WHY IS THE MEDIA STILL TRYING TO CONVINCE US THAT REAL ESTATE IS IN THE "DUMPSTER"

By
Real Estate Agent with Douglas Elliman Real Estate 30HA0800896

"All Real Estate is local"---is a phrase that we all have heard for some time now. This is the real truth about real estate and yet we are still bombarded with reports about the devastation that is still in the pipeline, especially where subprime mortgages are concerned, on a national level.

New homes or housing starts are in pretty bad shape nationally yet on my block in Southampton Village, in New York there are three new builds and one completete renovation going on as we speak.

Here on Activerain I read all the time about how business is active again in a lot of areas....some even say the phone will not stop ringing right now---just a FEW DAYS BEFORE CHRISTMAS!!!! Last week I offered up an article on the projections made by NAR for 2008---this was the ONLY report that was positive in it's projections for the near future in Real Estate!!!

I personally think that something to do with "buying short" by the big giants in the financial world may have something to do with this---and i just heard that the reason most BIG conglomerates like Morgan Stanley, Merrill Lynch et al were hit so hard is because they were in over their heads buying the mortgage backed secuities that were rewarding them with such high yeilds (I hear 10-12%). Most of these were based on the subprime mortgages that the poor "Little Person" was sold. TALK ABOUT THE GREED FACTOR!!

How do we ignore the national news reports that are so bad?? How do we convince our customers that this is THE time to buy a house when all they hear is that prices are going even lower????

It will be very interesting to see how those financial institutions that are buying short on real estate right now will come out at the end of the fiscal year for 2007.....stay tuned

"Paranoid Paula"

 

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Rainmaker
482,577
Steve Glose
Keller Williams Classic Group - Orlando, FL
TRC, CIPS, 407-616-7286, Orlando Real Estate, Orla
I tell my clients all the time that Real Estate is "Local". It dosen't matter what is going on in California, it dosen't apply to Florida. Listen to your Realtor as they are watching the local trends. The News Media is just trying to hype the story for rating only.
Dec 21, 2007 04:52 AM #1
Rainmaker
431,726
Frances C. Rokicki
Fran Rokicki Realty, LLC - Bolton, CT
Broker-Mentor,CRS
I think they want to make us understand their take on it.  I still cannot understand why people in trouble with their homes, don't just sell them.  They don't want to break even, are they greedy?  Who knows?  I cannot imagine why they would not fight their way out of it, rather than foreclose. Regardless of, who put who in the home in the first place, why not try to put it behind you, and as quickly, as possible.
Dec 21, 2007 04:57 AM #2
Rainer
155,621
R. B. "Bob" Mitchell - Loan Officer Raleigh/Durham
Bank of England (NMLS#418481) - Raleigh, NC
Bob Mitchell (NMLS#1046286)

Real Estate markets are local in nature, but you do have to be careful and make sure that your customer understands the good the bad and the ugly of the current market conditions,both locally and nationally.  Only then can they make an informed decision. 

Long run, I believe that real estate, even in many of the depressed markets, is a good investment - long run!

 

Bob Mitchell

ValueList Real Estate Services, Inc. 

Dec 21, 2007 05:15 AM #3
Rainer
52,504
Scott R. Turner
CENTURY 21 Broadhurst - Myrtle Beach, SC
Everything We Touch Turns to SOLD!!
I feel that we only here the negative because this it what sells there products, ie. the papers, TV advertising, mag subscriptions. The most recent numbers show that over 96% of the population is paying there mortgage on time. Lets not forget that prices are down in SW Florida to affordable levels and interest rates are low and projected to go lower. Spread the word it's a GREAT time to buy.
Dec 21, 2007 05:15 AM #4
Rainmaker
325,871
Esko Kiuru
Bethesda, MD

Paula,

Some positive signs are surfacing from different parts of the country which is great. Buyers are finally getting tired of sitting on the fence and jumping in, probably realizing it's time to act before they miss the good opportunities.

Dec 21, 2007 05:19 AM #5
Rainer
17,840
George Bone
Prudential Woodmont Realty - Brentwood, TN
ABR, GRI, e-PRO
Francis, in many areas people are not able to sell their homes nor fight their way out of it.  These people bought a home with no down payment with an A.R.M. whose interest rate has reset two or three times until it's in double figures and they can't afford the monthly payment.  Additionally, the value of their house has declined to where it is worth less than their mortgage.  In order to sell they must come up with enough money to pay for the difference between what their house sells for and what the mortgage is and they don't have that money.  It's not an issue of greed in many instances.  There is plenty of blame to spread around on how these people got in this situation, starting with the owner themselves.  The owner obviously shouldn't have agreed to a mortgage that they couldn't afford.  The lender shouldn't have given them a mortgage that they couldn't afford.  The reasons for these situations are numerous and varied, but to some degree involve ignorance, greed, avarice, immaturity, fraud, keeping up with the Joneses, etc.  I have mixed feelings about this whole situation.  On one hand I feel sad that people are losing their homes.  On the other hand, they made bad decisions and probably never should have had the home to begin with under the mortgage situation they agreed to.  In the end people need to be responsible for the decisions they made and suffer the consequences.  Experience is a great teacher.
Dec 21, 2007 05:21 AM #6
Rainmaker
495,774
Paula Hathaway, REALTOR, LBA
Douglas Elliman Real Estate - Southampton, NY
...The Most Informed Agent In The Hamptons!

Thank you all for your input and comments

 STEVE-- I agree, anyone with any real knowledge about real estate will know that you need to listen to the brokers to get the real scoop on that market; however, the dominant news is so bad that it psycologically leaves the fear in place; and all buyers have it: "Am I buying at the wrong time? Am I overpaying?" These are the dreaded "buyers remorse" questions that most buyers ask. 

FRANCES-- I think that most people in trouble would love to sell their homes; trouble is: when the news is SO bad, who would buy any house????

This is the problem--and I think that there is a benefit to the BIG guys who "short sell" mortgage backed securities when the RE market stays down...they are betting that the market is bad!!!...and winning!!!

BOB-- Now is the time to buy---if anyone waits still spring/aummer they will already see prices going up in certain markets. This is why the false doom and gloom being painted accross our TV screens is such a falsehood. The average person does not realize that the national news may not apply to their market!

SCOTT-- Well, I believe that the newspapers etc. are in the business to sell the news---so they do. If they had good news, they have to report that too! ..and then that would sell!

My point is that the financial markets may have a lot to gain right now by the bad news, not the good. If you placed a bet that the market would go down, wouldn't you want that market to go down????

Dec 21, 2007 05:36 AM #7
Rainmaker
495,774
Paula Hathaway, REALTOR, LBA
Douglas Elliman Real Estate - Southampton, NY
...The Most Informed Agent In The Hamptons!

ESKO-- You are so right!!! The market is simmering just under the surface with a hungary bunch of buyers waiting for the opportunity of a lifetime! ...a feeding frenzy!! This is what the 1st quarter 2008 is going to see if this market opens up and the news is reported correctly.

GEORGE-- I think you were addressing Frances's concerns but I would like to say that you are dead-on right! ...and the big financial institutions played a HUGE roll in driving the mortgage industry to sell, sell, sell that paper so that they could make the huge returns that they were betting on!

It just goes to show that you (or anybody) should only listen to the experts, the real estate professional who knows what is really going on in their local markets! 

Dec 21, 2007 05:48 AM #8
Rainer
6,635
Vincent Coccia
Construction Services Integration - Paoli, PA
So true...Although I actually have heard several stories recently about the area I live (around philadelphia area) that were actually positive.  Bad news sells!
Dec 21, 2007 02:15 PM #9
Rainmaker
495,774
Paula Hathaway, REALTOR, LBA
Douglas Elliman Real Estate - Southampton, NY
...The Most Informed Agent In The Hamptons!

You are right---bad news does sell; but if the news were reported accurately we wouldn't think that way would we? Because not all news is bad! Look at the war in Iraq for instance---bad news, bad news, bad news......then all of a sudden we see the light...how miraculous!!! Do you believe that we were told the truth by the mainstream media re: Iraq? I don't...not for a minute. What I do believe is that the media is so powerful, or think they are, that they can lead the news---they can set the tone, the pace and the result of the things that happen in this little world and we are "lemmings to the sea" and we buy it and live by it...what a shame!

Thanks for your response Vincent

Dec 22, 2007 04:08 AM #10
Ambassador
589,420
Julie Chapman
DR Horton - Lakeland, FL
New Homes Sales Lakeland Florida
Great post Paula,,,,real estate is local.....
Jan 07, 2008 09:55 AM #11
Rainer
6,635
Vincent Coccia
Construction Services Integration - Paoli, PA
Very true and I am sick of this.  Lets try to be positive and maybe we can have a great year not only for real estate but for any business! 
Jan 07, 2008 12:50 PM #12
Rainmaker
495,774
Paula Hathaway, REALTOR, LBA
Douglas Elliman Real Estate - Southampton, NY
...The Most Informed Agent In The Hamptons!

Hi Julie,

Thanks for taking the time to read my post...I just read today that NAR is planning on putting some concrete data out there to counter the media's negative national news coverage that we are all being bombarded with. Apparently this will be done at the local levels so that the positive news gets out there when it happens.  I will be keeping tabs on it and will try to let everyone know what, where and when this comes about.

Again, thanks for your fabulous post...lets keep it going!

Jan 07, 2008 01:42 PM #13
Rainmaker
495,774
Paula Hathaway, REALTOR, LBA
Douglas Elliman Real Estate - Southampton, NY
...The Most Informed Agent In The Hamptons!

HI Vincent,

Thanks for your response again, Vincent. It is so important that we don't just sit by and let the media control everything..As I mention to Julie Chapman Brunswick after reading her post, NAR is trying to counter the bad news with the more positive happenings in certain local areas. I will be getting more info and sharing that soon.

Thanks again!

Jan 07, 2008 01:50 PM #14
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Rainmaker
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Paula Hathaway, REALTOR, LBA

...The Most Informed Agent In The Hamptons!
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