May 14, 2007

Bits Bucket And Craigslist Finds For May 14, 2007

Please post off-topic ideas, links and Craigslist finds here.




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161 Comments »

Comment by jmf
2007-05-14 05:02:24

ECONOMIC FORECASTING SURVEY / WSJ
a good tool from the wsj with lots of topics like inflation, housing, gdp, fed, cpi, stocks etc…..

http://immobilienblasen.blogspot.com/

Comment by davidcee
2007-05-14 05:32:43

BS Housing Stats

The housing market has softened much more than is being reported. We have been advising our retainer clients for more than one year about misleading national sales information, both with the existing-home sales and new-home sales data. We are now going public with our concerns because we are concerned that policy makers are relying on national data to conclude that the housing market correction has not been severe.

Here is our support:

Closing Data: We purchase and compile actual home closing data for approximately 181 counties across the country, which captures the counties where about 55 percent of the U.S. population lives and a significant percentage of all of the counties where the large home builders are active. This data shows that sales have fallen 22 percent if you compare sales over the last 12 months to the prior 12 months. On a straight year-over-year comparison, the decline is much more.

Mortgage Bankers Association (MBA) Data: The MBA seasonally adjusted purchase application index, which is a measure of the number of people filling out loan applications to buy a home, is down 18 percent from its peak in September 2005. With presumably more applications being filled out by borrowers who now have to shop around for a loan, how could sales have fallen by less than 18 percent?

Builder Data: The nation’s two largest home builders, D.R. Horton and Lennar, are reporting that orders have declined 27 percent to 37 percent year-over-year. D.R. Horton and Lennar have dropped prices significantly in many markets to generate sales, while the resale market has not. How could their sales have fallen more than the resale market, even if new-home communities tend to be in fringe areas?

Realogy Corp. Data: Realogy, which is the parent company of Century 21, Coldwell Banker and ERA, participated in roughly 1.9 million brokerage-related transactions in 2006 compared with 2.3 million in 2005, representing a year-over-year decline of 18 percent nationwide.

2005-2006 NAR State Data: The National Association of Realtors state data does show sharp year-over-year corrections in major states: 28 percent drop in Florida, 24 percent drop in California, and a 28 percent drop in Arizona. Our data, however, shows the sales have probably dropped by 34 percent, 27 percent and 38 percent, respectively. The national numbers include some large states where sales volumes have not corrected substantially, such as in Texas and Ohio, but we believe these markets are not very healthy for other reasons. Interestingly, our calculations were tracking very closely with NAR data through 2005, as illustrated above. We did investigate NAR methodology and have found absolutely no reason to believe that the NAR is intentionally misleading anyone, as some have suggested.

New-Home Data: The Census Bureau calculation of new-home data does not calculate sales net of cancellations, and cancellations are running much higher than normal right now, which is why the sales numbers overestimate actual sales.

The preponderance of evidence shows that the housing market in vibrant areas where home building is prevalent has corrected much more than some people believe it has.

In summary, we believe that the Fed should know that the housing market correction has been quite steep and is also not showing signs of bottoming out, as evidenced by all of the above information, as well as significant additional research we have conducted. While the Fed has far more to consider than housing, it should know that the housing market could sure use some lower interest rates to help achieve stability soon.

Comment by Lou Minatti
2007-05-14 05:40:53

Lower interest rates won’t help. The only thing that will help is a steep drop in prices.

Comment by P'cola Popper
2007-05-14 05:45:04

Groveling for an interest rate cut. LOL.

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Comment by tcm_guy
2007-05-14 06:57:05

Or a steep increase in homedebtor’s income, like 2x or 3x income overnight. My wagering money is on the steep decrease in prices, though.

May the house of cards fold and get blown away by the wind. It will be interesting to watch.

Got 10% down?

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Comment by aladinsane
2007-05-14 08:08:40

Lower interest rates won’t help you

Lowering prices will do you no good

When the levee breaks, real estate ain’t so good…

 
Comment by ex-nnvmtgbrkr
2007-05-14 08:58:46

favorite Zep

 
Comment by Carmichael
2007-05-14 09:19:37

I second that! Keep rockin Aladin!

 
 
 
Comment by packman
2007-05-14 05:53:32

“Builder Data: The nation’s two largest home builders, D.R. Horton and Lennar, are reporting that orders have declined 27 percent to 37 percent year-over-year. D.R. Horton and Lennar have dropped prices significantly in many markets to generate sales, while the resale market has not. How could their sales have fallen more than the resale market, even if new-home communities tend to be in fringe areas?”

Sorry, but that one’s easy to explain - naturally as the demand for homes decreases, new home sales will drop faster than same-home sales. There are simply less people that can afford to live in a home now than previously, due to higher costs. With same-home sales high prices don’t have as big an effect because the net loss equals the net gain; with new home sales there is no net gain, there is only net loss on the part of the buyer.

The extreme case would be where there are 0 new homes - people could still sell and buy homes, they would just be selling and buying from each other. The price could be astronomical because everyone could afford to pay high $$ since they sell their house for high $$ as well. Obviously this the unrealistic extreme case, but the principle is the same.

Comment by Army No. Va.
2007-05-14 11:32:34

Not quite on the astronomical prices and everyone affording the homes…transaction costs, death and long term illness would incrementally move people out olf the market and new buyers couldn’t get in.

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Comment by Bill
2007-05-14 06:51:54

Who is posting this analysis?

 
Comment by cactus
2007-05-14 06:55:53

” it should know that the housing market could sure use some lower interest rates to help achieve stability soon. ”

In other words more inflation so we all have to panic buy now or be priced out forever

Comment by Army No. Va.
2007-05-14 11:36:51

The inflation isn’t likely to occur in home prices nor salaries. More likely to show up in stock prices, gold, oil, nat gas, other strategic materials, even art, numismatics, very special real estate (with historical or celebrity value like Mt Vernon or Elvis’ home), etc… The money is too concentrated in too few hands to drive tens of millions of home prices up. The people with the money don’t want that many houses esp in these lower quality newer built or middle classs neighborhoods (with a few exceptions - rich enclaves).

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Comment by BP
2007-05-14 07:19:18

Meanwhile inflation runs amuck elsewhere. My suggestion to the Fed would be to increase rates ASAP in order to put the housing bubble out of it’s misery so we can get back to normal housing prices. Pain now growth later.

 
Comment by irmaron
2007-05-14 08:42:55

“While the Fed has far more to consider than housing,”

And just why should the Fed consider housing now? During the sharp rise in housing prices the Fed totally ignored the rise in prices relative to inflation and now the Feds totally ignore the rise in food and energy costs relative to inflation too.

 
Comment by Army No. Va.
2007-05-14 11:29:38

Lower short term rates will raise long term rates! In fact, I’d like to see two to four more .25 point hikes. Might see 5%-5.5% 30 year loans again then.

 
 
 
Comment by oxide
2007-05-14 05:08:24

I know the 60 Minutes segment was covered a bit in the California thread, but:

The NAR says that they are not being monopolisitc. Their line is that they have the right to hold back the MLS because those are “their” listings. But, isn’t it the seller’s house, and therefore sort of the sell’ers listings? I think what what we’re going to see is two MLS: the realtor MLS, and a free public MLS.

And is a seller is smart, he’ll list on both, because folk are going to go to the public MLS first. Realtors are going down…or least they’re going to have to charge by the hour, like the rest of us worker bees.

Comment by flatffplan
2007-05-14 05:13:16

what do realwhores make in EU and what % of listings are FSBO?
answer alot less and it’s pretty high %

Comment by JA
2007-05-14 05:20:54

Flat fee broker? $10,000 a home.

Comment by Peter T
2007-05-14 06:19:53

10k? Pretty expensive for a 200k house. I rather use a discount broker who does only what I cannot do so well.

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Comment by nhz
2007-05-14 08:20:57

in Netherlands the standard commission is 1.6% (average home price 245K euro); used to be 2-2.5% fifteen years ago (when home prices were 5-10x lower). Despite this relatively low %, some realwhores (of course not everyone) get extremely rich within a few years, I know several who retired while still in their thirties. There are so many ways to make loads of money in RE besides the standard commission (all kinds of fraud with developers, flipping homes etc; authorities are totally uninterested in this). Keep in mind that most realtors here only sell homes that are within a few km from their office, and most sales are to people from the same area - that is a significant difference with the US situation. Over the last years many realtors have added portfolios of investment homes abroad (France, Spain, mediterranean coasts, Balkan, Eastern Europe, Dubai etc.). Customers usually don’t even visit these properties so I guess they make even more money on those.

FSBO is getting more important, but probably still a minor part of total sales (mybe 5-10%?). There is lots of advertising lately for cheaper sales models where the seller takes the pictures for the internet listing, shows the home to customers etc. Some of these work with a fixed basic fee (like EUR 800,- or so) where you can add extra ‘modules’ for things like advertising, appraisals etc.

 
Comment by speedingpullet
2007-05-14 09:06:40

I sold my late mother’s apartment in London last june, and the estate agent charged me 1.5%. For that, he took complete control - he only phoned me (at his expense) in Los Angeles to tell me the number and price of the bids, and again to tell me the place had sold.
For the roughly GBP 5000 he charged, I had to do absloutely nothing to sell the place. Being 6,000 miles away at the time - it was money well spent.

OT - saw the ‘60 minutes’ section last night…..OMFG….could the NAR have provided a more entitled, smarmy, uncomprehending example of their employees if they’d tried??

Every time she nodded her head and said ‘um-hum’ in that condescending and defensive tone, I felt like jabbing her in the eye with one of her complementary ball-point pens.

Her defense of her 6% seemed even more pathetic and unjustified when she was segwayed into the part on the couple who went FSBO - she was doing nothing more than they did to sell thier house, yet….printing out some color flyers somehow justified (in her eyes) the $26,000 the couple saved by doing it themselves.

You could see the 60 minute reporter’s mind boggle at finding out the very dodgy - if not outright illegal - machinations the NAR use in different states to keep realtors part of the game.

BTW - her Pacific Cruiser probably cost her nothing - many companies are happy to provide you with a car, if you’re willing to drive around town with a custom paintjob advertising their company - be interesting to see what she acutally drives ‘home’.

Unbelievable.

Comment by Sammy Schadenfreude
2007-05-14 16:15:04

Thanks for the comments. I didn’t get home in time last night to watch the 60 Minutes piece, but figured the perspectives in here would be the most informed and insightful, per usual.

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Comment by John M
2007-05-14 05:23:09

Best propaganda in the business :-)

“The Housing Market’s Great! (Or So Say Ads From Realtors): Category Jacks Outlay by 20.3% to Dispel ‘Myth’ That It’s a Bad Time to Buy”, by Mya Frazier, Advertising Age, May 14, 2007.
http://adage.com/article?article_id=116601

 
Comment by liwaiting
2007-05-14 05:23:33

You have to go to cbs.com and read the comments posted to this piece from some really pissed off realtors. Pretty funny stuff.

http://www.cbsnews.com/stories/2007/05/11/60minutes/main2790865.shtml#ccmm

Comment by Tom
2007-05-14 05:28:19

A comment from Riva Diva

I’ve seen the MLS entries of internet based real estate companies and because the owners are doing it themselves the information is incorrect and fair housing laws are broken. Realtors are not attornies but we have to stay up to speed on the laws including proper disclosure and fair housing. Even the marketing is poor. I’ve seen homes listed where the description is just plain vanilla for a home which had many many selling points which were not being highlighted in the on-line information, I’m sure causing it to be passed by in favor of something which sounds more enticing. Also, because the owners are not getting the right advice or perhaps only have their own advice to listen to, most times they are grossly overpriced. They are nothing short of a high tech FSBO (for sale by owner) and the mentality is generally based on greed - “saving the commission”. Statistically, FSBO’s sell for considerably less money than a home sold through a Realtor - so what is being saved? Nothing, except they have just driven the average price for the neighborhood down by thousands of dollars. And if they are purchasing same on the other end of the move, they may be getting a bargain today but again, they have just de-valued the home they just purchased.
Posted by rivadiva1 at 07:50 AM : May 14, 2007

YES! you just devalued the home you are purchasing today. Now you have to pay less in taxes. So to avoid this, you should use a Realtor so you have to pay more.

2007-05-14 07:00:07

“I’ve seen homes listed where the description is just plain vanilla for a home which had many many selling points which were not being highlighted in the on-line information,…”

Train tracks running through the back yard…”Close to public transportation!”

Ravaged by Katrina…”A handyman’s dream!”

Once great, now blighted area…”Historic community!”

Hey, I qualify to be a realtor!

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Comment by hwy50ina49dodge
2007-05-14 08:37:30

LOL.

Don’t forget:
“…and there’s a Starmucks just around the corner.”

 
Comment by Bronco
2007-05-14 09:41:15

you mean Starbunks

 
 
Comment by ronin
2007-05-14 07:04:48

>>>most times they are grossly overpriced. They are nothing short of a high tech FSBO (for sale by owner) and the mentality is generally based on greed - “saving the commission”.

>>Statistically, FSBO’s sell for considerably less money than a home sold through a Realtor

So although FSBOs are overpriced, they sell for less than a house using a realator. Which is it?

An if the spread of selling “less” is less than 6%, odds are both buyer and seller came out ahead.

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Comment by nhz
2007-05-14 08:47:55

just an example of what you get when the realtor provides the details in the listing: an investigation in the Netherlands found out that the amount of living space listed for exactly the same homes (without any modifications), measured in square meters, has increased by nearly 50% over the last 10 years. Apparently realtors are extremely creative in what they count as ‘living space’.

I once found a listing for a home where I immediately noticed that the amount of living space mentioned could never be correct. The home didn’t have a garden, so it was easy to check the maximum amount of living space by counting the number of levels in the home. Turns out the realtor had counted a virtual extra floor because the top floor below the roof had a maximum height of 4.5m (in the middle) like many 17/18th century homes, which gives the buyer the option of adding an extra level (a bit low considering the average length in the Netherlands, and probably without windows but who cares …). When I asked the realtor didn’t think there was anything wrong with this creative acounting.

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Comment by UnRealtor
2007-05-14 05:36:10

Yes, lots of crybaby whining.

The big defense is that realtors don’t get the full 6%, but their agency gets a big cut.

Irrelevant — the seller still pays out 6% to “realtors,” be it one or a dozen.

Comment by az_owner
2007-05-14 09:06:01

Isn’t it true that in most cases the buyer pays all the commissions. Who brings money to the table? If they’re not upside-down, the seller just brings the house.

I wonder if a buyer could speculate in the contract “240K to the seller, and $1000 for the realtors to split”?

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Comment by Tom
2007-05-14 06:02:21

If you want to attack professionals for being overpaid, why not start with yourselves and work your way up to corporate CEO’s. Most Realtors are hard working and dedicated professionals who did not deserve this piece of uneducated reporting.

I stopped watching 60 Minutes years ago because of your misleading reporting, and only viewed this story online because I am an agent and a Realtor. With this story, you certainly reinforced the decision I made many years ago.
Posted by srqops at 07:19 AM : May 14, 2007

Yeah, and I stopped using a Realtor years ago. Their dishonesty and strongarm mentality to keep their monopoly disgusts me. With this story, you certainly reinforced the decision I made many years ago.

Comment by GetStucco
2007-05-14 08:25:05

If your professional association (the NAR) did not promote a culture of lies and deception, perhaps Realtors would have a better reputation.

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Comment by PDXrenter
2007-05-14 13:15:19

If you want to attack professionals for being overpaid, why not start with yourselves and work your way up to corporate CEO’s. Most Realtors are hard working and dedicated professionals who did not deserve this piece of uneducated reporting.

Sorry, realtors are NOT professionals. Most are just hacks. A few could be called professionals if their education included professional accredited degree like MD, JD, MBA for other professionals.

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Comment by Sammy Schadenfreude
2007-05-14 16:20:25

Most Realtors are hard working and dedicated professionals who did not deserve this piece of uneducated reporting.

BWAHAHAHAHAHA! This is either a housing bear spoofing as realtor, or the genuine article who is now red meat in a shark tank. Let the feeding frenzy begin!

The record overwhelmingly shows that most realtors are snarky and opportunistic parasites who prey on the ignorant and uninformed, and who are probably the most dishonest and dishonorable “professional” class ever seen in this country.

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Comment by Sammy Schadenfreude
2007-05-14 16:24:48

Two words, Tom: David Lereah.

The prosecution rests.

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Comment by speedingpullet
2007-05-14 10:24:13

Oh, the ‘comments’ are just fabulous! So much indignation at the 6% commision -
‘but…but….WE don’t charge 6%….we only charge 5%!!!”
….’We work SO HARD”
….’you don’t negotiate a deal with your surgeon, DO YOU?!?!?”

a) If you’re not making enough on comission, then why not charge by the hour? If you really do spend ‘hours and hours, inculding weekends(!!!), then prove it by charging by the hour. If it’s as you say it is, then you’ll make more money by the hour, rather than the 6% (or 1.5%, or whatever, meh) you get now.

b) Driving people around and printing fliers is not hard work - digging ditches and mining coal is hard work. Sure, you need to be paid for what you do - but see a) above - charge by the hour. Stop pretending that what you do is unique and vital to life.

c) Tell you what, go to college for 4 years, and then do a further 7- 10 years, working 100+ hours a week for almost no money while you learn your skills, and I won’t demean you by negotiating. Comparing yourself to surgeons or lawyers is insulting - for them. Anyway, a surprising number of lawyers and surgeons do ‘pro bono’ work - I’ve never heard of a Realtor(tm) doing anything free ‘for the common good’.

I’ve not really had much exposure to the Realtor(tm) way of life - other than reading about it on blogs - but my resolve is now steely-hard against ever using one of these people to buy or sell my house.

 
 
Comment by Tom
2007-05-14 05:24:35

Here is the link for Deborah Arends, the Realtor(TM) who whiffed on her segment last night. I know Realtors(TM) had to cringe when they saw her horrible representation for their profession.

http://www.deboraharends.com/

2007-05-14 07:07:20

When Lesley Stahl asked her “You don’t do enough for the 6%”, and she responded “I am not the agent for you”. I almost puked.

Who the hell does she think she is?! I suppose she only takes “high end” listings because she’s a “mover and a shaker”.

Comment by Tom
2007-05-14 09:54:24

Yeah… beggers can’t be choosers. Especially in this market!

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Comment by PDXrenter
2007-05-14 10:54:43

Here’s what I posted on the CBS website:

The paper-pushing, non-producing parasitic minions of the Real Estate Industrial Complex are being made redundant by technology and the hordes of these characters are now in their collective ‘professiona;’ death throes. You can see it right here in the comments section.

Too bad. Buggy-whip manufacturers and sellers had to go find something else to do to make a living. realtors are LESS skilled than whip-makers and will probably have to start at the local fast food joints. But, hey, if they are adaptable, they wlll be OK.

 
 
 
 
Comment by Lou Minatti
2007-05-14 05:30:10

Realtors are toast. There is no reason for them. Buyers and sellers simply need to be educated about how the process works.

Comment by Mystry62
2007-05-14 05:46:45

Just a side note, did anyone who watched 60 minutes last night catch the commercial for the online real estate company that allows free access to foreclosure listings, etc? What was the name of the website? I can’t remember and I wanted to check it out. If anyone caught that, I’d appreciate the memory jog. Thanks!

Comment by chiphxla
2007-05-14 11:33:01

Redfin is the name of the online listing source.

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Comment by oxide
2007-05-14 05:50:09

I think you’re right, Lou. Sure, a full-time realtor probably will give the best service (and, IMO, might be good for first-time buyers). But the question is, is that service worth upwards of $20K. And more importantly, why should a seller be FORCED into paying for premium service? If a seller feels confident in using Wal-Mart quality realty, that should be his choice.

Comment by P'cola Popper
2007-05-14 05:55:33

Also wouldn’t a lower commission percentage push NAR to make up the revenue short fall per unit by pushing transaction volume which would then lead to better pricing of homes in a more liquid market?

Maybe some of the guys in the biz could comment. Thanks.

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Comment by Housing Wizard
2007-05-14 09:13:56

I think you have a good point . The problem most FSBO’s have the most is getting a offer written up on contract .There is something to be said for a third party aware of the real estate laws and escrow fuction writing up the deals for protections and compliance with disclosure laws as well as having 2 seperate agents for buyer and seller .People in general are pretty stupid when it comes to contract writing (not the people that post here of course ).
I would think with the discount outfits they would have to do alot of advertising to get borrowers to directly call to see a listing with the listing broker because the regular MLS full service agents arent going to want to show those listings . But maybe alot of realtors will be willing to work on a volume basis for the discount places .First time buyers really need alot of assistance with buying as well as first time sellers .

Your coming from a hot market where property almost sold itself and real estate agents were order takers not putting that much time into each transactions .Now the whole ballgame is changing .
I was really impressed with the REDKINS website . They lay out alot of information in easy to read format and give alot of sales data information .

 
Comment by Housing Wizard
2007-05-14 09:33:36

Lot of sellers need a discount on selling costs for a house because the prices have gone down so much , just to make the deal work . Sellers don’t want to bring money to the table so they will be searching out ways to discount costs . Sellers will be wanting to spend money on incentives for closing costs for buyers rather than paying higher commissions to get their house sold .There is only so much room in the transaction for paying a bunch of fees . The closing costs for a seller really add up also these days .The title policy and escrow fee costs these days are a major cost for sellers .The whole down-turn in real estate is forcing sellers into rejection of the full service RE agent in spite of sellers needing that service .

 
Comment by P'cola Popper
2007-05-14 11:01:45

“There is only so much room in the transaction for paying a bunch of fees .”

I was a bit surprised that there is a broker and an agent on both the buy and sell side. Thanks for the reply HW.

 
Comment by Housing Wizard
2007-05-14 11:36:35

Sometimes the listing agents also sell the property and are representing the buyer also , but that agent has to fill out a bunch of extra forms disclosing that they are representing both sides of the transaction and both buyer and seller understand that .

 
 
 
Comment by Sammy Schadenfreude
2007-05-14 16:23:33

I think there will always be a place in this country for ethical, informed, market-saavy, conscientious realtors - both of them.

 
 
Comment by Tom
2007-05-14 05:39:42

You may find this NAR Publicity Alert to agents regarding the 60 Minutes program to be of interest.

http://blog.seattlepi.nwsource.com/venture/library/60minutes.pdf

Comment by oxide
2007-05-14 06:08:27

My computer can’t read online pdf. Could somebody give me a quick one-liner summary? Thanks.

Comment by Giacomo
2007-05-14 07:50:33

As I read it, the NAR is basically telling its members that although they may be catching some flak as a result of the broadcast, the damage is going to be minimal, because the NAR has already talked CBS out of delving too deeply into core issues (they’re too complex), or making more than a passing reference to the DofJ lawsuit. And here’s some talking points in case you run into any bit of trouble…

I was disappointed - but not surprised - in the segment. I think Redfin was a strawdog, and was presented as relatively weak alternative to the status quo (they’re in just a few markets, aren’t doing much volume, and their staff looks like they’ve just moved out of the dorm).
On the other had, the Realtor was given passes on several inane responses (she justifies her fees because the price of gasoline and postage stamps are up?).

As per usual, the MSM takes a poke at hot topic (for ratings) but avoids any real fight.

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Comment by oxide
2007-05-14 08:01:50

Was one of the talking points that the 6% is not set in stone, it’s negotiable yada yada? Because that sure showed up in the comments on the website 92% of the time.

And the talking point on how hard realtors work?

I’m not against realtors making money or even a lot of money. I object to
1. 6% of the price no matter how many hours they put in.
2. In a bubble they get double the commision than they woul have gotten 5 years ago, for the SAME HOUSE.
3. Colluding to stifle competition from lower-cost (if lower-quality) alternatives.

Thanks for the summary. :-)

 
Comment by Giacomo
2007-05-14 08:30:04

“Was one of the talking points that the 6% is not set in stone, it’s negotiable yada yada? ”
Yes.

I should say that negotiated a 5% commission when we sold our house least year. Most listing agents in my neighborhood wouldn’t agree to it. The unintended consequence was, we had a sense that our listing was under-promoted by our agent’s office, and we may have been “shunned” just a bit by agents bringing buyers (no way to prove this).

It all worked out in the end, though, for us. Still, I look forward to NOT using a realtor next time we go to sell. I would just rather have more control of the situation.

 
Comment by GetStucco
2007-05-14 08:30:13

“…or making more than a passing reference to the DofJ lawsuit.”

Which lawsuit — this one?
——————————————————————-
JUSTICE DEPARTMENT SUES NATIONAL ASSOCIATION OF REALTORS FOR
LIMITING COMPETITION AMONG REAL ESTATE BROKERS

NAR Policy Obstructs Internet-based Real Estate Brokers from Offering Better Services
and Lower Costs to Consumers

WASHINGTON, D.C. — The Department of Justice’s Antitrust Division today filed a lawsuit against the National Association of Realtors (NAR), challenging a policy that obstructs real estate brokers who use innovative Internet-based tools to offer better services and lower costs to consumers. The Department said that NAR’s policy prevents consumers from receiving the full benefits of competition and threatens to lock in outmoded business models and discourage discounting.

The Department’s civil antitrust lawsuit was filed today in U.S. District Court in Chicago.

http://www.usdoj.gov/atr/public/press_releases/2005/211008.htm

 
 
 
Comment by synthetik
2007-05-14 10:16:40

http://tinyurl.com/33s4d9

A discussion on Seattle’s “Rain City Guide”, a web site designed to lure new homeowners into a home purchase with one of their “trained professionals” about the 60 Minutes Redfin story.

Can you smell the panic? Real whores are a dying breed.

 
 
Comment by Tom
2007-05-14 05:59:09

Texas and Oregon got slammed as states that have given into the Realtors (TM) propaganda and lobbying machine. They have passed “full-service” laws which have eliminated competition and kept their monopoly rolling. This is bad for consumers and good for Realtors.

 
Comment by tcm_guy
2007-05-14 06:48:41

When we talk about systems of delivery for products and services in America that do not work very well, housing has to be near the top of the list along with medical and new car sales and service.

Imagine an airline industry where all bookings can only take place through only one computer system for all airlines and all bookings. Isn’t this what the NAR has achieved with their MLS?

Got 10% down?

Comment by Homoaner
2007-05-14 09:23:02

“Imagine an airline industry where all bookings can only take place through only one computer system for all airlines and all bookings.”

Ticketmaster. For show tickets. And we know how much everyone hates *them*.

 
 
 
Comment by IllinoisBob
2007-05-14 05:26:13

From the WSJ: Things are getting SCARY, a foreclosed condo sold for @ 50% off!
The article goes on to mention 99% of all the thoughts blogged here, minus the start of a depression.
1) Prices went way too high
2) Lending standards are tightening
3) Demand is not that strong
4) Mortgage defaults in LA are going up like an e ** x function :-)
5) A GLUT of condos, with more still in the works

Mortgage Woes Force Banks
To Take Hits to Sell Homes

SAN DIEGO — An auction of nearly 100 foreclosed homes here Saturday showed that mortgage lenders are having to accept huge discounts in some cases to unload such properties.

A surge of foreclosures over the past year or so has left lenders struggling to sell a growing backlog of homes. Rather than relying on real-estate agents, the usual practice, some are turning to large-scale auctions to speed up the sale process.

Real Estate Disposition Corp., the Irvine, Calif., company that organized Saturday’s auction of lender-owned homes, plans similar sales May 19 in Los Angeles and May 20 in Riverside, Calif.

At the San Diego sale, houses and condos typically sold for about 30% below the previous sale or appraisal prices. In a few cases, the discounts were around 50%.

A four-bedroom home in Oceanside, Calif., attracted a high bid of $495,000 at the auction, 33% below the sale price recorded in November 2005 for the property. One condo in San Diego sold for $120,000, less than half of its previous value.
http://online.wsj.com/article/SB117910010258001458.html?mod=home_whats_news_us

 
Comment by UnRealtor
2007-05-14 05:28:50

At most, a realtor may spend a full work week (spread over time)trying to sell a house. Give some parasite 3-6% of a million+ dollars, for a week’s work?

I guess it makes sense for a realtor to make more than a brain surgeon, since they provide an invaluable “marketing strategy” to the seller.

Check out the show “Million Dollar Listing” to see these parasites in action, leaching off the wealth of others by doing nothing.

http://www.bravotv.com/Million_Dollar_Listing/

Comment by UnRealtor
2007-05-14 05:29:30

And don’t forget “Million Dollar Agents”:

http://tlc.discovery.com/fansites/milliondollaragents/

 
Comment by aNYCdj
2007-05-14 07:26:01

Hey I spend 20-30 hours total on an average Large Wedding, over time, most brides book 6 months to 1 year ahead of their date….and yet i get about $1000, man i am “Giving Away” My services so cheaply!

At least I do some good for society…….LOL

————————–
At most, a realtor may spend a full work week (spread over time)trying to sell a house. Give some parasite 3-6% of a million+ dollars, for a week’s work?

Comment by Darrell_in _PHX
2007-05-14 08:37:30

Wait… 20 hours for $1000 and you’re underpaid? Hello, that is $50 an hour!!!

I think the wedding industry is as big a sham as the real estate one. People wanting to make “a good living” working 2 days a week or so.

I drove a HARD bargain with my wedding, which I can do since I’m dead center of the off season AND NO ONE but us are getting married that weekend. $500 for the DJ that normally charges $1000+. Still, that is much more per hour than the job should really pay. $500 for the photographer. $3500 for facilities, food, etc.

Man did I get called a cheap arse SOB by a freak load of pompus jerks…. So what. I just needed one to realize that half price is still better than sitting home doing nothing.

Despite 50% discount, I’m still paying about double what I think I should be.

Comment by Homoaner
2007-05-14 09:37:09

“$500 for the DJ that normally charges $1000+. Still, that is much more per hour than the job should really pay.”

That’s right. Rent or borrow the equipment, bring your music collection to the reception hall, and ask one of the more exhibitionistic guests to DJ. We did that at our niece’s wedding, and it worked out like a dream. Especially since the attention-starved guest DJ knew exactly what the wedding party’s primary musical tastes were. And he was entertaining, too.

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Comment by shadash
2007-05-14 09:49:00

I agree 100% the wedding mafia is insane. They play into girls fears. What blew me away was the cake maker. $250 for one type of icing and $500+ for another you wouldn’t believe the hard sell we got for the $500+. Fortunately my wife is picking up my price awareness. You should have seen those wedding hags scatter as soon as I came into the room. (since I held the checkbook) I don’t buy into the stupid crap a cake is a cake is a cake. Either it looks good and you charge a reasonable price or I hire the next guy down the line.

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Comment by aNYCdj
2007-05-14 09:59:37

Are you REALTORS trying to prove you 6% is a fair price for your services?

Sounds like it…since you are obviously so clueless to even knowing what a Professional Wedding dj does.

I agree 100% the wedding mafia is insane.

 
Comment by PDXrenter
2007-05-14 13:54:49

Hahaha! “professional” wedding DJ. I guess next we’ll hear from “professional” McDonald’s burger flippers.

 
Comment by aNYCdj
2007-05-14 13:59:31

Just because you Can’t afford me is no reason to be nasty.

Just what do you do that is so valuable to society?

And how overpaid are you?

I’ll bet you have are a low life REALTOR or have some dead end government job, because you would fail miserably if you had a real job.

 
Comment by Sammy Schadenfreude
2007-05-14 16:29:33

PDXrenter,

We’re allies about 90% of the time, but your barbs against wedding DJs were uncalled for. In any occupation, competence and professionalism can name a fair market price, and it ain’t always cheap.

 
Comment by aNYCdj
2007-05-14 16:57:36

Thanks Sammy……

Its not the only thing i do in life, but its one heck of an investment in time and money. Remember i am a dwindling number of Legal DJ’s…yes none of my music is stolen.

I had over 1000 cd’s before Napster even existed…most bought at full retail $20-25 each because they were special dj issues, they could not be sold at Best Buy or Walmart.

Plus how many people take $10-15,000 worth of stuff to work just so they can do the job? Even if you had to buy a fully loaded Laptop for your job its a fraction of what i have to take to a gig.

I would be happy to lower my price, IF these damn brides would get married on a Wednesday Afternoon, i could book tons of cheap weddings during the week…but they all want Saturday…and in June… damn!

 
Comment by Sammy Schadenfreude
2007-05-14 20:22:21

No need to explain. For the capital investment and time required for set-up/takedown and keeping everyone happy and on track, I’m sure your fees are justified and appropriate.

 
 
 
 
 
Comment by michael
2007-05-14 05:46:09

MRIS (Metropolitan Regional Information Systems, Inc.), an online real estate information service for Maryland, Washington DC, Northern Virginia, and parts of West Virginia and Pennsylvania, has updated its Monthly Real Estate Trend Indicator for this April.
Data: http://www.mris.com/reports/stats/monthly_reti.cfm
Charts: http://www.recharts.com/AroundDC.htm

 
Comment by WT Economist
2007-05-14 05:49:30

WSJ today:

Banks dumping foreclosed losses at auction are taking big losses vs. the comps,

Florida as a canary in a coalmine for our consumption-oriented economy (uh-oh),

New rules limiting the use of “gifts” from the seller as downpayments in HUD-sponsored mortgages decried as destroying homeownership for first time buyers (what? save?).

Sorry on that last point. It seems the only way for the seniors to care about the relative economic status of the young is the fear that the young won’t be able to buy their houses. Older generations need to give the young a break, and the young need to realize that with the deal they will be getting they had better learn to live on less.

Comment by GetStucco
2007-05-14 08:06:30

“Banks dumping foreclosed losses at auction are taking big losses vs. the comps,”

How does one best learn the auction prices? I am guessing these do not enter DataQuick statistics…

 
 
Comment by Peter T
2007-05-14 05:50:38

An article about housing bubble bloggers and their views:
http://www.freeerisa.com/Insight/200705si.asp
found on patrick.net, but of interest also to the writers here.

Comment by cactus
2007-05-14 07:07:56

Thats interesting, things are changing if RE agents are advised to read RE bubble Blogs.

Comment by Beer and Cigar Guy
2007-05-14 09:39:36

I believe that website is geared toward financial advisors and/or individuals, not RE agents. It is a free pension and benefits info website.

 
Comment by Sammy Schadenfreude
2007-05-14 16:31:09

As if they’re not self-hating enough!

 
 
Comment by SD_suntaxed
2007-05-14 07:26:45

The writer completely ignores two of the biggest points that the bubble blogs are the most outspoken about. There isn’t a word about the (A) systematic offloading of risky mortgages products to investors or (B) pension / retirement funds holding housing related or mortgage backed investments. I’m guessing the writer doesn’t want to startle nervous clients, since it is a pension investment site.

It’s one of the fairer assessments I’ve seen of the scope of the bubble blogs and the facts they report.

 
Comment by mikey
2007-05-14 07:47:58

Good article about Blggers being RIGHT about Housing Market.

Congradualations to BEN and all of other bloggers for ALL for their HARD WORK and being PERSISTANT in exposing the REIC, NAR and the MSM BULLSH*T lies and propaganda.

Thanks…

 
Comment by Darrell_in _PHX
2007-05-14 08:55:46

How in the heck can he make such a great case for why the market is going to crash, then conclude with saying this is not the time to put your house on the market????

What? Wait for prices to come down 20-30% or more, THEN put it on the market? How is that good advice?

Comment by az_lender
2007-05-14 09:23:33

Right, sorry, didn’t see this when I posted same idea below.

 
 
Comment by az_lender
2007-05-14 09:19:37

Congratulations to Ben and also to all of us! In the case of Housing Bubble Blog, the writer says, “The large volume of reader posts are almost as insightful as the blog itself.”
I do have one great big BEEF with the free-erisa writer: he incorrectly attributes to housing bubble blogs (collectively) a conclusion that now is a bad time to sell, the typical realtor’s “don’t sell now if you don’t have to.” I don’t think many of us here share that view. The Credit Suisse chart alone militates in favor of selling now rather than later. Or, die in your house, that’s reasonable.

Comment by GetStucco
2007-05-14 11:11:10

“Or, die in your house, that’s reasonable.”

Especially if your debt dies with you.
——————————————————————————
Papa was a rolling stone…
Wherever he laid his hat was his home,
and when he died
all he ever left us was a loan.

 
 
 
Comment by WT Economist
2007-05-14 05:52:45

One of the things a Realtor could do for the seller, which would be pretty valuable, is review the financial qualifications of the buyers so a sale won’t fall through. So how do you thing the profession did on that one in the past year or so?

Comment by Ozarkian from Saratoga, CA
2007-05-14 06:32:38

When I sold my house in the fall 2005, my agent examined the qualifications of the buyers very carefully and explained why he thought one offer was better from a “will the deal go thru” point of view (there were multiple offers on the house). He not only looked thru the information provided but he got additional information by making phone calls and following up. It’s what he should have done professionally, and given the commission (I got him to do 2%) he was making $30K when the deal closed so well worth his while.

 
Comment by Catherine
2007-05-14 07:33:35

are you kidding me? I HEARD realtors say, “Man, this buyer doesn’t have a pot to piss in, but I’m making sure he’s getting the loan and I’m getting 6%!” They WORKED with the lenders to get it thru. They KNEW just who and who didn’t really have any business buying. In AZ, a completed loan status report has to accompany an offer…they knew what was what.
I knew a loan officer OFFER to pay out of his own wallet a furniture lien for a buyer, so they’d qualify for a loan.
Realtors would transfer money to buyer’s bank account to make the cash look good on a application.
There was so much monkey business between shady realtors and loan brokers.

 
Comment by motepug
2007-05-14 08:11:20

One of the things a Realtor could do for me (a cash buyer), which would be pretty valuable, is review the financial qualifications of the seller, so a sale won’t fall through.

The reality is that a seller probably won’t sell if they have to bring cash to the closing, to pay off the heloc’s (hummers, plasma’s), mortgages, r/e commissions, etc. In which case, I’d be better waiting for the foreclosure.

Comment by ronin
2007-05-14 10:13:46

Are you saying a seller would sign a sales contract, and then not follow through with selling the house?

If so, they are in a lot more trouble than just waiting for foreclosure.

Comment by Housing Wizard
2007-05-14 11:45:47

There is such a thing as a seller not being able to close unless they bring money to the table . What if the seller had a 100k tax lein that they didn’t disclose that came out in the title search ?
I guess realtors/agents are submitting short sale contracts that are subject to the lender being willing to discount the amount owed on the loan . Usually those transactions are disclosed up front to the buyer and they know its subject to the lenders approval .

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Comment by motepug
2007-05-14 12:36:45

I’m sure the really desperate sellers would sign just about anything, and worry about the fallout with the bank later.

I want to see all the documents up front, deed (ie what the sellers paid), what their mortgages are, etc. Unfortunately, in the town I live in, none of this stuff is on the internet - you actually have to go fiddling around with micro-fiche at the county courthouse.

Additionally, I’d like to see the contract between the seller and the r/e agent. They claim, as a buyer, it’s none of my business, but that’s BS because it’s reported on the HUD settlement form.

If the r/e agents want their 6% out of me, as reported on the HUD form, I want them to go look up all the relevant paperwork. For some reason, they never get around to it.

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Comment by Key Lime Toast
2007-05-14 05:56:30

Today in the Herald Tribune:

Spanish for construction work

Truex Preferred Construction in Englewood will hold “Spanish in a Pinch” classes Tuesday, to help English-speaking construction industry folks communicate with Latino workers.

The classes will be at Kimal Lumber Co.’s learning annex, 11184 Hughey-Kimal Drive, Venice, and will be presented by Debby Jones, a former risk assessment officer from Salt Lake City.

“The main thing we are going to cover is general labor and safety terms,” said Andrea Truex, part owner of Truex Preferred Construction. “The lady who teaches this used to be a risk manager, and she saw the number of injuries on the job due to lack of communication.”

Participants at the vocation-oriented Spanish language crash course will also receive small, laminated “cheat sheets” to take with them that will include commonly used construction job site terms in English and Spanish, accompanied with correct pronunciation.

To reserve a seat or for more information, call 475-6680

– Devona Walker

Comment by P'cola Popper
2007-05-14 06:05:42

“Participants at the vocation-oriented Spanish language crash course will also receive small, laminated “cheat sheets” to take with them that will include commonly used construction job site terms in English and Spanish, accompanied with correct pronunciation.”

I wonder if “that’s crap, do it again” is on the cheat sheet.

Comment by P'cola Popper
2007-05-14 07:30:46

“¡Éste es crap! ¡Hágalo otra vez espalda mojado!”

 
 
Comment by John Fleming
2007-05-14 06:20:57

Lesson 1

Porqué aprendo español?
Porque tenemos un problema serio.
Se llama la burbuja immobiliaria…

http://babelfish.altavista.com/tr

Should translate as:

Why do I learn Spanish?
Because we have a serious problem.
We are having a housing bubble…

 
Comment by In Colorado
2007-05-14 08:32:29

Kidding aside, there are other industries that have become overrun by illegals. The next time you eat out at a chain restaurant, take a peak into the kitchen. Chances are its fully staffed by illegals. All of the menial work done at our corporate campus (janitorial, groundskeeping, etc.) is done by illegals. I can only wonder how many more work in “behind the scenes” jobs that the public does not see.

Comment by Darrell_in _PHX
2007-05-14 09:10:03

That’s been forever. I did 6 months as a waiter back in the 80s. Nothing but undocumented workers in the kitchen.

Once we had 3 guys that were sharing an apartment call up and say they couldn’t make it into work that day because they’d been raided by INS and shipped back to Mexico. But, said they’d be in tomorrow.

Sure enough, the next day, all were back at work.

 
Comment by FutureVulture
2007-05-14 10:45:43

How exactly do you know who is “illegal” and who isn’t by glancing at them?

I’m not crazy about the rate we let illegals into the country, but I’m even less crazy about racism.

Comment by In Colorado
2007-05-14 10:52:52

You can tell by their accents if they are Mexican-Americans. If not then either they came here legally (not likely, as visas are granted to skilled workers) or they are illegals.

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Comment by In Colorado
2007-05-14 10:54:56

Also, you can tell visually. People from Oaxaca look different from Mexican Americans, who look more like people from northern Mexico.

 
Comment by P'cola Popper
2007-05-14 11:06:47

The problem is so bad that we probably need to risk a little racism.

 
 
 
Comment by Sammy Schadenfreude
2007-05-14 16:35:18

I worked in a restaurant in College. When it first opened we had a couple of corn-fed American boys working back in the kitchen. They didn’t work out - had a real aversion to working the required 12-hour days on the pay offered. The Mexican guys, whatever else you say about them, worked their asses off 12 hrs a day, six days a week. The place would’ve had to raise menu prices at least 30% to attract the kind of money that would be required to interest most American workers in that kind of grind.

 
 
Comment by ronin
2007-05-14 10:16:20

Sounds dangerous to me, since the contractor is taking on the responsibility of informing the laborer of safety issues. When the laborer gets hurt, he can point to the contractor and say the contractor recognized the obligation as evidenced by his taking classes, but did not follow through by informing me of the issue.

Consequently, because of his negligence in a recognized responsibility, I am suing bla bla

 
 
Comment by Peter T
2007-05-14 06:01:18

One important role in this current mess was played by appraisers. Their function is to assure the holder of the secured debt that the debt is indeed secured by the collateral. The debt holders are often investors in MBS now. How could appraisers regain the trust of investors? Should for example rating institutes for loans, like Moody’s, certify appraisers?

Comment by Neil
2007-05-14 07:00:01

You make a good point Peter T, Let me expand.

MBS investors are going to get screwed. Its only a question of how much.

Thus, they are going to be demanding changes in the bond rating system.

They’ll be demanding changes in the appraisals.

But don’t be surprised when they demand down payments. There has always been a correlation between down payment and risk. 25% down payment is when the risk of default *almost* disappears.

Got popcorn?
Neil

Comment by bob
2007-05-14 07:22:40

Do these packaged mortgages show up as somewhat regular bonds? For instance the Lehmans AGG ETF? Do these show up under the corp bond portion? Thanks in advance - would be nice to clean up the portfolio soon

 
Comment by Peter T
2007-05-14 08:07:59

While I prefer to see large downpayments in house purchases, house transactions with little down, like 10%, should not be completely discouraged but insured. If there has been PMI (private mortgage insurance), the size of downpayments has already been correlated with the PMI premium. Maybe in one mortgage model of the future, PMI companies insure the risk for the remote MBS holder completely and act as the local agents of risk in the house transaction. (PMI policies are not traded, I believe; the insurer stays the same over the life of the policy.) The insurer could then be the customer of the appraiser who does not longer depend on the favor of people whose only financial interest is in getting the transaction through.

 
 
 
Comment by luvs_footie
2007-05-14 06:14:20

Banks Face Growing Pressure on Home Prices.

An auction of nearly 100 foreclosed homes here Saturday showed that mortgage lenders are having to accept huge discounts in some cases to unload such properties.

A surge of foreclosures over the past year or so has left lenders struggling to sell a growing backlog of homes. Rather than relying on real-estate agents, the usual practice, some are turning to large-scale auctions to speed up the sale process.

Real Estate Disposition Corp., the Irvine, Calif., company that organized Saturday’s auction of lender-owned homes, plans similar sales May 19 in Los Angeles and May 20 in Riverside, Calif.

At the San Diego sale, houses and condos typically sold for about 30% below the previous sale or appraisal prices. In a few cases, the discounts were around 50%.

A four-bedroom home in Oceanside, Calif., attracted a high bid of $495,000 at the auction, 33% below the sale price recorded in November 2005 for the property. One condo in San Diego sold for $120,000, less than half of its previous value.

http://usmarket.seekingalpha.com/article/35447?source=d_email&u=12036

Comment by WT Economist
2007-05-14 06:57:51

I think the auction is revealing the affordable market price. Of course if interest rates rise, that price could go down.

At $120K for a condo, for example, Downtown San Diego could be a nice, affordable, middle class neighborhood. Too bad about the construction and mortgage loans, however. That’s what I call private sector subsidized affordable housing!

Comment by BM
2007-05-14 07:20:00

I watched the STL vs. Padres game yesterday there, and I thought the same thing. I loved the guy’s condo that had a giant “4 RENT” plus phone number sign hanging off the balcony. Classy!

 
Comment by GetStucco
2007-05-14 07:47:18

“I think the auction is revealing the affordable market price.”

Close. The auction would reveal the affordable market price under (counterfactual) postulates of the efficient market hypothesis. But in the real world (which differs considerably from the economist’s imagined world), the real estate market is inefficient, in part due to the NAR’s information monopoly (the MLS system).

 
 
Comment by OB_Tom
2007-05-14 11:33:39

Funny about the 30% below appraisal, here’s what the “real estate pros” said before the auction:

“Friedman, like many of the real estate pros I’ve spoken to recently, said he hasn’t yet seen the market fall as far as it did last decade. Then, foreclosures often resulted in bargain-basement prices, halving neighboring homes’ values.
“If it’s gonna be like that, I haven’t seen it yet,” he said. “This downturn is not going to be nearly as deep as that one. That’s the vibe I’m getting.”
Lenders are more interested, and have a greater ability now, to sell the homes for closer to what they’d go for under regular market conditions, he said.”
http://www.voiceofsandiego.org/articles/2007/05/14/survival/769auction.txt

And more from Voice of San Diego today:
“Congratulations?
San Diego won the dubious title of most overpriced real estate market in Forbes magazine’s examination of the 40 largest metropolitan areas of the country.
Miami, Sacramento, San Francisco and Washington, D.C., rounded out the top five.”

 
 
Comment by GetStucco
2007-05-14 07:23:54

My new hero: Glenn Kelman
———————————————————————————-
“Real estate, by far, is the most screwed up industry in America. And we feel like things that Amazon or eBay or Yahoo have done of other industries, we can do for the real estate industry.”

Glenn Kelman
http://www.redfin.com

Comment by GetStucco
2007-05-14 07:27:26

The above is a quote from his 60 Minutes interview last night:
—————————————————————————–
Chipping Away At Realtors’ Six Percent
Lesley Stahl Reports How Realtors’ Commission Fees Are Under Assault
Special section with news and information regarding the housing market.
May 13, 2007

(CBS) Even with today’s housing slump, real estate agents will pull in about $60 billion this year. And the reason is, as any homeowner knows, they charge a six percent commission on the price of every house they sell. So, for instance, a home that goes for a half a million dollars will net agents $30,000 right off the top.

For realtors, the six percent commission is sacrosanct. It’s remained in place, even as the price of homes has quadrupled over the past 25 years.

http://www.cbsnews.com/stories/2007/05/11/60minutes/main2790865.shtml

 
Comment by Matt_in_TX
2007-05-15 06:26:28

The other way to break the monopoly is for everyone to become a realtor. CA seems to have been well on the way to this, except for the ongoing setback.

 
 
Comment by GetStucco
2007-05-14 07:43:03

Here is a how-to article on selling your home solo. If you plan to go this route, you should also check out these web sites: http://www.redfin.com , FSBO.com and ForSaleByOwner.com

Is there any comprehensive list of online sites designed to help individuals market their own homes without interference from NAR members?

I am highly skeptical of any piece that hints at essential services provided by NAR members. The value of Realtor (TM) services is mainly in the monopoly lock they have on the MLS data. Once this is broken, the NAR, with its culture of lies and political manipulation that have nearly destroyed the national U.S. real estate market, will be history.
———————————————————————————
Selling Your Home Solo
Ray Martin Tells You How To Sell Your Home Without A Broker
New York, N.Y., April 21, 2007
Selling your home by yourself takes effort and initiative.

Putting a “For Sale” sign on your lawn is probably not going to sell your house. To know why, just think like a buyer. Most buyers don’t have time to drive around neighborhoods, searching for signs.

The majority will begin their search either on the Internet or by asking a realtor to search for them. When a home is “listed” with a broker, they place your homes information in the area’s Multiple Listing Service (or MLS), which alerts all real estate agents in the area that your home is for sale.

The MLS also makes it easy for other realtors to search for a home by location and price range. If yours fits their search criteria, they will show it to potential buyers.

http://www.cbsnews.com/stories/2007/04/20/business/realestate/main2712819_page2.shtml

 
Comment by DeepInThe909
2007-05-14 07:43:08

I’ve got a couple of homesellers here at my work in SoCal. Out in the hallways we have bulletin boards where people occasionally put up For Sale ads. There are now a couple of houses for sale on the boards.

House 1: Riverside, CA. 2200 sf, .23 acre lot with 5 bedrooms/4baths and a 2-car garage. The pic makes it look like a nice place with lots of trees.

Asking $529,999 which is supposedly “drastically reduced” from $610,000.
The “ZEstimate” is $424,575
Zillow says it was last purchased in 1987 for $97,500, and also says it is 4 beds/3 baths so maybe that’s why the owners think they should get such a huge premium.

House 2: Victorville, 1500sf, tiny lot. Picture shows a ugly stucco box with no personality and not a single tree in the backyard. The ad says “3-5 bedrooms”, whatever the hell that means.

Asking $355,000, but that’s crossed out and “$340,000″ is written next to it. They’ve also written “willing to lease for $1800/month”.
The “ZEstimate” is $338,244
Zillow has no sales history for the property.

Comment by peter m
2007-05-14 09:26:19

“House 1: Riverside, CA. 2200 sf, .23 acre lot with 5 bedrooms/4baths and a 2-car garage. The pic makes it look like a nice place with lots of trees.”

I would be careful purchasing any property, no matter how big the house or how nice it looks in the pic. Riverside city/metro region, part of the IE, will be slammed hard during the inevitable RE price correction: it is already getting slammed with foreclosures. About the only area in the entire Riverside metro area which looks halfway decent is the Canyon Crest zip 92506. Every other riverside zip is housing bust territory, much like the entire IE. No property in Riverside is worthmore than $300,000 even for 4,000 sq ft, 5/3’s on 1 -acre lots.

As for Victorville, no property is worth more than $100,000, which is what REO victorville homes will be fetching by end of 2007.

Comment by CA renter
2007-05-15 02:28:35

And that Victorville house should rent for no more than $1,200/mo, IMHO.

 
 
 
Comment by GetStucco
2007-05-14 07:43:47

Business
Former Ameriquest Workers Tell of Deception

Listen to this story… by Chris Arnold

Morning Edition, May 14, 2007 · Some former employees of the nation’s leading subprime lender say the company encouraged them to conceal rate terms and make fake fixed-loan documents that pushed customers into loans they couldn’t afford.

http://www.npr.org/templates/story/story.php?storyId=10165859

 
Comment by GetStucco
2007-05-14 07:59:50

A generation after the U.S. govt bailed out Chrysler, a hedge fund gets to do it. And this is the former Treasury Secretary’s hedge fund. My special cosmic beam detector is going bonkers right now…
——————————————————————————-
Cerberus to buy majority of Chrysler for $7.4 billion
Mon May 14, 2007 10:53AM EDT
By Michael Shields

FRANKFURT (Reuters) - Private equity firm Cerberus will buy the majority of DaimlerChrysler’s struggling Chrysler Group for $7.4 billion, a fraction of the $36 billion deal that created the transatlantic car union nine years ago.

http://www.reuters.com/article/newsOne/idUSWEA280820070514?src=051407_0953_TOPSTORY_chrysler_sold

Comment by GetStucco
2007-05-14 08:02:47

More Business news
Cerberus to pay $7.4B to DaimlerChrysler for 80.1 percent of Chrysler
By Matt Moore
ASSOCIATED PRESS
7:24 a.m. May 14, 2007

FRANKFURT, Germany – German-based DaimlerChrysler said Monday it will sell almost all of money-losing Chrysler to a private equity firm for $7.4 billion, backing out of a troubled 1998 takeover of the Jeep and Dodge maker aimed at creating a global automotive powerhouse.

Eighty percent of Chrysler Group, burdened by high pension and health costs and declining market share in the United States, will be sold to Cerberus Capital Management LP. Cerberus is taking a huge risk by agreeing to take on billions of dollars in pension and retiree health care costs at Chrysler.

Cerberus Chairman John Snow, a former U.S. treasury secretary, told a news conference in Germany that the New York-based private equity firm believes in Chrysler and wants to see it recover.

“We think at this particular point in Chrysler’s history, there may be opportunities in the private world, the world of private investment, that create more room for growth and expansion, that allow management to focus with greater intensity on the day-to-day business of producing better cars,” Snow said.

http://www.signonsandiego.com/news/business/20070514-0724-chrysler-cerberus.html

Comment by In Colorado
2007-05-14 08:45:28

Expect the bloodletting to begin! I’ll bet that once the dust settles Chrysler will have offshored most of its factories to China. White collar workers won’t fare much better either.

Expect Chrysler to eventually sell Chinese designed and built economy cars. They will continue to milk their truck and Jeep franchises, utting costs to keep them profitable, until fuel costs kill them off. Also of interest will be how Chrysler deals with the UAW. I suspect that they will tell the UAW that they hold all the cards and that they are going to bypass the UAW and tell them that if they are flexible with contract negotiations that they might be able to keep them on for a bit longer.

Comment by Homoaner
2007-05-14 09:40:26

“I’ll bet that once the dust settles Chrysler will have offshored most of its factories to China.”

They’ve been moving them to Mexico for the past several years. My PT was built in Mexico.

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Comment by In Colorado
2007-05-14 10:44:29

True, but Mexico can’t touch China regarding cost of manufacturing. Believe it or not, they have unions in Mexico. The autoworkers union, while nowhere close to the UAW, is a pretty good union and Mexican autoworkers are better paid than Chinese engineers. In the past the advantage of making cars in Mexico was that as long as they had sufficient US/Canadian content they could be sold as “domestic” cars. Not sure how NAFTA affected that.

 
Comment by aladinsane
2007-05-14 13:17:39

To give you an idea of how utterly ruthless China is, business-wise…

They can export chili peppers to Mexico and undercut the local market and make a profit~

Ay-Chihuahua

 
 
 
Comment by ozajh
2007-05-14 08:52:55

Cerberus is taking a huge risk by agreeing to take on billions of dollars in pension and retiree health care costs at Chrysler.

I don’t want to buy into the very real debate about the validity of the pension and healthcare entitlements, but I would just about be prepared to guarantee that Cerberus has worked out some way to walk away from them.

I think the interesting thing is that DaimlerChrysler (will this become DaimlerBenz again?) has retained 19.9%. A mistake, IMHO. Any turnaround upside is minor compared to the risk they run from being the only participant in this circus with really significant net assets.

Comment by GetStucco
2007-05-14 09:05:18

As long as the money presses are running flush out in many countries, where is the downside to diversifying into some real assets (like auto companies)? We have already seen how the homebuilder stocks can stay persistently high against a steady barrage of worse-than-expected news. (Of course, things did not turn out so well for shareholders of certain subprime lenders…)

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Comment by In Colorado
2007-05-14 10:59:49

Apparently when a closer look is made at the deal, Daimler is giving Chrysler away for free:

http://money.cnn.com/2007/05/14/news/companies/chrysler_sale/index.htm?postversion=2007051411

“But the German automaker, which will be renamed simply Daimler, will not actually get most of the money that Cerberus is paying for the once proud automaker. Instead Cerberus will contribute $5 billion to the Chrysler auto operations it will now control, with just over another $1 billion going to Chrysler’s finance arm.

While Daimler will receive the remaining $1.4 billion of Cerberus’ capital contribution to the sale, Daimler expects to have to cover another $1.6 billion in Chrysler losses before the deal closes. So Daimler estimates that it will end up paying out about $650 million to close the deal, and that its earnings for 2007 will take a $4 billion to $5.4 billion profit hit due to charges related to the transaction.”

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Comment by Pharmer John
2007-05-14 13:00:38

It will be Daimler AG. Saw it on CNN this morning. Don’t remember what Chrysler will be.

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Comment by GetStucco
2007-05-14 08:40:08

To continue in this tinfoil hat vein, are some of the big new hedges front companies for Uncle Sam Bailout Corporation, Inc? (Citadel, Cerberus, etc…). I guess there is no way to separate tinfoil hat hypotheses from the conventional explanation that there is a revolving door between the top of our govt and the private sector…

http://www.washingtonpost.com/wp-dyn/content/article/2007/05/12/AR2007051200653.html

Comment by In Colorado
2007-05-14 08:48:39

The billionaires have won. It almost makes one wish that the Berlin Wall had not come down. At least back then capitalism had to put on a show that it was better for workers than communism.

Comment by GetStucco
2007-05-14 09:06:07

“The billionaires have won.”

Not sure yet. If all the plankton dies, so do the whales.

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Comment by Patriotic Bear
2007-05-14 09:33:29

You hit the nail on the head. One of the major causes of the 1930’s depression was the polarization of wealth. Humans are a biological systems and so is our economy. The wealthy own assets which are backed by the rest of the peoples debt and ability to consume. If we have massive debt default those assets will crash in value. If consumption declines so will wealth.

 
Comment by In Colorado
2007-05-14 10:34:41

I think that something we overlook about billionaires and oligarchs is that what turns them on is power. The raw numbers of their net worth are secondary. If the worker bees are impoverished and in debt then the oligarchs have the power. Oligarchs understand that it is better to control 95% of a smaller pie as opposed to 40% of a much, much larger pie, because even though 40% of say $100T is much more than 95% of $10T, with the bigger pie they have to share power with us.

Oligarchs don’t see themselves as being equal to the rest of us. They believe that they are entitled to special priviledge, including being above the law.

I am sure that even though he is the richest man in the world, Bill Gates must view 3rd world Oligarchs with great envy, as they can literally get away with murder.

 
Comment by GetStucco
2007-05-14 11:05:10

“If we have massive debt default those assets will crash in value.”

To play the devil’s advocate to my own (and your) point, there is a lot of plankton out there. So lots of plankton could die, and still leave enough behind to keep a few whales fat, dumb and happy.

 
Comment by GetStucco
2007-05-14 11:08:26

“I am sure that even though he is the richest man in the world, Bill Gates must view 3rd world Oligarchs with great envy, as they can literally get away with murder.”

As much as I dislike the Microsoft-dominated IT world order, I don’t believe Mr. Gates is as evil-hearted as you suggest.

 
Comment by bubbleglum
2007-05-14 11:33:26

That’s a pretty accurate description of the movie Harrison Bergeron.

 
Comment by In Colorado
2007-05-14 12:45:35

As much as I dislike the Microsoft-dominated IT world order, I don’t believe Mr. Gates is as evil-hearted as you suggest.

I am sure that he would love to not have to deal with all those pesky anti-trust lawsuits. Anyway, dollar Bill is about to be passed by a real oligarch (Carlos Slim Helu) as the richest man in the world. And Carlos made his fortune in less time than Billy boy, in a 3rd world economy (Mexico).

 
Comment by aladinsane
2007-05-14 13:23:05

Props to Carlos Slim…

Known to me, to be quite the fancier of Sequioadendron and has made many visits to view and learn from Nature’s Brobdinagians and surely is much wiser, from his experiences.~

I salute you, Sir.

 
 
 
 
Comment by GetStucco
2007-05-14 11:18:14

A little plunge protection, please…

http://www.marketwatch.com/tools/marketsummary/

 
 
Comment by Schnooks
2007-05-14 12:03:24

Made me wonder too… what about that lumber store burning down?

 
 
Comment by 85249 is Toast
 
Comment by Housing Wizard
2007-05-14 08:47:14

I just checked out the REDKIN site and I got to say I’m impressed . They arent holding out on information . They give sales data history and all listings near the property that are listed plus “solds” data .Don’t know how much other marketing they do or how many open houses they give or many many buyers they have but their website is impressive in how they lay the information out .

 
Comment by GetStucco
2007-05-14 08:50:10

Has the U.S. Inc. outsourced its printing press operation?
———————————————————————————-
MARK HULBERT
Is the best yet to come … from China?
Commentary: Huge influx of capital could power U.S. stock boom
By Mark Hulbert, MarketWatch
Last Update: 9:53 PM ET May 13, 2007

ANNANDALE, Va. (MarketWatch) — More than a few of you expressed incredulity this week upon learning that Richard Russell was now envisioning an unprecedented global economic boom.

Russell, of course, is well known as the granddaddy of the investment newsletter world, having published his Dow Theory Letters since 1958, nearly 50 years ago - longer than any other investment newsletter editor publishing today. It’s also well known that Russell has been bearish on the stock market’s major trend since late 1999, treating the market’s impressive strength over the last four-plus years as a counter-trend rally within the context of a primary bear market.

So ever since Russell’s conversion, I have been on the lookout for plausible stories of this magnitude. I think I found one that at least comes close.
To be sure, just because a story is plausible doesn’t mean that it will play out as envisioned. But until I came across this one, I didn’t think a story could be told that was even remotely plausible.

I owe the story to Dennis Slothower, editor of a newsletter called On The Money. In his hotline Friday night, he pointed out that the China Banking Regulatory Commission, in an attempt to cool its overheated stock market, had ruled that Chinese banks “can now invest as much as 50 percent of funds in overseas stock markets.”

Slothower calculates that this means that “up to $2.3 trillion in China monies … can now move out of China.”

To put a sum like that in perspective, consider that the total value of all publicly traded stocks in this country is around $15.1 trillion, according to Wilshire Associates. If even a modest fraction of the $2.3 trillion makes its way into U.S. stocks, we could see a “further parabolic advance in equities,” as Slothower puts it.

http://www.marketwatch.com/news/story/huge-influx-chinese-capital-could/story.aspx?guid=%7BC58901E3%2D19F0%2D4A32%2D86D3%2D7FC9E0CAE034%7D&dist=TNMostRead

Comment by CA renter
2007-05-15 02:38:03

Thanks for the link, GS!

 
 
Comment by Patriotic Bear
2007-05-14 10:05:01

Richard Russell has been a historic bear all the way back to the late 60’s. He did make an excellent call turning bullish on the stock market near the December 74 low. A few years later he became bearish.

He has covered himself with his “primary trend indicator” which allowed him to state that he was bearish but the indicator was bullish. In my eyes this allowed him to have it both ways.

He did play the bond market well in the 90’s. He seems to be a great guy but his record is very mixed.

The facts are that on a dividend to price and book value to price measure the US stock market is highly over priced. Price earnings ratios mean zero for both factors are variable.

Why would a Chinese investor buy US stocks when their companies have a better future? Why would they buy into the dollar when their currency will rise steadly for the forseable future? Would they invest in the USA for safey, a sort of get out of China bond? Maybe but wouldn’t it continue to be treasury paper?

There is an old expression on Wall St regarding a market reaching its high when the last bear throws in the towel. Russell qualifies for that roll in my opinion. Some of you may recall when gold was allowed to be purchased by US ciizens. The metal proceeded to fall 50% over the next two years. The good(?) news about Chinese investing in our market is the same. Sell on the good news.

A final point about China. In the work I do in the market, the Chinese market appears to be on its last leg of a “J” curve upward. It looks just like NASDAQ in 2000 or gold in 1980. If that market crashes as I expect the Chinese are far more likely to be forced to call in some of their debt forcing up US interest rates or at least making credit harder to get.

The USA was the world’s creditor in 1929. When our market broke we starting calling in the debt worldwide creating credit cisis all over the world. China may well play that roll.

Comment by GetStucco
2007-05-14 11:03:14

Thanks for the excellent insights.

 
Comment by rv doc
2007-05-14 11:45:20

I’ll second the excellent. The parallels between the US circa 1929 and current China are numerous. They have Communism and we received the notorious FDR who wanted to be a Communist.

With Wall Street - it’s always about the “money on the sidelines” waiting to drive markets to new pinnacles - well that’s the sales pitch anyway.

Comment by GetStucco
2007-05-14 13:40:01

And if there happens to not be enough “money waiting on the sidelines,” why not print a bit more?

 
 
Comment by FutureVulture
2007-05-14 12:18:13

I agree — China today is the U.S. of 1929. China’s stock chart looks even more like Dow 1920’s (only speeded up) than it does like Nasdaq pre-2000. And likewise, the U.S. today is like the U.K. was in 1929. If things play out the same as then, the U.S. will take a big hit from a global crash (which should happen this year), but will recover quicker than say China, because the U.S. will “go off the gold standard”, i.e. greatly devalue its currency.

 
 
Comment by catherine
2007-05-14 11:39:41

I’m so glad that MD was covered in this blog over the weekend. I’m tired of hearing that we’re not too exposed to subprime or that it’s different due to the proximity of DC. In the higher-priced neighborhoods of Montgomery county, listings are between 1.2 - 1.5 million when even the bubbleicious comps support 600k - 700k! On the other side of Rt. 355, crappy 50’s 60’s oops I mean mid-century ramblers with no updates also listing for 2-3x the 2000 price. But at least it’s a house! 2BR condos are listing in the high 600’s, regardless of the 25K units coming online this year and 25K more over the next five years. Whoever said “Wyle E. Coyote mode” nailed it.

 
Comment by GetStucco
2007-05-14 13:43:45

Parsky’s Party
The UC regent whose pension fund overhaul may have cost the university billions is now in a position to play with even more of the public’s money.
By Chris Thompson
Published: May 9, 2007

Last December, Governor Arnold Schwarzenegger created a new panel to figure out how to solve what may be California’s worst-ever budget crisis. The state’s two biggest retirement funds will owe at least $49 billion they don’t have, and Californians will be paying this bill for decades. The man Schwarzenegger chose to lead this historic undertaking is commission chairman Gerald Parsky. But for the hundreds of thousands of teachers and state employees who depend on these funds, his appointment should be cause for alarm. Just ask the employees of the University of California.

http://www.eastbayexpress.com/2007-05-09/news/parsky-s-party/full

Comment by aNYCdj
2007-05-14 17:03:42

GS:

IT’s the most controversial position i take, the shortfall is, because so many NEW employees don’t smoke live longer and take out more benefits, and the actuarial tables are designed for a lot of state employees to die early from smoking related causes.

So People have no choice but to end ALL 20 year and out full retirement pension plans and most 25 and out and immediately it has to be 30 years full and 25 at half pay, Plus you have to put 4-6% of your own pay in too boot…

Consider it the consequences of all the non smoking campaigns.

 
 
Comment by Pondering the Mess
2007-05-14 18:17:35

Hey, Catherine! Another Maryland resident here. Don’t you know that “Maryland is different?” And that we’ll have 1,000,000,000 new jobs created by the BRAC? And all of those jobs will pay salaries high enough to afford $500K starter homes and $600K affordable housing? Hehehe… Yeah, it is absurd here. Maryland has the “silent bubble” where we are as bubbly as any other place, but people have some strange belief that being near DC somehow makes it all okay, as if “leftover” money from feeding the politicians/pigs will somehow float its way on down to the average wage earner in this state - fat chance of that happening! But it is “different here” in that people seem far more willing to accept stupid prices and come up with novel excuses than in the now collapsing realms of CA and FL. I can’t wait for Maryland to have it’s “Oh, crud!” real estate moment!

 
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