“Wishful Thinking” A “Sign Of The Times”
The San Francisco Chronicle. “Last week, when I received an e-mail press release from the National Association of Realtors previewing its $40 million ad campaign with the slogan, ‘It’s a great time to buy or sell a home,’ I had to read it twice. Was this a joke?”
“This ad campaign seemed to come straight from the Mad Hatter’s tea party. How can it be a good time both to buy and to sell?”
“I called the NAR to get a more thorough explanation as to why they launched this campaign. ‘We believe people aren’t aware of the realities of the marketplace,’ explained Steve Cook, VP of public affairs. ‘There’s been a lot of negative media coverage, and a lot of people are missing the boat.’”
“‘In the sense of buyers, right?’”
“‘In the sense of sellers, too. They are related. Sellers need buyers and buyers need sellers. They both need to work together.’ Cook then suggested that since inventory is constricting, it will probably become a better market for sellers. ‘But then it will become a worse market for buyers,’ I ventured.”
“There was a pause on the other end of the line. ‘Well, yes, but the most important thing is that interest rates are at all-time lows, that’s good for both buyers and sellers. Like the New York Times said, the stars are aligned.’”
“Actually, it was the New York Times quoting an NAR spokesman, but let’s not quibble.”
The Chicago Tribune. “Saying that ‘the worst may be over,’ the housing industry’s chief economist said Friday that home prices must continue to come down in some regions before the real estate slump plays out.”
“‘We need a price decline, we were overbloated,’ particularly on the West Coast, David Lereah, chief economist for the National Association of Realtors, told attendees at his organization’s annual meeting here on Friday.”
“‘In 2007, it will be a flat year, maybe 1 percent [sales] drop, and that’s it,’ Lereah said. ‘After 2007, we’ll be back to expansion again.’”
“Lereah said the national picture is positive. ‘I’m optimistic for 74 percent of the country,’ where local markets are, at worst, flat. The other 26 percent are in for some rough times.”
“Struggling the most would be California, South Florida, Arizona, Nevada, and metro Washington, D.C., he said, where sellers need to lower their prices.”
“But Steve Murray, an industry consultant who followed Lereah on the podium at the convention, said he was less optimistic about the speed of the market’s recovery. ‘Lereah said we’re at the bottom [of the slump], but in most markets we are going to slide some more,’ he said. Citing interviews with executives at more than 100 large real estate firms, he said the pending sales data could be falsely reassuring.”
“‘The fall-through rate [of contracted home sales] has gone from single to double digits,’ Murray said the executives reported. ‘Buyers can’t sell their existing homes.’”
“‘People who think this thing is going to turn around in six months are out of their minds,’ Murray said in an interview before his speech.”
The Washington Post. “There’s a bright side to the decline in the U.S. housing market, says the National Association of Realtors: plenty of choice.”
“‘There’s a big change in psychology and that’s what they’re reacting to,’ said Robert Shiller, an economics professor at Yale University, who cut out the ad and showed it to his students. The campaign is a true ’sign of the times,’ he said.”
The Dallas News. “‘The bad news is just about behind us,’ David Lereah told industry members meeting Friday in New Orleans. ‘It appears that we have bottomed out.’”
“Not so fast, say Texas housing analysts, who think that’s just wishful thinking and further cutbacks in home sales and prices are ahead. Prediction that the worst is over for housing is ‘more jawboning, hoping that they can influence things to be at the bottom,’ said James Gaines, economist with Texas A&M University.”
“‘Personally, I think the 2007 housing market will be down across the board and not make significant improvement until sometime in 2008, and that assumes we don’t have a recession or anything approaching a recession,’ Mr. Gaines said.”
“Dallas housing analyst Ted Wilson agrees that it’s too early to see an end to the housing slowdown. ‘Yes – a little bit, perhaps wishful thinking,’ said Mr. Wilson with Residential Strategies.”
“Major homebuilders are preparing for a significant slowdown, he said. ‘In Dallas, about 10 of the large builders currently are on hiatus – not committing on new lot deals,’ said Mr. Wilson. ‘There have also been some significant layoffs with many of the building firms as well – indicative of a more long-term issue than just a blip.’”
“Median home prices declined slightly in the Dallas-Fort Worth area during both September and October. Home sales in North Texas have been down in each of the last five months. In many U.S. cities home prices are already falling.”
“‘Don’t be afraid of prices coming down,’ Mr. Lereah said. ‘When prices come down, it brings back buyers. If they see sellers are more flexible, they are more apt to come back to the marketplace.’”
“There will also be fewer real estate agents. ‘We are actually predicting an 8 percent drop in membership,’ Mr. Lereah told Realtors, who enthusiastically applauded the news. ‘Productivity will get better as we have less members and the quality will improve. It’s an overall good thing for the industry.’”
It is a great time to buy or sell. Agents, brokers, etc. all have far more time to devote to the buyer and seller. Why just a few months ago, they might have even neglected to return calls. Not now, hands-on service is the new trend in real estate. Of course, if the buyers and sellers prefer a good deal over a feel good deal, then maybe not so much of a good time.
” more time to devote to buyers and sellers”
Loan agents too. In 2004 I inquired about a land loan from a local agent and she turned me down, saying that there was not enough money in it for her. Somehow, I got on her email list, and about 10 months ago, started hearing from her twice, sometimes 3 times a week with market updates, rate sheets, business advice, jokes, recipies, general newsletter stuff as part of her “prospecting” campaign. Last month, in one of her mailings she was selling her 2005 T-Bird. This month she announced her new online health and beauty aids business. How times change!
We need a bitter recession every ten years or so, if for no other reason to improve the quality of customer service. Particularly in retail.
Yes, a recession is painful, but useful.
Went to Home Depot today. This is unusual because as a renter I don’t have to fix stuff. Customer service was, as usual, the pits. The store was pretty empty compared to a year ago. But this did nothing to change the long lines. They had reduced the number of checkers by 1/2.
Is this a sign that they are beginning to feel the pain?
went to the home depot in Long Beach(CA) on friday nov 10, a fine sunny day when gov’t offices and some businesses were closed to observe Veterans day. It was very,very slow, and there were almost as many employees as customers. This a new store just opened, and maybe the old Signal Hill Home depot just down the street was getting all the business. Still, it does seem a bit slower than normal. The usual scenario over the past few years was for the Depot to be bustling with holiday pre-shoppers, especially considering that Christmas is just 6 weeks away:
Yes. A depression every 40 to 50 years to keep us humble and thankful for what we have.
Last month, in one of her mailings she was selling her 2005 T-Bird. This month she announced her new online health and beauty aids business.”
Next month “relaxing sensual massage”… 3 months from now, relaxing sensual massage….. with guaranteed happy ending!…. 6 months from now?… something we from the lower classes like to refer to as “The World Tour.” ;-}
imploder, you are indeed a funny person. I have to admit, I’ve never heard of “The World Tour”, and I’ve heard a lot of stuff. Couldn’t even find it in a few slang dictionaries.
I’m sure we all know what he’s talking about
Yeah, I figured he meant around the world. Thought maybe something new.
So where’s a nice place to get a house in Australia on the coast, i.e., reasonable people, prices, weather and of course, bars?
There are some great spots here, and you guys are like second cousins………..just wait a while……maybe 2 years and you will get some really beautiful homes amounst very fine people very cheap……….hope you can cope with our beer……if not byo……and when ya get don’t forget to say g’day
You are absolutely correct. “World Tour” is not a slang phrase. I was merely attempting to speak “the Queen’s English”…
I am sure the “world tour” would include some quality time “down under” including a fine map of Tasmania.
Hey guys!
Be sure to email the woman (Carol Lloyd)who wrote that SFChronical article and cheer her on! The more msm…the better!!!
surreal@sfgate.com
Agreed. And she has the parody ad linked to her article and concludes her article with the headline from the parody. Great stuff!
Just for the record that was made by CharlesM2 who posts here and at the boston.com board…bright and witty fellow
Hey thanks for pointing out that link. I’m glad people are enjoying my little parody.
- CharlesM2 (aka CharlesM)
My ZipRealty.com account was taken over by a different agent/broker/whatever. Suddenly I started getting emails from the new one. The latest said:
“I noticed you have been very actively looking at homes on our website. Is it time to go have a look at some of these homes in an effort to zero in on which one is right for you?
“I know you have been hearing and reading all the news buzz about the real estate market. Prices have fallen and sales are down in our
area…this is a great time to be buying! Sellers are now realizing that if they are serious about selling their homes they have to get realistic about their pricing.
“Winter time is usually the best time to buy because there are not as
much buyers buying ( no competitors) and the selling market is slow
(easier to negotiate). Prices generally go higher in the spring and summer time.
We have seen a large up tick in the number of homes on the market, but more importantly I notice that many of these listings are now showing reduced prices in the MLS. This is a great time to be making an aggressive offer on a home you are interested in.”
I want to respond, but I don’t want to be a jerk, and I don’t think I can help myself.
Oh go ahead, be a jerk….they “deserve” it..hahahhahahhah
I get the same Ziprealty spam.
I simply send a few links back like the HBB blog, piggington.com and suggest that I am waiting for reversion to the mean and call back in 2008 or so.
That usually gets rid of them.
I get spammed every time I surf Zip realty. Mostly by the Phoenix rep. I am kind. I tell him the truth that I have no job certainty after December 31. I may have 90 days of no job. It shuts him up for a few weeks. I last told him a couple days ago that I may be moving to Philly for a one year engineering contract. Maybe that will really stop him from e-mailing / phoning me for a few months. No need to be rude to those folks. They didn’t take my money. The world has enough problems than to add needless contention. And they need us more than we need them. That is a good position to be in.
I love getting those e-mails from realtors. I always respond, telling them thank you for being so kind, and when can we meet in person? I also confide that the worst mistake that most of us make is believing the State Psychiatrist is our friend, but because of him THEY KEEP LOCKING ME AWAY! For now they let me live in a group home, but every morning I have to drink that special hot cocoa that turns my peaks and valleys into gently rolling hills. And while the earnings from my car wash job would seem to rule out homebuying, I’m glad someone realizes that the million-dollar checks I like to draw on my etch-a-sketch are linked to an account that will shortly receive a major cash infusion from my special friend in Nigeria, who as a former Emperor was overthrown by bad people but has promised to wire a fortune into my bank account in appreciation for my help and sympathy.
Oddly enough, I rarely hear back from them after that.
More nonsense words and phrases… overbloated? Not a word. Falsely reassuring? How about just false.
One sentence that did make sense…. “People who think this thing is going to turn around in six months are out of their minds,” Murray said in an interview before his speech.
Clearly, anything that is overbloated must be levelized.
This guy is like a corp. restating earnings from 2004. Except he is restating earnings for 2008 and it sounds like 2004 and can not get the year right .
It’s more like he is restating reality.
lol
“‘People who think this thing is going to turn around in six months are out of their minds,’ Murray said
I wish he would’ve just cut to the chase and called Lereah an assbag.
LOL, yea because he’s spot on. It’s interesting what’s happening now. Recently I’ve been talking to some folks who in the past would vehemently give me a reasons why SoCal is not going to bite the big one. Now when they start that mantra their voice kind of trails off and they get a real concerned look on their face. I even had a guy that told me last night that the changes in Congress where going to help stave off the downturn. Like the man says if you think it’s going to rebound in 6 mo’s you’re an a$$hat.
Changes in Congress are going to help?! What the hell was that guys reasoning for that? Is Nacy Pelosi going to pay his mortgage for him?
Dems have never been known a biz friendly. If they put the squeeze on industry that could push a teetering economy off the edge. That wouldn’t be good for housing.
I understand that and you understand that. But for some reason there are folks out there that think Dems are the answer to their prayers as far as the economy is concerned. If I was still working in the Defense industry or any private sector business. I would be real nervous right now and stockpiling cash and reworking the resume like their was no tommorrow.
their=there
Like all the problems in the economy would have gone away if the GOP had been re-elected? Come on off it. They (and I include Greenspan in “they”) are responsible for this mess in the first place.
I agree that the Democrats don’t have the answers, but that’s because there aren’t any answers. The US cannot finesse itself out of this mess.
Dems, Reps, they is all gonna screw it up, right fine.
OOPS, got that wrong. It was all screwed up to begin with. We are going into a deep recession regardless of who does what. If they started in 2004, maybe 2007 might look OK. But neither rep nor dem is gonna be able to fix a damn thing. Not Hastert nor Pelosi, not Reid nor Frist, not W nor Bernanke.
I submit that divided gubmint is good. It slows the politicos down, like shackles on a prisoner.
GS Posts ” So I would guess that tighter lending standards will be on the way soon, to protect unsuspecting unsophisticated buyers from the evil lenders who are trying to get them to buy unaffordable homes with suicide loans.”
I think you are right, but too bad the toothpaste is all ready out of the toob.
“Like all the problems in the economy would have gone away if the GOP had been re-elected?”
Yogurt, I don’t want to get into a political debate here. All I’ll say is that no where in my post did I say or imply that the problems of the economy would be solved by a GOP mandate. I make no apologies for your inference of it.
Dems are more likely to see the need for regulatory oversight of the lending business than were their deregulation-crazed Republican predecessors. So I would guess that tighter lending standards will be on the way soon, to protect unsuspecting unsophisticated buyers from the evil lenders who are trying to get them to buy unaffordable homes with suicide loans.
You’re probably right on that GetStucco. However, even though tighter lending is needed and would be a good thing in the long run it would (and I know you know this) immediately tank the market. People can afford to buy these inflated prices with 20% down and standard 30yr fixed rate.
If the screws are put to lending housing is screwed. If the rates jump even a few points housing is screwed. It’s painted itself into a corner.
The Dems may rather have the ship sink more quickly if it is sinking anyway, as the longer it stays afloat, the more low income buyers get sucked into buying homes that will eventually lead them down the path to debt serfdom then bankruptcy. Wouldn’t a typical Democratic politician enjoy the bragging rights to having saved low income buyers from this new form of predatory lending?
GS, don’t forget that one decent thing Bush tried to do was rein in Fannie Mae and Freddie Mac as far as portfolio growth. It is fairly widely expected that the Dems will back way off as their buddies run the show there and it has always been their sop to the proletariat to show that they were working for them to promote homeownership among the masses. If it turns out otherwise, I’ll be very surprised.
The Congress will go for more loan regulation and thus tighten the loan quals. That will wipe out the number of potential buyers out there who can get a loan for the current house prices, driving down prices.
The Dems are reported to be all for an increase in the minimum wage. With unemployment low, an increase or threat of increase in the minimum wage will be inflationary causing the FED to keep the interest rates up. That will reduce the number of people who can qualify for high prices, driving prices down. That will also keep the screws to the ARM holders till they are forced to sell or go into foreclosure.
The Congress will hold hearings on real estate fraud/abuse and nail some hides to the side of the house so to speak. That will cause those in the business to get real careful, making it difficult for marginal buyers to execute a purchase, driving down prices.
Some of my real estate “friends” on the radio today were discussing bridge loans where the first payment is not due until after 12 months. SOOOO. . . . you get the bridge loan to step into a bigger and more expensive home but don’t need the contingency of having to sell your present home to get you into the new one. Huh! So, you’re not stressed about selling the old home and take your time to stage it and otherwise goof around in selling it. Come a year down the road you won’t be able to sell the old home because of the further drop in prices. The mortgage industry has NO boundries in how far they will go to extend this. . .
“The Congress will hold hearings on real estate fraud/abuse and nail some hides to the side of the house so to speak. That will cause those in the business to get real careful, making it difficult for marginal buyers to execute a purchase, driving down prices.”
This has a ring of truth. If the Dems are whatsever clued in to the situation at hand, the change of congressional leadership will be accompanied by a move to nail down culpability for the housing bubble before they reap the fallout. The alternative going forward is for legions of low-income buyers whose suicide bomb loans blow up to pin the blame on whomever happens to currently occupy elected office. A pre-emptive first strike is the antidote.
What the hell was that guys reasoning for that? Is Nacy Pelosi going to pay his mortgage for him?
You can bet on a Dem sponsored ” Mortgage Debt Moratorium” when the SHTF.
Of course ALL taxpayers will foot the final bill.
So what’s another couple trillion in debt to the 65 already coming.
I don’t think either party will bail out the FBs. Congress was run by Democrats for 40 years up until 1994. They didn’t act to bail out the FBs during the prior RE boom/bust cycles, and there’s no reason to now. I don’t think the majority of us who played by the rules would stand for it.
You are absolutely right about the no-bail out, Lou. I’m not sure it’s because the majority wouldn’t stand for it, though. What we have is this country amounts to a global Oligarchy, where the ruling elite divide and conquer the people for their own gain. The concept of a representative republic (as well as a strong middle-class) has been pretty much destroyed. The ruling elite won’t bail out anybody because this whole bubble/bust is going to be great for them - it represents another opportunity for a giant land/power-grab.
I would go as far to say that the whole RE bubble was engineered by the evil Central Bankers of the world for exactly this purpose. What better way to ensure that all of the land is essentially owned by the banks than to fabricate an RE mania, suck all of the FB’s and GF’s in, and then pull the rug out from under them with increased regulation and/or higher rates? Most of the population will just become poor paupers/serfs, never having the money to buy land again. Then the banks will transfer the property to strong hands for a song.
Now, whether this scheme was devised by a foreign government (China, Russia, etc.) or by our own home-grown crackpots is debatable. Maybe it was a combination.
I don’t think either party will bail out the FBs.
She didn’t succeed, but my local rep in CA, Anna Eshoo (who is generally a decent person), proposed legislation to let greedy dotcommers off the hook for their AMT (Alternative Minimum Tax) on discounted options after the dotcom crash.
If the Democrats would try to bail out people with dirty dotcom-dollars who tried to engage in a complicated form of “tax reduction” speculation and lost, I’m sure they’ll try to bail out “Mortgage Mommy” and “Harry Howmuchamonth.”
Have we forgotten that Frank Raines (Dem) was in the Clinton Adminstration then CEO of Fannie Mae… His take on the housing market are very much in line with the NAR.
I ask myself this — which of the 2 political parties is going to stand by and watch the housing market explode on their watch, without a bailout?
the demomcrats (Who control congress)? or the republicans (who control the presidency)? so wait until the “housing relief act of 2007″ flies through congress and lands on the president’s desk. do you think the pres. would dare to veto it. Cause if he did, and the economy tanks, then the republicans can kiss congress and the presidency goodbye for a long time.
37 Democrat Senators voted for the new bankruptcy law. Those that think the gov will bail them out are going to have a long wait.
What’s the matter badger boy? Do you need to get bailed out or something?
And how would this hypothetical “housing relief act” read? Would it tax renters to help pay the jacked up interest for the FBs who took out ARMs? I cannot imagine any way a “housing relief act” will not rob the irresponsible to pay for the speculators. It would spark a revolution, at least among people like us bloggers who know better.
no, I actually rent, and looking to buy when rent costs more than a mortgage. I would love for that to happen tomorrow. especially in phoenix. But, the cynic inside of me says no it won’t.
And besides, someone has to fall on the MBS gernade. Historically, that has been our good old uncle sam.
Well, then you haven’t been paying attention over the Mish Blog. Inflation will not save the FBs. Because that’s the only way the FBs can be bailed out, it’s too much for handouts. Inflation will not happen. The FED cannot allow it or the country is truely screwed. They’re going to have to let the FBs and MBSs burn…no way around it.
You’ve got it. No FB bailout is fiscally possible. They are toast, and the pols know it. Any attempt to save them will just take the whole country with them.
As a previous poster noted, the Dems will just do a lot of finger pointing to show (correctly) who was responsible for this mess. And just maybe, legislation may be passed to prevent a similar debacle from happening in the future.
But the most likely scenario, IMO, is that the FBs are left to fall on thei swords, and the Gov bails out the banks. We can lease millions of poor sucker dangling, but we can’t afford a banking crisis.
So the question goes back to the question that’s been asked so often on this blog…..Where is the money?
If it’s in pensions, God help the Baby Boomers. If it’s in hedge funds, God help the rich. If it’s in China, God help the Chinese. If it’s spread all over the world, we might be OK.
Follow the money. Where do those MBS actually reside?
badger boy wrote “no, I actually rent, and looking to buy when rent costs more than a mortgage. I would love for that to happen tomorrow.”
Don’t hold your breath: with so many vacant homes, the rents will come down along with home prices so you may have to wait awhile before you see rent becoming higher than mortgage (esp. if the interest rate goes up). Make sure the difference is very high (not just 5% or 10%, maybe 20% or more) since recent homes will require a lot of repairs and maintenance (see the previous post/thread about shoddy homes).
The Democrats were elected for the singular purpose of getting us out of Iraq, fast. If they fail at that, they will fail in 2008. Everything else, though very important, is secondary.
I agree with this. Their mandate is pretty obvious and they better get to it in a dramatic way.
I don’t think that the housing falling apart is going to hurt them between now and 2008. It will just be one more woe heaped on Bush. If the Dems win the White House 2008, then maybe they would be stupid enough to address housing with legislation, but by then it will be to late.
Don’t forget, last time with the savings and loan fiasco they went out and helped the “institutions” not the little guys. They saved S&Ls if they could and administered a quick coupe de grace to the doomed. The on thing the “people” got were a few well publicized “circuses ” like the Keating trial.
Right on imploder .
Thank you. I have read you for almost a year.
You are a member of the “dear school” as Benny Franklin once said. You are quite wise and measured in MHO. Your children and grand children would do well to listen to you. Sorry if I busted you out. It’s my way… PS I am not a computer. (despite what my ex wifee says)
“The Democrats were elected for the singular purpose of getting us out of Iraq, fast.”
Very few Americans have any connection with the military these days; it’s the economy!
The middleclass voter is backed up against the financial turn buckle, and the hits just keep coming. The rate of increases in the cost of housing, transportation, education, and healthcare have exceeded the rate of inflation during the past five years to the point where the savings rate has gone negative. People vote with their pocket books, and this past election is just a taste of what’s in store for the incumbents. Historically, the American middleclass has been very generous…as long as they are comfortable themselves. Today, the middleclass is not comfortable; stagnant income growth, outsourcing, poor healthcare and pension benefits, illegal immigration, etc. have taken their toll exhausting voter patience. And there are few solutions that won’t drag the economy further in the red, i.e., we are simply rearranging the deck chairs on the Titanic. IMHO, it’s game over for many folks who thought middleclass membership was an American birthright.
I agree somewhat. This immigration schmoozing by GWB was certainly an eye opener for me. I did not vote this election (moved my base home address from California to Phoenix October 31). But I was intending to vote for J.D. Haworth if I was qualified in AZ, I would have voted for Jon Kyl. I contributed hundreds of dollars to several candidates all over the U.S. who stood against illegal aliens. I contributed money to Jon Kyl’s re-election too. If the Presidential election were held today and somehow GWB could run, I would vote certainly for Hillary if it looks as though we’d have a Republican Congress. Otherwise I’d vote for the Libertarian Presidential candidate and a mix of Republican and Libertarian congressional/state candidates.
The Dems will get us out of Iraq. But they will fail, in that Al Quaeda will take over Iraq and combine with Iran. The Islamic revoulution against civilization will use the new congress as their catalyst. The pullout will be Al Quaeda’s victory. Ronald Reagan warned us about the effects of weakness. Peace is through strength.
I just wanted to comment that this is the most civil online political discussion I’ve seen in a long time. Well done.
And on topic, I have heard that one of the Democrat proposals is to revamp or remove the AMT. Any thoughts on this?
The one comment I have on the subject is that in an inflationary world, it seems really stupid to me to put hard dollar amounts on tax proposals and no easy way to revise them. “Bracket creep” indeed.
Destroy the AMT. I do not believe in a secondary stealth tax system that has outgrown its usefulness. The AMT was created in the late 60’s to tax a few very wealthy individuals who paid no taxes due to extensive loopholes. The loopholes are gone but each year more and more people fall into AMT because it is not adjusted for inflation. (Although each year Congress temporarily sets an inflarion-adjusted minimum. If they stop doing this the vast majority of us will fall into AMT instantly.)
State income taxes should be a write off. Property taxes should be. Large expenses for work that extend 2% of your income should be. Children should be. All the exemptions and deductions lost ONLY because some arbitrary income level is reached (like $60,000 for a family with ten kids) should not be lost.
The tax code is too complicated. The first way to simplify it is to only have one tax system. It won’t happen - soon we will raise more money from AMT than from the traditional system - but it should. Of course, one tax system means politicos can’t proclaim tax cuts knowing a lot of the “cuts” will be recovered with a very poorly understood secondary system.
“…large builders currently are on hiatus – not committing on new lot deals,’ said Mr. Wilson. ‘There have also been some significant layoffs with many of the building firms as well – indicative of a more long-term issue than just a blip.’”
Here’s another symptom of the slowdown; halted condo conversions turning into drug slums:
http://www.miami.com/mld/miamiherald/15989685.html
“As the condo market cools, what happens to projects that haven’t broken ground yet? Portico in Miami is one of those. The Cameo Apartments still stand on that site, occupied now by vagrants and drug addicts.”
What a scary place, sad too.
1825 NE 4th Avenue. Welcome to America, sophisticated $1mm tower condo buyers from Europe and South America. These are your new neighbors. You’ll enjoy meeting them on your stroll over to the trendy new Performing Arts Center.
This article here seems a total spin job:
http://www.reviewjournal.com/lvrj_home/2006/Nov-11-Sat-2006/business/10718633.html
Most of the important numbers in the chart don’t seem reassuring to me, yet the article itself tries to act like nothings wrong.
This may be a classic case of the denial phase.
That photo is sadly reminiscent of Mokhattam Hills, the Coptic Christian “exile” community on the outskirts of Cairo, Egypt. You haven’t come close to experiencing bone-deep discrimination until you’ve visited that place. And there are much worse, though not on the tourist trail.
Thanks for the link
Were I in biz in LV, those numbers would scare me. Lots more people getting jobs. Marginally more visitors coming, spending up a couple of percent over inflation, gaming income down, RE down in a big way.
How blind, dumb, and deaf a sheeple do you need to be to believe David ‘Bozo the clown’ Lereah?
Eight pct of you will be fired next year… prices are falling and at best flat-lining… sales are plummeting… buyers disappeared… we need a price decline… but, but, it’s all good.
‘There will also be fewer real estate agents. ‘We are actually predicting an 8 percent drop in membership,’ Mr. Lereah told Realtors, who enthusiastically applauded the news.’
I wish I had a video of that..
And the rest of the world will clap when it’s a 80% droo in membership .
I mean drop in membership . Wow ..I just woke up from a dream . I was traveling through a desert were a bunch of tall sand castles have been built to honor the sand people but the tent people didn’t like it . The tent people were out for blood . I was looking for a place to hide when I saw the tent people and the sand people partying . One said ,”eat ,drink ,and be merry ,for tomorrow we shall die “.
I woke up from the dream,turned on the computer and I saw this thread .
Dude, you’re still dreaming…
Right , I wish I could wake up from this bad dream .
Timothy Leary song playin all the while. Sounds like a bad trip.
No just a weird dream . No big deal .
Only 8%, Nah, it’s going to be more than that. 8% have probably already dropped out. I was speaking to a guy earlier in the week who said when he sells his last listing he’s getting out. He’s got 2 left and not even trying to get new business. I think NAR is going to be in for a real shock when dues paying time comes around.
“We are actually predicting an 8 percent drop in membership,’ Mr. Lereah told Realtors, who enthusiastically applauded the news.”
Yeah! We’re all out of work!!!
It will definitely be more than 8% and the drop in agents will coincide with the drop in prices.
My realtor wannabe relative just learned the agent she listed her second for rent specuvestment home with got fired. The agent’s been fired for weeks and has not been marketing the property. It’s approximately 3 months since closing and the tenant search has to start anew.
LMAO when I heard the news b/c my relative is completely oblivious to industry and market trends; she does’nt even read the paper; nevertheless, she is actively searching for a 3rd specuvestment home.
Thanksgiving is going to be very interesting this year. I’d serve crow but she is so oblivious she would’nt know I was dishing it. God help the gullible greater fools out there.
Try serving “squab.” Sounds fancy, but it’s pigeon — a flying rat.
Just serve crow.
She is unable to sell or rent the properties she owns.
Therefore, she has become what she had hoped to be:
an “investor”.
Congratulations!
It is usually only during the holidays that family members get together and talk about what is really going on in their lives. This is also the time when they brag about how well their investments and doing. When the discussion turns to how bad they are doing this year, and they here the reason why, coming from their brother in law, whom they trust, they will start to believe where we’re headed next year. DOWN.
Perhaps it would be better for the economy, to just cancel the holidays this year. Or maybe our relatives will be sitting around the Thanksgiving table talking to someone on their cell phones, instead of talking to each other, and hearing to the bad news. Selective listening is now the norm, so I can actually picture this happening. Social ramifications of the cell phone society.
‘There will also be fewer real estate agents. ‘We are actually predicting an 8 percent drop in membership,’ Mr. Lereah told Realtors, who enthusiastically applauded the news.’
David’s farewell call to his newly unemployed constituents:
“So long, suckers!”
Its good to see others in the business dont buy into NAR shill
Got this off http://davidlereahwatch.blogspot.com/
Lereah from Peter Schiff, the bearish president of brokerage firm Euro Pacific Capital, http://www.europac.net). It was emailed to me by his brother and publicist:
“If the National Association of Realtors chief economist David Lereah had covered the arrival of the Hindenburg in New Jersey in 1937 (instead of Herb “Oh the Humanity” Morrison) it too may have been described as a ’soft landing.’”
The NAR ads are just a big set-up for people to argue over what 25% of the country is going to tank verses the 75% that doesn’t according to DL. The problem with DL predictions is it sets the stage for local realtors to spin why the area they sell in is part of the 75% that will see gains next year .
When have you ever heard a corporate leader tell his members that a membership loss was forthcoming and then the membership applauded?
Ad appears once again page k5 this Sunday’s LATimes.
In big print.
“DON’T DELAY”
“now is a great time to buy or sell a home.”
Listening to Bob Brinker as I type. Four or five reports due out this week, he expects to be all negative.
If LA is one of those ‘hot boom’ markets and prices are expected to fall, why run the ad in that market? Don’t the facts on the ground and DL’s own statements completely contradict the claims in the ad?
It could be a bribe to the media a 40 million dollars bribe.The newspapers will be afraid to run negative stories on the re crash.Dont bite the hand that feeds ya.
Catch where Brinker got all infuriated at a caller questioning the Fed Reserve’s basis? I wish more people were interested in money beyond the cha-ching.
Has he changed his “buy signal yet”?
What’s his advice for the poor shmucks he told to buy the QQQ in 2000? They’ve never seen their price since.
He “forgot” he said that. LOL
I enjoy listening to him though as he loves to argue with everyone.
Brinker missed the housing downturn and now tries to act like he saw it all along. He could care less about the middle class, as long as Fed keeps interest rates low and the market climbs.
He sure did. Callers bugged him big time in Early 2006 and he BRUSHED them off as “nervous nellies”. Now he claims he “knew all along”.
Brinker had Robert Shiller on his show. Shiller called for a 40% decline while brinker said he saw it more at 25%… this was around mid 2005 as I recall.
He probably tries to avoid those callers. Once again, fallible like DL. That is why we need more than just one testimonial expert when it comes to money. I learned the hard way about backing up the truck long in momentum and bounce markets. Things are pointing to recession. Of course, I am no expert, but too much smells of BS. I am a horrible market timer,so take that for whatever it is worth. Still, when bullish solicitors tell you that you are a fool to not use credit, I side with prudence,patience and wait-and-see attitude.
I know two people who are Bob Brinker cultists. I was to the point of being so sick and tired of “Bob Brinker says to do this…” that I googled “Bob Brinker reviews cult.” I came up with a blog site that discussed the QQQ thing, and some bloggers even said they confronted BB on issues such as that, but he basically censored them from his web site. I told one of the guys what I discovered. He only says that he profited because of BB’s advice. Oh well! I have always been out of step with what the crowd thinks. I’m very socially liberal, by no means religious, very fiscally conservative, and very hawkish on defense and RKBA. I laugh when people call me a Bible thumper because I tell them I voted for GWB in ‘04. But I digress. I’m just a big skeptic on investment gurus.
Bill — and we know that you’re really libertarian at heart. Fess up. It’s not nearly “all about” Mary Jane and you know that.
Chip, many pundits wrongly think Libertarian Party candidates attract only marijuana advocates. You and I both know there are serious scholars (present and past) in the libertarian movement. And what about the Reason Foundation and Cato Institute? They write respectable Op-Ed pieces in news media all over the nation. I only fell out of the LP based on their stance on defense.
Brinker has 20 years on the radio, and propbably another 10 years experience before that. During the last 30 years fortunes have been made in the stock market and real estate. Yet, here he is on Sat and Sunday afternoon working.
I don’t get it. How could he not be retired living on his boat
with all his great knowledge of investing? I’d say the same about Crammer. Why are they still working???
Add to that list Robert “Don’t Call Me Bob” Kiyosaki.
Most likely a big ego. People love to hear themselves. I’m sure Cramer is a millionaire many times over from his show and his days scamming on Wall Street, but now he gets to show his ugly mug on TV and shoot off his stupidity for the world to hear
I listened to him in January 2000 and got out
during the year. I didn’t follow his advice on the Qs as my technical analysis said that he was wrong. He was dead on right in 2003 and
has been right up until now. Those that followed his advice in 2003 are up 80% in the Spoos. I stopped listening to him sometime after the Q’s debacle. Wish I would have listened to his call. I did fine on my own with gold, silver, oil and ng but
I had to work at it.
He can sound quite conceited. But he has been right much more than he’s been wrong.
Hey Michael,
Just a newbie question–re gold. Do you buy mining stocks, ETFs or do you take physical possession–coins or bullion?
Check out the yield on PCU (copper producers). 10.10%
RE: spike66 & Gold Query
I like this site. Check out as many sites as you like. Buy what you feel comfortable with:
http://www.1stmillionat33.com/
~Misstrial
“It’s a buyers market” is what I’m hearing, I’m noticing offers being made at 80% (and dropping) of listing price. Some sellers are offended, but most are not and are willing to negociate.
Thanks,
Brian Nygard
Team IllinoisRealEstate.com
RE/MAX GRAND
http://www.illinoisrealestate.com/
http://www.illinoisrealestate.com/forum/
http://www.illinoisrealestate.com/blog.html
CRE — thank you for an honest assessment of the market from a Realtor’s perspective. Though this blog is reliably, and fairly, hostile to REIC hype, I, for one, think we should welcome posts from brokers/agents who see the world through the same general lens as we do. IMO, as an individual poster.
Some of the best posters over time have been REIC involved. Deb, Boulderbo, NNV, and others lend a real prespective.
The worst posters have also been REIC involved. They typically post blowing sunshine and rehashing the NAR talking points. No facts, no links, no on-the-ground viewpoints. These guys get nuked in about an hour.
“Lereah said the national picture is positive. ‘I’m optimistic for 74 percent of the country,’ where local markets are, at worst, flat. The other 26 percent are in for some rough times.”
How many buyers are going to rush in for a “flat” asset or risk “some rough times” with hundreds of thousands of mortgage debt? Why even bother??
‘Don’t be afraid of prices coming down,’ Mr. Lereah said. Tell that to everyone who is strapped to the gills, little or no equity, with an ARM about to reset in 2007.
“Lereah said the national picture is positive. ‘I’m optimistic for 74 percent of the country,’ where local markets are, at worst, flat. The other 26 percent are in for some rough times.”
Classic manipulation of stats. He talks this way giving every market equal economic weight. By his own previous admissions the Boom (expected to suffer the crashes) markets are Cali, Florida, Boston…etc. This 24% of the Markets account for 60% or 70% of the country’s economic productivity. When those markets have a “rough time” it will ripple through the entire country’s economy. And the “rough times” have just barely started.
Wait till the ARM’s start resetting in earnest next year. When Southern Cali starts to crumble then the Mainstream Media will really get on the bandwagon. After, this is TV Headquarters, and They will be getting reamed just like everyone else.
“Lereah said the national picture is positive. ‘I’m optimistic for 74 percent of the country,’ where local markets are, at worst, flat. The other 26 percent are in for some rough times.”
I love the Kafkaesque 74%/26% fake precision. It’s a wonder he didn’t take each out 3 decimal points.
actually many of the supposedly non-bubble areas are showing weakness also. Including Indiana, Ohio, Texas. These areas are more sensative to the local job market and the auto industry is having difficulties. In comparison, (by some measures) the most desireable parts of california are holding steady in price.
The conventional wisdom was the most expensive places would decline the most, but in reality the lower cost places are decliing first.
“Lereah said the national picture is positive. ‘I’m optimistic for 74 percent of the country,’
Yeah, the 74% with no houses on it.
You are so right. DL says “Struggling the most would be California, South Florida, Arizona, Nevada, and metro Washington, D.C., he said, where sellers need to lower their prices.” That is where about 50% of the housing is being built these days. If those markets are being decimated, wait ’till the news spreads to the rest of the nation, where there is no demand anyway……
That’s interesting only because I would have thought that the potential ad revenues produced from such a large inventory would prompt RE sections to get more pages with roughly the same number of articles interspersed. Has the market gotten so bad that there is a lack of buyers with cash on hand to market their property?
Oops, that was intended as a response to Ken’s post.
My thought exactly! (See my post below, which I wrote before seeing yours.)
FYI Ben,
That Tribune article appeared in today’s biz section because the Trib has now stopped doing a Saturday RE section. For the last several years they’ve been doing both a Sat. & Sun. RE section.
Hmmm…
Downsizing of staff too?
Probably. The Trib Corp is hurting in a bad way. Lost of talk of it getting sold or selling off pieces.
You know it’s bad for them when there’s talk of selling off the Cubs. That’s their only consistent money maker.
There was a Saturday real estate section today. It is a “New Homes” section. They have had it for years. It is, however, generally a r.e. cheerleading section. They save the bad news for the Business section.
Couple of images from Dallas via my favorite realtor (these guys are actually ok)
http://www.davidgriffin.com/index.aspx?List=2985&Area=4&Agent=159&Link=25&id=ctrl/Detail.ascx
this one was hawked on Craigslist a few months ago. Obviously whoever was building it ran out of money. In Oak Cliff. The price is la la land. They’ll be lucky to get 70% of that to finish it out
This one has had TEN open houses in a row, every weekend. No bites. He can’t rent it either. So after all this, he reduces the price. Wanna guess how much? 4K. Open again tomorrow.
http://www.davidgriffin.com/index.aspx?List=2795&Agent=46&Area=5&id=ctrl/Detail.ascx
No bites after two open houses and a 10% price reduction (from admittedly a ridiculous price). I still think this will sell at 300K even or a little less
http://www.davidgriffin.com/index.aspx?List=2933&Agent=159&Area=5&id=ctrl/Detail.ascx
The crazy thing is putting a $1+ million home on a 1/4 acre lot in Texas. I just don’t get that. Remember when anything less than a 1/2 acre was considered small? - and that was with a modest 1200 sq ft house. Why not at least double the lot size - or, who knows, maybe that already is a double lot? What’s the land underneath that pup worth, anyway?
I like the blue one….I’ve always wanted to live in a grain solo, or an ore stamping mill.
“DON’T DELAY”
“now is a great time to buy or sell a home.”
NAR puts on full-court press, inventories decrease by a percent or so as sales increase by about a percent… How about this ad campaign;
‘Looking to REALLY screw up your life? Now is a great time for a dead-cat bounce!’
Yep , if the cheerleaders don’t get a rally going now they will never get a rally going . Bad time for advertising home buying but the target is the first quarter of 2007 .
“Lereah said the national picture is positive. ‘I’m optimistic for 74 percent of the country,’ where local markets are, at worst, flat. The other 26 percent are in for some rough times.”
He must be talking about geographic area — about 26 percent of it has homes built on it, and the other 74 percent is open space.
Well its really a load off to know that polar bears and desert rattlesnakes will weather this market fine, or at least until the delicate balance of their ecosystems are ruined by global warning.
stop it, this is blaphemy
I’ve got one word for you; Bearpigman…
Assume DL is correct about 74% having “flat” prices. How many of them are in Neg Ams, I/O’s or ARM’s?
It seems like Carol Lloyd may be trying to curry some favor with the bubble blogs after her getting savaged for a large number of her pollyanna’ish articles.
One thing to remember, journalists get paid for readers and nothing gets readers more than stirring the pot.
Honest journalism also results in a post on bubble blogs, which results in more eyeballs taking in the ads on the SF Chronicle web site. Accurate reporting on the housing market bust sounds like a great new business model to me.
GS –you’ve got it right. They’re seeking and we’ve got it.
Exactly. I said it months ago when Jon Lanser first reached out to this blog. The MSM would eventually have no choice but to start reporting on the bubble truthfully. Either that, or they would lose all credibility after the SHTF and people would be wondering why they hadn’t reported on it sooner.
JWM in SD:
That was pretty close to my thought.
Carol Lloyd - reaches out to the bubble blogs.
Alan Gin - was supposedly posting on piggington.com
Jon Lansner was the first with the most backbone to engage Ben’s blog directly.
Do you think this blog is actually beginning to wield some influence in the media? I think we’re beginning to see signs of that.
JWM –
The question you raise is rather tricky to sort out empirically speaking. For instance, when Krugman recently wrote his NY Times piece on the stages of housing bubble grief, we have no way to tell whether he took that idea from our numerous posts on this subject, or from his own independent sources.
My wife and I just were talking about this housing bubble. She started off saying “It is like little pop, pop, pop, and pop.” Then I said, “This housing bubble is like a nuclear explosion.” Then she finally said, “It is like the Hindenburg disaster. The housing market is flying high and then it will come down in a fiery crash.” I laughed so hard, I almost fell out of my chair.
Some of the major homebuilders have walked away from multi-million dollar deposits on land, so clearly they don’t believe the crap about things picking up in ‘07 or ‘08. They know it’s over and done; it’s only NAR shills like David ‘Bagdad Bob’ Lereah who are ludicrously trying to breathe life into this dead horse.
When I rented, for the first time since college 40 years ago, I thought it would be for one or maybe two years. Nope, the decided economic benefit of renting will last for many more years.
“‘In 2007, it will be a flat year, maybe 1 percent [sales] drop, and that’s it,’ Lereah said. ‘After 2007, we’ll be back to expansion again.’”
Somebody needs a Reality Check. I suggest DL go back to his own powerpoint presentation of August 2006 and find the slide that shows that every other real estate bust in the history of the USA lasted at least four years.
“‘Don’t be afraid of prices coming down,’ Mr. Lereah said. ‘When prices come down, it brings back buyers. If they see sellers are more flexible, they are more apt to come back to the marketplace.’”
It seems like there is a good chance a buyer could “get stucco.” What if somebody bought a home at a bloated price (say, $500K+) and then prices dropped by, say, 20%. Wouldn’t they have just lost $100K? Or are Realtors (TM) or maybe builders offering price loss insurance these days as a purchase incentive?
I saw the first open house in our subdivision today. I know that most of ya’ll see these all the time, but this is a first for me, especially so close to home. The agent was an older woman, heavyset, and I felt kinda sorry for her this morning as I saw her pounding the signs on the busy median leading to our subdivision. (And good for her - unlike most bandit sign weasels, she went back later this afternoon and removed the signs.)
I don’t think she had much traffic, and as she was removing the signs she didn’t look too happy.
Lou,
I love your YouTube vids you’ve made. Very good!
I got this today through my realtor updates. Interesting
http://nationalrealtynews.com/content/templates/standard.aspx?articleid=300&zoneid=1
Silicon Valley’s reported median prices appear to be holding up but we increasingly see evidence of manipulation of the data.
We see it in our own neighborhood:
http://www.viewfromsiliconvalley.com/id277.html
and also in reported county-wide stats:
http://www.viewfromsiliconvalley.com/id125.html
Keep checking
http://www.viewfromsiliconvalley.com for all the latest numbers and news.
Thanks!
A few new developments here in S. Cal.:
1. At a wedding today, the broker trying to sell a $2.2M. condo in Hollywood for my sister’s client, was basically crying to me that the market is worse than it’s been since the early/mid 90s, thinks she’ll have to drop the price to bring more “attention” to the listing.
2. House I’ve been following in Ventura dropped in price 50K (but still overpriced). Others I’ve seen dropping 50K - 100K, in the past month. Again, still overpriced, but headed in the right direction finally.
3. Broker that hasn’t talked to me in a year because she said my price targets were ridiculous is now calling me and e-mailing me daily, encouraging me to make lowball offers. Says the market is really, really weak.
That’s all for now.
3.
Glad to see your still posting after that last “womping” you received.
You are so irrelevant
Since the election, the I believe word is “Thumping.”
Good comebakc, BTW, lagirl
has there ever been a 10-15% RE price decline w/o a recession ?
California RE prices declined 15-40% in 1991-2…while rest of nation was rebounding. In So Cal the Aerospace industry went under due to end of defense cut backs.
No Cali was different, there was no impact from defense cut back. Starting in 1988, we got killed from Japanese and Euro industries killing us with cheaper commercial products. Layoffs sky rocketed and home prices declined. It was pretty bleak… everyone in SV really hated G Bush for not stopping the Japanes from dumping their tech products below cost.
Where or what is “SV”?
Silicon Valley.
“The Washington Post. “There’s a bright side to the decline in the U.S. housing market, says the National Association of Realtors: plenty of choice.”
This is the dark side of the US housing market. More choice = more supply = lower demand = falling prices!!! Is it at all possible for anyone other than me to utter the words; Wealth Destruction?
How about Credit Destruction? I like that one better.
Me like “Thumping!”
So what’s that supposed to mean??
It’s a play on a comment Bush made the day after the swing of power in Congress.
For some, it’s too unbearable to even think about.
OT, but of all the stupid…. Ugh!
Trump’s Hotel-Condo in Hawaii Sells Out (to be finished in 2009)
http://articles.news.aol.com/business/_a/trumps-hotel-condo-in-hawaii-sells-out/20061110214309990004
BayQT~
Proof that we have not yet run out of people with buckets of money and boxes of stupid.
Hey ’stucco! Trade you what I got in my box for what’s in your bucket.
I don’t have much in either to trade…
Trup is just pushing this box of junk so he can keep his cash flow going. Once they find out the property is not worth what they paid. They will be after Trump.
The HB buys a cow pasture in America and the local city council( full of local ranchers etc) does a rezone so that commerical or SFH can be built. Now the HB balance sheet looks even better because that raw ag land now is rezone SFH and worth tons more. A few years pass and the HB cancels the land options and the development.
What happens to that cow pasture that has become rezone? If the owner took a option from the HB then he is stuck with a cow pasture with a higher tax rate, if the HB actually purchased the property outright then they have to do a write-down.
The property that the HB are dumping back on the market will create nothing but problems for the RE industry.
Inflation about to take off the next few years. The only way inflation was kept in check after Nixon was through imports from countries with increasingly cheaper labor to offset the increasingly cheaper USD. First, it was Japan. Then came Mexico, Taiwan and Korea. Now it’s Eastern Europe, India and China. There’s nowhere else to go for cheaper labor. Africa and Latin America are too unstable. Now that the chinese and Indians are demanding better wages and living conditions, the cost of their products and services will also increase.
I remember when it was about .60 USD to 1 Canadian dollar. Now it’s almost even.
“I called the NAR to get a more thorough explanation as to why they launched this campaign. ‘We believe people aren’t aware of the realities of the marketplace,’ explained Steve Cook, VP of public affairs. ‘There’s been a lot of negative media coverage, and a lot of people are missing the boat.’”
“‘In the sense of buyers, right?’”
“‘In the sense of sellers, too. They are related. Sellers need buyers and buyers need sellers. They both need to work together.’ Cook then suggested that since inventory is constricting, it will probably become a better market for sellers. ‘But then it will become a worse market for buyers,’ I ventured.”
“There was a pause on the other end of the line. ‘Well, yes, but the most important thing is that interest rates are at all-time lows, that’s good for both buyers and sellers. Like the New York Times said, the stars are aligned.’”
Just re read this and consider how sad the NAR case really is………………why do we even take the time to debate it.
We don’t have a bubble we have a balloon that has run out of gas and the NAR are throwing out the last ballast………..it really is so sad…………when this current situation becomes part of history I can only hope it never gets repeated
I’m wondering if this ad, which ran for two weeks in the New York Times business section, violated any laws. Other companies can’t advertise investments as being “good” without significant disclaimers or explanations. As a group that represents people that are supposed to ensure honest and fair transactions, saying that a home is a great way to achieve “wealth” seems unethical if not outright dishonest.
Time for another letter to my state’s attorney general! If you have a few minutes today, write yours to see if any laws have been broken in your state with the wording on this ad.