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Moving And Relocation: The Prince of Eminent Domain

Am I the only one who finds it disturbing that the architect of the biggest eminent domain land grab yet quotes Machiavelli as his inspiration without irony:

Machiavelli said it best - the hardest thing to do is to sustain and change the order of things," Brown says. "I will use every ounce of energy I have to fight to make a better life for these people. There will be no more lower class.

I'm all for the idea of lifting up a community through sustained economic change, but in the here and now, what this guy is doing is masking the plight of his region for short-term gains, and violating the property rights of homeowners to do it. "The greater good" is all well and good, but it's not exactly long-term planning for some bullshit developer to reap huge gains from building overpriced s$#tboxes that will sit there like giant middle fingers dirtying the landscape, while they make off with the loot.

Here's an even grimmer tale from my old stomping grounds of Bergen County, Noo Joisey, dealing with displacing a homeless shelter to build condos. Ah, the milk of human kindness. I think NIMBY types really imagine that if they close their eyes and hold their breath, all those nasty, stinky, evil (and usually not white) people will just go away.

The Real Estate Bloggers have been kicking it hardcore on the eminent domain issue for a while. Their blog's well worth the read.

Oh, and here're some pertinent (and definitely ironic) Machiavelli quotes for ya:

The wish to acquire more is admittedly a very natural and common thing; and when men succeed in this they are always praised rather than condemned. But when they lack the ability to do so and yet want to acquire more at all costs, they deserve condemnation for their mistakes.

Whoever conquers a free town and does not demolish it commits a great error and may expect to be ruined himself.

(Image courtesy of Philosophy Pages.)

Posted at 03:38 PM | TrackBack

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Fed Watch: You Have Been Warned

Federal Reserve chair Ben "Is It Too Early To Quit?" Bernanke has issued a new warning that continued energy price volatility may mean another hike in the interest rate--which will, in turn, goose lenders to raise their rates. Of course, the young padawan has learned his lessons well from his master, and did not actually commit to a rate hike or deny the possibility in his testimony:

The resolution of the nation's long-run fiscal challenge will require hard choices. Fundamentally, the decision confronting the Congress and the American people is how large a share of the nation's economic resources should be devoted to federal government programs, including transfer programs like Social Security, Medicare, and Medicaid. In making that decision, the full range of benefits and costs associated with each program should be taken into account. Crucially, however, whatever size of government is chosen, tax rates will ultimately have to be set at a level sufficient to achieve a reasonable balance of spending and revenues in the long run. Members of the Congress who want to extend tax cuts and keep tax rates low must accept that low rates will be sustainable over time only if outlays can be held down sufficiently to avoid large deficits. Likewise, members who favor a more expansive role of the government must balance the benefits of government programs with the burden imposed by the additional taxes needed to pay for them, a burden that includes not only the resources transferred from the private sector but also the reductions in the efficiency and growth potential of the economy associated with higher tax rates.

Shorter Ben Bernanke: "We're pretty much screwed either way you go. Say, how soon can I apply for early retirement?"

Now, much has been made of the rebound in home sales reports from the 26th, but as the mighty Bubble Meter points out, those numbers look a lot less impressive when placed in context. But even on its face, if people are buying houses in greater numbers, it might very well be due to the extension of such astonishingly bad mortgage products as the 50-year-mortgage, or as I like to call it, "debtors' prison."

So, what is happening, you ask? Simple. Developers and lenders are doing all they can to wring every last ounce of profit from the housing market before the mass ARM resets cause foreclosures nationwide, so they are pushing their products to every last subprime or marginal borrower there is. The volatility from gas prices is going to probably push Bernanke to make as many rate increases as he needs to in order to keep inflation contained, as the guy is obssessed with proving the economy can be stimulated without resorting to New Deal-esque measures.

Tim Iacono provides snippets of an interesting discussion about what may happen if housing prices stay up forever. Chilling stuff indeed. I think what'll happen is that different regions will have such dramatic price skews that some areas will moderate, some will flatten, and some will continue to rise sky-high. Instead of a bunch of regional bubbles, we'll have regional bubbles, healthy markets, AND crashes all at once!

Fun for the whole family! :)

(Image courtesy of the very appropriate Boojum.)

Posted at 02:36 PM | TrackBack

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Architecture & Design: Go For The Green

Right now no energy issue is more pertinent than high gas prices, but don't forget, high oil means high heating bills as well, and ironically, we can thank global warming for our mild winter last year. Talk about getting it coming and going, eh?

This month's Wired (featuring resurrected eco-evangelist Al Gore) has the first of a series of articles on the affluent and increasingly eco-conscious. I'll be posting a link to that "Green Home" article as soon as it goes live.

The concept of marrying real estate development to environmental concerns isn't as weird as you might think. Building new communities isn't just about putting up sh$!boxes in any random area and hoping people take a bite. It's about innovation, urban planning, and having the cojones to say that not everyone needs fifty flat-grass acres and a winding driveway that leads into the next county. Here's a great story about how one Florida community is building for the future.

One of the reasons why homeowners are fleeing the cities is because they want nature. All the convenience in the world can't make up for the ugliness of sprawl, and people are starting to grok that. Look at this DIY guide to building your own solar power generator, found via Lifehacker.

And don't forget LH's eco-conscious cousin TreeHugger for great shopping and living tips for people who want to use their green to make the world green.

Earth Day is officially over, but that doesn't mean we should stop caring. Everything you do--from the way you build your home, to the gas you use, to the car you drive, to the products you buy--has an impact on the world at large. You can make that impact positive or negative, and either one has an effect. Not to get all Galadriel-esque on you, but even the smallest change in your life can cause change on a much greater level. Think about it.

(Image gratefully appropriated from Audobon of Florida.)

Posted at 02:17 PM | TrackBack

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Hurricane Housing: And Your Money Back....Whether You Like It Or Not

Thanks to FEMA's monolithic incompetence, thousands of hurricane survivors from both Katrina and Rita who got money they didn't need are going to have to pay it back.

How much do you want to bet that those notices are going to go to people who DID need the aid and are just being squeezed to pay for the Iraq war, eh?

Let's be clear: Everyone who spent their $2,000 debit card allotment on strip clubs or Louis Vitton bags should pay up. But as the AP article notes, a good portion of those incorrect payments were due to mistakes FEMA made in the processing. To be fair, the agency was monumentally overworked and relying on untrained volunteers to process all of these claims, but if they'd had more transparent oversight, there would have been a lot less in the way of fraud.

I especially love the whole IRS-esque "set up a payment plan" nonsense. These guys KNOW most of these people won't have the dough to pay that money back immediately, and even at 2 percent interest, if it compounds daily, you're looking at an extra $100 a month, each month, not including penalties. Good luck getting that off your jacket.

And how's all that FEMA money being spent? Well, apparently people who have been begging for trailers are getting left out in the cold, while unused trailers sit vacant and FEMA can't be bothered to move them.

Your tax dollars at work:

Posted at 07:53 PM | TrackBack

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Housing Market: The Great Escape

As I prophesized, there are more and more reports that extreme housing prices are pushing people further and further inward, leaving the coasts for cheaper living costs, more space, and (they say) better places to raise families.

This is fascinating to witness...whereas before, industries would develop in an area and communities would build around them, now communities are being built in areas starved of industry, with new jobs and economic flows being built to meet them. Peep this fluff piece from the Nov. 2005 West Virginia State Journal:

"They say the world is flat because of technology, and in this new flat world, people can do anything from anywhere," he said. "So what we need to do is get people to stay here. And if the talent is here, companies will build around them....After Sept. 11, a number of larger companies and government contractors reconsidered whether working in the middle of big cities such as New York and Washington, D.C., was the best idea. People want safety. They want security. They want space."

The necessity of building new industry to match this increasing demand for exurban housing is only going to be amped up by the incredible distances people are traveling just to maintain their quality of life. Not only that, if the gas shortages keep happening, prices will soar beyond the ability of American pocketbooks to compensate.

So what will happen to the cities?

My guess is that they won't suddenly become "Mad Max-" like ghost towns, but businesses, local governments, and developers will refocus their selling points to different groups of people. Rather than play to families with children, they will woo the single, the childless, the gay, the affluent, etc. In a sense, this is always how it's been, but it's also in reverse...instead of the ultra-rich living on giant estates in the far hinterlands, they'll be commanding top-shelf penthouses in luxury condo developments.

One thing's for sure...if this trend towards exurban development continues, prices will HAVE to fall in the coastal markets, even as they start to rise further inland. It'll always be more expensive to live in NYC than it is in Morgantown, West Virginia...but the difference may soon be less than you thought.

Whether or not Cleveland is still a hell pit or a new suburban mecca is, apparently, not solely up to Snake Plissken either.

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Housing Market: Crying Wolf

A news header on CNN this morning read "Crying Wolf About Housing?" Interestingly, CNN's own financial reporting seems to show that Grandma may, indeed, have something to worry about. MSNBC has a more thorough roundup of the state of the market.

Although no official word has come from Helicopter Ben and company as of yet, word has it that the Federal Reserve may put a halt on increased interest rates....and then again, perhaps they won't. This whole schema for the CPI is ridiculous, I might add...the two most serious cost inflation areas right now are gas prices and food costs (due to higher gas prices themselves), and yet they're not counted because they're "too volatile." Yeah, because that Gap V-neck T-shirt is the deal-breaker that's keeping me from filling up my $50 a tank SUV.

Here's a line that's worth noting: Fed officials are counting on a slowing U.S. housing market to keep the economy from overheating -- and there have been numerous signs a long housing boom is simmering down.

I saw it commented somewhere that the Fed's rate-hike marathon is designed to pop the bubble gently, not abruptly, and then turn around and crow about how we didn't need to provide new public works or government jobs to combat wage stagnation and price explosions. Interesting theory, to say the least.

Peep the discussion about the perfect housing storm over at the Daily KOS. As one commenter put it, the change will happen slowly. There's probably not going to be any single massive trigger that suddenly makes nationwide housing prices drop like Kirstie Alley's dress size. But as long as short-term-minded developers keep churning out hyper-expensive McMansions, prices will have to drop in the long run, because eventually, there will simply be too much inventory to make value of anything.

I've been wrong before, but will I be this time? YOU MAKE THE CALL!

(I wish I'd had a picture of Wolf Blitzer I could've used for this, 'cause that would've just been great. :) )

Posted at 03:48 PM | TrackBack

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Moving and Relocation: "Eminent Domain" On The March

Found via Daily KOS: Florida developers are using "eminent domain" to kick homeowners out in favor of expensive new condos.

This is the logical extension of the massive condo boom. Localities are convinced by fast-talking developers that people will do anything to get into these assembly-line units, and thus will sell real, valuable homes. Then the condos sit vacant, the developers make their money, and the town is stuck holding the bag. This, naturally, leads to condo glut, which has the net effect of driving down prices from oversupply. In the long term, that's a good thing, but not at the expense of violating people's property rights.

Luckily, it seems that some people are wising up and fighting back. Ironic...the same court system that's been castigated for allowing Kelo vs. New London is now the best method of preventing its enforcement. ;)
I'm a devout supporter of eminent domain for its intended purpose--using the property for public works, like office buildings, parks, schools, etc. Building massive s?!tboxes just so a bunch of shady "real estate investors" can make bank is of no benefit to the town whatsoever.

The Real Estate Bloggers put up a great essay about who owns your property. One point they don't really get is that as more people use creative mortgage products (ARMS, HELOCS, reverse mortgages, etc.) just to keep their payments low, that will lead to fewer and fewer genuine payoffs, more foreclosures, and more empty developments. Talk about urban blight!

That's what happens when you don't think about what home ownership really is. The bank ends up owning you, and the state ends up owning your home.

(Image courtesy of the Economist, which published a blistering article about this last year.)

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Buying and Selling: Family Valuations

There's a very creepy-yet-compelling article from yesterday's Washington Post about the lengths developers are going to in order to build the "perfect" community. Now, it's human nature to want to gravitate towards communities that share your physical makeup, religious beliefs, social standards, etc., but I'd like to think it's also human nature to want to meet new people and have new experiences, and it's just unsettling to think of developers quizzing potential buyers as to their political persuasions, so as not to match a red-state gun nut with a blue-state nancy boy.

People are more complex than that, and as difficult as the home buying process is, turning it into an armchair shrink session just adds fuel to the fire. Money quote for you D.C. heads:

To some extent, self-segregation has always gone on among people lucky enough to choose where they live. In the Washington area, it is no secret that liberal-leaning, vegan types tend to pick Takoma Park over McLean.

Of course, that might have nothing to do with the fact that you'd be forking over maybe an extra $200,000 to live in McLean...

If you want a better idea of what your community may really look like, try out Zillow's new 3-D aerial photography of your potential home. Courtesy of the folks at Microsoft, who brought you Windows Vista...except they didn't.

Speaking of D.C., a multi-think tank task force just released a report strongly recommending that D.C. build more affordable housing. The report itself is available here. It looks like a fascinating read....but I wonder if there'll be backlash from mortgage lenders thanks to the sudden increase in FHA mortgage insurance premiums. They SAY "affordable housing" won't be affected, but what the hell is affordable in a market where the median prices are still in the $400 grand range?

Posted at 05:10 PM | TrackBack

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Buying and Selling: Lemon Aid

The Washington City Paper has a cautionary tale about what happens when you think you're getting a condo bargain, and the price of repairs to the building is more than your entire s?!tbox is worth. :) Not only that, but all your attempts at redress are due for "Mortal Kombat-" style failure.

Actually, what amazes me is that she was able to find ANYTHING in the metro D.C. area for under $300,000. I guess this explains why. Money quote:

“How can DCRA allow a developer that forges bank documents, and then submits those forged documents to DCRA as if they were genuine, to continue selling condominium units in the District?”

But...but...it's for the good of the economy! If you don't buy the most expensive condo possible, you're supporting THE TERRORISTS! Why do you hate America?

Don't worry, because in Maryland, they still have adjustable ARMs to hold you. Come on, Examiner, I know you're a free paper and what not, but THIS is the best you can do?

For information from people who actually have more of an idea of what they're talking about, check out this piece on doing environmental assessments before buying condos. You gotta wonder if the poor woman in the City Paper article really, seriously LOOKED at the place she was buying before plonking down the cash. That's what happens when you do your shopping based solely on price--you squeeze lemon juice in your eye and blind yourself to all else. Yeah, that's foul, but so is the housing market. :)

(Link courtesy of the excellent Urban Trekker.)

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Buying and Selling: The Realtor Curse II

Remember my friend who was selling her home in upstate N.Y.? She IMed me with a terrifying tale. Seems her realtor--a former co-worker (Warning sign #1)--nearly bollixed her entire home sale by inexplicably overestimating her buyer's potential property taxes by almost $3,000, then demanding to keep his commission! Unbelievable. She managed to restore the sale, took a minimal financial hit, and reported his behavior to his brokerage, the Greater Rochester Realtors Association, etc. The buyer's broker even agreed to take less of a commission himself in order to complete the sale.

Things like this are why the realtor qualification process needs much more vetting. There's a very pertinent comment from the liveblogging of the Real Estate Technology Standards that sums this up:

Real Estate Agents are not “typical” in the sense of corporate America. They are essentially 1 million individual proprietorships. It’s not like GM or someone who can say “All employees will use a token to access their PC at the office” Agents are mobile, work on multiple PCs and independent.

Precisely. If I thought we could trust the current administration to push strong uniform federal regulations for realtor training, I'd go there--but we can't, so it's gotta be done at the state level. Here's a nice little reminder from the Real Estate Journal on the prevalence of mortgage fraud.

The MRIS blog is a great read, by the way, and a tip of the fedora to Inman for pointing the way.

Posted at 05:09 PM | TrackBack

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Housing Market/Architecture & Design: Where The Money Isn't

Two quick things that taste great together:

First, has a really neat interactive walking tour of home remodeling projects. It's fun to play around with, but the text is what caught my eye:

Americans are obsessed with remodeling, expanding and generally improving their homes.
They spent an estimated $210 billion doing just that in 2005, according to the Remodelors Council of the National Association of Home Builders, which projects spending this year to increase to some $238 billion.
Why? Despite much talk about a real estate "bubble," most homes are expected to continue to appreciate at a healthy rate -- giving homeowners yet more equity to tap for renovations. Plus, if real estate markets start to cool as anticipated, more people may choose to fix up what they have and stay put instead of moving.

Wow. WOW. $238 million to remodel homes. And yet the author still persists in "What is this 'housing bubble' you speak of?" nonsense.

The problem with excessive remodeling is that it can be so trendy--if you put too much into the countertops, say, by the time you're ready to sell, you'll find people are suddenly liking whetstone instead of granite or whatever. Then you're sitting there with a HELOC that needs paying, mortgage bills soaring, and $10,000 in your kitchen that people think looks "tacky."

There are few instances where life sucks harder, but thanks to the wonderful people at the Wall Street Journal, we found one:

"In some places prices might fall. In others, price gains will slow," says David Berson, chief economist at Fannie Mae, the mortgage-finance company. The price gains over the past five years, which caused home values to double in many of the hottest markets, "were not sustainable," he says.

The current slowdown reflects three broad trends, according to real-estate agents and economists. One of the most important is that many speculators have started to dump homes that were purchased as investments. In addition, high prices and rising interest rates have reduced affordability for middle-class families. Finally, the intensity of recent hurricanes has prompted potential buyers of second homes to pull back in places like Florida. Some even blame media coverage that has warned of a possible downturn for triggering a real downturn.

Wow, so not only did we single-handedly sabotage the Iraq war, but we popped the housing bubble too! :) Man, I feel the power. Someone order me up countertops made out of gold from Hungary!

(Image courtesy of In Dissent.)

Posted at 07:19 PM | TrackBack

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Housing Market: Watching David Lereah

The mighty Bubble Meter has recently launched David Lereah Watch, a blog dedicated to upending the worm-infested rock upon which Mr. Lereah prognosticates like the Thinker.

I am all for this. I'm tired of watching major media quote this guy uncritically again and again, like he's the Oracle at Delphi or something. Here's a perfect example of what I mean, nicely captured by BM as well:

"That's what spurred all this on in the beginning," says David Lereah, the NAR's chief economist. "It's like all the stars are aligned. The tax situations helped, but at the same time, baby boomers were entering their peak earning years. That's why we just boomed in second homes."

"What's going to be leaving the market right now are the speculative investors who came into the market and were trying to flip homes," he said. "They were buying one, two, three or four properties at a time, and that was distorting the numbers."

Distorting the numbers, eh? Let's see what Lereah Watch has to say about that:

The conclusion for every market is the same. In the executive summary the reports conclude "With home prices rising strongly in most parts of the country, there has been widespread media coverage on the possibility of a housing market bust. A thorough analysis of the metro market, as detailed below, reveals that there is very little danger of this." ( Thanks Felix who posted over at Calculated Risk)

The only thing less fallible than the Internet when it comes to catching phonies in action is Uatu the Watcher. Not that we've got big heads or anything....

(Image courtesy of SHAFT AGENTS, sucka. Can you dig it?)

Posted at 05:29 PM | TrackBack

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Housing News: Now 100% 75% Bubble Free

I'm going to take a page from David Lereah's and Ben Bernanke's books, and for one glorious day, pretend there's no housing bubble. Let's see how many interesting real estate items I can find that don't mention it in any fashion at all.

In New York City, housing advocates have teamed up with major banks to force landlords to repair dilapidated properties. I'm amazed this doesn't happen more often. Follow the money trail--if using legislation and advocacy doesn't work, pressure the lenders to make changes or have them be embarrassed through exposing their risky portfolios. Good on them.

In New Orleans, it seems the milk of human kindness has dried up, and residents of upscale NOLA neighborhoods are banning FEMA trailers. Unbelievable. First of all, it's a shock to me that there are any upscale neighborhoods LEFT in New Orleans. Hey, schmucks, your whole city was UNDER WATER less than a year ago. Your property values ain't exactly skyrocketing. Second of all, how dare these people turn up their noses at their fellow residents? It's inhuman and selfish to the extreme. Is it any wonder the country's all but written off the Gulf Coast, when the people right in the thick of it are more concerned with appearances than doing the right thing?

A comment over at the Inman Blog that's worth repeating in terms of the Great Immigration Debate:

mmigration legislation currently under consideration in Congress could bring about a "crisis" in the homebuilding industry, we are told by Gary Roden, immediate past chairman of Associated Builders and Contractors. "Our industry is almost desperate for new workers. If the current undocumented workers are pulled out of the industry, we will be in crisis mode," Roden said. And the National Association of Home Builders said the industry could be in danger of losing a significant portion of its labor force if immigration reform doesn't include a guest worker program and a program to address illegal immigrant issues. As lawmakers wrangle over three different immigration bills, what do you think? Click the comment button to share your opinion.

That is so true. One reason why the current housing boom....

Goddamnit. Two links in and I muffed it. Oh, well.

Anyway, the boom is so profitable for construction companies and contractors is because they've been using low-cost (i.e. illegal) labor, and pulling more money back in profit. If all of those day laborers suddenly got deported, or even better, became American citizens and earned the right to work for living wages, the market would absolutely collapse in on itself.

The whole "guest worker" idea is a cheap facade, so to speak. It's a way to ensure a never-ending pool of under-the-table workers--get them in here for a few years, have them build houses and flip burgers, and pay taxes using stolen I.D.s--which leads to identity theft--then cycle them out again with false hopes of getting a legal way into the country, while making way for the next batch.

The housing market is almost totally dependent on undocumented worker labor, and the fact that the market is tanking will only exacerbate that concern.

It's a mark of how serious the bubble is that even completely unrelated discussions end up going that way, isn't it? :)

Posted at 06:44 PM | TrackBack

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Buying and Selling: How To Trust Your Realtor

I realize that I come down awfully hard on realtors in this blog, and not without just cause. Every time David Lereah runs his mouth, it just makes me want to scrub with a steel wire brush to remove any trace of his "sophistication."

The problem with real estate is the same problem with any sales-based business. Everything's based on commission, and there's no base you can cushion yourself with when times get hard. Realtors are strongly incentivized to do whatever it takes to close the sale, because all their money comes from that. And when financial services firms and banks stand to make mad moolah on churning mortgages, that's how you end up with Ameriquest's folly, among other things.

So what can you do?

* Do your homework, first of all. Teach yourself the fundamentals of buying and selling. Talk to your friends, family, neighbors, and coworkers about who they may have used to sell or buy a home. Use resources like Bankrate to learn the terminology of real estate. Do NOT go into any deal without knowing what kind of loan you want, what the payments are, what the difference between a home equity loan and a HELOC is, etc.

* Vet your realtor. Do they have a Quality Service Certification? Do they have any reports on them from the Better Business Bureau? (Yeah, yeah, I know these may just be rubber stamps, but it's better than trusting Joe's Chicken Shack Realtor!) Check the news, public records, anything and everything you can find to get proof your realtor is legitimate and honest.

* Stay involved in the process. Too many people pull the equivalent of handing the keys to the valet and let the broker and realtor do everything without paying attention. Even if it means being a backseat driver instead, this is your economic future at stake. You can't afford NOT to pay too much attention.

The key to any deal is trust and honesty. Know your realtor like you know yourself, and don't be afraid to ask questions, find out data, and play the skeptic. Take it from the fine folks at Zero One Realty: It takes more than a 5% commission to bring happiness.

(Image courtesy of what may indeed be the greatest real estate movie ever.)

Posted at 04:26 PM | TrackBack

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Housing Market: The China Syndrome

Most of the major media is (rightfully) consumed with the fall of Tom DeLay, but there was a potentially even more significant news item in Reuters' business section today. Specifically, a Chinese parliamentary bigwig said that the country should consider trimming its holdings in U.S. debt.

Why does this matter to you, o Joe (or Jane) Average Home Buyer? Well, Reuters is kind enough to explain:

Despite rising short-term interest rates, longer-term debt yields in the United States are exceptionally low by historical standards. Any move by China to sell some of its massive debt holdings could drive up long-term rates, which ultimately could make it costlier for Americans to take out home mortgages.

It has been a big buyer of U.S. government bonds, helping to finance the U.S. current account deficit and keep American interest rates low. Investors watch closely for any sign that Beijing might shift the government's investment mix.

How freaky and sad is it that our economy is poised so precariously on the actions of another country's economy? And the best that nimrod John Snow could come up with was telling them to spend more and save less? It's no wonder that rumors are flying about his imminent removal.

And what does Ben Bernanke have to say on the issue?

But Bernanke said he is not "deeply" concerned about the issue.

"I don't think that the Chinese ownership of U.S. assets is so large as to put our country at risk economically," he said February 16.

Imminent meltdown, folks, and this time we won't have Hanoi Jane and Gordon Gekko to act as symbols of our misery. ;)

Posted at 01:47 PM | TrackBack

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Buying and Selling: Housing Bubble Goes Mainstream

When media sources ranging from the fast-food news of USA TODAY to the so-far-right-it-has-whiplash Weekly Standard are discussing the housing bubble in real, honest terms, you know for certain that it's arrived.

This isn't something I'm doing the dance of joy about, necessarily. As gleeful as I am to see all the "market never goes down" types get their just desserts (Would you like cherries with that, David Lereah?), we can't forget that these are real people, suffering real problems. The market may not completely tank, and bubbles may gently deflate, but people will still be losing homes.

So, what should we be doing? By now simply reporting on flattening condo markets, foreclosures, and unscrupulous realtor/broker/banker practices isn't enough. Bloggers were attached to the housing bubble long before anyone else was, so now we need to push the envelope and offer some solutions.

My best ideas include greater support for realtor transparency, first of all. Real estate brokers are one of the most under-regulated employment areas around. It never ceases to astonish me how people can take a few courses part-time, slap a shiny gold name tag on their lapel, and claim that they can predict the market WITH AUTHORITY. If everyday folks like me can discuss real estate just by watching the news and paying attention, why should we trust them? :)

We need stronger laws against predatory lending. If the Feddie Gov can't get its act together to prevent shady marketers from pushing no-doc loans to people with bad or no credit, the states and towns have to do it for them. That means more attention on local markets, contacts with major and minor media, and so on.

And we need to push the growth of Internet-based "alterna-brokerages." Sites like Google Base, Zillow, Craigslist, RealEstateABC, and so on...(Yes, including this site :) )...these are all tools that, if properly used, can give buyers serious information power on what their home is worth, what the broker's ultimate goal is, and where the markets are trending next.

We know what needs to be done to bring the housing market back to reality. Now it's just a matter of how to do it.

Posted at 04:48 PM | TrackBack

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