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Looking forward to a Complete Collapse of the Housing Market? Are you serious?

By
Industry Observer

I almost hit the center median while driving home on I-75 tonight.  It's a couple of hours later and I am still in disbelief at what I heard.  As Sophia on the Golden Girls would begin, "Picture it.  Dallas.  2008.  A skilled REALTOR who blogs frequently and has a lot of opinions is driving home at the end of the day listening to local public radio station.  On the nationally aired show Marketplace he hears a real estate story...

The story I heard was about people trying to decide whether to list their homes for sale in a market with lots of inventory and not a lot of buyers.  The commentator speaks with a couple who want to sell their home in order to buy a larger one.  They take the very sensible approach that they recognize that home values in their community have fallen lately, but that it is OK because the value of whatever they buy will have fallen as well.

And then it happens... The commentator tells us that the couple being interviewed is looking forward to a complete collapse of the housing market.  And this is serious!  The commentator on the story continues to explain that the couple in the story saw a 100% increase in the value of their home in the first two years that they owned it and that it has resulted in a property tax burden which makes their home nearly too expensive for them to live in, so a complete collapse would drive home values down to a manageable level from a tax burden perspective and would allow them to purchase the larger home they desire.

So is this what the home buying public is waiting for?  A complete collapse?  And do people actually believe that our local municipalities will not have to find other ways to tax us if property taxes drop?  None of our infrastructure costs will go down.  People will still demand that our streets and sewer systems be maintained, that police patrol the streets, fires be extinguished quickly and that our children still receive a quality education.

What scares me most is that if this couple was willing to go on national radio and say such a thing, there must be others out there who agree with their thinking.  Like I said, I almost hot the center median with my car from the shock. 

What do you think???

Comments(13)

Ray Wilburn
Keller Williams Realty - Everett, WA
CPA, MBA
I think that it is unfortunate that many of our clients listen to such nonsense...you have to educate your clients one at a time...that's all i focus on Steve.  ONE BY ONE, we can educate the public not to go in for this nonsense...
Jan 24, 2008 01:33 PM
Epcon Communities Epcon Columbia
Epcon Columbia, SC - Columbia, SC

WOW.  Speechless.  WOW.

I like the Golden Girls Reference...

Jan 24, 2008 01:56 PM
Mark and Tana Hunt
Team Price Real Estate/Dan Price Broker - Austin, TX
Born and raised in Austin, WE KNOW THIS PLACE!
I agree with Ray.. ... One by one we have to educate everyone.....
Jan 24, 2008 02:02 PM
Chris Frantz
EDU Real Estate Group - Indianapolis, IN

Too many people have been placed in the "Real Estate Expert" role and their ignorance on the subject is unbelievable.  This is the same as the nightly news anchors and their attempt at scaring the American consumer.   Lets get the tobacco lawyers and see if we can sue the news anchors for damages in loss sales from their fraudulent and irresponsible reporting.

Jan 24, 2008 11:06 PM
Mike Norvell Sr
Morris Williams Realty - Leesburg, FL
Norvell Consulting Group

The collapse of the pricing is a direct result of the homes beign priced out of the range of the area. When the homes "appreciated" to the point that the last person buying is the last person holding the bag...its simple math...If you take the average home buyer and their average income, you will come up with a price range for the homes the banks will allow them to purchase......Our area is so over built with homes so far out of the reach of the average home buyer...

Taxes are out of control here in Fl, we just bought a number of mobile homes with 1/2 acre lots for less than 30k apiece, the taxes are over 1100 dollars for each lots..Insurance is another 1200 dollars...

If you think its getting bad in Texas, then Fla will freak you out

Jan 24, 2008 11:24 PM
Tony Nuncio
Nuncio Realty Group - Dallas, TX
Nuncio Realty Group at Dallas City Center REALTORS

I have always been and I am sure will continue to be amazed at people, in general. The story you just mentioned is proof positive that the general public does not have a clue about real estate and the reasons why we own it. Outside of the personal utility we get from living in our homes, a HUGE consideration for purchasing a home is to enjoy the return on investment. If this couple believes that a complete collapse of the real estate market will benefit them in any way, they are sadly mistaken. And, how can they even think that purchasing a larger home would ever be less expensive than the smaller home they currently own? Eventually, even after a collapse, the market would rebound and that larger home would most likely end up being worth more than their existing home. Am I making sense? To me, this would be common sense, but I guess common sense is not so common, after all, is it?

 

Jan 25, 2008 02:09 PM
Linda Box Taylor
Castle Connections Realty - Plano, TX
Your Plano, TX Realtor
All I can say is that "people are stupid". 
Jan 25, 2008 02:24 PM
Steve Shatsky
Dallas, TX

Great comments from everyone.  It seems the consensus is that as REALTORS we need to sharpen our skills as educators.  Maybe this is why so many teachers go into real estate???

I am still just amazed, and I am not sure if I am more amazed that people actually think this way and say these things, or that a program which airs nationally on public radio stations would air such an uneducated viewpoint without pointing out the fuzzy logic in that thought process.

Any thoughts??? 

Jan 26, 2008 03:25 PM
Linda Box Taylor
Castle Connections Realty - Plano, TX
Your Plano, TX Realtor
Steve, they have these people on the air because it gets people talking and increases their ratings.  Fear sells!
Jan 27, 2008 02:06 AM
Steve Shatsky
Dallas, TX
Linda:  It's a sad and strange world where fear sells.  I guess in this age of rampant global terrorism it is what the terrorists and media are banking on, but in this case the story really was not presented from a fear perspective, rather it seemed to me that it was presented as a logical and factual story, but in reality anyone hoping for a "complete collapse" of the housing market is just ignorant to believe that it will solve problems.
Jan 28, 2008 12:43 PM
Ricki Eichler McCallum
CastNet Realty - Corpus Christi, TX
Broker,GRI,ABR, e-Pro, TAHS

I am rarely amazed at what some people think but this takes the cake.

Jan 28, 2008 02:18 PM
Mary Jo Schaffer
Sweetheart Realty - Bandera, TX
Bandera Texas Real Estate
My question is for buyer agents out there- are the clients already asking you "How far down are the prices going to go?'  Are they already waiting for the bottom of the market before they will buy? 
Jan 29, 2008 02:24 AM
Steve Shatsky
Dallas, TX

Ricki:  I agree!

Mary Jo:  I would like to know that too!  And even more so, if buyers are asking that question, how are the other agents out there responding?

Jan 29, 2008 07:46 AM