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The MLS listing is essentially a formality. The selling agent has it locked up by the time you see it. You're on the outside looking in.
Somewhat...we know the listing agent reasonably well. What actually goes on is they have possession of the homes before they hit the market...and they show them. So they had a buyer all lined up and waiting when the bank said go. Many of the lenders particularly on the more expensive properties specify a minimum list period before they will look at offers.
And of course this all happens because it's in the financial interest of the listing agent to get dual agency and commission. I'm very suspect that minimum listing periods are being adhered to. It's too easy to just tell inquiring agents that the house is under contract and then just sit on an offer. The result is a property that gets snapped up at a lower price than had it been exposed to the market. If it's a full-price offer then all the better since the bank will be happy and none the wiser. It's a clear violation of the listing agent's fiduciary responsibility to the seller. Buyer's agents don't have a chance.
Quote:
Originally Posted by olecapt
Somewhat...we know the listing agent reasonably well. What actually goes on is they have possession of the homes before they hit the market...and they show them. So they had a buyer all lined up and waiting when the bank said go. Many of the lenders particularly on the more expensive properties specify a minimum list period before they will look at offers.
And of course this all happens because it's in the financial interest of the listing agent to get dual agency and commission. I'm very suspect that minimum listing periods are being adhered to. It's too easy to just tell inquiring agents that the house is under contract and then just sit on an offer. The result is a property that gets snapped up at a lower price than had it been exposed to the market. If it's a full-price offer then all the better since the bank will be happy and none the wiser. It's a clear violation of the listing agent's fiduciary responsibility to the seller. Buyer's agents don't have a chance.
Wasn't dual. Was in the same office. No connection between the agents except same office. Listing agent is the brokerage recruiter. Used the deal as a sales pitch to come with them. Know a bit about the system used. So the bank approved the immediate offer. Weird. Had to be priced off a BPO. No way it would appraise for anything under 700K.
You really think you are in a position to argue the meaning of "catalyst" with an engineer?
"Catalyst" is a buzz word used to explain things after the fact. It is a very nice word in that it means, ala Alice, whatever its user intends it to mean.
"Catalysts" are easy after the fact. Low price, improved cost to income rations, growing economy, increasing population, out of country buyers...and if it goes bad you just reverse them.
You are arguing with the actuals. You are claiming the actuals might not occur? There will an "adjustment". Please.
You really think you're in position to argue the definition of catalyst, as it is used in investment circles, with an investment analyst? Pardon me for thinking a discussion on investing is the relevant context of the definition. Yes, catalysts are easy after the fact. People who bring real knowledge and insight to the discussion can identify catalysts before the fact. You say indicators are showing a turn, but can't identify why, seeming to rely on past relationships that may no longer hold. They are, in fact, spurious indicators if there is no underlying change in sentiment. Markets never go straight up or down, and will even trend sideways for a time before turning up or down again. I saw a chart the other day on the Vegas market that shows about 3 other similar short-term bumps before resuming the downward trend.
You don't understand what a catalyst is in investment circles. Everything you cited are fundamentals, not catalysts. A catalyst would be something like, say, a change in the tax law giving an incentive to repo buyers. A potential catalyst would be easing credit or a rebounding stock market, a plummeting dollar, anything that could cause a change in sentiment or dispersion in valuation (when the dollar declines, the house is relatively cheaper to the foreign buyer despite no nominal change in price) leading buyers to act on favorable fundamentals. Catalysts are usually structural market changes or other "events" that affect a change in sentiment. Volume and price are not typically catalysts, however when such data leads to a change in perception/expectations it can be viewed as a catalyst. But it's ex-post and the stuff of hack analysts. The guys on the ball identified the real underlying factors that led to the increases in volume/price and made a call if that would be enough to reverse sentiment. Nothing I've read indicates to me anything but a general worsening in sentiment, which is why I'm calling this uptick a spurious indicator or temporary trend. The housing market is still fighting strong headwinds.
I don't disagree that a bottom is potentially forming, but I think all the risks are to the downside (and I'm talking price, not volume).
You really think you're in position to argue the definition of catalyst, as it is used in investment circles, with an investment analyst? Pardon me for thinking a discussion on investing is the relevant context of the definition. Yes, catalysts are easy after the fact. People who bring real knowledge and insight to the discussion can identify catalysts before the fact. You say indicators are showing a turn, but can't identify why, seeming to rely on past relationships that may no longer hold. They are, in fact, spurious indicators if there is no underlying change in sentiment. Markets never go straight up or down, and will even trend sideways for a time before turning up or down again. I saw a chart the other day on the Vegas market that shows about 3 other similar short-term bumps before resuming the downward trend.
You don't understand what a catalyst is in investment circles. Everything you cited are fundamentals, not catalysts. A catalyst would be something like, say, a change in the tax law giving an incentive to repo buyers. A potential catalyst would be easing credit or a rebounding stock market, a plummeting dollar, anything that could cause a change in sentiment or dispersion in valuation (when the dollar declines, the house is relatively cheaper to the foreign buyer despite no nominal change in price) leading buyers to act on favorable fundamentals. Catalysts are usually structural market changes or other "events" that affect a change in sentiment. Volume and price are not typically catalysts, however when such data leads to a change in perception/expectations it can be viewed as a catalyst. But it's ex-post and the stuff of hack analysts. The guys on the ball identified the real underlying factors that led to the increases in volume/price and made a call if that would be enough to reverse sentiment. Nothing I've read indicates to me anything but a general worsening in sentiment, which is why I'm calling this uptick a spurious indicator or temporary trend. The housing market is still fighting strong headwinds.
I don't disagree that a bottom is potentially forming, but I think all the risks are to the downside (and I'm talking price, not volume).
Ahhh the modern equivalent of withcraft...
There are two...Business consultants and financial analysts.
Both thrive off the belief that there has to be a better way. Which may be true but would only be accidentally stumbled upon in ths context.
Both extract large sums of money by using the modern equivalent of a newt's leye ...the Power Point Presentation.
Both develop large lexicons of indecipherable terminology. They borrow real terms from other fields and bastardize the meaning.. Kind of like "Catalyst" in the present discussion.
They make very good livings...often end up rich.
They make absolutely no contribution to the overall good...and are proud of it.
One thing I have learned from this forum is when would it make sense to buy a house if one was going to rent it. I think this is what is driving the uptick in purchases in Las Vegas. If one can get a solid ROI and has a long term investment plan one would go forward and purchase a house based on renting it.
Should you buy vs. when you buy is a different discussion and opportunity cost changes the equation for individuals. Real estate is different from many markets due to natural stickiness of buyers/sellers (ie: the relative illiquidity of the assets). That's why the market is unlikely to truly turn without some strong and readily observable reasons and why fundamentals can diverge significantly from their theoretical values.
When does the market start to correctly value the fundamentals? That's the real question. You can argue we have found some stability, at this point, with many repos clearing and the worst of the credit crisis being over. But more and potentially worse looms (along with other headwinds), and anyone arguing the market has bottomed or turned is implicitly making a call on those risks or has a theory on local conditions trumping the macro.
I view Vegas largely as a "leveraged play" on the national market and, as such, might expect it to lead the larger market. However, I DO NOT expect the Vegas market has turned to lead out while the general economic conditions are still worsening.
Should you buy vs. when you buy is a different discussion and opportunity cost changes the equation for individuals. Real estate is different from many markets due to natural stickiness of buyers/sellers (ie: the relative illiquidity of the assets). That's why the market is unlikely to truly turn without some strong and readily observable reasons and why fundamentals can diverge significantly from their theoretical values.
When does the market start to correctly value the fundamentals? That's the real question. You can argue we have found some stability, at this point, with many repos clearing and the worst of the credit crisis being over. But more and potentially worse looms (along with other headwinds), and anyone arguing the market has bottomed or turned is implicitly making a call on those risks or has a theory on local conditions trumping the macro.
I view Vegas largely as a "leveraged play" on the national market and, as such, might expect it to lead the larger market. However, I DO NOT expect the Vegas market has turned to lead out while the general economic conditions are still worsening.
You are simply arguing with the data. May is up over April. It appears that June is up over May though it may still turn out to be the same. I don't project the market was up in May over April...it was. Enough to declare botton...nope. Enough to say we are close. Yup. Griswold could be right...it is a porch on the way down and after a little while the down will continue...but evidence that is true? Don't hold your breath.
A continuing down trend is one of the many possible directions from here. I consider it to have the same probability as a massive price rise.
We gonna hunker down here for a while in indecisiveville. Wandering around figuring out where to go next. Nothing interesting is likely though.
Clark probably considers this bullish. I think it neutral. Decide for yourself.
I can appreciate both points of view. But while I was reading the posts I was thinking that Bear Stearns employed thousands of financial analysts and probably only a few engineer/realtors and look what that got them. (Sorry, Clark, i could not resist that one.)
If we all thought alike, then there would not be the great debate i am witnessing here, nor would we need either realtors or financial analysts to try and make sense of the markets. Job titles are only good on a business card, they don't mean s#$t otherwise, so stop bandying them about like they are swords to be drawn in battle, and please, keep the analysis coming!
This is probably the best thread I have seen on here since joining and am really enjoying it. I just signed on a house today in Lone Mountain so I am rooting for OleCapt, but think Clark has some good points. We did use a realtor and I really think he went above and beyond, we argued and he argued and got the house we wanted in the end for far less than we were looking to spend. I hope the price zooms upward, LOL.
So from what I have read and heard the housing crisis is a black swan.
Ehhh, I'd be more apt to agree if Australia (down 40% from the 2004 peak) was already bursting/busted a good bit before the US. And, of course, you have Japan way back in the early '90s. Took over 10 years to bottom, and is still more than 50% off it's peek (property in general, not just housing). In large cities, prices fell 64%. UK is off @ 6% already from it's Aug. '07 peak.
Here's a little food for thought: According to estimates by The Economist, the total value of residential property in developed economies rose by more than $30 trillion over the past five years, to over $70 trillion, an increase equivalent to 100% of those countries' combined GDPs. Not only does this dwarf any previous house-price boom, it is larger than the global stockmarket bubble in the late 1990s (an increase over five years of 80% of GDP) or America's stockmarket bubble in the late 1920s (55% of GDP). In other words, it looks like the biggest bubble in history. …
How much did the Nasdaq decline from it's peak? Plenty of numbers to choose from, but national US home prices are down some 15-20%. Without launching into the differences between the markets, suffice to say I've listed a few other bubbles to draw inference from.
Vegas was down 28% from its peak in March. I really can't see a rational argument of why this isn't going down at least another 5-10% from here, which would be a very modest overall decline by one of the ring leaders judging by historical bubble standards.
To say Vegas could be flat from here, when many think the US national market is going lower, would basically be saying Vegas will see only an average decline from peak values. I think such an prediction requires rather dubious assumptions.
Now, is attaching equal probability to a massive increase as to a massive decrease bullish or not? You decide for yourself.
Last edited by ClarkGrisowld; 06-11-2008 at 10:57 PM..
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Exactly
