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Selling Fear & Entitlement To The Culture Of ME

With CNN in the background I hear an "expert" explain that Wall Street is based on "fear and greed. And fear is a much more powerful driver for investors."

What does this have to do with real estate?

Its about confidence.

Mommy Congress and Daddy Bush have asked Granddad Paulson to give the markets a "loan".   Seems we all overspent a little too much over the past few years and need some help to get by."Rock a bye Baby, it will be OK".

Its also an election year. I ran scared when I heard one candidate say in an interview he has  "a little something for everybody". But this bailout package eclipses any "giving" our candidates could ever promise.

So it is a confidence issue. Confidence game as in con job. We all know granddads loans are really gifts in the real world. With low interest and no due date.

However Government money comes from two places. Taxes or they just PRINT MORE.

So my point is to not think that our parents in DC are going to help. As I implied in a recent post. Prospecting and selling will take care of you and yours.

The reporters are all whining this is the biggest meltdown ever. On the same broadcast I heard at least a couple misrepresentations of the AIG bailout. Puleeze. Aren't you tired of people explaining this thing after just learning the meaning of LIBOR a few days ago?

They will overhype. However, they also over hyped the run up. Good for goose I guess. But, it is time to take matters into your own hands.

Online we can cause geometric attitudinal change. This blog alone is syndicated all over the place. What are you doing online?  Are you making good things happen in your market? Isn't it time?

Financing ran the last market. What about now?It is is still about financing. The agents who know financing will not only survive they will position themselves to dominate their markets as this thing turns the right way. Pre-1980 agents had to do all kinds of creative deals. Pull out those old sales training manuals.

Assumptions, carry backs, wrap arounds. Get comfortable with these ideas as it may be your way to transact as banks freeze your deals. Oh by the way, when you are the only one who knows how to get a house financed, the "will you cut your commission?" question quite insulting.

The only ones that will create real confidence in the real estate market is YOU.

Bottom?

It will get better, sooner than later!

This sounds like the mom telling her son that the swelling and welt on his face will go away minutes after just getting pummeled by the school bully.

Nevertheless, we see some positivity even while stock plunge.

The U.S. economy will recover from the current recession in the second quarter of next year, assuming the credit squeeze in global financial markets improves gradually, according to a survey of 48 economists released Monday.  And social media man and market watcher Patrick Kitano just wrote a post claiming that capitulation means we have hit bottom.

My Recession is Worse Than Yours

Have you participated in a pity party lately?

Have we as an industry,like our country become whiners? Tony Robbins thinks we are emotionally unfit.

In Today's real estate mess Misses '80s Mark by a Mile, the author illustrates why this isn't as bad as back then. You can also make the argument that back then he was in Texas and that was one of the hardest hit real estate environments, while today it is one of the most stubborn markets. But what does that argument or his do to help?

Everyone, has it a little better, a little worse. Even here in Cali. I can remember being told that the unemployment rate was being cooked and it was closer to 20% back in the 80's. All the aerospace jobs had left town it seemed.

People literally had to reinvent themselves. Many of my friends, and myself included benefited from that "season". It was hell going thru it. In many ways it was worse than today, better in others. But tell that to the guy facing foreclosure or bankruptcy. They always need to bring that up don't they.

But what does that matter?If that person is you, or isn't you?So what.

There were more millionaires created during the Great Depression than ever (until the dot com boom, and a million was a million back then).

I know a guy who was broken from the late 80's, early 90's real estate bust. He decided to syndicate some guys with cash. He found the deals for a piece of the action.

He didn't really work during the last run up. He didn't have to. His cash flow from his "BK" set him free.

Some Perspective on the U.S. Economy

In today's economic environment there is a little of everything for the pessimist and the optimist.

Foreclosures are at record levels. Sales volume is way down. Vegas seems to be ground zero for bad housing news. As I mentioned in a previous post, to some investors, it has never been a better time to buy real estate.

Today's global economy is pulling the world's poor into the middle class at a rate of 70,000,000 people each year according the Goldman Sachs.

That means they will want to buy stuff. That means they will want to buy stuff from the U.S. And because of the weakness of the dollar our stuff is a pretty good bargain in other parts of the world. That could be why the Container ships are full and moving product over seas. (23% over this time last year). Yes, folks manufacturing is back.

And according to John Mauldin it is THE reason we are not in a deep recession. He is a great read and as his newsletter is headlined this week, Take a Deep Breath, The World Will Not End.

Some more interesting tidbits from his newsletter that kind of puts things into some perspective:

• Next year there will be 2.3 million weddings in the US, at an average cost of $30,000 (we have helped increase the average this year considerably). That is $72 billion on weddings. And many of those new families start with the need to find a place to live, furnish a home, and build their nest.
• 4.3 million babies were born in the US. Each of them will need all sorts of "stuff" - food, education, and places to live - in (hopefully) 20-25 years.

That spells opportunity. Mauldin goes onto point out that despite our big scary problems here and abroad that there are some really good things happening that usually in the end overshadows the bad. And his best advice: "Markets will adjust, and the world will be a better place. Things will work out better for you as an individual if you anticipate the problems and make the proper adjustments, as much as possible, in advance."

John Mauldin, Best-Selling author and recognized financial expert, is also editor of the free Thoughts From the Frontline that goes to over 1 million readers each week. for more information on John or his FREE weekly economic letter go to: http://www.frontlinethoughts.com/learnmore

Some Good News In Housing

Housing is getting some good news as the markets keep fighting on despite the front running economists saying its all but dead.

First off any good news needs a narrative and it starts with Donald Trumps record sale of his Florida Mansion.

Meanwhile U.S. Housing starts U.S. housing starts unexpectedly surged 9.1%,  the most in more than two years in June.  Barron's Magazine is asking if the market is ready for the "giddy days again".Stating a recovery may well be on its way. While affordability of many real estate markets are being sung across he Country.

Study good and bad news on the web. Be curious how it spreads. Do you want to talk viral marketing? This is how it is done folks. Not some widget or some poorly conceived link bait.

This is good news folks. If I was an agent I would publicize it.Everywhere. My next move after this post is to talk about Trumps sale at Twitter.  I would get the world to know that there is positivity out there. Say it enough times and eventually it will catch on. Perception is reality.

Is America the New Debbie Downer?

Even before the recession hit (darn there I go we are not in a recession by technical standards) we heard that the economy sucked. Never mind that we had the longest growth in U.S. history and unprecedented unemployment.

A new article at the Washington Post mirrors my sentiment in Why We're Gloomier Than The Economy.

Soft? You betcha. In recession? Quite possibly. And a crisis in the financial markets has rattled nerves for months now. But so far, the economy is holding up better than it did during the last two recessions in 1990 and 2001. Employers haven't shed as many jobs, the unemployment rate is still relatively low, and gross domestic product has kept rising. Things are nowhere near as bad as they were in the Great Depression, or even during the severe recession of 1982-83. The last time consumers were this miserable, in May 1980, the jobless rate was 7.5 percent and inflation was 14.4 percent. Now those numbers are 5.5 percent and 4.2 percent respectively...This has left economists trying to figure out why Americans' perceptions are so much more negative than the data analysts use to measure how things are going....

Wellesley College economist Karl E. Case and two co-authors researched how changes in the value of homes affect what people spend and got a curious result: When home prices are rising, people spend more money. When they are dropping, they don't spend less money. With stocks and other assets, by contrast, spending both rises and falls with prices...people spend more when house prices go up and worry more when prices go down, but don't actually spend much less," Case said. "That could explain why consumer spending numbers have been much more robust than you would expect if you look at consumer sentiment."

And it is getting old to hear folks claim this downturn is a complete meltdown in the economy. Not to sound like Lyoyd Bentson to Dan Quayle in their VP Presidential debate. But, I knew the last recession and as bad as it may seem this is not 1990! And the old timers who sold houses in the 70's would say the same to me and you. The lesson is the markets go up and down. A fool does not prepare for either. Since I no longer sell real estate after the last downturn you can guess how well I prepared back then.

Recession Repression

The World is truly freaky! Lots of bad news and lots of good news. Foreclosures are crazy, to fill my gas tank I need some of that no down financing from Countrywide. All while retails sales is higher than expected. How can that be? As always I try no to report the bad real estate news, only the good. And good realty news is good for sales!

Home prices go up in California so says FNC Inc.

Prices appreciated in 15% of ZIP codes in San Diego, 25% in Orange County, and 24% in L.A. County  this from January through April.

“We are seeing signs that certain ZIP codes, typically in coastal areas, are beginning to stabilize and even appreciate from their end-of-2007 lows," said Robert Dorsey, executive vice president for Data and Analytics at FNC.

The Pending Home Sales Index, a forward-looking indicator based on contracts signed in April, rose 6.3 percent to 88.2 from a reading of 83.0 in March. It’s the highest index since last October.

Lawrence Yun, NAR chief economist, says:

“Bargain hunters have entered the market en masse, especially in areas that have experienced double-digit price declines...Sharp price reductions are leading to a quicker discovery of price equilibrium points. The West is already seeing year-over-year gains in pending contracts.”

Is the Housing Bust Over?

Thats what Dr. Steve Sjuggerud says in his most recent post. Actually he says we are near the bottom. So what does that mean? If your buyers are waiting they will find out they waited too long. And Sjuggerud is pretty good. I read his letter when he was recommending Housing Stocks way before they were sexy, and he dumped them way before we heard the word bubble.

I list his analysis over at the Positive Real Estate site. I am not sure if you get what this site can do for you. It lists a library of positive news on your profession, on your product-housing. No bad news is allowed. And the bubblistas have tried. I simply will not be fair and balanced. Its all roses and flowers all the time. Well pretty much anyway.

It gives you a starting point in compiling a ton of reasons why now is a good time to buy. And you are welcome to add these stories in yourself.

Prices are Going Up?

I guess it is all in whose stats you read.

This from Coaching Clues Newsletter: The Sky Is Not Falling!

They point out that despite the media darling Case-Shiller index, the better indicator of the indices is provided by OFHEO (the Office of Federal Housing Enterprise Oversight), Realogy and NAR. These three organizations seem to validate one another's results.

They all have come to the same conclusion: 

"Overall U.S. prices were UP 0.6 percent....In other words, a whopping 77 percent of the areas in the U.S. reported a price increase in January 08 - February 08! The Case-Shiller Index, in contrast, concludes that 95 percent of the MSA's reported negative returns. "

Bernice has been at the forefront on preaching the positivity as we have at positiveonrealestate.com.

I believe that this economic situation is way overblown and so is the housing crisis. It cannot be a meltdown when you continually hear of multiple offers occurring across the country.

By blogging and posting great real estate news you can help counter the negative impressions that get published daily in the traditional media. You can be a leader and can help form the public impression on housing.

More Info:

Dave Lakhani Ends the Recession

The Three Prong Spear to Housing

I visited a friend over the weekend and he asked me what is up with real estate? In fact he posited that, "aren't we at the bottom?" That was interesting that he would think that.

I told him that my unscientific reasoning is that:

• The real estate market got way past rent value
• There are way too many agents
• And most importantly credit is too tight

My ear out there tells me that the buyers are wanting to buy. I know this from my client traffic, and lead counts that are showing the highest numbers in a long time. And in some cases they are higher than ever.

Either the lending will loosen up, or you must learn how to get creative.