BloodhoundBlog

There’s always something to howl about.

Month: October 2008 (page 4 of 7)

October 17, 2008

Mortgage Market Week in Review

by

Mortgage Officer

Author website

Well, here we are and it’s time for another Mortgage Market Week in Review.   This week, we’re going to talk about consumer spending, consumer confidence, the new normal, where’s the bottom? and why interest rates have had a 1 percent up and half percent down swing since last week Wednesday.

Consumer Spending – Retail Sales came out and surprise!   They were down by 1.2%.  With all of the gloom and doom that is being preached in the mainstream media, is it any wonder that people are pulling back?   Nope.   But something that I think is missing from the discussions is a simple question.   Are (or were) people spending more than they were making?   I believe that a pretty convincing case can be made that our society was living on credit and spending more than they made for too long.   It appears that it’s starting to catch up with us.

Consumer Confidence – The same goes here.   The mainstream media is preaching gloom and doom and consumer confidence is down, way down.   Are there cases where the mainstream media are overdoing things?   Absolutely.   However, I was telling my wife the other night that I think being a mortgage guy watching the news about the economy is sort of like being a nurse (she is) watching her parent be a patient (she did this week – Mom is fine).   She said she can readily believe that.   The media is overdoing things, but frankly there are a lot of really ugly things going on.   I’m not going to go into them, but if you want to read up on them (and keep yourself up at night), let me know and I’ll point  you to some good sites on the web to read up on them.

The new fundamentals in mortgage rates. What in the world happened to mortgage rates?   Last Wednesday, they were at 5.875%, they climbed to a high of 6.875% and then dropped back to 6.375% by today.   A couple of thoughts:

1. As the government, not only ours but virtually all governments in the world, has gone on a huge borrowing spree, that has Read more

October 17, 2008

A Song and A Smile

by

Real Estate Renaissance Man

Author website

A week or so ago I was out for an early morning run through Balboa Park.  This is one of San Diego’s gems and part of what makes living here worth the cost.  It was daybreak and quiet; mostly the sound of my own footsteps echoing across the Spanish style buildings that house the many museums and exhibits.  Occasionally I would see another runner or a young couple up early for a walk (or maybe they were still out, ending their evening with a walk).  Mostly though, it was a wonderful run of solitude.  As I came up on the little art village I turned in to its plaza.  Here, in a few hours time, there would be artists selling paintings and sculptures and all forms of creativity.  I still don’t know why I veered in, the plaza does not go anywhere.  It is just a cul-de-sac of stone pavers lined by small, decoratively painted arts and crafts buildings used during the regular business hours of the park.

There was one other person on the street that early, unloading paintings from his van and arranging them just so.  He looked to be in his late fifties and he looked to be happy, but more than that he looked interesting.  I found myself slowing down as I made the turn to go back by him; I guess I wanted to connect somehow… there was something about this guy.  So I stopped and said hi.  We talked a bit about his paintings and we talked a bit about my run and pretty soon we were just talking.  The kind of talk that is comfortable, like you already know each other.  His name was Steve and he was almost 74 years old, yet we had a lot in common.  He had been a shot-putter and football player just as I had.  We knew the same names, although he knew them as the guys that came along after him and I knew them as the guys I tried to emulate while growing up.  Our philosophies were similar and our backgrounds too.  It was a rewarding conversation Read more

October 16, 2008

Sarasota Association of Realtors – The real Cybersquat

by

The Real Estate Group, Virginia Beach and Chesapeake VA

Author website

If you are not familiar with the controversy brewing around Marc Rasmussen, here is a great place to start. Morgan has laid the essence of the story out for the world to see. Others are starting to chime in already on it as well.

It boils down NOT to trademark (because MLS is NOT a trademark that NAR owns), but greed and envy from fellow REALTORS over a guy who worked his butt off to get ahead. It boils down to an Association that is run amok. They battle a guy and take him to court and when they finally win, and he redirects the domain, they then go to ICANN and try to win the right to take ownership of it, by claiming his domain is confusing to potential customers and Cybersquatting. And he is now appealling ICANN’s decision that will send his site–and the authority that it has built (his site is dominant in the search engine rankings)–over to his association. When he re-directed the domain, the battle was over. He was no longer “cybersquatting” at that point. He was no longer hurting them, but by them trying to grab his domain, they were trying to take away his asset and livelihood pretty much to make a point.

That is not right. That is a land grab. That is PUNITIVE.

He (Marc Rasmussen) is no different than you or I. He built his website’s authority over a number of years. I have known him for several of those years. And because he had the courage to buck the MLS “supposed trademark that they do not have” issue, he had to fight his own “Association”. Standing up against idiocy. Many of us have had local issues that we stood up for. And yet, this one will cost Marc dearly.

My take? (Glad you asked!) I am TIRED of jealous folks at a local Board of REALTORS using thug tactics (and loopholes brought about by IDIOTIC NAR regulations that should never have been made in the first place) to bring someone who is extraordinarily achieving into line with the rest of their Read more

October 16, 2008

Spread the Wealth Around Real Estate

by

Free Market Cowgirl

Author website

Ladies and gentlemen, I am pleased to announce that Spread the Wealth Around Real Estate will be the name of my new real estate company. You can call it S.W.AR.E for short. I plan to open doors nationwide just as soon as the election is over. I am a very patriotic person and I want to model my new company after the feds. I anticipate rapid growth and high demand for the exciting and much needed programs that I am going to implement. Keeping up with it all is going to be very taxing.

Our business model is very simple: Spread the wealth around – You don’t need all that darn money!

Top earning agents will give back 70% of their commissions to the company. Then we (the company) will redistribute it to underperforming agents in the office.

Top listing agents will be told to hand over the vast majority of their listings to the worthless bums that sit around drinking coffee and gossiping all day. It seems that sitting on your rear isn’t very productive and we need to help them out.

Agents that have SEO will quickly become SOL! We will move aggressively to forward their leads over to agents that don’t even own a computer. Exactly how they will communicate with the prospect is something that we are still trying to figure out. Do typewriters get online? We’re working on it…

My people (that I’m not really affiliated with) have already begun distributing my autobiography to elementary school students in the continental United States to ensure proper brainwashing. History will soon show my model to be the salvation of the real estate industry. Yes, thank you, thank you. It’s all me. Unless something goes wrong then it was the previous administration.

And, if you aren’t licensed but want to come to work for S.W.A.R.E, just tell the state examiner that you are down with commission redistribution and they will give you a real estate license in ANY name that you wish. It’s that simple! We try Read more

October 16, 2008

To Condi, with sweetness

by

Suburban Phoenix Real Estate Broker

Author website

[I wrote this essay six years ago. I knew even then that Rice wouldn’t run for president — she’s much too smart for that. Too bad, though. She would have been a great president, a great argument for everything America can be. I don’t see this promise in Barack Obama — much the contrary — and I hope to Christ I’m wrong. Nota bene: Many of the links will be broken by now. –GSS]

 
The Los Angeles Times has an article (registration required, alas) speculating on the prospects for a 2008 presidential match-up between Hillary Clinton and Condoleezza Rice.

It’s not a brand-new idea. I first heard of it from Andrew Sullivan. And the Times article is following-up on, without mentioning, a recent public address by William Safire.

I am in love with this idea, and not just because I have publicly and repeatedly declared my enmity for all things Clinton. I would love to see Hillary Clinton get trounced at the polls by Condi Rice, but, truly, I would love to see Hillary get trounced at the polls by just about anyone.

And I’m not changing my spots to become a Republicrat this late in the game. Everything I’ve heard about Rice suggests that she is the least objectionable sort of mainstream politician — pro free-trade, pro second amendment, anti big government. And like that other bright light of black conservatism, Justice Clarence Thomas, she seems to be driven by firmly-held principles, not will-o’-the-wisp polling results. But it remains that she is a mainstream politician, a decidedly small-L libertarian.

Nevertheless I want her to run and I want her to win. I want what she stands for to win.

And by “stands for”, I mean what she stands for as a symbol. This is completely unfair to her, I confess. It was unfair to Justice Thomas, too. And as much as I regret what was done to him for all the things he stands for, both in his principles and as a symbol, nevertheless I am glad that he was stout enough of heart and spirit to withstand his torment. He conferred upon America a gift Read more

October 16, 2008

Point / Counter-Point

by

Real Estate Renaissance Man

Author website

Michael Cook wrote a thought provoking post earlier entitled What Happens to the Early Worm.  So thought provoking that I found my comments drifting to post length.  So how about a little point/counter-point?

Michael, a very detailed and thoughtful post. I would not disagree with you that cautiousness is a safe strategy (although not always a profitable one) and I certainly do not disagree with your assessment of the people here on BHB.  But I do have some other questions:

The income / price equation did not get out of whack overnight, so buyers and sellers should not expect it to correct itself overnight either.

All real estate is local and that is never more true than now. In some areas we have seen real estate go through the support level of fundamental value (that value which would allow an investor to purchase a property and cash flow). This is no different than the Dow last week. It was oversold and many companies could be purchased below their fundamental value. So are you suggesting that rents are going to decrease in these areas?  Otherwise, the correction has already occurred in some areas.

You are looking at some of the best real estate agents in the business here. So when they write that their business has not dropped off, it might lead the casual reader to believe that the real estate market is not in a tailspin or even that real estate is close to a bottom. Do not be lulled into a false sense of optimism. This group is adaptable, smart and most of all well above average.

Michael, to whom are are you writing this post?  If it is agents then I suggest the new market has caused an industry-wide house cleaning.  Those that do not belong have seen business disappear and those that do have been rewarded; but this does not necessarily reflect a worsening real estate market.  If, on the other hand, you are writing to consumers then I suggest they read you closely when you say that the top agents have found “their business has not dropped off.”  It has not dropped Read more

October 16, 2008

What Happens to the Early Worm?

by

Real Estate Investor

Author website

Quite a while back I asked a question, if the early bird gets the worm, what is the early worms reward for being early? In this tumultuous market we have already seem many early worms. Several months ago a lot of people began jumping back into real estate only to be crushed by the weight of numerous new market developments. But surely the worst is behind us? Think again early worms…

Real Estate is as slow as the stock market is fast. It takes time for sellers to get desperate enough to lower their price and it takes time for buyers’ incomes to rise to the level where they can afford housing prices. The income / price equation did not get out of whack overnight, so buyers and sellers should not expect it to correct itself overnight either.

The Bloodhound Blog is a very deceptive place. You are looking at some of the best real estate agents in the business here. So when they write that their business has not dropped off, it might lead the casual reader to believe that the real estate market is not in a tailspin or even that real estate is close to a bottom. Do not be lulled into a false sense of optimism. This group is adaptable, smart and most of all well above average.

Consider these national facts about the economy and then let’s draw some conclusions about the future of real estate (taken from the latest release of the Biege Book and other financial sources):

-Consumer spending is down
-Manufacturing is down and declining
-Jobless claims are up and rising
-Housing remains weak
-Housing inventory remains well above average
-Dow Jones has dropped nearly 40% over the past six months

The most significant thing on the list above has to be the decline in the stock market. This represents a decline in confidence in the global economy. This level of decline says that investors believe businesses could be in for sustained economic distress. It stands to reason that businesses in distress tighten their belts by laying off workers and Read more

October 16, 2008

Peter Schiff: “Our leaders irrationally promoted home-buying, discouraged savings, and recklessly encouraged borrowing and lending, which together undermined our markets”

by

Suburban Phoenix Real Estate Broker

Author website

Peter Schiff in the Washington Post:

Amid the chaos of recent days, as the federal government has taken gargantuan steps to stabilize the financial markets, realigning the U.S. economic system in the process, comes a nearly universal consensus: This crisis resulted from government reluctance to regulate the unbridled greed of Wall Street. Many economists and market participants who were formerly averse to government interference agree that a more robust regulatory framework must be constructed to cage the destructive forces of capitalism.

For the political left, which has long championed the need for such limits, this crisis is the opportunity of a lifetime.

Absent from such conclusions is the central role the government played in creating the crisis. Yes, many Wall Street leaders were irresponsible, and they should pay. But they were playing the distorted hand dealt them by government policies. Our leaders irrationally promoted home-buying, discouraged savings, and recklessly encouraged borrowing and lending, which together undermined our markets.

Just as prices in a free market are set by supply and demand, financial and real estate markets are governed by the opposing tension between greed and fear. Everyone wants to make money, but everyone is also afraid of losing what he has. Although few would ascribe their desire for prosperity to greed, it is simply a rose by another name. Greed is the elemental motivation for the economic risk-taking and hard work that are essential to a vibrant economy.

But over the past generation, government has removed the necessary counterbalance of fear from the equation. Policies enacted by the Federal Reserve, the Federal Housing Administration, Fannie Mae and Freddie Mac (which were always government entities in disguise), and others created advantages for home-buying and selling and removed disincentives for lending and borrowing. The result was a credit and real estate bubble that could only grow — until it could grow no more.

Prominent among these wrongheaded advantages are the mortgage interest tax deduction and the exemption of real estate capital gains from taxable income. These policies create unnatural demand for home purchases and a (tax-free) incentive to speculate in real estate.

Similarly, the FHA, Fannie and Freddie were created Read more

October 16, 2008

And That’s Why Commission is Better

by

Real Estate Renaissance Man

Author website

There are a great many rewards to being a commission-based, self-employed entrepreneur.  Freedom has to be number one.  Even in the limited form it takes within our system of centralized decision making, pointless licensing laws and oppressive, regressive taxation, there is still freedom.  Another, decidedly less esoteric benefit, is the inherent unlimited income opportunity.  To what degree we utilize that opportunity is entirely up to us.  I mention this in light of all the discussion lately about Socialist policies and redistribution of wealth.  It seems an opportune time to point out how the system self-corrects when left to itself (albeit painfully at times).

It wasn’t more than a year, year and a half ago that social engineers were up in arms over the outrageous pay CEO’s received.  They would graph the income of the president of a large company as a factor of the average employee’s income within the same company.  “This is wrong!” they would yell.  “A moral outrage” they would opine on the talking head shows.  “Another example of the evil capitalist system rewarding the rich at the expense of the poor.”  We all heard it and quite frankly, I had a hard time myself not gagging over some of the pay structures I saw.  I would be the first to stand up and agree that paying a CEO tens (never mind hundreds) of millions of dollars is nearly impossible to justify from an economic standpoint.  But the difference in argument should be painfully obvious.  The enraged egalitarians may have disagreed with the economic soundness of executive level pay but they decried the morality of it.  Few things as scary as a large crowd informing me what morality is.

Those angry groups of ivory tower thinkers and blue collar unifiers do not believe the system corrects.  They believe the best option is their option and invariably it involves income redistribution.  Pointing to graphs relating a CEO’s pay to that of an average employee on the assembly line is meaningless.  Their is no logical nor economic reasoning to justify some type of mathematical relationship.  The issue, of course, is whether a company Read more

October 15, 2008

The soul of wit: Boiling Obama down to his essence

by

Suburban Phoenix Real Estate Broker

Author website

This is Melanie Phillips in the Spectator:

You have to pinch yourself – a Marxisant radical who all his life has been mentored by, sat at the feet of, worshipped with, befriended, endorsed the philosophy of, funded and been in turn funded, politically promoted and supported by a nexus comprising black power anti-white racists, Jew-haters, revolutionary Marxists, unrepentant former terrorists and Chicago mobsters, is on the verge of becoming President of the United States. And apparently it’s considered impolite to say so.

Now that’s good writing, just blistering concision. It’s 76 words, and I’ll bet she could recite it with passion in less than 30 seconds. It would be sweet if a 529 group were to televise this message nationwide.

John McCain is cold oatmeal, and I can’t imagine that anyone except his wife wants him to be president of the United States. But everything in Obama’s background comprises a sound reason to fear what he will do as president, particularly in the company of Nancy Pelosi and Harry Reid. At a minimum, we’re about to fail to learn yet again what made the Great Depression so lengthy and so painful. But the thug tactics Obama and his minions deploy give us good reason to fear a Hugo Chavez, Norte-Americano-style.

I’m not picking a fight. Both of these goons are national socialists, lacking all conviction but full of passionate intensity. McCain is nothing to be preferred. But Obama strikes me as a cipher very much to be shunned. The worst of it is, we won’t know the worst about Obama until after it’s too late. The blood-dimmed tide is loosed. May god spare us the oceans of blood that swept over us the last time we elected a socialist in a recession.

October 15, 2008

Bloodhound Blog Radio: Fundamentals Trumping “Headline” Risk

by

Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL

Author website

Sean “Rocky” Purcell and I discussed his big prediction of the stock market bounce and I repented for my recommendation to stay “unlocked” in hopes of lower mortgage rates.

Download and enjoy this light-hearted 17 minute show

We felt the near-term future for stock and bond markets would depend on the numbers not events.  We’re looking closely at Retail Sales (which were weak) and CPI, specifically Core CPI, this week.

Download and enjoy this light-hearted 17 minute show

October 14, 2008

Videoplay: My idea of a halfway decent real estate video

by

Suburban Phoenix Real Estate Broker

Author website

I haven’t talked about video for a while because we haven’t been doing very much with it.

That’s not completely true. We use the Flip digital video camera to share notes with clients fairly frequently.

But as I have discussed at length in the past, I have no use whatever for the typical Lurch-takes-a-home-tour style of real estate video. I see it as being anti-marketing, worse than doing nothing at all.

For video to work, there has to be a story, and I can only think of two stories that make sense in the context of listing a home.

The first is simply an interview with the sellers, and we have done this on other homes. The second is the documentary, an illustrated narrative about some aspect of the home or the neighborhood. An example of this would be a slow drive-by of the structures in the neighborhood with a voice-over narrative telling the tale, whatever it is.

Arguably, you could impose a fictional or farcical story on the home, but this strikes me as being simultaneously too familiar and too stoopid by half.

The population of pundits who don’t actually sell real estate is rife with people who swear that video is the wave of the future. But, even with a plausible and endurable story, video has other drawbacks. It can be a real bear to edit, both labor- and computer-intensive. The down-sampling necessary to make it work on web sites robs images of their detail. Moreover, real estate photography wants very wide-angle lenses — which make people look fat and exaggerate foreground-to-background distances.

The solution I’ve arrived it, for now, is to superimpose still images over the video. Talking heads are boring, but we can use stills to illustrate what they are talking about, lending visual interest to the total package.

Here’s an example, as processed through YouTube:

You can see a better example of that video on the video page for 56 West Willetta Street.

The video scene was shot with the Flip camera. The native AVI file was converted to NTSC video, which is native food for Apple’s Final Cut. The photos were just dragged and dropped Read more

October 14, 2008

Why the Bailouts Don’t Work and Why Wall Street Loves Them

by

Real Estate Renaissance Man

Author website

The stock market came back with a vengeance yesterday.  On Friday’s episode of BloodhoundBlog Radio we noted that the market was vastly oversold from a fundamental perspective and suggested a rebound after the weekend.  This was prescient enough that the Mortgage Cicerone made note of it, which is high regard indeed.  So why am I not celebrating?  Because yesterday’s reaction was as irrational as the sell-off.  One thousand points?!  Sure the correction was in there, but so was the exuberance of a seemingly ceaseless font of federal gifts.  The markets like the latest ideas out of Washington and why shouldn’t they?  Wall Street has done a good job creating an aura of representation – most people now believe that was is good for Wall Street is good for America.  How else do you explain the frantic efforts our fearless leaders make each time the market drops?  The rally cry lately seems to be: “If we make the Dow go up, we must be on to something.”  This is nothing new.  For years now the markets have taken a preeminent position in economics beyond their reach or relevance.  One need look no further than earnings reports.  You might report record earnings for your company, yet your stock is pummeled because the reported earnings did not equal what the market had already priced in to the stock.  “You didn’t do as well as we thought you would do based on our self-serving judgment of what is best for you.” (Which is shareholder profits, of course.)

If you believe what you hear from the talking heads (and by virtue of the fact you are reading BHB, I doubt you do) the source problem for the economy is the toxic mortgage derivatives and their tentacle like reach.  Everyone bought these things, even when they didn’t know they were buying them.  Now (as the story goes) our problem is this: no one knows what this stuff is worth.  Everyone is marking down their portfolios, no one wants to risk lending money and the initial bailout (bailout 1.0) didn’t phase anyone; all because we don’t know the real Read more

October 14, 2008

How To Get Better, The Easy Way (Never Make The Same Mistake Twice)

by

Instigator, anthill kicker.

Author website

I’ve never been a lifer in the real estate business.   That doesn’t mean I don’t have a lot to give, it doesn’t mean I don’t love it, and it doesn’t mean that I can’t kick ass.  I say this: there is no finer, safer way to learn how to be in business than being a successful real estate or mortgage guy.  And I say that you learn more, faster in the 100% commission lifestle than you’d learn anywhere else.   It’s the perfect microcosm of business: you get a litle marketing, accounting, customer service and sales.  You get to work with people that gave the middle finger to being kept citizens, and you get to have control over your own income.

What a great job we have.

One of the things that ground me up in the latter part of 2006 was the number of crazy stips that underwriters started to send.   On every deal, starting in about August, the canary in the coal mine died, so everyone I worked with, from Lehman Brothers to First Franklin, and even Interfirst…was stipping files.  (The inside joke among appraisers was always: is this an Interfirst deal or a ‘real’ deal).  These companies begun to underwrite files instead of rubber stamping them.  The audacity!

And in my office, loan officers bitched and moaned about this.  “The underwriter is stupid to not take this deal,” one of my colleagues said.  That particular deal, i followed it for a while.  It is now in foreclosure.  Eevery colleague and every deal was hard.   Even good loan officers didn’t react (see OODA) fast enough.  I decided to be different.   I didn’t belive underwriters were merely capricious, and since it was every lender, I figured it was gonna get worse.   So, in order to keep up with my payments to the IRS, I had to close a lot of loans.  And to close a lot of loans, I couldn’t be sending the same file up 4 or 5 times.

So I made a checklist in Word, all the things in reasonable categories.  I used stip sheets as a starting point. (The same checklist Read more

« Older posts Newer posts »

Inventing Real Estate 2.0

Welcome to BloodhoundBlog, the national real estate industry marketing and technology weblog written by, for and about real estate professionals. Better yet, welcome to the wired world of real estate. We are busily inventing Real Estate 2.0 – technology, marketing, service and salesmanship. Like all Bloodhounds, we are smart, frisky and fiercely independent. We've built a spot on the earth – beloved over all – where each one of us can be who we are, no matter who that might be. We are committed to an idea of excellence that will flush the bums, the con-men and the crybabies out of the real estate industry. If you yearn to have your failures excused, your moral lapses absolved or your boo-boos kissed, seek elsewhere. But if you are sick to death of mediocrity – welcome home. Read all about us, subscribe to our feed and steel yourself for the hunt. We work hard, we play hard, we learn everything we can – and we bow to no one.

Media Contacts