Real Estate Agents - real estate bubble

Author

real estate bubble

e@earthlink.net

2006-07-25, 8:25 pm

When will real estate bubble burst? I've been renting all my life and I
want to purchase a home or condo for the first time but all the
properties in Southern California are way over-priced right now. When
will real estate bubble burst? Any idea? I am just waiting and hoping
that Mr. Burnanke will raise the interest rates to at least 10% by end
of this year to burst the bubble. Anybody think this will happen? I am
waiting for average LA homes prices to come down from rediculously
high(550k) to normal(300k) range. The home prices right now are
ludicrous!
I really hope so.

DANIELHOMAN

2006-07-25, 9:25 pm

<e@earthlink.net> wrote in message news:44C6BB80.5E430508@earthlink.net...
> When will real estate bubble burst?

What bubble? This is free market, supply and demand. Everyone with a sense
of personal responsibility makes sure they have a roof over their head.
Everyone needs a place to live. There is no bubble, how about calling it a
realignment of prices. Here in Central Florida prices of vacant land went
up much faster than home prices, and home prices went up much faster than
rents. As a result rents are rising and vacant land is retreating a little
to bring the market back into line. This is far from a bubble.

>I've been renting all my life and I
> want to purchase a home or condo for the first time but all the
> properties in Southern California are way over-priced right now.

If willing buyers and willing sellers agree on a price this is the free
market at work. The technical term is fair market value. Fair market value
may be higher than you like, but, it is not "over-priced."

> When will real estate bubble burst? Any idea? I am just waiting and
> hoping
> that Mr. Burnanke will raise the interest rates to at least 10% by end
> of this year to burst the bubble.

Interest rates have an effect on price, but, not as much as you think. As
interest rates go up, people turn to creative financing, ARMs with negitive
amortization, or interest only, or baloon payments. The fact is as
appreciation slows and interest rates go up, rents tend to go up. Since you
are renting now, expect to pay more.

>Anybody think this will happen? I am
> waiting for average LA homes prices to come down from rediculously
> high(550k) to normal(300k) range. The home prices right now are
> ludicrous!
> I really hope so.

I don't know how to break this to you, but, if people are paying 550K for
homes in your area, that is the normal price. The fact is real estate is
going to continue to appreciate in areas where wages are higher, because
people want to live closer to good paying jobs. I think it is long past the
time where you bite the bullet and buy a home before the normal range in
your area becomes 750K.

The Shadow

2006-07-26, 1:25 pm

550k isnt that high. I am in Nassau county New York(avg home sold this
year is 600K).
We have already seen a decrease in property values where I am, in the
range of 5-10%.

550-300K that is a huge decrease. Correct me if I am wrong but in LA
area in the 80's didnt homeowners lose about 40% of their equity? your
example is about that same 40%. I am young, and find that huge a
decrease quite unbelieveable, but chances are if it happened once it is
bound to happen again. History often repeats itself.

and by the way some are saying first quarter 07. Don't quote me on that.

e@earthlink.net wrote:
> When will real estate bubble burst? I've been renting all my life and I
> want to purchase a home or condo for the first time but all the
> properties in Southern California are way over-priced right now. When
> will real estate bubble burst? Any idea? I am just waiting and hoping
> that Mr. Burnanke will raise the interest rates to at least 10% by end
> of this year to burst the bubble. Anybody think this will happen? I am
> waiting for average LA homes prices to come down from rediculously
> high(550k) to normal(300k) range. The home prices right now are
> ludicrous!
> I really hope so.
>

e@earthlink.net

2006-07-26, 5:25 pm

Professor Shadow, you are absolutely right!

The Shadow wrote:
[color=darkred]
> I am in Nassau county New York
> We have already seen a decrease in property values where I am, in the
> range of 5-10%.
>
> in LA area in the 80's didnt homeowners lose about 40% of their equity?
> your
> example is about that same 40%. but chances are if it happened once it is
> bound to happen again. History often repeats itself.
>
> and by the way some are saying first quarter 07. Don't quote me on that.
>
> e@earthlink.net wrote:

2006-07-28, 9:25 am

I saw an ugly tract home in California sell for $800 per sqaure foot
the other day on HGTV. New construction in Atlanta is about $100 per
foot and they throw in a free plasma TV.

Jobs in California do not pay 8 times more than in Atlanta. It's
pretty obvious that prices in California are inflated.

darrenli516@yahoo.com

2006-07-28, 5:25 pm

The real estate bubble, if there really is one, has been fueled mostly
by the historically low interest rates in recent years. Buyers could
afford to borrow more, driving the market.
But as interest rates rise, buyers can borrow less.
I don't see a huge drop in prices in any major suburban area happening.
The real estate market is a classic example of the principles of
supply and demand.
When demand is high, prices are up. When demand falls off, prices
flatten out or drop.
But for all the buyers out there that want to buy and find the prices
"too high", the simple thing to do is look in areas you can actually
afford to buy in.
This is a problem I run into all the time. Buyers always want to buy a
house in areas they can't afford, then claim the prices are too high.
As a Realtor, when we list a house, we try to get the seller to price
it in line with other houses already on the market.
But often, the buyers are simply out of touch with reality.
Many say they will wait till the prices fall.
For instance, I had a young couple looking at houses about 6 years ago.
I took them out a few times and they always said everything was
overpriced.
They liked one of the houses, which at the time was listed at 149K, but
they were hesitant to make an offer, and still balked at the price.
I stopped taking them out because they were obviously not ever going to
buy a house.
I am pretty sure they never did, because a few years later they called
my office
wanting to see houses again.
Anyway, the house they should have bought 6 years ago at 149K is now
worth about
399K.
My point is, buyers need to face reality.

Darren

e@earthlink.net

2006-07-29, 3:25 am

Real estate agent Darren needs to wake up and realize that his so called,
"reality" is just an illusion.
Everything fluctuates. What goes up must come down. Don't listen to
this real estate agent. All real estate agents lie, con and rip
you off with big commission. Real estate agents are worse than used
car sales man. I know plenty of people who lost everything after listening
to a real estate agent like this one. Be aware of the real estate agents.
Their mission is to act like they care, tell you bullshit stories like this
one, rip you off with huge commission and laugh all the way to the bank.

True FACT of Supply and Demand: Interest rage goes up => Supply goes up =>
Demand falls => home prices falls

darrenli516@yahoo.com wrote:

> The real estate bubble, if there really is one, has been fueled mostly
> by the historically low interest rates in recent years. Buyers could
> afford to borrow more, driving the market.
> But as interest rates rise, buyers can borrow less.
> I don't see a huge drop in prices in any major suburban area happening.
> The real estate market is a classic example of the principles of
> supply and demand.
> When demand is high, prices are up. When demand falls off, prices
> flatten out or drop.
> But for all the buyers out there that want to buy and find the prices
> "too high", the simple thing to do is look in areas you can actually
> afford to buy in.
> This is a problem I run into all the time. Buyers always want to buy a
> house in areas they can't afford, then claim the prices are too high.
> As a Realtor, when we list a house, we try to get the seller to price
> it in line with other houses already on the market.
> But often, the buyers are simply out of touch with reality.
> Many say they will wait till the prices fall.
> For instance, I had a young couple looking at houses about 6 years ago.
> I took them out a few times and they always said everything was
> overpriced.
> They liked one of the houses, which at the time was listed at 149K, but
> they were hesitant to make an offer, and still balked at the price.
> I stopped taking them out because they were obviously not ever going to
> buy a house.
> I am pretty sure they never did, because a few years later they called
> my office
> wanting to see houses again.
> Anyway, the house they should have bought 6 years ago at 149K is now
> worth about
> 399K.
> My point is, buyers need to face reality.
>
> Darren

Obama

2006-07-29, 3:25 am

Agree. When interest rate goes up, supply goes up, demand falls, and
home prices fall.
Actually home prices have been frozen for past one year and been seeing
it fall for the first time in a long time for the past two months,
especially in Southern California after the FEDs started raising
interest rates. I heard Feds is planning to keep raising the rates.

e...@earthlink.net wrote:[color=darkred]
> Real estate agent Darren needs to wake up and realize that his so called,
> "reality" is just an illusion.
> Everything fluctuates. What goes up must come down. Don't listen to
> this real estate agent. All real estate agents lie, con and rip
> you off with big commission. Real estate agents are worse than used
> car sales man. I know plenty of people who lost everything after listening
> to a real estate agent like this one. Be aware of the real estate agents.
> Their mission is to act like they care, tell you bullshit stories like this
> one, rip you off with huge commission and laugh all the way to the bank.
>
> True FACT of Supply and Demand: Interest rage goes up => Supply goes up =>
> Demand falls => home prices falls
>
>
>
>
> darrenli516@yahoo.com wrote:
>

Jackson@earthlink.net

2006-07-29, 1:25 pm

Real estate agent Darren takes one basic economic class at a local
community college and fools himself into believing it's equivalent to a
degree in economics. And then tries to convince people of his reality
which in truth is just an illusion by telling people how smart he is by
talking about principles of supply and demand. This is one of many
tactics used by real estate agents. They try to convince people that
real estate agents are smarter than them and that they should trust what
real estate agents are saying because they have more experience and
knowledge. The fact is real estate agents do have more experience; in
conning people out of 6% commission which now days average around whpping
$33,000.00 due to real estate bubble. That's right, if a real estate agent
sells your single house, they get $33,000. What kind of rip off is that?
For the amount of work they do and the lack of knowledge they have, they
surely don't deserve that. Do not trust real estate agents. Most real
estate agents only have high school diploma. If you just pass one simple 2
hour 8 th grade level english test, you can call yourself a real estate
agent too. And for surely do not listen to this guy as he has no idea what
he's talking about. He is just spreading bullshit rumors because he's
desperate and scared that he might lose his income when real estate bubble
inevitably busts as interest rates rise.

darrenli516@yahoo.com wrote:

> The real estate bubble, if there really is one, has been fueled mostly
> by the historically low interest rates in recent years. Buyers could
> afford to borrow more, driving the market.
> But as interest rates rise, buyers can borrow less.
> I don't see a huge drop in prices in any major suburban area happening.
> The real estate market is a classic example of the principles of
> supply and demand.
> When demand is high, prices are up. When demand falls off, prices
> flatten out or drop.
> But for all the buyers out there that want to buy and find the prices
> "too high", the simple thing to do is look in areas you can actually
> afford to buy in.
> This is a problem I run into all the time. Buyers always want to buy a
> house in areas they can't afford, then claim the prices are too high.
> As a Realtor, when we list a house, we try to get the seller to price
> it in line with other houses already on the market.
> But often, the buyers are simply out of touch with reality.
> Many say they will wait till the prices fall.
> For instance, I had a young couple looking at houses about 6 years ago.
> I took them out a few times and they always said everything was
> overpriced.
> They liked one of the houses, which at the time was listed at 149K, but
> they were hesitant to make an offer, and still balked at the price.
> I stopped taking them out because they were obviously not ever going to
> buy a house.
> I am pretty sure they never did, because a few years later they called
> my office
> wanting to see houses again.
> Anyway, the house they should have bought 6 years ago at 149K is now
> worth about
> 399K.
> My point is, buyers need to face reality.
>
> Darren

The Shadow

2006-07-29, 1:25 pm

I beg to differ on your opinion of Real Estate agents. #1 I believe the
nat'l avg home price is something like 225k which would make the avg
commission at 6% something like 13k. (not to mention the nat'l avg is
4.9% commission). NAR says there are 1.2M realtors at the start of this
year. Of those only 300k are active (1 transaction a month). Real
Estate schools were showing record numbers of students over the last 5-6
years, because everyone thought they could sell a house easily. In the
market we are leaving, that might have been true. There was/is an Agent
bubble, which will be bursting throughout the next 18 months. I just
became an agent, and I can't believe how many agents don't know what
they are saying. I have a mortgage license, and I am a part time
investor (bought 4 houses last year). (Major pet peeve, agents who say
a house is a major cash cow, or great investment, and the property
doesnt even pass the 1% rule)
Yes it is easy to become an agent, but is is not as easy to become a
successful agent.

Jackson@earthlink.net wrote:
> Real estate agent Darren takes one basic economic class at a local
> community college and fools himself into believing it's equivalent to a
> degree in economics. And then tries to convince people of his reality
> which in truth is just an illusion by telling people how smart he is by
> talking about principles of supply and demand. This is one of many
> tactics used by real estate agents. They try to convince people that
> real estate agents are smarter than them and that they should trust what
> real estate agents are saying because they have more experience and
> knowledge. The fact is real estate agents do have more experience; in
> conning people out of 6% commission which now days average around whpping
> $33,000.00 due to real estate bubble. That's right, if a real estate agent
> sells your single house, they get $33,000. What kind of rip off is that?
> For the amount of work they do and the lack of knowledge they have, they
> surely don't deserve that. Do not trust real estate agents. Most real
> estate agents only have high school diploma. If you just pass one simple 2
> hour 8 th grade level english test, you can call yourself a real estate
> agent too. And for surely do not listen to this guy as he has no idea what
> he's talking about. He is just spreading bullshit rumors because he's
> desperate and scared that he might lose his income when real estate bubble
> inevitably busts as interest rates rise.
>
>
> darrenli516@yahoo.com wrote:
>
>
>
>

darrenli516@yahoo.com

2006-08-01, 9:25 am

I have to address the issues mentioned about my education and ablities
as a Realtor.
I certainly have far more education than a high school diploma. I
graduated with honors from the university of Houston with a degree in
business(MBA), as I did with my bachelor's degree in finance there.
I have worked as a successful Realtor for over 7 years, and I certainly
know my market and the trends in my area.
The commissions I earn, I earn through hard work and successful
business techniques.
I do not lie, cheat or steal money from my clients.
I simply sell houses.
I do not get emotionally involved with any transaction, which allows me
to be objective about the entire process.
I know about the market trends because I work in the market every
single day.
If a buyer in my area asks me if there are any Tudors on the market, I
don't even have to look on the computer. I KNOW the answer, because I
know my market.
I am a trained professional.
If certain people have an aversion to Realtors, that's their problem.
Not mine.

Darren

Jeff Olsen

2006-08-07, 3:25 am

Jackson@earthlink.net wrote:
>The fact is real estate agents do have more experience; in
> conning people out of 6% commission which now days average around whpping
> $33,000.00 due to real estate bubble. That's right, if a real estate agent
> sells your single house, they get $33,000. What kind of rip off is that?

Well, that would be approximatly a $500k house on which the listing
agent got a 6.5% commission, and those are both unusual things in most
areas. In the market I am in, most houses sell for much less than
that, more like $200k-$300K, and it is unusual for the listing agent to
get the whole commission; usually it is being split with the buyer's
agent. In fact, 5% commissions are the norm around here and that
results in a 2.5% split. So your $500k home would have a $25,000
commission split in half, or $12,500 for the listing and selling agent.
A good day's work? Sure, but then again it's hardly a day's work.
But you have to view things contextually. How much does the average
agent make in a year, and how much do they work for it? Viewed that
way, you would see that real estate agents work hard to make a living
that ranges from decent to very good.

> For the amount of work they do and the lack of knowledge they have, they
> surely don't deserve that. Do not trust real estate agents. Most real
> estate agents only have high school diploma. If you just pass one simple 2
> hour 8 th grade level english test, you can call yourself a real estate
> agent too.

I don't know where that is true (nowhere, I suspect), but it's sure not
true in Oregon!! I am in the process of getting my licence and it's
150 course-hours of work and is NOT a trivial task. It will take me
about 2 months of all my spare time and cost about $1500 by the time
it's all said and done. That's coming from a guy with 2 college
degrees.

Most importantly, buying or selling a home is a huge transaction, the
results of which can shape your entire life. Given it's complexity and
all that can go wrong, to my mind it makes sense to employ a
professional to ensure the process goes as well as is possible. You
obviously see it differently, as is your perogative, but for many
people the reality of buying or selling a home is simply outside of
their abilities, or would simply take too much time and hassle to deal
with. Those people employ Realtors. Like my dad, a retired professor.
He's a very smart guy and, as a holder of a PhD, obviously not dumb or
unable to negotiate a difficult process. When he sold his last house
he used an agent. He's smart, retired, and a bookworm- he COULD have
handled it himself but why would he want to do THAT? What pain in the
XXX.

And for surely do not listen to this guy as he has no idea what
> he's talking about. He is just spreading bullshit rumors because he's
> desperate and scared that he might lose his income when real estate bubble
> inevitably busts as interest rates rise.

If or when things slow down it will hurt EVERYONE, real estate agents
included. Why you would wish pain upon a profession is beyond me, but
the truth is that it isn't agents driving prices up or making houses
unaffordable to the average bloke. What is driving them up? YOU are.
You being the average person buying a house. It's a bidding war and
people are just outbidding each other. The real estate agent is simply
providing a service to a market.

-jeff

[color=darkred]
>
>
> darrenli516@yahoo.com wrote:
>

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