Friday, November 16, 2007
They lie: NAR commercial
YouTube link
Outrageous National Association of Realtors commercial on CBS primetime tonight. Transcript and comments:
Family: When you have a family, it's always a good time to buy.
Blow your nest egg in a falling market, your family will forgive you.
Realtor: It's a great move-up market.
Not if you can't sell your old house.
Man: In this market, there's a lot a options.
That is, a lot of unsold houses at inflated prices.
Woman 1: The Interest rates are low.
Compared to?
Family: Didn't make sense for us for us to spend the same amount of money renting something when we could own it.
As if! And where can you buy for the cost of rent? See the 11/12/07 Fortune article that projects prices will have to fall 28% nationally to return to their historic relationship to rents: "All through the 1990s the multiple of prices to rents nationwide remained between 14 and 15." (page 82)
Woman 2: Working with a Realtor took all the guesswork out.
What did your Realtor tell you about nationally falling prices?
Realtor: This is the best market in years in terms of choice.
Which will get better in prices and selection if you wait.
Narrator: Interest rates are at historic lows, home choices have increased, and prices are favorable. Every market's different. Call a Realtor today.
Lie: interest rates are above their historic lows.
Couple: If we didn't buy now, we would have missed the opportunity on this home. Yeah.
But have had the opportunity of others at better prices. Maybe even this one on a foreclosure.
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41 comments:
I agree, but caveat emptor.
*yawn*
Same pattern of behavior is happening that happened in my industry (Wall St/financial services) 5-6 years ago ...
- Too many people with no experience join an industry
- After the first "hiccup" from the bubble, lots of blather about "minor correction", etc
- Then the talking heads say things will be fine, good time to buy, etc
The reality will end up falling somewhere between the predictions of those in the industry with their livelihood to protect and those who think the sky is falling. Oh, yeah, and probably be closer to those who think the sky is falling.
Also - by "historic lows", they must mean compared to, say the 1980s???
"They lie"
You don't say.
There's no way I could rent a condo in Santa Monica for what I'm paying on my mortgage. It would be 500-1000 more per month!
Then again, I had a crapload to put down.
As you said, some $4 million plus houses are selling fast right now
10/30-listed 6 bed / 4.5 bath at 425 23rd for $4.5M
Doesn't prove anything, but does indicate there are still people out there eager to write a check for $4 million plus
"Doesn't prove anything, but does indicate there are still people out there eager to write a check for $4 million plus"
Write a check? Yeah right. Show me one all-cash buyer in 90402.
Billionaires pay all cash when they buy in the 90402
http://www.newsweek.com/id/32992
Why look at the national ad campaign and talk about 90402. It just doesn't make sense. Market is very, very local. Lancaster and 90402 are 2 completely different markets, even 90402 and let’s say 90401 are very different. Let's not spin the ad campaign in to SM.
How did this turn into another 90402 discussion?
I somewhat agree with what a previous poster said...It was something along the lines of "as long as everyone here is so obsessed with 90402 and keeps talking about it, prices won't fall as quickly or as far."
Nobody here talks about condos in 90404 and they are getting hammered. Correlation does not equal causation but still...
Not to try and contradict myself here but all this "the market is so local" talk only holds up to a degree.
To pretend that ANY area is 100% immune is silly. While 90402 or any other high end area certainly does not have a beta of 1 compared to the national market, there is likely still a fair amount of correlation.
So yes, 90402 should suffer from the overall weakness but may hold up better than "inland" areas...but this is pretty much what most people have been saying all along.
This is not spinning the ad campaign, it is simply facing reality. "all markets are different" and "real estate is local" will not protect the holy ground of 90402.
The discussion about 90402 is the only interesting thing remaining on this board.
Think about it
There is no sane rational person who is not expecting a decline in real estate inland
No arguments can be found on this subject. How long can you discuss something that everyone agrees on?
The controversey revolves around 90402.
Without the 90402 you got no room for discussion
Hmmm ... I thought the title of this blog was "WESTSIDE Bubble".
Guess according to most people, there's only one zip code that constitutes the "Westside" ...
OK, let's stipulate that every sale in 90402 is an all-cash sale to a billionaire.
Will they be impacted by the real estate melt-down? How likely is it that the disappearance of trillions of dollars from mortgage defaults will not impact them?
We're saving for a downpayment, but that may end up being saving for survival during extended layoffs instead.
No one on this board is defending the distribution of wealth in the US
no one on this board is saying it is fair that some people in LA are sitting on $100 million in cash and can buy a house in the 90402 for all cash without it really impacting them
However - the moves of the wealthy all cash buyer impact the price of real estate in perhaps 5% of the neighborhoods in LA area.
Let's discuss honestly where these types of buyers want to buy and their impact on the 5% of the market that they impact.
Angry feelings towards these people, Anger that they have the money to impact the market is not productive. Let's all be rational
Again, there may be no one left on this board that is not looking for steep price declines in every neighborhood of Santa Monica except the 90402
If there is someone that says most of SM will not fall, I want to hear it.
The only real debate here is about the 90402. There are well thought out & civilized arguments to be made on both sides of that issue
One interesting observation.
If this blog existed in the early 1990's as the prices were going down 30% to 40%
there would be many people commenting about how much they hated Los Angeles and wanted to move out to Oregon or Utah.
There was a massive exodus of people who left LA by choice - they could afford a home in LA but wanted to leave because of the fear of more riots, rapidly rising crime, etc.
This board would be full of debate about whether to stay in LA or to leave.
Many people were hoping prices would go up in LA so that they could sell their home for a good profit and move somewhere else.
Fast forward to 2007. This board has almost no one who is saying that they want to leave LA and live somewhere else. It is full of people who hope that prices will fall so that they can buy something in LA - either their first home or a move up home.
It is also full of realtors and speculators who hope prices will go up so that they can sell
But think about it - there just are not people here looking to leave LA.
Isn't it astounding that despite the overall terrible schools, high taxes, and traffic that people still want to stay in LA? A desire to stay in LA is what unites almost everyone on this board and separates us from our peers in the early 1990's
I would speculate that in the early 1990's many people thought that the good paying jobs were going to continue to leave LA and that was a huge negative and also thought crime would explode upward on the West side and that led people to leave
Today, the fact that very few people on this board want to leave tells me that we are all pretty optimistic about the crime situation on the west side -
I love that commercial. It brings a tear to my eye every time.
"Fast forward to 2007. This board has almost no one who is saying that they want to leave LA and live somewhere else. It is full of people who hope that prices will fall so that they can buy something in LA - either their first home or a move up home...
Isn't it astounding that despite the overall terrible schools, high taxes, and traffic that people still want to stay in LA?"
Yeah, a scientific study based on a blogger, 5 anons, and a bunch of rally monkeys.
Sure, I'd want to leave L.A.
I think this is a city that is great for the well-off and the destitute. If you live west of the 405 and earn more than 65 or 70K a year after taxes, per adult in your household (and about 1/2 of that for school-aged children), then you probably have the luxury of seeking out the still interesting and relatively safe parts of L.A. to explore and enjoy.
And on the flip side - if you are a drug-addict, welfare recipient, homeless, transient, ex-con, recidivist, sex-worker or undocumented resident alien, there are also a host of geographically-convenient, government- and NGO-funded services for you (as well as plenty of employment on the black market.)
However if you are a student, an unskilled wage-worker, a mid-level employee with a large family, a government employee with salary tied to budgets and inflation, a teacher, non-profit employee etc., etc., (and are a naturalized citizen), you probably experience few relative benefits to being a resident of Los Angeles County to the amount of taxes you pay. (And yes, traffic and gang-infestation is a tax).
I think over the past year or so, there truly were a lot of people leaving or voicing their desire to leave L.A. and move to Arizona, Nevada and even parts north. The only difference now is the realization among job-seekers and potential home buyers that areas with decent jobs are now (or clearly will be soon) under the same recessionary and housing pressures that L.A. is under.
There really isn't anywhere else for the middle class to run.
"Today, the fact that very few people on this board want to leave tells me that we are all pretty optimistic about the crime situation on the west side -"
Wait a bit... the recession monster is just waking up...
The honest truth is that you can move to Oregon or Utah and find nice four bedroom houses for an affordable price.
With good public schools.
The honest truth is that despite that, the people on this board find LA more attractive.
Enough already with 90402. This board is about the Westside.
The very same issues that apply to Westside real estate is happening now in San Francisco. Prices there have resisted the plunge that is occurring in other Bay are counties.
However, it is only a matter of time. Isn't it interesting how people think that their special place is going to be immune to this international collapse of the mortgage and banking industries?
_______ zipcode is different--fill in the blank. In Northern California it is San Francisco and Marin counties. In Southern California it is the pricy parts of Santa Barbara, certain Santa Monica zips and a select few other westside locations.
There is a lot to talk about, 90402 notwithstanding. And I could give a ***** about how much some people make in this world. It may come as a surpise to some, but there are many people in this world who don't measure their self-worth or esteem on how big their salaries or wealth are.
In fact, as a society we put very little real status on the wealthy. About the only thing rich people can get for their "legacy" is a name on a wing of a children's hospital or other such place. But do we really value Lucile Packard more than the people who actually DO something good for society?
No.
If you believe otherwise then I feel sorry for you.
To pretend that ANY area is 100% immune is silly.
You're correct. No one is saying that this are ais 100% immune but it cannot be compared and lumped with national housing stats.
"Will they be impacted by the real estate melt-down? How likely is it that the disappearance of trillions of dollars from mortgage defaults will not impact them?"
This is smart money, they don't hold any CMO's, CDO's,etc., they were selling it to shmucks that once had a dream to live in 90402.
Agreed
the retards that run Citibank got sodomized by the smart folks that run Goldman Sachs. Read the most recent earnings reports
note that the Paulson hedge fund made 2 billion dollars so far this year betting on the subprime crash
Some smart folks bet right and some idiots bet wrong.
Don't lump everyone in together.
"There really isn't anywhere else for the middle class to run."
Given that the dollar has fallen relative to other currencies over the past few months, your comment is also true for retirees who've tried to stretch their funds by moving outside US borders.
"Don't lump everyone in together."
You have to be one of the "smart money" crowd in order to have the privilege to participate in Paulson hedge fund. To know about it doesn't mean you are in it.
Lots of people on this board complaining about how expensive west side is and very few moving to Oregon and Utah.
that is different than early 1990's
"Lots of people on this board complaining about how expensive west side is and very few moving to Oregon and Utah."
You idiot cheerleaders base your opinions on counting the number of anonymous postings to a blog. No wonder you actually believe everything will be ok in the California real estate market. Similar to drivers' licenses, people should have to get Internet licenses to prevent absolute crap from being posted. Here are some actual facts for you:
"The U.S. Census Bureau reported that last year, 287,000 more people moved out of California than moved in – a larger domestic population loss than Louisiana suffered after Hurricane Katrina. (California’s population growth is now entirely babies and foreign immigration). And by far the most popular destinations for outbound Californians were lower-taxed and less-regulated states."
http://tinyurl.com/yustjq
Look, no one is more sick of the 90402 obsession on this board than I am. However, we must also acknowledge that despite our agreement on the state of the market elsewhere, no rational person can conclude that any of this will have any impact on the 90402. Prices will fall everywhere, yes. In 90402, unfortunately for all of us vultures, they are likely to rise higher every year. Why? Simple logic:
(1) There is an almost unlimited amount of money worldwide.
(2) A lot of that money wants to be invested in US real estate.
(3) 90402 is the most desirable real estate in all of Los Angeles.
Conclusion? The falling asset prices in the rest of LA will not only not touch 90402, they will cause a dramatic INCREASE in the price of real estate in 90402 because all the investment money will be concentrated there as a safe haven from dropping prices. So ironically prices there will only rocket up from here.
Good luck to you all, and if you are a millionaire with any money (how I envy you), count yourself lucky and get into the 90402 before you are priced out and the only homeowners there become hedge funds and mutual funds.
In 90402, unfortunately for all of us vultures, they are likely to rise higher every year.
But low-end 90402 prices fell 25% 1990-96, and a number of current 90402 houses have remained unsold for months.
I agree with your longer-term trend, but wouldn't count on 90402 only rising.
"You idiot cheerleaders base your opinions on counting the number of anonymous postings to a blog. "
You're one of the IDIOTS who pays much attention to the other "idiots" posts. Once and IDIOT always an IDIOT and an "idiot" is realy the one runs a hedge fund.
Oh, I am sorry, I just realized that Thanksgiving is just around the corner and IDIOTS are actually turkey we'll eat.
this board is full of people hoping for prices to fall so that they can buy.
hope drives the posts not reality.
You keep saying how west side is overpriced compared to places in the us where you can buy a house for 200k but yet you just dont want to move there
face it there is a reason why west side is expensive
evidence is looking you in the mirror
I plan to leave LA. I am not alone. People are leaving in droves. Traffic is horrible. The place is a depressing strip mall. Yes, there are some nice things too, but come on. This is not the promised land. It is a congested, polluted, city with little vision for the future. There are many cities in the world. There are nice neighborhoods in all of them.
Best of luck to you bulls. I am sure LA will smoothly ride out the coming recession. Writers' Guild strike? who cares? Earthquakes? no problem? Fires? not a worry. Riots? Oh, those poor people aren't poor anymore, because they now own really expensive houses. All those mortgage brokers and realtors out of work (some pulling down $1M a year in 2005)? Not a worry, they all saved billions over the last years! Stock market declines? All the buyers here are super prescient and cashed out at the peak, then shorted the mortgage companies. Everyone here is smarter than anywhere else!!!
Well, after my Thanksgiving rant, happpy Thanksgiving to you all. I for one, am happy to have a healthy family, to live within my means, and not to be serving time in Iraq or Afghanistan.
Thank you for your comment
i know it is sincere and it comes from the heart
If there were thousands and thousands of people who owned houses on the west side that had the good sense to agree with you, and all wanted to leave Los Angeles, there really would be a lot of homes on the market and the selling would push down prices
Bears should look for this - look for people that today own homes on the West side decide to sell and get out since that really would push down Westside prices by 40 or 50%
on this we can all agree
"on this we can all agree"
I think most of us (maybe all of us except for you) can agree on one more thing too.
I grew up on the Westside and my family has lived there since 1923. That gives me a perspective that few on this board have of the Westside.
Except for the nice weather, there's nothing really special about the Westside. The traffic and congestion have gotten horrible in the last 20 years. There really aren't a lot of amenities--L.A. is really just a big suburb and you have to get into your car and drive to everything.
If you want to hear a symphony concert or see a ballet, you have to drive downtown. Except for the Getty, what else is there? Nothing, because L.A. in general doesn't have a lot of cultural amenities.
What's in Santa Monica? Not much. You have the promenade but I quit going to that overrated mob scene years ago. And Montana isn't the the Champs-Elysées or Fifth Avenue.
The "Westside", ie Santa Monica, Venice, MDR and West L.A. isn't New York or London or Paris. People in L.A., including the Westside, don't walk anywhere except from the parking lot to their destination.
There is NO central place to L.A.--it is a myth.
Try driving down Beverly from downtown today (Thanksgiving eve) to the westside. Hop on over to Olympic and tell me what the traffic will be like. The closer you get to the Westside the worse the traffic will be. It's just a parking lot.
You people who talk about Santa Monica and the Westside as if they are some sort of Eden are either real estate agents, have never lived on the Westside, or are really dumb. And the high cost of living in L.A. is having an effect on the recruitment of professionals to this overrated, crowded concrete and plastic suburb.
But people in L.A. have always been like a Hollywood set--they're not real.
A lot of truth, CA resident.
The City of Santa Monica did a survey a couple of years ago.
Question 1: What do you like about Santa Monica?
Question 2: Besides the weather, what else?
Rather says it, doesn't it?
So where have you chosen to live now?
Weather and changes in weather have moved more populations of people than anybody gives credit. My family just moved from Pasadena to Manhattan Beach adding a 1k+ to our monthly cost of housing; it is worth every extra penny.
westside bubble:
----"The City of Santa Monica did a survey a couple of years ago.
Question 1: What do you like about Santa Monica?
Question 2: Besides the weather, what else?
Rather says it, doesn't it?
So where have you chosen to live now?"-----
After both of my parents passed away we sold their house. I lived on the Westside for over 40 years. I had had enough of the "Westside" and moved to a very unexclusive part of L.A. County. But it's nice and for a fraction of the value of my childhood home, I don't have to worry about a mortgage.
The Westside today has lost all of its original charm. The traffic and crowds of snobs and unpleasant yuppies and struggling Gen Xers is in complete contrast to who used to live and work there.
The Villa Marina Vons market is one of the absolute WORST stores in the county with the crowds on weekends. It used to be a nice place to shop. Washington Blvd and Lincoln is a nightmare since the Costco went in and Lincoln Blvd is a parking lot--it used to be a quick trip from Westchester to Santa Monica.
We used fish in the Marina del Rey where the Fishermans Wharf is now. Obviously you can't do that anymore.
The snobs have taken over the "Westside". The proof is here on this blog--there are a lot of posters who define the "Westside" as 90402. I have news for all of you snobs and migrants, the "Westside" is NOT defined by what's in Santa Monica.
It never was--this entire myth was created by the real estate bubbles of the 90's and the one which we are experiencing now.
So I'm glad that I left the "Westside" since only status conscious idiots are moving there now. The people who are moving into my parents old neighborhood aren't anything like the people that built the Westside.
So have a ball with your mortgage payments--it only costs me $150/month to turn on the air conditioner where I moved.
And please, not everyone has to worry about the local schools. Some people don't have kids or the kids are long gone.
Thanks, CA Resident.
I lament the loss of much that made Santa Monica special, and its upscale replacements of hedged McMansions and designer boutiques.
Remember when Montana Ave. had a nursery, hardware store, stationery store, neighborhood markets, and affordable cafes?
Which is why I ask, seekling other parts of LA that still have those.
westside:
--"Remember when Montana Ave. had a nursery, hardware store, stationery store, neighborhood markets, and affordable cafes?"---
You might as well forget about the old Santa Monica, West L.A., Mar Vista, Palms, Venice and MDR. They are gone forever because once you have people spending over half a million dollars on a house, they become different. They automatically feel entitled to be treated as "somebody".
Society has changed and how it will turn out is anyone's guess, but it already isn't pretty. People chasing money so that they can live humble and down-to-earth lives!
Pathetic.
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