patrick.net

Many excellent observations posted here!

The ill advised notion of going through the motions to get a realtors lic. to complete one transaction just won't die! The same mindset for those that on-line/daytrade their own investment accounts. Subscriptions for just a few research sources can run into thousands per year (if making informed decisions is important to you). This is usually spread out over an entire client base, not the burden of one person.

Still and all, I'm the last person to rush to the defense of Realtors. Many that claim to be in the bus. for 10-15-25 years have actually been doing it "part-time" for that period. I don't want to beat this to death but I truly feel that any Realtor that has long term goals in the industry should embrace the "Crash". Get over the whole ego thing and bring value to your clients by presenting low-ball offers that will put them in a place (as buyers) where profitability is short term. Not burying them upside down where they might be stuck for 3, 5 or even 10 years before they can break even.

With friends like this who can afford foes?

How many realtors does it take to screw in a light bulb?

They don't screw light bulbs, they screw buyers.

I have to agree with Allah, I know a RE agent who helped my friends run drainage, install new windows and told them why one home was a total piece of $hit and another was overpriced. Of course this guy is a salesman and he did try to push up some houses more than others - that's his job. But he's still working. He also didn't give people the "now is the best time to buy" BS. As none of my friends or I have sold a house yet, I have no experience with selling a house.

The RE agents I hate the most are the selling agents who purposely list a house at a price way under other comps to generate a bidding war. I know a pair of women in the East Bay who did this very well in the boom cycle. I will never buy any home from this pair. I hope these two suffer in the coming dowturn.

Most of the posters and readers of this blog have never been through a real estate crash. I have. And it was a hell of a lot worse than the price depreciation we’re likely to see over the next few months.

ScottC,

I can't speak from experience about the South Texas RE crash, but I can about the CA crash in the early 90's. Nominally, prices here dropped some 21% from peak (87-88) to trough (96), and it took roughly 15 years for prices to recover to their bubble levels --just as in S. Texas.

And what makes you so sure it won't be just as bad or even worse this time? I see plenty of evidence it will be worse --prevalence of I/O neg-ams, higher estimated levels of speculation, RE constituting a greater share of job & economy, etc.

You guys are all a bunch of wussies to me.

Beware of painting with too broad a brush, Scott. Many on this board, myself, SQT, Peter P, etc., have consistently defended your right to express you opinions and have valued your input, even where we disagree.

This thread topic was obviously meant to be a bit cheeky and provocative a-la "Jealous Bitter Renters". But consider the last sentence:

Will the ethical RE agents be the one’s left standing?

ScottC Says:

"...I’d like to meet a Californian who can stand in an unairconditioned repossessed home in South Texas for 20 minutes. It’s like standing in a 120 degrees oven, while writing a list of repairs. You guys are all a bunch of wussies to me..."

I'm from San Jose, but live in Phoenix. I did live in Arlington Texas for a year and can say, hands down--especially during Monsoon season where it's both ungodly-hot and torridly-humid--Phoenix is hands down hotter than Texas.

Maybe even be hotter than hell itself!

I haven't met an honest realtor yet (and I have two of them in my family!).

btw, here's an article from CATO that might give you a different perspective on deflation.

http://www.cato.org/pubs/policy_report/v21n3/cpr-21n3.html

The same greed that motivates people to buy huge McMansions, eating up our prescious natural resources because for some reason, they need 7 bathrooms is the same greed that motivates RE ... It's the American way. Everything, even a spiritual holiday, is geared toward buy, buy, buy, consume, consume, consume.

NAR report this morning: sales dropped significanly across the board. NE leads by 7.5% sept to oct. Prices are still all lower than they were this summer.

Checkout this article As Prices Cool in California Markets, Defaults Rise

from the "As Prices Cool in California Markets, Defaults Rise" article:

"As interest rates rise, we'll see an end to the price boom of the last several years," said Ms. McGee (foreclosures.com pres.). "But we won't see a price crash like we did in the 90s. The high inventory just isn't there.

Funny things people say.

“As interest rates rise, we’ll see an end to the price boom of the last several years,” said Ms. McGee (foreclosures.com pres.). “But we won’t see a price crash like we did in the 90s. The high inventory just isn’t there.

Funny things people say.

She doesn't want people to think there is a crash....only that there will be more foreclosures....she has to play two sides...if she led people to believe that there was a big crash coming, people would wait it out instead of looking for foreclosures right now. She has a vested interest to protect....remember, she runs foreclosures.com.......Alexis is a saleswoman.

Shes right though...the high inventory just isn't there.....................yet!

Shes right though…the high inventory just isn’t there…………………yet!

Well, to be right she needs to be specific enough to prove or disprove her statement. I can't be sure if she spoke about inventory in the Bay Area, LA, San Diego, or possibly some market where RE is going strong. All the same, it struck me as blissfully hopeful.

Downside Bull,

You might be interested in this thread from August:
"Strategies for profiting off of a housing bust"

Go to the main blog page, find the links on the right-hand side & click on:
Archives
August 2005

@PeterP: "Prat, my swing is falling apart!"

That is the nature of swings. My driver decided that duck-hooks off the tee were the most appropriate way to torment me, and my scores shot up 20 strokes for a month. Isn't this game grand?

@Ha Ha: "Traffic is decreasing to this blog — posting is not that fast and furious."

And thank goodness. I prefer a leisurely read after work to the all-night chugs that were going on a few months ago. It was impressive, but exhausting.

@ScottC re Texas v California.

Like, whatev. You wouldn't last five minutes in an afro-fusion-cuban-thai-vegan restaurant with absolutely *awful* Chablis and a maitre d' whose icy scorn could freeze hell. I mean, really, like he's even that cute in those chartreuse crushed velvet pants. Sooooooo last week.

ta,
prat

I’m a whiskey man.

You, my friend, are in luck. I present...

PERFECTION ITSELF: http://tinyurl.com/da446

Cheers,
prat

I prefer bourbon to Scotch, Scotch is something old ladies like to conceal in a glass of milk.

Well, old ladies and that sissy Churchill.

Cheers,
prat

There are still a few party go’ers that refuse to call it a night.

Hasn't had any effect on the millions of for-sale signs that are still blossoming like spring flowers.

...and while that is going on, have a look at the article RealtyTrac survey sees increase in foreclosures

[snip]
"New foreclosures increased in October to their highest level so far this year," said James J. Saccacio, chief executive officer of RealtyTrac. "Some of the increase can be attributed to foreclosure activity ramping up again in Louisiana and Mississippi after being disrupted by the recent hurricanes. But it's possible that increasing interest rates and other economic factors are beginning to move foreclosures closer to their historic levels."

but I have yet to meet one Californian who would stand in an unairconditioned repossessed home in South Texas for 20 minutes.

Actually, I'd prefer to sit. With a cool drink, I can weather anything short of a fire.

but I have yet to meet one Californian who would stand in an unairconditioned repossessed home in South Texas for 20 minutes.

I'm sure anyone can if there is money to be made.

Here's another fine article: Condo craze is headed for crash and burn

I wouldn’t waste five minutes in an afro-fusion-cuban-tai-vegan restaurant. There’s no money it.

I prefer banks myself, but the food usually sucks.

Hmmm... "Last hurrah", dead cat bounce, or genuine evidence that this bubble still has legs?

/biz.yahoo.com/ap/051129/home_sales.html?.v=4
New Home Sales Hit Record Level in Oct.
Tuesday November 29, 10:09 am ET
By Martin Crutsinger, AP Economics Writer
Sales of New Homes Soar to Record Level in Oct. in What Could Be Last Hurrah for Housing Market

The rise in new home sales was accompanied by an increase in prices, with the median price increasing by 1.6 percent from September to $231,300 in October.

Same article did have a couple of caveats though:

The nationwide jump in new home sales was the one bright spot for housing last month. Sales of previously owned homes fell by 2.7 percent, the National Association of Realtors reported on Monday, and construction of new homes and apartments also fell during the month.

Re: New Homes Sales

y-o-y and broken down by region, the report tells a more interesting story:

Northeast -16.5%
Midwest -19.8%
South 27.5%
West 8.8%

Never recall seeing such a large discrepancy between regions.

We should send that condo “crash and burn” link to the people over at Condoflip.com.

I already did!

Thanks for pointing that out Frank. One has to wonder if that huge 27.5% spike in the South has something to do with Katrina, or if the RE speculators are simply leaving the coasts in search of less expensive properties to flip --or a little of both.

or if the RE speculators are simply leaving the coasts in search of less expensive properties to flip

What do you do for a living?

I'm a traveling RE speculator. :lol:

"There is no way a real estate broker can survive, much less profit, for 10 years in the business without absolute integrity and unassailable ethics. It’s just not.

Since realtors have a 90% failure rate–9 out of 10 new licensees will quit before two years–only the very best and most honest will make it for 10 years. And they are the only realtors worth doing business with."

ScottC,

I don't want to reignite another pointless "all Realtors are crooks" debate, but it's quite a leap to go from "9 out of 10 new licensees will quit before two years" to all those who survive have "absolute integrity and unassailable ethics". I'm sure that many wash out due to incompetence & inexperience, but that's not the same thing as failing due to dishonesty and a lack of ethics.

There are tons of talented "closers" in every sales-oriented profession under the sun. It does not logically follow that all long-term closers are also exceptionally ethical --just good at closing. Of course, this does not prove that they are exceptionally unethical, either.

Again, not a slam against you personally or your profession --just an observation. There are ethical and unethical people in every profession. I agree that most of the johnny-come-lately's will wash out quickly.

@Mother Ocean,

I was gone for a long while myself. I understand that Surfer-X hasn't been posting for several weeks now. As far as Mr. Fuchs' fate, that would be a question for SQT, Jack or Peter P.

What happened to Surfer-X?

Maybe he caved and bought a house.

Well this article cracks me up What home buyers really want I think what buyers really want is sane prices.

"There is no salary. All of your business expenses, and all of your personal living expenses, are paid solely by the commissions you earn...You get a reputation for dishonesty and poof, you’re gone. ...In real estate, only the ethical survive."

Now, don't take this personally, but the cynic in me wonders how any sales-driven business weeds out the unethical types. Oh, the rules. Well, when money is involved, rules are often bent, broken, or ignored. Even physicians do screwy things for money. I'll grant you're the exception, but many of us here have first-hand experience with realtors acting poorly. Perhaps it's all a matter of viewpoint on what is ethical, but I would venture to say the average homebuyer doesn't know how "ethical" any given is, until they work with them. To suggest that every realtor is as ethical as you would mean that everyone has the same personality and motivations. I wish the world were so! :)

ScottC, you seem to believe that there are no (zero) dishonest realtors who have been in business for more than a couple of years and you will not give up trying to prove a point that cannot possibly be proven. Sure, if you are caught being dishonest in the public eye (make the headlines or such) , you might have a hard time getting work again in the business...you might not get work in other business as well depending on what it was! The fact is, people lie, cheat and steal every single day....and many of them don't get caught. You can tell a client that RE prices will never fall and you cannot be sued for it when it does.....it is just an opinion. The client may be pissed that they trusted their professional opinion and they may tell their family and a few friends not to do business with this dishonest realtor...but do you think that their career will be damaged by this? Hell no.........Do you know how many people complain about being ripped off by a car repair shop,....thousands...but the shop continues to do business. There are some shops out there that have been in the headlines and the shop owner put in jail......and then he gets out and goes back to his business as usual. Would I ever bring my car to this shop? No, but I could drive by there any day of the week and see his garage is full and business is as good as ever. The fact is that there are some unethical people in all occupations, but the best salesmen are the ones who can make the sale whether it is worth it for the buyer or not!

Another thing...when most people become interested in buying a house, they don't go through the yellow pages looking for a realtor, they see advertisments for houses, see a house they like and call the realtor who listed it. The realtor will then answer their questions about the property....if they aren't interested, the realtor will find other properties for them. The realtor will convince the client to come and take a look at some houses, even offer to drive them around and thus a relationship is formed. Do you think the client is going to look up the realtor in the "big book of dishonest realtors" to decide whether or not to do business with them? No, there is no such book available...and if you try looking up the company on the bbb.org website, you will not find any companies there. Why? I don't know, but I can tell you I have reported an online company to the bbb that ripped me off....they called the company....no answer, wrote to the company and the letter was returned undeliverable. The issue I had was never resolved and if I were to go to the site to look up the company, it would return no results, I have made several attempts to find out why they are not listed on the site, but I get no answers.....yet I can still go to the company website,...so he is still in business, go figure.

"big book of dishonest realtors”

LOL, and to Scott's credit, I hope that book is small.

Then again, how would we define "dishonest" or "unethical" in regards to realtors?
Poor market advice, questionable appraisals, pushing bad financing--or worse?
A realtor doesn't have to be a full-fledged grifter to be viewed as dishonest by me.

Then again, how would we define “dishonest” or “unethical” in regards to realtors?
Poor market advice, questionable appraisals, pushing bad financing–or worse?
A realtor doesn’t have to be a full-fledged grifter to be viewed as dishonest by me.

Precisely.

The chain of dishonesty, distortion and greed does not start nor end with the Realtor. The Realtor is actually one of the weakest links in that chain (made up of dishonest Fed, GSEs, banks, sub-prime lenders, appraisers, brokers, speculators, dumb borrowers, etc.).

Even so, in the most Bubbly markets, a Realtor ultimately must choose between serving this rotten system or (very likely) going broke. That system is currently rigged against the reasonable homebuyer's interests, against transparency and against setting sane valuations. Realtors who feed into this cycle must share some of the blame, though by no means all of it.

If you can buck the overwhelming tide of deceit and still make a good living, ScottC, I salute you. If staying honest AND staying in business is the norm in Texas, then I salute Texans. This is not the norm in CA, I can assure you.

By the way, I have great sympathy for those long-term Realtors out there who have managed to stay honest and have had to put up with this crap for the last 5+ years. As ScottC has pointed out, you're up against ridiculously inflated ('hit the mark') appraisers, unscrupulous lenders, greedy sellers, ignorant buyers, unqualified greenhorn agents (giving the rest of the industry a bad name), etc...

FSBY signs are springing up at a greater rate than the realtor variety. Probably because these people bought recently and would be OOTM with a realtor's commission.