[powayseller]

How can inventory be at the peak level of the last housing bust, and we are only at the beginning of the bust?

Something is going on that makes this time very different.

If we were mirroring the 1990’s downturn, our inventory numbers should be about half, right?

This is another thing the UCLA Anderson Forecast overlooked. They did not mention inventory at all. Not one word about it.

They took the tactic of eliminating factors they couldn’t measure or explain.

Hey, I know. Let’s forecast the weather, but not consider that El Nino thing. After all, it’s kind of complicated and we don’t understand it too well, so we don’t really need to deal with that stuff. We call ourselves the UCLA Anderson Weather Forecast.

[powayseller]

I didn’t show my house to the East Coast buyer, because we were finalizing our contract, and had a signed offer by mid December. I didn’t follow up with my realtor to ask if he worked with that buyer. I found it interesting that the internet was the primary marketing tool, and that I’d attracted someone from the other side of the country, just with having some good photos.

My name is Schahrzad Berkland. What’s yours?

I am done with the anonymity thing.

I like Docteur’s style, and have thought a lot about his post of taking responsibility. This includes saying who I am, and not hiding behind a screen name. It feels so good to be free at last.

Why hide? What is there to protect?

[powayseller]

I think it’s interesting from a recession point of view. When my husband worked for U-Haul corporate in Phoenix, he learned they make most of their money during recessions, as people move and use storage facilities.

That’s why I checked all the public storage places, and the PEs were over 25. Why is the stock market so darn overpriced?

What else does well in a recession?

I spoke with my A/C installer today. He’s been doing this for 25 years, and has seen several cycles in SD. He owns his house free and clear, has several stocks (AA since $2/share, etc.) He told me he bought Watts, the air conditioning manufacturer/seller, a few years back. I told him the company would reduced its profits during the recession, but he disagrees. He says people will stop buying cars and trips, but they will not quit updating their heating, buying TVs. He says the service industry is recession proof.

I don’t buy it. Watts probably made a lot of money as builders were going crazy overbuilding the last few years. this is all winding down. I think their stock will sink, too. The guy I talked to doesn’t want to sell any of his stock. he says eventually they will turn around. He’s in it for the long haul. This reminds me of people who don’t want to sell their house, because eventually it will come back to a higher price. I couldn’t convince this guy that a recession will cut his profits. He’s owned the stocks so long, that even a 60% reduction will not make him lose any money. So he really doesn’t care about any dips. Interesting situation.

[powayseller]

Bugs, I bet on price declines nationwide. Cities like Kansas City, MO are already seeing high foreclosures and price declines. The auto industry states are also hurting. Cities like Omaha, NE are experiencing a record DOM and foreclosures, although prices are still flat.

Look, these exotic loans are doled out nationwide. Our negative savings rate is a national phenomenon. Folks in Lincoln, NE were just as likely to get an ARM to buy that new car as the couple in San Diego, CA. It’s only a matter of degree. The Lincoln NE family borrowed $40K on their $120K house. Interest rates are up, and they are struggling to make the payment.

By end of 2007, you will see nationwide price declines of 3-5% in all towns, and 25-35% in the bubblicious cities.

Add the recession to the mix, and you can increase the losses.

I am surprised that as an appraiser you are not more aware of the national market. I would love to hear your comments after you speak to some colleagues in other cities. How much of their business if cash-out refis? That will tell you a lot. I think you will be convinced only once you start talking to appraiser in some other states.

[powayseller]

I already wrote about this in another post yesterday. I think it’s the one about RS shorting LEND.

Thanks for starting a thread on it. I’d love to hear from anyone else who did the same thing.

Now why would the PIMCO guy sell his house? Isn’t he rich enough to afford losing money, as some on this forum claim as the reason for buying a house now? Or the reason for not selling…

[powayseller]

Early December, my realtor told me a client on the East coast was coming out to SD, had seen my house on the internet, and wanted to view it. We already had an offer in progress.

sdrealtor, I find it interesting that you dismiss this internet approach of selling homes. Did you not know that 80% of homes are sold over the internet? If the house is marketed well, the client will ask to see it. Your seller is competing with homes that have a video tour. You don’t think that matters? Why do you prefer to work without the internet? Do you think that flyers work better?

bugs – the UCLA group predicted the last recession. But they base their forecast on faulty assumptions. How can you predict the future of Southern CA housing, without taking ARMs, IO loans, 100% financing, stated income, foreclosures into account? How can you ignore that 88% of Fannie Mae’s quarter 1 2006 loans are for a higher interest rate than the one they are paying off?? Yes, you read that right. 88% of loans are for people taking cash out of their homes and willing to pay a higher interest rate to do so! Now what does that tell you about people’s financial situation?

I will make a new thread with some other poor assumptions, like the 5% max Fed rate and $50 max gas. Their model rests on $50 gas. So far, so bad…

[powayseller]

The link failed to explain the dangers of shorting. You can get caught in a short squeeze:

A situation in which the price of the stock rises and investors who sold short rush to buy it to cover their short position and cut their losses. As the price of the stock increases, more short sellers feel compelled to cover their positions.

You can lose many times your initial investment. Many times.

The risk of shorting is that you can be early in assessing the loss of a company. The markets may take many more months to price in the loss that will eventually take place. Rallies can happen before the big loss.

Small players can get run over by the pros in a short squeeze. Shorting is for the pros!

[powayseller]

Novice, realtors get their business off the web mainly. Over 80% of buyers find the home they purchase off the web. Realtors who understand this, have a web presence.

Gone are the days of open houses, flyers, etc. That’s the old way. Buyers used to see a realtor to get a printout of homes that matched their criteria. The realtor would drive the buyer around. If the buyer wanted to see the insides of a house, he needed to schedule the viewing with a realtor or go to Open Houses. Today, that buyer previews the houses online.

Today’s buyers go on realtor.com (or similar), search the homes they want, and call the realtor to see the home. Usually they’ve already taken the home video tour, and thrown out many of the candidates. The buyer goes to the realtor with the list of homes he has chosen. The opposite of how it was!

It used to be curb appeal, house appeal.

Now it is internet appeal, curb appeal, house appeal.

When you sell your house, make sure your realtor gives you a NARRATED VIDEO. It must be narrated, to really get the viewer’s attention. Most are so stupid – silent movies! Our audience these days doesn’t want a silent movie. Make sure your realtor does a good writeup with the best photos. The internet marketing is what gets you the showings. I paid scrupulous attention to this when I did my listing. I took many photos over and over, and cropped the images…I reworded the text. Unfortunately, I did not get the video with HelpUSell, but I saved $12K in commissions, and got lots of foot traffic anyway.

I find it interesting that sdrealtor does not have a website, given all the above. I think that realtors benefit by putting their name out in front of as many people as possible, and promoting their presence through the internet. This is proven with the 80% figure cited above.

For example, Jim the realtor and Bob Casagrand are two realtors who have a website. With picture. Rich Toscano has his photo on the Voice column. None of them are anonymous. I don’t see the point of being anonymous.

Perhaps the CEO of World Savings would wish to be anonymous when he comes on here and writes that RE will tank. But for the average person, why hide behind a screen name? No stalker is going to come look you up for your views on real estate!

Novice, I hope I have explained this sufficiently.

[powayseller]

What did you decide with PSA?

[powayseller]

Sales are down nationwide, foreclosures are up, builder sentiment is down, inventory is up. All this portends price declines. Nationwide.

[powayseller]

I can come anytime after July 4.

[powayseller]

I respect both Bob Casagrand and Jim the realtor, and have invited them to participate in this forum. They have both declined. I would not consider them shills. I think people behave better when not anonymous. I’ve also been curious why sdrealtor doesn’t post his real name, because realtors get business by marketing themselves. Rich has never said that realtors have to be anonymous. I’ve promoted several organizations on this forum, recently even my tenants’ attorney.

[powayseller]

I got a response back from Bill Fleckenstein.

What do you think are the drawbacks, if any, of shorting LEND now?
• …that you could get squeezed hard in a rally.

[powayseller]

I tried to get some feedback for you, since I don’t know the first thing about shorting. I asked Bill Fleckenstein, and will report back tomorrow if he answer the question about shorting LEND.

This is what Fleck had to say in today’s column about shorting.

BILL;

‘NEW’S STOCK SEEMS VULNERABLE GIVEN THE REAL ESTATE STOCKS DECLINE. DO YOU SEE THIS AS A GOOD SHORT CANDIDATE? I SEEM TO RECALL YOU WERE NEGATIVE ON THE STOCK IN THE PAST. THANKS
• I’m short it— it should be a disaster, but it’s a tricky stock to be short.

have you gone max short then? or are you wating for the failing rally you are talking about? I want to get short too.
• Max short? Nope— not until after the Fed stops and tells everyone. Until then, I’m selectively short… and happy being so.

Here’s what my brother, a former Wall Street securities lawyer, said about the question:
packaging things up as MBSs does not solve a lender’s problem – they typically have to retain a risk by offering to buy back non-performing loans from the pool. One would have to look at their MBS prospectus and see if the settlor has to guarantee payments or liquidity.

Rightside, I wish you all the best in your trading. Hopefully this works out for you.

[powayseller]

I can’t remember the sources. The next time I find it written, I’ll start a thread on it.

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