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Post-Bubble Newspeak


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2005 Nov 9, 3:40am   32,723 views  193 comments

by HARM   ➕follow (0)   💰tip   ignore  

Excerpts courtesy Ben's site (original article at Inman.com - unfortunately for pay subscribers only: tinyurl.com/accv8)
"Empowering phrases keep the real estate sale moving" - Agents find success through word choice

The type of language we use is a powerful force in the sales process. Successful agents use 'empowering' phrases that keep both seller and agent from feeling like a victim. The phrase, 'I can't,' implies we have no control over outcomes. Try substituting the words, 'I choose not to.'"

"When you attribute your feelings to something or someone else you are also disempowering yourself. Saying, 'This market makes me so mad,' suggests all your problems are the market's fault and there's nothing you can do. Instead name your emotions without blame by saying, 'I'm upset prices are falling.' Now you have room to explore your feelings and consider your options for handling the situation."

"Or try the words of Julie Garton-Good, renowned trainer. Instead of saying, 'The market is terrible,' she says, 'The market has not been as generous lately,' or 'In the economy we are given today, the reward factor isn't as high as it was last year.' These words remind clients that markets are beyond our control, and good things will still come of a sale."

"In pricing, don't tell sellers to 'reduce the price.' Instead, give them the opportunity to, 'reposition the home in the market.' They don't 'have to list' at a certain price, they can, 'choose to place the property anywhere in the market that fits their needs, considering that homes sell faster at one price compared to another.' It's their choice."

Looks like our friends in the realty biz are "choosing to proactively reposition" themselves for a "less generous market" with a "much lower reward factor". In the near future they can encourage their overleveraged sellers to substitute their "needs-based pricing" for a more "reality-based model", and "empower" themselves by "right-sizing" asking prices, then bending over and grabbing their ankles (preferably while making a squealing sound) for prospective buyers. Or (one of my favorite posts from Ben's blog): "...I wouldn't say the market is tanking per se. I like to refer to it as a shit sandwich that must be eaten. -jt"

Gee... have I got the hang of it, yet? Double-plus un-good!
HARM

#housing

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1   KurtS   2005 Nov 9, 4:08am  

I might say:

"I choose not to buy this house until you proactively reposition the price for the post-bust market."

"Put that coffee down! Coffee is for closers."

2   Allah   2005 Nov 9, 4:13am  

“Put that coffee down! Coffee is for closers.”

Take the 'c' off of closers.

3   KurtS   2005 Nov 9, 4:16am  

“Put that coffee down! Coffee is for closers."
Take the ‘c’ off of closers.

Well, yeah--anyone closing in the next few months, will see they're losing too. Line from Glengarry Glen Ross

4   HARM   2005 Nov 9, 4:18am  

But, can I still have a fresh-baked muffin? Please...?

5   Allah   2005 Nov 9, 4:20am  

“…I wouldn’t say the market is tanking per se. I like to refer to it as a shit sandwich that must be eaten. -jt”

The RE agents just have to use words to make the sandwich less stinky....but even if it doesn't smell so bad, it will still taste the same.

6   HARM   2005 Nov 9, 4:27am  

The RE agents just have to use words to make the sandwich less stinky….but even if it doesn’t smell so bad, it will still taste the same.

I think the Bard said it best (paraphrased):
"What’s in a name? That which we call a turd by any other name would taste as foul."

7   Allah   2005 Nov 9, 4:53am  

Speaking of shit sandwiches... I got some mail from capitol one today..... it was a normal envelope inside a bigger lightweight envelope with the writing "TIME-SENSITIVE MATERIAL ENCLOSED", very creative!......I guess they figure it will slow down its trip to the garbage pail....It worked with me....I open this one just being curious. When I opened the inner envelope, there is a fake credit card with a bright orange sticker on it that says 0% fixed APR until May 2006 on purchases....and "No Annual Fee".

Notice how it says "on purchases"? Meaning you cannot consolidate your debts on it without paying interest....it's a trend most of these CC companies are doing to prevent the perpetual transfer of credit from one card to another. These folks figure that people will say "hmmmmmmmm I don't have to pay interest on my purchases so why not charge away and only pay the minimum"........ Of course if they do only pay the minimum, it will be cost effective since there would be zero interest........untill something happens and they are late with their payment.......look at the fine print and you can see clearly under the microscope that if you are late with a payment, your 0% APR will be revoked and you will have to pay high interest on the balance.....and since the reason you were late in the first place was because for whatever reason, you couldn't afford to make the payment.......So paying off the remainder right away to prevent paying interest is less likely in this case and you are stuck in a bent over position with Capitol One until you get your finances in order. Nice marketing strategy thay have............."What's in your Wallet?", not Capitol One, that's for sure! :)

8   Sentinel78   2005 Nov 9, 5:04am  

What kind of language did NAR or individual use last time markets went bust in late 80s/early 90s? Was there a language PR campaign then too?

9   Allah   2005 Nov 9, 6:03am  

what is surfer-x s’ take on this newspeak…… one wonders

Haven't heard from the surfer in a while.

10   frank649   2005 Nov 9, 7:04am  

A friend who has been looking at condos in Manhattan for the past year told me that REs are starting to call him back weeks after to say that "the condo has been repositioned in the market".

11   Allah   2005 Nov 9, 8:37am  

CA real estate is just as, if not more so, risky than stocks.

It is also more painfull..........when the stock market crashes, your money is gone........your pretty much bummed out...but just like any other sudden bad events (like death of a friend/or family member), you'll eventually get over it and back on with your life....but in the case of a real estate crash..... it's like seeing your stocks crash in slow motion.........you see the value of your biggest asset get smaller and smaller, month after month.......you start seeing houses nicer than yours selling for less than what you paid for yours....and you may not be able to sell your house due to lack of equity. This is a very depressing spiral that will affect your whole life.

12   Allah   2005 Nov 9, 8:51am  

Our favorite housing stocks
http://tinyurl.com/bl5rm
........and a kick in the fannie
http://tinyurl.com/9k92y

13   Allah   2005 Nov 9, 9:04am  

A friend who has been looking at condos in Manhattan for the past year told me that REs are starting to call him back weeks after to say that “the condo has been repositioned in the market”.

Yes..... I posted about that in the previous thread...here it is again.

Here is a snip from a current article http://tinyurl.com/9gg3t

Anecdotally a friend who is looking to buy an apartment in the NYC area reports that sellers are calling back after three or four weeks to say that they have lowered their asking price. That’s something that never would have happened three years ago, this potential homebuyer observes.

14   Allah   2005 Nov 9, 9:55am  

Check out this flash real estate magazine.......after it loads, go to page 94.... it's an article about "The Antibubble". It's a cheerleading article about how the real estate market is going back to a "normal" market..... It's funny reading some of this stuff, Dotie Herman CEO of prudential claims that NYC real estate in her region will appreciate 8-10% per year. :lol:

http://www.rismag.com/2005/11/index.ipv?flash=1&

15   Allah   2005 Nov 9, 10:13am  

Well Duh! That, and greed and/or short-sightedness, among other things.

Your sister should have offered $200K when they called back.

16   Allah   2005 Nov 9, 10:58am  

Aren’t you guys getting bored of these blogs and endless articles saying there is a housing bubble? So far nothing has happened except threats of a downturn. It’s getting to be as boring as all the “end of the world” predictions over the past 500 years.

The question is why are you here? Probably because you are a realtor who has nothing better to do because noone is buying!

17   Allah   2005 Nov 9, 11:31am  

Well if you've been following the media, you would know that the inventories of houses are rising....and the sellers are slashing their prices hoping to reach a price that will actually sell............meanwhile the interest rates are rising and since noone is buying, next year will not be a good year for real estate.

18   sassy   2005 Nov 9, 12:13pm  

Johnny Bill-- I too want a bust, desparatetly. As a person who works with data for a living, I don't see it in the numbers just yet (from what I read in the articles listed in the links section of this blog). What I see feels more like the small gravel that begins to shudder down the hill before the avalanche. Maybe it's just a little gravel? Maybe it's the real thing. We will only know after the data tell us so.

I like this blog because I can feel smug and superior before the fact. When folks say to me "gosh I never saw the bust coming," I can smile inwardly, nod knowingly to my blog-mates and wait for signs of the bottom. I've learned a lot from the links! I particularly recommend today's " Housing Bubble, or Just Plain ‘Ole Appreciation?" if you have not yet read it.

19   Michael Holliday   2005 Nov 9, 12:21pm  

Greed or fear? Which is the stronger bubble emotion?

What will the face of the average, greedy Boomer look like as
his cherished equity suddenly evaporates like water on hot, Georgia asphalt?

My guess is that many buttocks are gonna' pucker...and the average Silicon Valley visage will come to resemble the frozen expresssion of the classic "sour puss" face: as if one had just bitten into a giant lemon, unaware...

20   praetorian   2005 Nov 9, 1:01pm  

May I interject some humor?

http://tinyurl.com/7g5lo

Ahahahhahahahahahahahahahahahahahahahahahahahaha

*gasp*

hahahahahahahhhahaaaahahaahahahahahahaahaha

*gasp*

ahhahahahahah

Cheers,
prat

21   praetorian   2005 Nov 9, 1:10pm  

Say what one will about the housing bubble, but it has provided some delightful absurdist theater.

I mean, $900,000! All I can say is bravo, bravo!

Cheers,
prat

22   KurtS   2005 Nov 9, 2:47pm  

Say what one will about the housing bubble, but it has provided some delightful absurdist theater.

And, that's Sacramento. Nothing wrong there, but a tad high, IMO.

Then, tack on another $600K and you get that home around here.
Now, that's really stupid!

23   praetorian   2005 Nov 9, 3:02pm  

Wait, wait, wait. Not a bad place?

You people are clearly insane. That place is overpriced at 300K. *Canadian*.

Or are you so sane that my mind is spinning out of control?

Cheers,
prat

24   praetorian   2005 Nov 9, 3:29pm  

"Real estate is expensive. It always has been. It always will be."

_smile_

When faced with terrifyingly sound mathematical reasoning like that, I mean, like, wow.

http://tinyurl.com/bkecn

Hi!
My name is... What?
My name is... Who?
My name is... Prae-Prae-Praetorian.

Chewbacca,
prat

25   HARM   2005 Nov 9, 4:09pm  

ScottC,

It's been a while since I've seen you post --welcome back! But then, I myself was away for over a month, so perhaps it hasn't been that long.

If memory serves me, you described yourself as a Texas-based realtor who, while no perma-bear, was relatively sure of the HB's existence and predicted that the market would start to turn by next spring.

Are you playing devil's advocate and having some fun with us, or have your views really changed that much?

26   praetorian   2005 Nov 10, 2:05am  

@newsfreak:

tipping point:
the moment at which above RV when occupied by the homeowners extended family falls over when partying to Huey Lewis.

That's the p-p-p-power of ARMs!

Can you feel it?

Cheers,
prat

27   DinOR   2005 Nov 10, 3:09am  

When our questions as potential buyers (not that I'm looking in earnest) are met with the language described above it really should be cause for alarm. This is exactly the same type of spin we were given by people on Wall Street even when it became clear that stock prices could not be justified. Realtors have more control because there isn't a "ticker tape" scrolling behind them. If they were smart, rather than expending effort pretending that a bubble doesn't exist they would be much better served to acknowledge it, look at things from the buyers perspective and put in low ball offers and get this thing over with. Their customers that bought at the top of the market will never trust them again anyway, let alone provide referrals. If they were ethical, rather than try to "prop" up prices they should own up to the mistake and go back to the people that they put in at the "top" and begin discussing exit strategies to put that customer in a better position and minimize the damage. Perhaps discount commissions or fees to offset the damage. They will not get praise initially but when prices have crashed they will in time come to thank you. All of these are strategies used by people that have long term careers in mind. If your realtor isn't willing to own up to their mistake it should be obvious that they only intended to make a quick buck and get out. This is known as "Hit and Run" sales.

28   HARM   2005 Nov 10, 3:22am  

Overall, I am guessing (and I at least admit it is a guess) it will be more like giving back between one and two years of the 5 year run up, but that will be more spread out over 3 or 4 years.

Jack,

If the market only gives up 1-2 years of recent bubble gains that's practically the same thing as saying there was no bubble to begin with. Sheesh, have you turned into a radical bull on us after all this time? ;-)

In order for the buy vs. rent equation to make sense, or the HH income-to-price ratio (or inflation-to-price --you pick your favorite metric) to revert anywhere close to the mean, we'll have to see 3-4 years of price gains evaporate. Or, incomes will have to shoot up fast while housing remains flat. I'd love to see that, but wishing and believing are two different things.

I agree the crash/correction will take years to play out, but crash she will. And yes, that's just an opinion, but one that is well supported by the data. Here's another excellent breakdown of HB appreciation vs. rents, inflation, population, incomes, etc. by CEPR: tinyurl.com/17a

29   HARM   2005 Nov 10, 3:26am  

@Paul_from_Oz,

I agree that under $150K is pretty unrealistic for 4-5 acres of developed land --with stables no less, but that wasn't what I was commenting on. I was responding to the closing comment ScottC made:
"Real estate is expensive. It always has been. It always will be.
The bubble is in the mind of anyone who thinks otherwise."

30   Peter P   2005 Nov 10, 3:31am  

Coffe is for closers comes from the movie Glengarry Glen Ross. All Bubble believers should see that movie.

My wife rented that movie for me. It was okay.

Now she wants to watch Chicken Little because she thinks that I look exactly like the main character. :(

31   HARM   2005 Nov 10, 3:32am  

@brahma,

forgive me if this is a bit silly. but where can i find the yeild curve for the treasuries? is there some website for this or some symbol?

Here ya' go: (just add the "http://www.") treas.gov/offices/domestic-finance/debt-management/interest-rate/yield.shtml

and how is this related to long term rates?

Traditional fixed-rate mortgages (which are becoming something of a rarity these days) are primarily based upon the 10-year Treasuries. ARM interest rates on the other hand, are based more on the Fed funds rate and/or LIBOR.

32   Peter P   2005 Nov 10, 3:57am  

chicken little! good call …….I’m thinking with a beer batter really crisp and piquant with a California Shiraz ..No?

I do not eat fried chicken. I do not like meat that I cannot eat medium rare.

33   Peter P   2005 Nov 10, 4:38am  

medium rare … hmmmm “prime” rib … maybe?

How about a nicely-marbled slab of bone-in rib-eye?

34   HARM   2005 Nov 10, 5:09am  

thanks HARM you guys are awesome! kudos to the board for thier wonderful discussion on real estate trends and how people are being suckered. if it was not for you guys i would be in dire financial trouble.

You're most welcome!
*sniff* (_tears welling up_) If I can help prevent just ONE senseless act of financial suicide, then it was all worth it...

35   SJ_jim   2005 Nov 10, 6:01am  

Hey all I posted this a while ago, but HARM's back now & there's another person interested in the yield curve.
Drag the diamon along the "year"-axis and see how the curve evolved throughout recent history.
Yield curve historical animator:
http://www.smartmoney.com/onebond/index.cfm?story=yieldcurve

mmmmmmmmmm...ribeye.

36   Allah   2005 Nov 10, 6:19am  

Real estate is expensive. It always has been. It always will be.

The bubble is in the mind of anyone who thinks otherwise.

Spoken like a true realtor!

37   SJ_jim   2005 Nov 10, 6:24am  

He may very well incurr half of her upside-down debt from this mess when it unfolds.
Just 'cause you lost the battle doesn't mean you lost the war: pre nup. :)

38   SJ_jim   2005 Nov 10, 6:26am  

Yes, that's a joke. But it sure is a funny thought? Prenup on bubble deflation.

39   Allah   2005 Nov 10, 6:44am  

ScottC,

One does have to wonder why you would come to this site.....All are welcome whether you believe in it or not, but I just can't see why someone would waste their time writing to this blog if they didn't at least partially believe in it. The only 2 reasons I could come up with is:

1) You believe in the bubble, but your in denial and very scared.

2) You don't believe in the bubble and you think you can convince us all that there is no bubble and maybe sell us a few houses.

I believe it is 1, if it is 2, your wasting your time...... That would be like going to a church and trying to convince all the priests that there is no God. You bring no real data that would justify your belief....... I have read a few of your posts and they sound like realtor pep talks, the kind that a realtor will tell their client to prep them for a sale. If you really don't believe there is a bubble, why don't you give us some data so maybe you can make a point.

40   Allah   2005 Nov 10, 6:47am  

But that would leave him with a square 20 acre doughnut with no center,

Could be used as a race track........... I hear they are pretty big on racing over there. :lol:

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