The pendulum swings both ways. It’s restitution time for recent lack of due diligence.

There are buyers and sellers out there, making offers on housing–I know, as an industry participant. The stats tell us volume (transaction count) is down a lot, but prices have fallen only a little, if any (definitely nothing like Las Vegas, Phoenix, Florida, etc). What’s this mean?

Here’s an angle to consider:
How many of you think of this as pendulum swings in the market? Real estate markets always run in cycles…and they cycles all have different durations and magnitudes.

Now let’s think about a few of the recent influences on this one…
* Heady dot-com days lead to dot-bombs, but still lots of money to invest…hey, real estate has often been a stable market…let’s throw some money that way!
* Continuing foregn trade deficits leave China, among other countries, with huge US dollar reserves…hmmm…how can they get good returns on their money? why, let’s try wall street!
* So now we have all this money going after too few borrowers (and houses)…guess what…loan prices go down, house prices go up. where next?

By now, you should be getting the picture. There are multiple factors at work here…unrealistic sellers, buyers on the sidelines, and banks now overreacting to the last few years’ excesses.

I have now seen some of the craziest (unexplaininable) actions in the market, and not unethical actions by buyers and sellers but irrational decisions by lenders who have become so risk averse they don’t care if otherwise good transactions fail. Like:
* bank holding up final loan approval (20% down, 800 credit score buyer) because HOA docs weren’t personally signed (they came off a website)
* power of attorney for spouse deemed insufficient by lender for lack of words “sound mind”
* bank rejected closing papers because borrower’s handwritten date didn’t meet someone’s idea of “proper” numbering (who made them the second-grade teacher?)

Why It’s Worse Than You Think

….Lawrence Yun, chief economist at the National Association of Realtors, tells NEWSWEEK that “home sales and prices in most of the country will improve during the second half of 2008.” (Yun is the Little Orphan Annie of forecasters. He’s always sure the sun will come out tomorrow.)….

I think that a good, painful depression, will help the United States in the long term. It will wake us up, lower prices, and create a generation that can help rebuild the United States. This country is a pyramid scheme that needs to come crashing down. Maybe we can even elect a president not a D-list motivational speaker like we usually get.

when I lived in Seattle in the past and I was missing the summer sun, I would take a trip over to Orcas Island or go East a bit over the mountains. I wonder if there has ever been a gauge or reading of a region’s denial, or how to read it, surveys?

Info found on the Seattle Bubble blog finally got thru to him! :-)

Go Tim!!!!

Strangely, more then most types of industries, real estate tends to make people lose focus of their most basic tenets of common sense. Questions they normally would ask a tire sales man they avoid in real estate for fear of looking unsophisticated. The whole process is pretty much a scam as it is.

I remember having a real estate agent contact me with a link to that conference a few months back asking if I was up to date on the latest information about the market. It was laughable…I returned a link to the bubble in the reply email.

Strange – He never emailed back… : )

Alan Greenspan, November 23, 2007

I disagree with Yun and believe that a market recovery is actually finally in sight. Except my idea of a market recovery involves prices sliding another 15 or 20% so they can start selling again.

Dang, Ira. That was brutal. ;-)

chief economist of NAR walks away?

I’m happy the truth gets repressed sometimes, if it somehow delays the inevitable negativity through psychology.

Even Newsweek is reporting a national recession that’s worse than we thought; with high gas prices putting inflation pressures on the fragile economy and no end in sight for 2008. That’s a turnaround too.

I have to give him credit, he has that rare uncanny ability to state the obvious.

Applications Jump on Strong Purchase Activity: MBA
Mortgage application activity jumped 10.9 percent last week as anecdotal evidence suggested that purchase interest in bank-owned real estate is beginning to drive buying activity in some of the nation’s hardest-hit housing markets.

The Mortgage Bankers Association said Wednesday morning that a composite index of application activity rose to 557.1 for the week ended June 6, up from 502.3 one week earlier; applications remained 16.5 percent below year-ago levels.

Ummm, the basis for comparison – the week ending 5/30 had 4 working days (due to Memorial Day). The week ending 6/6 had 5 working days – so volume was only up 10% on a 25% increase in days to do business.

Where is the good news?

None of the reporting I have seen even caught this basic fact.

I wonder what’s up with the investigation of those homes that were mysteriously torched a few months ago. I haven’t heard any more on that.

http://www.seattlestreetofdreams.com/20082009showinformation/

Would that now be “The Street of Broken Dreams?” We couldn’t sell any of our dream houses here in Portland, but we still have Kool-Aid, so the show must go on.

Economist = Propagandist
Analyst = Fortune Teller
Spokesperson = Court Jester
CEO = Delusional Monarch

Keeping these small revisions in perspective will help us see through the spin in real estate and economics news and quoting.

Alternatively:

1) Perhaps a solar radiation flipped a few bits on his brain. It happens on computers (especially those used in space).

2) NAR is running out of funding for their drugging/brainwashing programs. It’s now so bad they can’t even brainwash their spokespersons.

3) This isn’t the same Yun. Either the real Yun was replaced by an alien/robot when he got the top post, and the real Yun has recently killed the impostor to take back his old life, or the real Yun has been replaced by a robot/alien in the last few months.

4) Yun gets his information from one of those online random fact generators. This one spits out a city name, and then either a thumbs up or down. He then has to scramble to explain the machine’s output, regardless of how incredible it is.

There is no other explanation. Yun is a man of his word.

Steve Tytler.

(Steve, since you are a a member of the media, I implore you to stop making the market worse. Especially your most recent remark about no appreciation for three years “or more.” Because of that remark I’ll never have our office close one of your transactions. Never. I’ll remember your negative sentiment. Plus, all the agents you work with should stop doing business with you. You are single handedly ruining our market. Plus, because Glenn Beck gave you a testimonial on the air, that’s just over the top).

He, he ; ) just teasing.