patrick.net

Albeit, a Mercedes is nicer than a Civic, but Some of the New Lexus and Acura models are catching up real fast, and if Mercedes and BMW do not improve their product, they will start losing market share.

I will take a comparable Lexus over a Mercedes any day (LS - S Class, GS - E class) Even if Lexus becomes more expensive than Mercedes, it will still sell better.

Lexus keeps improving. Mercedes keeps de-evolving. I do not know what is the the appeal of MB anymore. (If you want a status symbol, you really need a Bentley anyway)

Ray W,

It's worse in Las Vegas. I'm doing a little scouting for a friend that just sold his SoCal home and looking for good "lease w/option" deals for the guy. I kind of look after him since, well since I can remember. Anyway, all of the realtors I speak with when responding to an ad on C/L or whatever get downright militant when you challenge their view on the market. Doesn't bother me. Some threaten to hang up, but never do. I'm just looking for a lease w/option where at the end of 1-3 years my friend can have the home's value appraised 12-36 months from now, not a "buy-out" based on today's still ridiculous prices! And what thanks do I get? Guest Editorials.

These people need to be challenged. Your blog and other blogs are good but this different view needs to be in print for people to see also.

Do you want to be a guest blogger here? We would love to have more rebuttal threads here.

I’m just looking for a lease w/option where at the end of 1-3 years my friend can have the home’s value appraised 12-36 months from now, not a “buy-out” based on today’s still ridiculous prices!

Do not use a future "appraised" value, because it can be a fake.

Try to broker a deal based on a relationship with the OFEHO price index.

For example, if the OFEHO price index for a region is 400K, and the house "worths" 500K now, try to peg the exercise price to something like "125% of OFEHO index price". This way, there is an objective and official target for both parties.

Ray, you can also register (using the link on the right column) yourself and Patrick will give you permission to post threads.

Peter P,

Thank you and I don't know how any reasonable person could object to that! Suffice it to say I'm bearish on residential RE, in particular Las Vegas but I wasn't sure how to structure the deal so as to get maximum bang for the buck out of the price correction. I did get a few realt-whores to agree to having 3 appraise-whores and take the average of their findings though. I just can't see how these guys could possibly be deluded enough to believe they have any leverage in the deal at all. When it's said and done I think we're talking about a short sale anyway! I guess that's what they are trying to prevent?

Hey Ray,
good for you. I'm glad someone else is writing to newspapers about the utter happy face they seem to put on housing. I've written to the San Jose Mercury, The SF chronicle, The Alameda Sun, and most recently- the East Bay Express, which of all publications I would never expect to run an article like they are this week entitled" The adjustable rate mortgage", where couples are shown buying a house over getting married. Hell- one of the first thing the article says is a quote from a young couple that says: "Homes could be 2 million bucks, I have to buy now." or something like that.The article is amazingly rosey and is written as if the obvious insanity these couples are participating in- placing a crappy stucco house first- are perfectly normal and all is hunky-dorey. I was really surprised to see this in an "alternative" publication until at the end it said:" and yes- the author just bought a house in the Oakland Laurel neighborhood" It was stupid. An article written by an author who probably wanted to write something justifying something he did that makes no sense- buying a house at the peak.
I also have written to local officials, most of whom never respond, or do so with simulfaxed copies with generic replies. I have written to the mayors of Alameda, Oakland, and SF.. again with no response. I always stress the harm this housing bubble will have on the future economy and social class structure of the state and area unless more is done to reverse it. I also mention that HOA's( homeowner associations) need to have less power over local government since we are now at an almost 50/50 homeowner ratio and the non- homeowners don't get to participate in community planning. Again- No answer.
After doing this for almost a year, I have gathered that no politician, business leader, or publication wants to even touch the subject, that is unless they can spout about how good things are in housing. It was only recently that the SF chronicle posted a story about the 36% decline in Home sames last month, but only after the numbers make it painfully clear that the sales of homes last month is point-blank proof that the bubble is either collapsing or very close to doing so. Keep writing!

SFWoman, Lexus is truly amazing. It has the power to raise prices, enough said. Trust me, it will last.

We bought a used 2003 Lexus. The only regret is: we should have bought a 2000 and paid less. :)

I'm trying to contact Mr. Barry to see if he'd be willing to author a guest blog-thread here. Below is a Feb. attack piece from the Santa Cruz Association of Realtors(tm) "Legislative Watch":

---

FEBRUARY 2006

Trial Lawyer Seeks to Qualify “Open MLS Act” for 2006 Ballot

A proposed ballot initiative, called the Open MLS Act of 2006, has been submitted to the Office of the Attorney General for the State of California for preparation of a title and summary. The initiative’s proponent is Mr. David Barry, a San Francisco attorney. Mr. Barry has a long and contentious history with organized real estate and has been the attorney of record for several lawsuits involving both NAR and C.A.R., including attacks on the MLS and the REALTOR® trademark.
June Barlow, Vice President and General Counsel for C.A.R. has said that she believes Barry’s effort is “ill-conceived.”
“There’s no need for an effort like this because free enterprise has worked well for a number of years,” Barlow said, adding that it “shows a lack of confidence” in attempting to place the issue before the voters.
The purpose of the initiative is to establish a “California-wide residential multiple listing service open to the public and realty agents alike.” The proposed open MLS would contain listings of homes for sale and rent and provide free access to buyers and renters.
Under the initiative, any licensee entering into a contract with a seller who requests a MLS listing would be required to list that residential property in the open MLS. The operator of the MLS would not be able to claim any copyright protection in the listing compilation or any part of the data. Any person, upon written request, could receive any or all of the non-confidential data in the MLS once every 24 hours at no charge. The initiative also establishes sanctions, fines, and the right to “bring an action…in any superior court” for damages and/or attorney’s fees. An individual need not sustain damages to bring suit.

The initiative currently is pending at the Office of the Attorney General. To qualify for the ballot, initiative supporters would need to gather the signatures of approximately 373,700 registered California voters.

Randy H,

I'd love to get Mr. Barry's spin on things! I'll bet the realt-whores feel pretty smug about his having to get THAT many signatures just to get on the ballot! It's a complex issue and they have to feel pretty confident that even if it does find it's way on to the ballot that they can crush it with a flick of their wrist with a mighty marketing machine and deep pockets. Where's the Ace in the hole on this one?

Thank you and I don’t know how any reasonable person could object to that! Suffice it to say I’m bearish on residential RE, in particular Las Vegas but I wasn’t sure how to structure the deal so as to get maximum bang for the buck out of the price correction.

Yes indeed. I would try to exploit the psychological biases of those investors. Lease-options should be cheaper if the exercise price is higher, because the seller is given more upside potential. You may be able to get a great deal (with less option cost AND lower eventual exercise price) by convincing the seller that prices can only go up.

Peter P,

Thanks! I've been tracking these for some time and it seems like there's this "threshold of pain" that I haven't been able to reach just yet. It's frustrating b/c I have to imagine to myself that they are in arrears so why are we playing these games? It's now fairly common knowledge that LV is awash in speculator "purchased" homes and no one to sell them to or rent them out to! Here you are offering them a life preserver and with the attitude already?!

DinOR, one thing though, if they are foreclosed upon, they will not be in a position to honor the option agreement.

Peter P,

"convincing the seller that prices can only go up". The genius of that! Poor, poor pitiful me. I'd like to buy out right now but I can't (most advertise by saying NO CREDIT CHECK NEEDED! So how will they know what you are or aren't qualified for! All you need is the "option payment" and they don't care if you're an axe murderer! The only thing we would have to worry about is their trying to back out down the road when it becomes obvious we're all looking at a short sale. Think balcony, think pool, think close to The Strip! Outstanding! Here all along I've been trying to fight them! Let them win!

Peter P,

That's a good point! But it doesn't have to spell train wreck though. You might be in a position to work the short sale directly with the lender and b/c you are already occupying they may see the sense of not taking on yet another REO and re-deploying the assets on a loan that will make more sense?

You might be in a position to work the short sale directly with the lender and b/c you are already occupying they may see the sense of not taking on yet another REO and re-deploying the assets on a loan that will make more sense?

If possible, I think it is still better to find the house with a smaller mortgage. Psychologically and logistically, going through a short sale may not be pleasant.

Peter P,

I was kind of kidding about the pool and all, and with the tightening lending standards sensible is the way to go. I do wonder about the brass of these characters though.

Let's see, I'm 3, 6, 12 months behind on my mortgage on my "investment property" so I'll?

A. Make every effort to get current on my payments
B. Work with the lender to do a loan work-out
C. Sell it and face the music
D. Since I never had any skin in the game to begin with I'll stay with that and find some poor sucker to cover my arrears and take over my payments and then pencil myself in for some upside while I'm at it!

The brass of SOME people!

Did directors do enough?
By Edward Iwata, USA TODAY

http://tinyurl.com/emhoj

"Touted as a model of corporate governance before its accounting scandal erupted in 2004, Fannie Mae's checks and balances clearly weren't strong enough to police the mortgage giant, according to corporate-governance and pay experts who reviewed the investigative report released Thursday.

The internal report, commissioned by Fannie Mae and conducted by former senator Warren Rudman and the Huron Consulting Group, sketches a positive portrait of Fannie Mae's board, clearing them of direct responsibility for the company's accounting troubles."

This just in...

Panel clears Big Bad Wolf cleared of wrong-doing in Wolf vs. Three Little Pigs incident

Touted as a model citizen before the Three Little Pigs incident, Mr. Big Bad Wolf was in no way responsible for any wrong-doing, according to lung-power and construction experts who reviewed the investigative report released Thursday.

The internal report, which was commissioned by Mr. Wolf and conducted by Mr. Wolf's relatives and close business associates, sketches a positive portrait of Mr. Wolf, clearing him of direct responsibility for the pig's housing troubles.

Perhaps we can hope that Bush can get us a federal anti-NIMBY law.

Harm,

Read the link. Sad. What DO you have to do to land in jail. Evidently "fiduciary obligation" doesn't mean what it used to. After what the other publicly traded co's went through this is like getting a detention. Score another victory for RE as the preferential treatment continues!

SFWoman, I guess you are right. We just need to be careful about interests and power.

My taste runs towards the more understated style exemplified by MBZ or more recently by Audi. I honestly don’t know what to say about the recent line of Bimmers, though. Words fail me.

True. Have you seen the new 2007 LS460?

The door-closing sound of the current generation LS is still not right. However, I am sure the new one should be better. The doors on the all new GS sounds much better then the previous generation.

Yes, I like to go straight to the minor details that nobody cares. I think those are the true indicator of quality.

As far as looking for quality in a car, I think the European carmakers really pay attention to "cosumer percieved quality" areas.. like door closing sounds, dampening in the switches, and the fit and finish of the interior plastics. The first thing I do is open the hood to the engine, look at the grade of bolts on the the head, and how things like the serpentine belts are positioned. I also look at the frame and undercarriage. Are the bolts dichromate or painted steel? Are the welds straight and complete, or splattered looking? Is the paint on the frame uniform and heavy?
Look inside the new MB's and BMW's and the quality of the interior and the engine shrouds that hide are impeccable. But I've looked enderneath a number of these and it seems that they don't pay attention to the unseen as well as the equivelant japanese models.Things like sloppy brake caliper assemblies, inconsistent frame welds, and AC units with way too many hoses jutting out of it was what I saw. My 10 year old 9k toyota truck has some of the highest quality hardware I've seen on a truck holding it together as well as a very organized engine compartment. 180k later and it still looks almost new in there. I did have to remove the air horn to clean it last year, and the quality of the unit was amazing. All die-cut and polished. Nobody would ever see this part except a mechanic. So why do it? Because they care about the product and want it to be as well made as possible.
I'll admit I rode in a BMW M5 about a year ago, and the impression was like that of riding in a jet plane. Amazing. But again, I'm fairly confident that they are not up to par in terms of construction with even the cheapest japanese cars. Taste has everything to do with it, and it's consumers who make the call to spend the extra green.

And based on past experience, they aren’t terribly fun to drive. Very refined, extremely quiet and well insulated, but built for comfort rather than cornering ability.

I know what you are talking about. My wife also does not think that the GS is a fun car to drive. She thinks that the color or our car (silver/grey) is absolutely boring (looks like unpainted model car).

Lexus would strike out as their own brand though - there always seems to be an air of a trying-to-be-an-MBZ/BMW, particularly in the LS.

I thought Lexus always wanted to build Caddy/Bimmer hybrid. :) We always joke that our GS is a cross between a VW and an Oldsmobile.

In some sense, they have been successful. You get the silk-smooth boat-like ride and impressive German-like technology.

I don’t know if it was because of the reclining seats in the back that they had in that specimen, but the trunk was unbelievably small.

I think they really should not play around with reclining backseats. Lexus owners here do not get driven around. It is way too small a car to compete with Bentley Arnage and Mayback anyway.

Just like how the RE people say everybody needs a place to live, quality isn’t part of the equation.

Yes, buy anything you can, or cannot afford, even in transitionary neigborhoods. Prices always go up. :)

Sometimes, I feel bad for those who spend thrice as much on converted apartments just to "own". Sometimes, I think they deserve the consequences of their stupidity.

He actually looked a bit wounded when he asked and I gave him my rather-too-honest opinion of it. He ended up getting rid of it within a year because it had so many electrical problems.

I will never get a convertible. The lack of a top hurts structural integrity and I doubt it will protect well in a pile-up.

“I honestly don’t know what to say about the recent line of Bimmers, though. Words fail me.”

Some call it the "Bangle Mangle", in honor of BMW's design director, Chris Bangle. It was an effort to remake their line into, well...headlights that resemble Dame Edna glasses, plus similarly strange twists, bump, bulges of sheetmetal. Car cancer is another way to put it.

The proof of the existence of the X is in the fact you cannot disprove the existence of X.

Any expert of modal logic here? :) Let's talk about possible worlds.

I watched something about a galaxy far, far away once. Does that count?

That should help. Welcome to the dark side of the force. :twisted:

My ex-wife has refered to me as Darth Ray on a number of occasions.

Someone (A Jedi homeowner?) here used to call me Darth Bubblehead.

Since we're on the subject of galaxies and the Dark side, anyone here read up on the latest ivory-tower explanation of our yawning trade deficits: so-called economic "Dark Matter"?

It’s just that we obviously have our own preferences. My old job used to require that I drive a lot, so I tended to prefer (at least at the time) a car with tighter handling. That’s all…

I understand. My wife does not like the handling of the Lexus at all. (But I usually get 2 mpg more than she does)

Driving is the most risky thing I have done. It is much safer eating Fugu from a licensed chef. :)

I still think that there should be no zoning control whatsoever. People should be able to build whatever they want. That said, I am not saying that environmental impact studies should not be done at all.

But it makes perfect sense to me why the posters on this blog want realtors to waste valuable money and time studying theory. It’s because that’s all they know, theory. They know nothing about business.

Actually, I believe in caveat emptor.

I like some zoning. I wouldn’t want a medical marijuana club to move next to a middle school, and I’d be pretty miffed if someone purchased the house across the street and made it into a nightclub.

I will refrain from talking about medical marijuana clubs. If they ought to be legal and adequately regulated, we should not mind if it is near a school. If it ought to be illegal, it should not be anywhere.

RE: nightclub

I think people should just learn to restrain themselves. There is no excuse for bad behaviors even if they are around nightclubs.

(disclaimer: I think alcohol consumption should be banned in all public places)

The lawyers who were calling your mom probably weren’t real estate lawyers, and they probably valued her expertise in her field.

I thought (at least in California) laywers can become real estate brokers simply by passing a simple test.

ScottC is a regular late-thread poster here. He never RTFA. If he had he would have noted that I never said a word about intelligence, nor did I state that education/certification/licensing ensures success. Certainly, there are many people who succeed with limited education, although having an education certainly increases the odds of wealth outcomes. Certification and licensing is what defines professionalism in this context. One can be an expert -- really good at what they do -- and not be a professional. But, we set up professional barriers like the Bar, the CPA, and supposedly the Licensed RE Broker to create a minimum level of expectation and trust in the practitioners of that profession.

I have yet to meet the self-taught, high-school level, surgeon, quantum physicist, economist, lawyer or financial engineer who'd I'd trust with my well being.

He also never reads responses, or he'd know that

It’s because that’s all they know, theory. They know nothing about business.

is an ignorant statement. Many here, myself included, have started, managed, grown, and sold many more businesses than he probably ever will. I'd put my bets on Zephyr over ScottC as a RE businessman any day.

He also seems to insist upon mixing buying a home with running a business. There is no parallel here. Maybe people who are "salary-slaves" won't get rich; but maybe they don't want to. And for those of us who do run businesses, I'm tired of his reactionary anti-everything-not-me crap. Working for mom != being a successful entrepreneur. Sorry.

ScottC also just makes shit up:

What they don’t teach is the business of law, which explains why, despite their rigorous certification, the average salary of a lawyer in the US is $30,000, less than a school teacher.

Average salary of lawyer in the US in 2005, according to official data was:

$80,820

He wasn't even close. Teachers were $46,509. Realtors(tm) were $32,843.

{All Data National Average, median salaries}