Monthly Archives: September 2007

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why are potential buyers afraid of buying

Keyword search:  why are potential buyers afraid of buying when house prices are declining?

Hot Property Is  US housing 20% overvalued? – BusinessWeek

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NPR Talkshow Alert: The Subprime Mop-up, a nationally syndicated talkshow on NPR, is hosting a program NOW entitled, "The Subprime Mop-Up."
If you live in Greater Boston, you can listen to 90.9FM from 9-10am
this morning, Thursday, September 6, 2007, or the rebroadcast tonight
from 7-8pm. Beyond Boston, you can also listen to the program LIVE
now or access the audio anytime later at your convenience:
Aired: Thursday, September 06, 2007 10-11AM ET

Program description:  The Subprime Mop-up

you thought the subprime mortgage mess was behind us, think again. In
the next year, another two million adjustable-rate mortgages are
scheduled to reset from low "teaser" rates to household budget-busting
new highs.

Foreclosure rates are already soaring. In some
regions, whole neighborhoods risk going under. A credit crunch backlash
has markets around the world in turmoil.

Now Washington is girding to weigh in.  But who, if anyone, should be bailed out?  Who punished?  Who reined in?

This hour On Point:  homes, high-rollers, and moral hazards in the subprime mop-up.


Housing economist Karl Case just ducked a question on the implications of the subprime crisis on housing prices nationwide and Congressman Barney Frank just finished speaking.  The complete line-up of guests include:

  • Rep. Barney Frank, Democrat from Massachusetts, chairman of the House Financial Services Committee
  • Karl Case, professor of economics at Wellesley College and co-author,
    with Yale’s Robert Shiller, of the Case-Shiller Index, the leading
    database of U.S. housing sales
  • Michael Mussa, former chief
    economist at the International Monetary Fund and former member of
    President Ronald Reagan’s Council of Economic Advisers
  • Michael G. Ciaravino, Mayor of Maple Heights, Ohio, a city hit hard by foreclosures

Posted in Foreclosures, Real Estate Bubble, RECALL: Real Estate Consumer Alliance

Are paper files & walk-in real estate offices obsolete?

Twelve years ago, The Real Estate Cafe was founded as a walk-in,
internet-based, housing information center — to our knowledge, the
first in the country (see story below.)  Over the next five years,
1995-2000, we amassed a mountain of paper files, some in the 1,200
square foot body of the cafe and more in the basement.   

though The Real Estate Cafe has operated virtually in recent years, we
continue to amass mountains of paper.  About 20 boxes of paper, mostly
marketing materials from recent real estate conventions and newspaper articles, are ready to
sorted, filed, or tossed today.  Approximately 50 files boxes are
already in deep storage.  While we rarely access paper documents in
"active" file cabinets, we constantly update digital files on The
Real Estate Cafe’s intranet.

So our question is three-fold:

1.  Is paper filing obsolete?

2.  Are walk-in real estate offices obsolete?

3.  If real estate brokerages reorganized to operate virtually, would savings be passed onto real estate consumers, both buyers and sellers, in the form of lower commissions, rebates, or fee-for-service business models like The Real Estate Cafe?


Buying A La Carte
Bill Wendel’s Latest Venture, The Real Estate Cafe, Aims To Be The Buyer’s ‘guardian Angel’

Source: Boston Globe | Date: Sep 10, 1995 | By: Mary Sit, Globe Staff

…Called The Real Estate Cafe, it is a self-service information…[reducing] costs by having consumers do some of the work themselves.

Posted in Change Agents, Commission Reform, Fee-for-service, Inside The Real Estate Cafe, Savings & Rebates, Tech Trends, Writing tools

Real time “comps”

Link to recent press post Inman re "real time real estate."

Instead of developing a "CMA" type of report that describes sold data, I’ve
been using the "pending date" instead of the sold date.

Reason?  The market is changing so much on a daily or monthly basis,
that considering "comps" may not be as accurate if the sold date is used, as
much as using the "pending date."  If you develop a list of 6 houses that
sold in August to compare those sales with an offer you’re making today, then
what if the market has been in a decline since March?  How much of a value
difference may there be from properties that went pending in the spring,
compared to a property on the market now?
Some, if not all of those 6 "comps" could have sold last spring.  As
we know, listing agents and appraisers will often use the "comps" that best fit
the subject being appraised rather than an objective assessment of the sales
So, next time you structure some type of analysis, why not use "pending
dates" instead of "sold dates" to make any comparison to a subject property
you’re trying to negotiate for on behalf of your buyer clients?
I suggested this to one of the "honest" appraises we typically use
here…he said he’s only using month old "comps" because there is an ongoing
decline in values here.

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"By neglecting the critical role that housing plays in U.S.
recessions, our Federal Reserve has let our recessions be more frequent
and more severe then they need to be," said Leamer. "In particular, the
subprime mortgage crisis is a direct consequence of short-term interest
rates held too low for too long by the Fed."

Leamer examines statistics back to World War II to highlight how
weaknesses in housing and consumer durables make significant
contributions to economic recessions.

More from his paper: "The historical record strongly suggests that
in 2003 and 2004 we poured the foundation for a recession in 2007 or
2008 led by a collapse in housing we are currently experiencing. Only
twice have we had this kind of housing collapse without a recession, in
1951 and in 1967, and both times the Department of Defense came to the
rescue, because of the Korean War and the Vietnam War. We don’t want
that kind of rescue this time, do we?"

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