, no real issues but a third child would be a bit much in the current house. Unfortunately, trying to sell a house is a nightmare these days and is causing us to delay our plans to move. I don’t think we are alone in the catch-22. Good thing we don’t have to move. I think that is what the wife was trying to say, people don’t have to move.
She’s too bright to be a real estate agent. I suggest a dumb blonde role in hollywood for that high of an IQ.
Reighard told the audience at downtown Sarasota’s University Club that he was there developing relationships for HomeBanc and to ‘breathe life into your dreams.’
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Translated: To keep blowing sugar up the RE agents pants! The “Chief People Office” has to earn that six figure salary.