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DON'T BUY NOW? According to Christopher Mayer PhD-worse than Glenn Beck

Grandma is Smarter then me

"Now is NOT a Time to Buy"?
Christopher Mayer, PhD-Columbia University

It's bad enough to hear Glenn Beck (professional...???) on CNN or whatever that station is, say you can't trust a real estate agent to tell you if you need to buy a house in this market because they have a vested interest, but to hear a PhD from Columbia Business School that "teaches" real estate tell you on CNN, as I saw today, that now is not the time to buy. Not for a young person, not for an old person, not for a person getting married, not for a person wanting to move up into a larger home, not for someone wanting to downsize. In other words, it's not advised to buy a home period!

Who does this guy think he is? No offense to you "younger readers" but #1 you don't learn everything from a "Book" or a "Classroom" and you sure as hell don't know everything before you've lived a certain number of maturing years.

I've been a broker for 33+ years and I've seen bad real estate markets and the one we're in now is a piece of cake compared to 1974 and the mid 80's. When I started in the business, there was NO SUCH THING as buying a house without at least 20% down and perfect credit. Just because of loan shark competition and trying every technique one can dream up to make a loan...110% loan, 50 year amortization, "reverse" mortgage and you name it...doesn't mean owning real estate is not wise.

It's ALWAYS wise to buy real estate and it's always wise to buy in EVERY MARKET...you just have to be "cautious" what you buy in what type market.

Is this "book-smart" PhD expert going to tell me that 2 singles making $50,000 each and each living in an apartment that get married, making a combined income of $100K a year should "continue" to rent their tiny little apartment rather than "buy a house"? Maybe they don't need to purchase a $500K house, but that doesn't mean don't buy a house!

I got so pissed off seeing this young whipper snapper book-educated "expert" in real estate that probably went straight from grad school to a $400K house say that no one should buy, I looked him up and sent the following email. He'll either "set my ass straight" with a razzle dazzle of nonsense numbers or not respond at all. I can do this sort of thing because I'm old....I'm cranky and I'm sick and tired of "experts" that know nothing televising nothing on the Drive By Media chanels.

My email:

Subject: Your CNN Story
Date: 08/16/2008 1:18:58 P.M. Central Daylight Time
From: DBONWEB
To: cm310@columbia.edu

Christopher, with all due respect, I've been a real estate broker for 33 years and to hear you say "that will never happen again" and all your No, No, No in purchasing a home in the current market only shows your age and immaturity. There's a reason people "practice" and some "teach" and you're a classic example.

First of all...you HAVE to live somewhere. Either a "Rental" or as a "Home Owner". Surely you have an understanding of long term economics? Are you advocating renting? Are you certain that a 6.5% or 7% interest rate is an unbelievably high interest rate and not worth paying? Obviously you don't remember as I do when interest rates topped 10% in 1975 when I started in the business and I told my clients you'll NEVER see rates drop below 10% again. Wrong. You obviously don't remember in the mid 80's when interest rates were 4% above prime as I do. It wasn't uncommon for 14% and 16% interest rates in real estate. Also the birth of seller-backed 2nd mortgages. So you KNOW that will never happen again? Someone having the opportunity to pay 7.5% now and finding out rates are 14%, some 7 years from now might not consider your advise very sound.

Surely you also have an understanding of the stock market? Has it not historically gone UP with "cycles"? Has real estate home ownership not outperformed the market "historically" with "cycles"? Common sense will tell you that if the cost of energy and the delivery and manufacturer of materials increase significantly in the future, so does the "raw costs" to build a home. Which means the value of an existing home will skyrocket as well in a time of inflation. The key is not that you DON'T BUY...it's that you BUY LESS, but you BUY.

Your advise and negativity is unbelievable to me. As an "educator" I would expect more. Home Values WILL continue to rise and interest rates will rise and fall and the qualification for a loan will continue to tighten, but for those selling a $180,000 home with $60,000 in equity can easily purchase a larger $270,000 home and have the 20% to put down and it would be WISE to do that NOW since that $270,000 home would have sold for $300,000 last year and will "cost" $350,000 to build within the next 5 years.

My education and expertise comes from EXPERIENCE and Living It, and you can trust me, my predictions and/or assessment of the current market will be far more accurate than your computer models. I think you should address a broader vision if you're going to give advise on national television.

David W. Bolick, GRI
(501)960-8601
Network Real Estate, Inc.
2411 Clapboard Hill
Little Rock, AR 72227

Posted by David W. Bolick on 08/16/2008 02:11 PM

Comments (12)

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12 Comments on DON'T BUY NOW? According to Christopher Mayer PhD-worse than Glenn Beck

AUG

2008

David

I agree with you, everyone has to live some were so should they rent or should they own. I have purchased a number of homes over the years and it was the right time for me. Now is an excellent time to buy.

Good luck and success

Lou Ludwig

I agree Lou. Especially if you're a renter now...you'll be in a position of cherry-picking a bargain.

Thanks for sticking up for us and letting him know what you think!

AUG

2008

David,

Great post!! I wish the media would quit telling everone not to buy that the market is so bad. Here in Jonesboro the market is not like it is all across the states. We have great food manufactoring and jobs are good here. What do they know about our area!!

Tinker

Your right Tinker. Here in Little Rock, sales are doing good as well. They're selling for a bit less, but that's what a normal buyer's market is all about.

Another thought...if Mayer is recommending "renting" versis buying...WHO'S going to own the rental?

Put a camera on someone and who know what they might act like. This year we have seen many unbelievable performances by want-a-Be's such as: discount RE companies, TV journalists and their supporting casts of experts. I think if they would have said wait until you save some money folks, then you would have some extra bargaining power, a better rates, and are making a wise decision to buy a house. We would all be agreeing on that statement.

I think now is a good to time to buy. I bought my first home at an interest rate of 10.25. I would have loved 7. Prices of homes are falling and sellers are listening. I just started painting my house yesterday. I am very happy with the results, look forward to coming home, and it gives me the drive I need to keep on working. Pride of ownership is still the heartbeat of America.

Now is the perfect time to buy! When else will buyers be able to get such good deals. Buyers do actually need to qualify for a mortgage though. What a concept! (sarcasm!)

Lisa, you are so correct.

Do you realize that interest rates rose to 8% in 1973, and that in 1974 they reached 9%, and from there they climbed to 14 3/4% in 1982 and got back down to 8% in 1992?

THAT MEANS THAT FROM 1974 THROUGH 1992 THAT INTEREST RATES WERE BETWEEN 9% AND 14 3/4% INTEREST. THAT'S 18 FULL YEARS!!

WHO among all these drive by experts can guarantee me that paying 7% now is bad and that rates will NOT hover above 9% for another 18 years? Who?

David, I believe the mortgage applications in 2007 were:

(1) Have you held a job for the last 2 weeks?
(2) Do you feel confident you can make the mortgage payment for at least 2 to 3 months?
(3) Is it 'ok' to loan you 100% or more of the homes value?
(4) Can you use a VISA card to make a MC payment?

AUG

2008

Kelly, sorry I had to delete your post. I was about 90% unreadable html code and appeared to be 100% a hijack for advertising a website.

AUG

2008

David - I agree with you. Good for you on calling him out on what he said. I think now is actually The time to buy, as you would think that the appraised values will go up from this point forward due to their recent declines over the last year or so. Thanks for the post!!

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David W. Bolick

Little Rock, AR

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Network Real Estate, Inc.

Address: 2411 Clapboard Hill, Little Rock, AR, 72227

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