Floyd wrote on Feb 27, 2008 12:25 AM:It's time to quiz the Realtors and see if they think the housing bubble is likely to burst any time soon. Quotes like "the market's great if you're a seller and you're willing to put an attractive price on it" could be interpreted either way, though.

looks like wrote on Feb 27, 2008 5:11 AM:greed has caught up. Real estate agents are in line with lawyers these days.They don't care what happens to your finances, long as they turn a sale. Why not just buy a house cuz you like it & simply LIVE IN IT? Have agreat day~

Jack wrote on Feb 27, 2008 5:39 AM:I guess 100% of the Realtors were wrong last year when they said, "Now is the best time to buy". My parot is smarter than a Realtor.

Jim wrote on Feb 27, 2008 6:04 AM:Floyd,

So my quote is interpreted in the way it was meant, I'll clarify.

The demand for homes is intact - people want to buy, just not at these prices. Savvy sellers who put the right price on their listing from the beginning, or those who at least lower their price early and often are selling their home.

Unfortunately, the majority of the sellers think it is smart to hold out at their sky-high price, and wait for the lucky sale.

They are going to find out the hard way how unproductive that is, and end up selling for less, later, or not selling at all.

The realtor community has ignored their fiduciary duty to sellers for years now - but now that I'm at the podium, I'll say it - SELLERS, LOWER YOUR PRICE, OR YOU'RE NOT GOING TO SELL, AND BE LEFT BEHIND BY OTHER SELLERS WHO UNDERCUT YOU.

I've been saying this for years on my blog ...

...Good News... wrote on Feb 27, 2008 6:16 AM:...
This is all good news. I think we are all going to be able to buy nices houses for very attractive prices within a year or two. I think when the time is right, we should buy two houses...
..

Finally, wrote on Feb 27, 2008 7:18 AM:A realtor with good advice. Actually, I've been reading Jim Klinge's blog for about a year and he does make sense. Sellers do need to lower their prices if they want to sell. Prices will eventually rise but not for several more years, as has happened in every "boom and bust" cycle. However, since this "boom" was unlike any other in appreciation, the "bust" we're in now will be comparatively worse than any other.

Elzabeth wrote on Feb 27, 2008 7:20 AM:Descriptive words like "Sucks, goose it up, screaming big house" illustrates the lack of professionalism in this industry.
I take no advice from an interview such as this.

JoJo wrote on Feb 27, 2008 7:50 AM:Sweet.......think I'll wait a little longer to scoop up a deal!

JSten wrote on Feb 27, 2008 7:55 AM:
Theres nothing wrong

Theres NOTHING wrong

THERES nothing wrong

Theres nothing WRONG

No matter how you say it it's the same thing

But there is something wrong, and its not over yet.

response wrote on Feb 27, 2008 8:00 AM:"Savvy sellers who put the right price on their listing from the beginning, or those who at least lower their price early and often are selling their home."

How can you possibly say that? Savvy sellers are those in a position to be able to drop their prices enough to compete with the foreclosure properties and still not lose their shirts. "Savvy" as you put it only pertains to that person's current status on the house. I could be "savvy" all day, but if I owe 400,000 dollars on a house that's now worth $300,000, how on God's green earth does "savvy" come into play??? ROFL!

makes sense wrote on Feb 27, 2008 8:03 AM:that the drop should be fast. The rise was a lot faster than the run-up to the 90s recession. But do you suppose anyone will remember this after we hit bottom and the next rise starts again? It will be a realtor/buyer feeding frenzy all over again. Then in 15 years when the bubble bursts again people will sit there wondering why and how it all went wrong again. Those who fail to learn from history...

Concerned-1 wrote on Feb 27, 2008 8:21 AM:There's been an anomoly in the market for the past six to eight months where new home prices are actually lower per square foot than existing homes. Another factor in the mix is affordability. The price per square foot of a home exceeded the average buyers income. These are tough times and I'm afraid there are tougher times ahead. Not the time for knee-jerk reactions from our body politic. There is money out there, and we do live in Southern California.

Henri wrote on Feb 27, 2008 8:50 AM:Buy low. Sell high.

TC wrote on Feb 27, 2008 8:54 AM:Nobody is talking about the flip side - home values went UP a few years ago at a crazy pace! My home value doubled in less than two years! Unheard of...so this is just a correction. We will soon be back to the historical 5% up each year.

Olaf wrote on Feb 27, 2008 9:30 AM:Exactly Makes Sense... this has just begun and with inflation and reccession it will get worse for those who used their houses as an ATM. People and realtors should not be using the housiing market as a stock market. People need housing and we as society have to many developers/realtors/bankers/etc... playing in the housing game. It now has come back to bite many in the end.

La costa resident wrote on Feb 27, 2008 9:43 AM:


Thats a new twist! Just when you think you have heard it all, the cheerleaders come up with a new motto! This thing has a long way to go. Until prices come in line with wages, you will see the slide continue!

Fred wrote on Feb 27, 2008 9:46 AM:Realtors want it bith ways.UP and down.
With the internet and proliferation of web sites,the only purpose of a realtor is to open the house to see inside.a 1% fee is more than enough.What we have today are Bimbos with Mercedes Benz showing houses for 5% commission is nuts.
What say ye JIM KLINGE

John E wrote on Feb 27, 2008 11:38 AM:In San Diego County we recently completed the longest and highest housing price run-up in the 40 years I have been watching the market. At any point in time, a prospective buyer needs only to do simple math to estimate how overheated the market is. A realtor's sole objective and purpose is to encourage you to buy a house, so that he or she can collect a commission -- it is up to you to determine honestly whether you can truly afford it.

David wrote on Feb 27, 2008 3:33 PM:blah,blah,blah.....I dare anyone making derogatory remarks about Realtors or other Real Estate Agents, to reveal 2 things......1) Have they ever made a large amount (lets say over 50,000) on a Real Estate investment and 2) What more "honorable" profession they are in.

I doubt if any of you have the _ _ _ _ s to do these two things....

To David wrote on Feb 27, 2008 4:14 PM:OK, I'll take you on. Yes, I made more than 50K on a real estate investment. Actually, it was closer to triple that. I used a broker to find the seller, and after that the attorneys took over. I paid less than 6% of the purchase price to the broker and my attorneys combined! Oh, I'm a CPA. That said, I have nothing derogatory to say about Realtors. They are fine for what they are supposed to do, and I have no problem paying them for just that. "That" is to find a buyer, or a seller. Once they've done that, get them the heck away from the deal. Most of them really don't understand the transaction anyway. That said, the brokers I deal with love me, becuase they get paid for what they consider the best part, the introduction. Sure they make less with me, but they still get paid well for the time spent, and they don't have to deal with the lenders, inspectors, etc. The real reason Realtors get a bad rap is because the buyers/sellers are more incompetent than the realtors! Sure, it's intimidating to read escrow instructions and lender doc's, but you have to! If the seller/buyer doesn't understand what is going on, how the heck do they make sure the realtor is doing the job correctly!?!? Talk about the blind leading the blind!

SIGN OF THE TIMES wrote on Feb 27, 2008 4:38 PM:REAL CLASS USING WORDS LIKE "SUCKS" IN AN INTERVIEW. WE HAVEN'T SEEN BOTTOM YET. PRICES WILL FALL BY 1/3RD MORE THAN WHAT THEY ARE NOW. FACE THE FACTS. TOO MANY PEOPLE WHO CAN'T AFFORD A HOUSE TOOK A BLIND LEAP AND GOT INTO ONE, OUT OF IGNORANCE OR GREED. JOBS IN SAN DIEGO(SOUTHERN CA.) PAY POORLY AND THE COST TO LIVE HERE IS ENORMOUS. AND PEOPLE HERE CAN'T SEEM TO MANAGE WHAT MONEY THEY DO MAKE.

joe wrote on Feb 27, 2008 4:52 PM:David,

Every profession from being a janitor to the president is more honorable than being a realtor. Go blah blah blah yourself. REaltors are NOT needed in the process. Complete waste of money. They aren't economists nor do most of them know a thing about the housing market. I've actually called up two realtors who, at the height of the market, told me some CRAZY things that couldn't have been more wrong. I just wanted to hear what they had to say now, after they laughed at me for telling them this party is going to end. Their responses only proves their stupidity.

Olaf wrote on Feb 27, 2008 5:05 PM:Exactly right to Joe... Realtors have been the cheerleaders for the last 5 years... Everybody and their mom has gotten into quick selling of houses. I think they watch to much TV saying you too can make a million dollars. Obviously they aren't the sole problem because most go to them like they do know something. The problem is the licensing of these people is what? a quiz? How to open doors? How about some ethics classes for them as well as the lenders and everyone else involved. As David points out people aren't well versed in buying homes so does that mean the realtor can take advantage of them??? I think not. Realtors should accept their part in this mess.

Escondido East wrote on Feb 27, 2008 5:06 PM:REO and short-sale properties are being launched on the market at prices 40% below prices two years ago! How low will it go?

theWolf wrote on Feb 27, 2008 5:33 PM:Most of the problem is the ease of entry into the field. Anyone can pass the test to be come licensed and everyone knows it. But, if you are a realtor it is a high-risk profession that is why they charge 6% and the average realtor makes about 15K a year.

theWolf wrote on Feb 27, 2008 5:35 PM:To Joe: so if you were going to sell your house, you would stick a sign in the yard and a post on Craig's list and it would sell? Hardly. Plus the required disclosure paperwork is nightware-Seller beware.

Jim wrote on Feb 27, 2008 9:50 PM:I apologize for using the words 'sucks'. We were speaking casually, and when he said he was going to use it in the article, I didn't object loud enough.

Fred, there are plenty of agents who work for 1% and less. You are welcome to use them. Anonymous people who get on these blogs to rant about commissions just perpetuate the 5% and 6% myth. Go find a realtor that charges a fee that commensurates with what you think their service is worth.

MIT PhD wrote on Feb 27, 2008 10:02 PM:San Diego will experience massive declines on the order of 70% from the peaks. This means a $700,000 will go to $210,000 before its over.

Mary wrote on Feb 28, 2008 5:15 AM:Shut down new housing permits until housing prices stablize. Price is always about supply and demand, so start limiting supply. Start issuing 40 and 50 year mortgages to make them more affordable. MIT PhD - right on trend, wrong on magnitude. We STILL have the best weather and environment in the entire country. When it comes back, it will come back as quickly as it dropped.

Stephan wrote on Feb 28, 2008 7:21 AM:Doctor, Lawyer, Realtor, CEO, Appraiser, Mechanical Engineer, Soldier, Teacher... Which two professions don't belong?

These people have had a remarkable free ride. Looks like the BMW's go back after the lease (if they can hold on that long) and they move back in with their parents while they try to save enough money working at McDonalds to build a 20% down payment to by that "cute" starter home. Welcome back to reality - We'll all be better off for this in a few years.

response to Wolf wrote on Feb 28, 2008 7:37 AM:Wolf, no my brother, that's not the case. That's what every realtor wants you to think. I know many people who have sold "for sale by owner" and did perfectly fine. All the paperwork and documents are online; you just have to know where to look. What you say I'm going to do is exactly what I'm going to do. Do you really think sticking a sign in the ground is any different than what a realtor does anyway? ROFL!

Aragon wrote on Feb 28, 2008 8:03 AM:The leaders of China, the EU and Mexico would like to thank Bush for all he has NOT done to facilitate the wrecking of the US economy; which is more than any enemy could help for. The lack of interest the federal government has had in the long term economic health is stunning, even from a man who speaks at the 3ed grade level.

The housing bubble is just the beginning. Our dollar is worth so little to us from devaluation BUT those with the Euro and the Yen are buying our assets, assets that our children will never own. Thank you Bush. Did you know we compete on the world market for OUR OWN FOOD and the moron in the white house says it is good. BTW the moron in the white house said today we are not heading to recession. Wake up sheep you are losing you culture and country and don't even know it.

Howiek wrote on Feb 28, 2008 8:05 AM:I’m afraid Mary has the best angle on this issue—it’s all about location, location, location—it’s all about ZIP codes folks! To think otherwise is pretty stupid!

builderbob wrote on Feb 28, 2008 8:55 AM:Just so you know, I'm a small volume builder and in 16 years have only used a Realtor twice! Each time I felt really dirty, like a needed a shower afterwards. Most of the time they call me and say they have a "client" who likes one of my homes...now they want a commission. I say NO, the "client" then calls me directly and buys one of my very reasonably priced homes. (Usually 10-15% below market prices partly due to not needing a cheerleader, I mean Realtor) More often than not, i get an angry phone call accusing me of stealing a client. My question is "Who's interests are the Realtor looking out for?" In Washington State, ALL necessary forms are readily available and most attorneys would review docs and make suggestions for a couple hundred bucks. Times are tough right now so good luck buyers and sellers!

Happy (ex)Landlord wrote on Feb 28, 2008 10:08 AM:Hey, David:
Yes, I bought a triplex from a REALTOR% who was losing his shirt, for 20% less than he bought it; $147K for 3 bedroom units on an acre, five blocks from the beach. After I renovated, new tenants, landscaped, the rents covered the mortgage. ( Realtors seem to make lousy landlords, assuming the property will just magically appreciate...) Took another 5 years to actually make break even, before tax breaks.
Maybe 20 years later sold for $750K. (The ROI was roughly 2000% ) The REALTOR% tried to bring a pocket buyer, I had to make him put it on MLS.
Oh, and I'm an engineer; you are working on a PC that my work helped build.

Pieter wrote on Feb 28, 2008 10:26 AM:I noticed a lot of the "poor" rifraf that had no business buying in our neighborhood has gone, including two clown houses. This is just a purging exercise, at the end, FV will be better for it.

donovan wrote on Feb 28, 2008 11:47 AM:I'm watching this all from Spring Green, WI where I'm enjoying the house I bought In August of 2007 after cashing out of Long Beach, CA. I bought what would have been an 800K house for, are you ready.... 155k, plus 2 acres on the Wisconsin River. Shure the snow sucks, but hey people, we now have 4x4's with heated seats and internet and cable if you are snowed inside. I don't miss Crazy California for the world. The only negative about living in Wisconsin. NO ethnic diversity. Everybody is white and there are not rap and latino radio stations. Bummer.

oceanside res wrote on Feb 28, 2008 12:04 PM:No pity here. What everyone fails to mention is how a couple of years ago the real estate market was jacked up to the point where most could not afford to buy. Way past what homes were worth. Now all of the dreamers and get rich quick speculators are taking a hit and want the government and the taxpayers to bail you out. When you went to your rip off lender with eyes open you knew the day of payback would come but expected saleries to take a 300% jump. Right!! What about the speculators?? Keep ahold of the properties , Maybe in 20 years the market will again go high.

Scott wrote on Feb 28, 2008 2:00 PM:Realtors are idiots, by and large. Of course, that's an unfair generalization, but try and find an industry where its representatives make as much money as real esate agents, with as little education. It takes nine hours of classroom time and one test to become a real estate agent. No wonder there are so many so-called "realtors" trying to cash in at the consumers' expense. They need to make their money somehow, and getting a real education apparently wasn't an option.

Banker-Man wrote on Feb 28, 2008 5:14 PM:You haven't seen the internal banking data. It will get much worse and will be a bloodbath.

Unlikely, to MIT PhD = wrote on Feb 28, 2008 5:53 PM: = The housing prices will drop drastically, but never by 70% for one reason: inflation is coming like gangbusters. A house worth $700 K today, may cost $8000 K in five years, but due to devaluation of the dollar, the $800 K will be worth less than the original price today. Remember, a quality house built 50 years ago for $10K now costs $500K or more. That’s NOT because the house is worth more, but because the dollar is worth less than it was 50 years ago. Inflation will keep raising the dollar cost of homes over time. The value is what we get from the use of the home as shelter, or investment income stream over the years. This is the result of the most insidious of all tax frauds: the dollar devaluation tax.

To Unlikely wrote on Feb 28, 2008 7:24 PM:You fail to realize that the devaluation would need to increase the price of goods about 8-9 times for it to continue going up. There has never been inflation that high as long as it's been tracked. While this might keep the crater a little higher, it'll never do what you think it will.

The houses don't cost that much to build, either. You could build a house that cost 10k 50 years ago for ~40k worth of materials. The land, on the other hand, is attached to the hyper-inflated housing market, which means the land itself is worth more than ten times as much as the house that rests upon it.

My prediction? Average houses here will go for ~130k when we return to sensibility and will drop below this for a short time before those that just want to live in the houses start buying them to save on rent money. It'll be right around what it would have been had the unreasonable price increases never happened. Condos will fare worse than houses and you'll probably see above-average ones drop below 100k before we hit rock bottom.

Take the average household income, multiply by 2.5, and that's about what an average house should cost. That's what they did when that 50-year-old house cost 10k.

Olaf wrote on Feb 29, 2008 8:58 AM:Mary and Howiek sound like realtors... These realtors and speculators have ruined the American dream for many people. How about Mary up above trying to re inflate the bubble with 40-50 year loans??? And shutting down the supply???LOL... yeah let's prop up the straw man and keep him up there as long as possible for so the realtors can drive BMW's... The market will correct, IF the Dem's keep their noses out of it, and be better for the average consumer. People should not have to drive out of San Diego to buy an afforable house to live in. I have to agree with Jim: sellers drop your prices or your going to hand the keys back to the bank.

Venus wrote on Mar 1, 2008 12:51 PM:To Donovan: Wisconsin... over Southern Cal! What a joke! In a year or two you will see that you have not saved any money by moving to the Ice Box. You will have to pay to heat your Ice-House for 10-months and buying gas to go where(?) You are right about no ethnic diversity there - there's no people there that's why. Everything including houses should be free in Wiconsin(:

nate wrote on Mar 8, 2008 2:49 PM:What about investment properties in San Diego? What are best areas to buy in San Diego? Is the commercial real estate market (apartment complexes) following the same trend?

Still Renting wrote on Mar 8, 2008 3:31 PM:The anger towards Realtors is misplaced. Realtors are not investment advisors. Anyone looking at their qualifications should know this. Realtors exist to put buyers together with sellers. Period. If you thought otherwise in the past few years, you probably ended up purchasing a bad investment and now you're looking for somebody to blame for your actions. It's absurd to feel "duped" by a Realtor who introduced you to somebody that was selling a product you were actively seeking at a price you were willing to pay. Your Realtor did his/her job. A smart investor does his homework. Meanwhile, a fool and his money...