How is trying to buy a home irresponsible? Isn’t that the epitome of responsibility?

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I have seen a lot of talk about how the financial meltdown was apparently caused by people who were irresponsible or shouldn’t have been given loans or were just lazy or stupid. (Have I missed any?) To me this doesn’t really make much sense. I know the media seems to have painted a black and white picture surrounding these events and they are really trying hard to make it seem clear that its stupid poor people who screwed this all up for everyone else and as Rick Santelli eloquently points out why the heck should he have to help these people? In case you missed this you can watch him talk below.

But there is a reason the powers that be want to point the finger at the delinquent homeowners. It’s either point the finger at them or we start figuring this out and point our fingers at Rick and his buddies. But since they control the media it’s going to be a lot harder for our fingers to win. And really Rick is right about one thing, this whole mess is about one thing: responsibility. But it’s not in the sense that you are probably thinking especially if you watch a lot of news because if you do you might even have agreed with what Rick had to say or what the rest of the media has said. They certainly are convincing and it sounds reasonable enough. People with bad credit were given homes they couldn’t afford. Simple right?

But it’s not as simple as that because as I asked in the title since when is wanting to own a home irresponsible? Seriously think about this for a moment isn’t that the epitome of responsibility? I think it is. Everything we ever learned growing up taught us that some day if we worked hard enough and held a good job that someday we might be able to own a piece of the pie and have our own place to call home. That’s the American dream for most poor people but I guess that’s not enough for people like Rick. But you have to really look at the situation to understand things fully.

What Rick is saying assumes an awful lot and it goes against basic psychology. People become emotionally attached to homes, ask anyone in the Real Estate industry because we all know that. It doesn’t make any sense that people would just throw it all away and just not care because it defies all logic to do so. It’s not in our nature to act this way, even if as they often point out they have no monetary investment in the home because they didn’t need a down payment and got a 100% loan. But again this defies logic because then you could argue that anyone who got a 100% loan could care less if their homes burned to the ground because they “can just walk away” as you often hear. But it’s simply not true in either case. The powers that be try to make it sound this way for a reason, it’s either that or we start blaming them.

Bad Credit?

What exactly is bad credit? If you really look at the financial record of someone with bad credit you will notice a pretty remarkable pattern. It’s not the gambling and ridiculous things that the media tries to portray but typically a pattern of simply not having enough money. Not that they are any more irresponsible with money than anyone else but when you have no leeway with how much money you make versus how much money it just costs to live in this country, when something happens you are out of luck. The bigger the gap between your cost of living and your income the easier it is to save. Sure you could argue that someone should have substantial savings before they buy a home but how many do or did in the last few years? Not many. So the ones that make it they were responsible while those that suddenly lost their jobs or who weren’t lucky enough to have good health insurance and find themselves facing large medical bills, those are just irresponsible people? That doesn’t add up to me.

And what’s bad credit? Someone who gets $10,000 in medical bills and suddenly can’t pay them or is forced to use a credit card and then the interest rate racks up and they can’t afford it? Or they could afford it and suddenly lose their job(s)? After all look at the unemployment rate, there is a reason I am stressing the job thing. People at the top typically don’t lose their jobs while those at the bottom are routinely picked off like a scab when times are lean because those at the top certainly aren’t going to take a pay cut.

Like I said this is about responsibility. But it’s not a few people not paying their mortgages because they just don’t feel like it. It might even be a lot of people not paying simply because they can’t afford to but that’s not our problem. The problem is responsibility and it’s the people at the top of these financial schemes who would rather throw out all responsibility for their own greed. They would rather see the lives of innocent people completely left in financial ruin and kicked out of their only home just so they can own that 3^rd or 4^th home that they never even see.

Our country is in a state of panic and turmoil because of a few people who have so much power and who already have so much wealth but it just wasn’t enough. They needed more and they just took it. But they have the audacity to say that it was other people who are not responsible? So yes it is about responsibility and those at the top are ultimately responsible for this entire mess. They can try to use everything at their disposal and every media outlet that they own will send the same message as they have from the start but I will never for a moment believe that average hard working Americans are somehow irresponsible enough and had enough power to bring our country to its knees. Since when have poor people ever had power in this country?

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Apple + KISS + Real Estate for 2009

You won’t find me saying too many nice things about Apple and I don’t really feel like saying anything negative at the moment either. But one thing they are doing that is undeniable is all out kicking butt when it comes to marketing.

But why is this?

This recent article is saying its simple, in fact its KISS, rather K.I.S.S. (Keep it simple stupid) The article is a good read and I think they have a good point. As much as everyone loves choices, sometimes you don’t need a hundred basic variations of the same thing. I think an old business model was putting slight changes in a product line and hoping the confusion would lead people to purchasing a more expensive version that doesn’t necessarily have any specific reason why it should cost more. For years computer companies have done this, throw out a bunch of confusing numbers that even a computer “expert” like myself can barely decipher. You walk away thinking you got the best buy and have to wonder if you did.

That’s why web 2.0 and the Internet are changing things. Information is available at a high rate of speed, its mobile, and there is lots of it. These factors are having an effect on real estate and it shows. Consumers are dependent on us, the real estate experts to help them with these important decisions. Well, you see, that statement used to be true but when you think about it, how true is it today? Our roles are changing. Sure we are always there and we are able to be reached even easier than before but information is free and its everywhere. There are so many great resources out there that we could quickly become outsourced so to speak.

But that doesn’t mean we aren’t resourceful either, we change and adapt. But just because we have MLS access doesn’t make us a resource. Its our experience that becomes the resource. We help buy and sell more houses in any given month than the average person deals with in their lifetime. Its these experiences that equate to value. So go out and provide the most valuable experience you can with the most valuable resource available, your experience.

If you have something to say please leave a comment. I will try to comment on your blog as well.

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Obama Reveals Part of Stimulus Plan: Cutting Your Energy Bills

I just came across this article and regardless of your political affiliation this sounds like a good idea to me. It actually feels a lot like thinking outside the box so to speak because of the hundreds and thousands of articles I have seen and read I have never seen this suggested. But why not? Everyone has to pay the energy bill regardless of whether they are a home owner or renter. This would really hit home for almost every American faced with bills that can just be plain overwhelming. Maybe there is more to this but to me it seems spot on. Good job is all I can say.

If you have something to say please leave a comment. I will try to comment on your blog as well.

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US Homes Lose $2 Billion in Value and why Headlines Like These are Misleading

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According to this article, the website Zillow, has reported that US homes have lost about $2 Billion in value. That certainly does make a great headline and probably scares enough people into reading the story. But take a good look at that story for a moment and then lets analyze this together.

Whenever I am presented with an opinion and this article is certainly opinion, I want some basic facts to be presented alongside that opinion. This is just basically supporting your argument or at least documenting where you got your information from when you formed your opinion.

Now take a look at the article again and show me where they are documenting their source for this information. Unless I am missing something the article only mentions that Zillow is the one saying this. I would have expected a more clearer citation in the least and this already makes me question the validity of this information.

So now we have an article written based on something someone else says without the opportunity to examine the original source. Anyone else find that misleading?

One would assume that when you are talking about numbers that you would include numbers, data after all is very important when you are talking statistics. This is what the article says “Zillow collects home values and analyzes home price trends in 163 markets; all but 30 registered price drops over the nine months ended Sept. 30, compared with the same nine-month period of 2007.”

163 markets?

Correct me if I am wrong but aren’t there 50 states? This means that this opinion is based on approximately 3 markets per state. Last I checked my state of Wisconsin has more than 163 markets. Disregarding extremely small towns, which is misleading as well, I am pretty sure there would be more than 163 cities in Wisconsin. In the area that I cover, Chippewa Falls, Eau Claire and Altoona primarily, that is 3 markets right there. I would also argue that I probably cover 3-4 other towns that have a pretty distinct market as well.

I also know for a fact that Zillow does not have access to our MLS data. We cover a very large geographic area of Wisconsin and overlooking our data would mean a pretty significant gap. I would also extrapolate from this that there are probably other markets that are being “overlooked.” In fact, well it has to be a fact because I have already shown that they aren’t making a very good argument when you infer from 163 markets that this is a nationwide trend. I agree that prices are declining but when you make an argument and pretend that it is fact you better have some good, sound data to back up that “fact.”

Of the 163 markets, 30 did not even report price drops! Thats one fifth in case you don’t like doing math in your head.

If these numbers haven’t sounded fishy enough lets dig a little more…

What does it mean “price drop?” Well I am assuming that they mean the owners of the home and their agent have lowered the price. There can be a variety of reasons for this but anyone in the business knows this doesn’t really mean much at all. When we talk about home sales and try to calculate a list price we base our data on homes that have sold rather than homes that are currently listed. Why? Because anyone can list a house at any number they choose. I can list a $100,000 home at $2 million dollars, does that mean the house is worth that? If I then lower the price to $100,000 will Zillow say that the home has dropped $1.9 million in value?

The problem, as you can see, is that basing data on imaginary numbers is rather dangerous. The only number that matters is how much someone paid for the house. Until we get to that number, none of the other numbers matter.

Most agents who list homes on Zillow do not directly link it with their MLS. Instead the numbers are manually entered and the agent is prompted to change this after so many days. I may be wrong but I think this is only done once a month or so. There are a few problems with this. If the agent is not diligently updating the information on Zillow then the information can be just plain wrong. Again this is why its so important to have direct access to the MLS systems instead of relying on information second hand. The other problem is that the data is just out of date. Relying on information that is a month old is dangerous.

So what does this article really mean? Not much. Taking 163 markets full of bad data and then inferring from that is just plain misleading and wrong. Everyone knows that prices have come down from last year. But Real Estate is local. That might be a cliché but it’s true. If I wrote an article based on data from a single city in our MLS and then said a market 200 miles away must have the same situation you would say that I am crazy or stupid. I would have to agree. This is just another case of having to take a grain of salt with every headline.

I also want to point out that after diligently searching Google for the original information that this article was based on, I could not find it. I went to the Zillow site and used the search there and found nothing as well. I even went into press releases and basically all over the site to find where this data came from and if anyone can actually find this I would appreciate this. But if you were a student at a University and you turned a paper into your professor and quoted a source but did not cite your source, it would be entirely unacceptable. In fact, I found the entire article unacceptable.

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Low Rates Entice Buyers-Record Mortgage Applications-Eau Claire Wisconsin-Altoona-Chippewa Falls-Real Estate

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According to this story mortgage applications have been reported at record rates as mortgage rates have fallen to very low levels. “Potential borrowers were lured by enticing mortgage rates, which dropped dramatically after the Federal Reserve unveiled a plan last week to buy up to $500 billion of mortgage securities backed by government-sponsored enterprises, Fannie Mae <FNM.P>, Freddie Mac <FRE.P>, and Ginnie Mae.”

What does this mean for people in our area? I would hope that it would encourage buyers to come out and invest in the community. This is a great opportunity to do so and indeed that is what I am attempting to do here. With rates this low the potential savings is tremendous. If you haven’t considered investing in Real Estate in Eau Claire, Altoona, or Chippewa Falls Wisconsin this is your chance. If you have any questions about what you need to do to invest give me a call today. I would be happy to discuss some of the opportunities available.

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Moving Homeless Into Foreclosed Homes? Is This Really a Good Idea?

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I saw this article and am sort of scratching my head because to me this just doesn’t seem like a good idea. “He is helping homeless people illegally move into foreclosed homes.” I suggest reading the article quick to get a feel for it.

Here are some other things to note:

“He also breaks into the homes he shows.”

“Pierre herself could be charged with trespassing, vandalism or breaking and entering.”

Now I am not saying that something shouldn’t be done about homeless people or foreclosures. Personally I think there shouldn’t be homeless people in our country and we definitely have some foreclosure problems facing us in parts of the country, but this doesn’t seem like a good solution. Regardless if this guy claims he can get free legal counseling in case something goes wrong, something will most certainly go wrong. It seems to me he is putting his activism first and endangering these people. If you know me, I am most certainly a huge activist but something doesn’t add up here.

Maybe I am wrong what do you think?

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NAR Reports Housing on Obama Agenda

Eau Claire Wisconsin Real Estate

If you are like me and have been wondering when someone was finally going to get around to addressing the housing market it looks like Obama is working on it. “ President-elect Barack Obama is likely to make a housing market recovery a central part of his economic revival plan” That is definitely good news for everyone and hopefully this can be worked on sooner rather than later. Many have felt that the gigantic stimulus package was less than stimulating and so far has resulted in no help at all, other than banks apparently helping themselves to the money. Regardless, I look to see some true relief here and I am sure I am not alone. Many have heard the saying help out main street instead of Wall street and hopefully it will happen.

You can read the rest of the story here. 

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Flip This House Creator Flipping Mad!

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I am sure many of you have seen the show Flip This House. It was perhaps one of the most influential shows of its type. I actually have seen quite a few of the episodes and I got some great ideas. In fact last year after my wife and I were married we spent the entire rest of the summer trying to do our own flip. I learned a few lessons and found out my own strengths and weaknesses. I think we both can agree that the pace we were going at was killing us both. We did make it and we are still married! I dont know that I would go through with it again though. Thats why often in my blog I have stressed that this is not something to just go into thinking its so easy like you see on TV. What they arent showing you is the sheer amount of time and energy involved.

Well apparently the creator of the show and an idol of mine is very angry at A & E for breaking a verbal contract, “Davis claims in his lawsuit that A&E had verbally agreed to share half of the show’s revenues with him. A&E denies making such a promise.”

It is hard to say what will become of his lawsuit. For more details you can go here. 

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