What a difference a few months makes...

Real Estate Agent with Century 21


I can't believe this is happening.  I'm a big Laker fan since childhood.  I was in various states of depression, disillusionment and bitterness during the fall of 2007.  The teams star, Kobe Bryant, had made several public statements about his desire for a trade.  His feeling was that the team had not brought in the right support around him to win a championship...and that was his ONLY goal. There was much debate whether the team should trade a player, who most experts agree, is the best in the NBA.  Are you going to get enough value to replace him?  Things were falling apart quickly for a team who had dropped from elite status after dumping Shaq and his huge contract.  They were starting to remind me of my other sports love...the Raiders...almost dysfunctional.

Then a weird thing happened...the team ownership and the players decided to play basketball and quit talking about how bad things were.  They focused on fundamentals and began to win games.  They suddenly were beating teams they previously couldn't compete with.  It became obvious something special was developing with their core group of young players.  They got back the swagger of a winner. Kobe learned how to be a team player instead of "the show." 

Just prior to the league imposed trading deadline, ownership made a blockbuster deal giving up a few young role players for Pau Gasol a very talented European big man.  Wow talk about team chemistry...Gasol meshed immediately with his new team and good things happened.  Within two weeks the team had won about 14 out of 15 games.  They were now labeled "the team to beat" in the powerful Western Conference.  The playoffs are right around the corner and it the new look Lakers are still fighting for the #1 seed.

I can hear you asking..."what does this have to do with real estate?"  Don't I always find a way to get back on track?

No matter how bleak things look in our market...there's always hope for a rebound (notice the sports phrase?)  As bad as it's been, if we just quit the doom and gloom talk, and get back to the fundamentals...things will improve.

I know this market is a complicated mesh of our nations economy and local buyers and sellers.  Nothing about it is simple...no matter what the Fed wants you to believe.  You can't just "drop rates" and expect everything to be all better.  The bad habits (can you say "sub-prime"?) that got us here won't go away overnight.  The 5 year ride we just went on, had to end...and you know that "jerk" you feel when the roller coaster slams to a stop...that's what our market is doing.  It couldn't continue or nobody would be able to afford a home. 

But the trouble is...our society (maybe just us "boomers") don't want to wait for anything.  We want it fixed NOW.  Instant gratification. We want pop tarts in 20 seconds rather than fixing breakfast.  Can you believe Pop Tarts even have "micro-wave" directions...if you don't have time to wait for a toaster and must nuke your Pop Tarts you better seriously evaluate your life.  Our parents expected to work their whole lives and at the end have a nice retirement with a monthly social security check.  They had no illusions of grandeur.  Heck, they were just happy they didn't have to go through the Great Depression like their parents.

We need to keep focusing on fundamentals...buying and selling good property, in good neighborhoods...putting away as much as possible for retirement...educating ourselves as investors. When we do that, time will begin to heal the industry's wounds.  We will appreciate the much needed correction our market takes.  I just hope the government keeps it's hands out of the fix.  It is not fair to bail out all the "bad decisions" at the expense of those who made good choices.  Why should a flipper who is behind on 4 mortgages be offered "relief" when other investors who made prudent decisions and struggled to keep his payments current...not get relief?

Have you heard the latest?  If you call your bank and ask them to re-negotiate your current loan...they will consider it if you're late on your payments.  It makes sense to them...stop a possible foreclosure from happening by renegotiating the current "bad rate" the borrower agreed to and signed off all disclosures about (basically, "yes I agree to borrow at 9% and will pay it back..but now I can't afford to since I bought a boat, hot tub and new car...please help me out")  But try calling and asking your bank to lower your rate by 2% if you're current on your payments.  They'll laugh your ear off.  Why should they? You're making your payments just fine. 

We just need the Fed to stay out of the mess and let the pieces crumble.  This will bring further correction.  The banks who created the mess should be the ones to pay the penalty not the tax-payers.  What a difference a few months makes...I hope we're saying that soon...along with Kobe and Co.

Comments (2)

Suzanne Gantner
Realty Texas - Round Rock, TX
Good post - I loved the PopTart in the microwave.  We have gotten pretty bad but that is sinking seriously low.  Thank goodness, Austin, Tx is doing better than the rest of the country - I stay steady and am real grateful for that - as long as people retire, have kids or want an investment I am good.  And yes the Feds need to lay off.....Take care!!
Apr 09, 2008 06:14 AM
With that blog alone, I can easily catagorize you in my econ book.
Apr 15, 2008 08:49 AM