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rankandfile
ParticipantThe RE industry in my opinion is akin to a cartel in that they are in control, or trying to gain/maintain control, of the entire sales process of a home. They are currently trying to pass legislation in Michigan to make discount brokerages completely illegal…you MUST pay the full 6% commission! 10 or 11 states already have this legislation in place. Now how’s that for killing competition! I’m sure they are doing it to “protect” the consumer though.
The cold truth is that the times are changing and it’s not a matter of if, but rather when, a home owner or buyer will be more able to purchase a home independently online. Cut out the middleman. Sure, there will still be service providers available for those that don’t want to do the legwork. But make no mistake, the hay days of earning 6% commissions are numbered.
ParticipantI think there is a prototype for that in development in Taiwan.
ParticipantThe problem is that the government doesn’t do it’s real job: to make sure that the market is flowing properly and that nobody is getting f@cked over. Instead of doing this, it goes way overboard for fear of electoral and legal repercussions. I truly feel that frivolous lawsuits will be the death of our society. One of the biggest costs for the medical profession is malpractice insurance. What this essentially leaves us with is a battle of the doctors vs. the lawyers. The lawyers will always have the upper hand IMHO because they know the legal system and laws of the land better than anyone. Heck, they are the ones who write the laws! Most senators are former attorneys themselves. What do they do when they leave the public sector? They usually work as a lobbyist for some big law firm.
Getting back to outsourcing healthcare. It is outsourced because the market allows it to be outsourced. It is just too darn expensive. The real problem is that the current healthcare system that we have is the ONLY game in town. You have a problem, you must have go to a certain provider that accepts your insurance. When I say provider, I lump Kaiser, Sharp, Scripps, etc., together because they are basically the same. What I am trying to say is that more alternative forms of healthcare are not only not allowed to be used, they are illegal! Some laws against certain practitioners of medicine are there for obvious reasons. But the entire systems is rigged! It’s sort of like the realty industry, I guess. Hmmmmmm.
ParticipantThis development seems like that one gas station at a busy intersection that has it’s lowest gas price at $3.00 a gallon when the other gas stations are listing theirs at $3.20 a gallon, and are cursing the cheaper station under their breath. This is going to get ugly and coincides with my theory that prices will drop more rapidly than expected. All it takes is someone to push the first domino.
ParticipantLindismith, let your hair down from your bun, take off the thick-rimmed spectacles, and have a little fun for a change.
Participant1 vote for sdrealtor
I am partial to sdrealtor for the following reasons:
1. I am pretty sure he was here first
2. He has a realtor’s bullish perspective on many things, but he goes against NAR party lines and gives the other perspective as well.
3. He is a Phil Hendrie fan (most important reason)I don’t know SD Realtor as well, although he does seem to be quite knowledgeable and fair.
ParticipantCan’t say I blame them…it just costs too much to do business in California. If it isn’t the high energy costs, the high taxes and workers comp costs get you. Besides, California is notoriously anti-business and pro-worker. They seem to think that businesses are endless cash cows from which to leech. I have experienced this first hand with an unemployment insurance issue I had with one of my employees. No matter what facts I presented, the State sided with the employee…who quit on his own and is now collecting unemployment on the side. Which I end up paying for.
The old Buck Knife factory left El Cajon after 40 years and moved to Idaho for similar cost-saving reasons: http://www.signonsandiego.com/uniontrib/20060326/news_lz1n26buckkni.html
At least they are still making their knives in the USA.I, too, am looking at ways to move my operations out of California. I am just a small business with 5 employees, but I imagine there are more like me thinking the same thing.
ParticipantI work with a lot of cities and my impression is that a lot of them DO NOT save their excess revenues for a rainy day. There are a few exceptions. I think San Marcos and Poway run pretty tight ships. Talk with some of the San Marcos city staff and they’ll tell you that their city manager is tighter than a drum. Most other cities, however, still seem to carry the spend now attitude. This is performed at the middle manager level, but it is enabled by upper management. Basically they must spend all of the funds in their budget or they might lose it the following year. Some more business-minded cities, I think, provide incentives for staff to accomplish their annual goals under budget. Maybe there are some city personnel out there that can provide more evidence of this?
ParticipantYour second chart completely thwarts the theory that real estate always goes up and that price levels will never decrease to previous levels. Just look at what happended in 1982-83.
ParticipantI certainly don’t hope there will be any sort of depression. I tend to agree with Daniel about the Fed anticipating a recession next year as a means of correcting things. I think it will be on it’s way to getting worse than that, but the government and/or private industries will step in to keep things from getting too bad. IMHO, we need to find a way to keep consumption going in order to keep the recession from getting too bad or lingering for too long. I bet we’ll suddenly start to see lower energy prices and incentives for purchasing homes, vehicles, and other items for low up-front costs. Isn’t is funny the reasons that are used for increasing/decreasing oil prices?
Increase! Reason: A couple refineries were shut down for maintenance.
Decrease! Reason: Better than expected output from Saudi Arabia…like they all of a sudden exceeded their own expectations! Translation: people are getting pissed at the high prices so we better leave the pumps on for a little longer.
ParticipantI’d be willing to guess that the number of people who are in trouble outnumbers those who have made cash by selling at the peak. One reason would be those that bought a new home. The developers/contractors would seem to be the ones who make out those instances. But they make out at the expense of many times more people and families.
Another reason is that a percentage of those who sold their homes at the peak likely bought another home at the peak, rather than investing their cash and renting. In these instances the extra cash made in the sale went as a down payment on a new loan (exotic perhaps?) on another over-priced property. Wouldn’t purchasing an over-priced property essentially offset most, if not all, gains made from selling an over-priced property?
ParticipantNice addition, Daniel. That report seems well thought-out and comprehensive. I am not an expert in housing or economics, but I do have some comments.
1. PAGE 20: The author equates rising monthly mortgage payments (due to resetting ARMs) to increases in gas prices in 2005. He basically said that rising mortgage payments will cause pain, like the rising gas prices did, but that life will go on. Well, no s$#% Sherlock! The problem is that resetting ARM prices could present SUBSTANTIALLY higher monthly costs that would dwarf those of gas prices. Oh, by the way, gas prices (and utilities) are still up- so add those to the higher mortgage payments. One more thing- wage growth is not keeping pace with all of these rising costs. Time for a new credit card or refi.
2. PAGE 32: The author essentially states that purchasing residential real estate should be a long term investment, and those that treat it as such will fare well. The problem is that a number of folks bought residential real estate either as an investment property or to live in for the short term, or both. I wonder if this wisdom was also applied to those who purchased at the height of the early 1980s bubble?
Although the author does a good job in using data to support his arguments, I still feel that his viewpoint is too optimistic.
ParticipantIt’s funny you mention the Roman Empire FormerOwner, because that’s exactly how I feel. I am of Italian descent and have a fond interest in the times of that great empire. But all great things must come to an end. I think there are many parallels between us and them. To quote Juvenal, “panem et circenses”.
ParticipantWaiting Hawk, did you see my post on your blog?
I will be one of the first (and few) to predict that we are actually headed for a depression, rather than a recession. I admit this is mostly based on gut feelings (I think my brain tends to shut down when there are too many variables to calculate). At any rate, there is a little method to my madness.
The science behind my prediction is based primarily on the consumption factor of GDP, which is often broken down between personal and public sector consumption. The US is the largest single consumer in the world. Consumption in the US has been “priming the pump” since the dot com bust. Unfortunately, this consumption has been financed largely by housing speculation and cheap loans. This is somewhat similar to the lead-up of the Great Depression.
From Wikipedia:
“Prior to the Great Depression a huge wave of investing in the stock market had taken place which created artificially high prices of stock. This process was driven by the fact that shares were being used as a collateral for loans in order to buy more stocks. When the economy showed signs of slowing and share prices plummeted, this caused an extensive domino effect.”
Some predicted that the dot com bubble would lead us to a depression. This was offset by extremely low loan rates and artificially boosted housing prices. In other words, I think we averted an impending depression after the dot com bust and 9/11 by falsely boosting consumption. And now, in the words of Ward Churchill, the chickens have come home to roost. We are no longer able to consume at our previous levels. The worldwide “pump” will no longer be fed by US consumption.
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