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This is the ONLY thing think isn't dead on. Agents income doesn't drop dramtically when house prices drop. If an agent sells a $100k home (assuming 6% in realtor costs) they get $1500. (assuming they only have 1 side of it) So if a 500k home drops 100k it doesn't affect them that dramatically... Even less when you figure 300k homes dropping to $250k.
Now if you are referring to price drops causing lack of sales? Then sure he has a vested interest. But it doesn't matter what he THINKS or tells his clients. The market (buyers) will dictate what they will spend on housing over the next year or two and everything points to much less than today.
knock it off NatasNJ, My questioning of the NJ.com report and calling NJ a real estate bubble has nothing to do with income, has to do with being accurate. If you have to resort to this argument, perhaps you have nothing else to contribute to the conversation.
Ok SERIOUSLY, forget about the DATA SOURCES. Who cares which one has more, has less, etc.. Fact of the matter is both sources are showing homes sold averaging 100% + increases in such a short time span (1997-2007 approx). What can you not see? That is a bubble.
Go ahead and dispute the wikipedia entry. Go ahead and dispute all the linked CITATIONS in the entry. I'm sure sources such as known economists, case-schiller, financial journals were all wrong but the NJ real estate agent is right.
You may not want to change your mind, but at least everyone else reading all these threads, that may have not have had the knowledge of what is really going on with this market, can see both sides of the story presented to them with facts and opinions and choose who to believe. That's the power of the Internet, it can either help you or hurt you in your business, it's up to you to decide which one.
This will only be settled in the future. I feel fairly comfortable that the near future is much brighter than you and a few others would paint it. As far as economists, haven't we all learned that there predictions are worth about the same as what we all leave in the toilet.
by the way, I did not level personal attacks against you, why take this to the personal level?? I happen to see the data and not see the end of the world.
knock it off NatasNJ, My questioning of the NJ.com report and calling NJ a real estate bubble has nothing to do with income, has to do with being accurate. If you have to resort to this argument, perhaps you have nothing else to contribute to the conversation.
he was arguing agianst realtors income being a factor. In other words, it was the one point he made on your side, and you get annoyed at it???
This is the ONLY thing think isn't dead on. Agents income doesn't drop dramtically when house prices drop. If an agent sells a $100k home (assuming 6% in realtor costs) they get $1500. (assuming they only have 1 side of it) So if a 500k home drops 100k it doesn't affect them that dramatically... Even less when you figure 300k homes dropping to $250k.
Now if you are referring to price drops causing lack of sales? Then sure he has a vested interest. But it doesn't matter what he THINKS or tells his clients. The market (buyers) will dictate what they will spend on housing over the next year or two and everything points to much less than today.
First, your calculations are wrong. The decrease of prices is the same decrease of income for the agent. So if prices fall 25% the agent's income falls 25%. If one's income falls 25% one might panic. Second, the income of the agent depends on sales (if they sell half of the houses they used to sell their income is 50% down). In short, it is of their interest that you believe that it's a good time to buy. Ignore him.
Third, the buyers do not dictate the market. The market involves lots of forces. We call that economy. RE agents can distort what happens and influence buyers.
Arguing for keeping prices high he goes against buyers and argues for the benefit of sellers. If you ask me he is not looking business from buyers but business for sellers. Not a bad thing if you ask me, as sellers are many more than buyers right now
he was arguing agianst realtors income being a factor. In other words, it was the one point he made on your side, and you get annoyed at it???
It is a bad argument. Sould be left out of the picture.
The other guy implied it as well and I thought it insulting as well.
Perhaps I should find out what he does and insult what he does, yeah that really makes a difference. As if arguing my point here will make any difference in my income this year or next year or ...
I will not justify licnyc's comments with a responce as he is throwing mud and has nothing of value to add so far.
Despite things slowing down, I did more business in 2008 than 2007 and will do more business in 2009 than 2008, no doubt in my mind, but that does not have anything to do with my argument.
This will only be settled in the future. I feel fairly comfortable that the near future is much brighter than you and a few others would paint it. As far as economists, haven't we all learned that there predictions are worth about the same as what we all leave in the toilet.
by the way, I did not level personal attacks against you, why take this to the personal level?? I happen to see the data and not see the end of the world.
Yes we'll see how it turns out, the inflation inducing government intervention might reinflate things - I have doubts though.
All I know is that the W-2 I have in front of me says I grossed $135k last year (and I have no debt to speak of - no car loan, no student loans, pay off credit cards each month, etc), and I can't afford a 3 bedroom house in the towns I like in NJ at the current prices. I can afford to rent though. Note, we're talking towns an hour by bus.train from manhattan but that are *nice*. And no I'm not giving more details, the above is way more details of my life then I want to hand out on the internet.
Of course NJ residents might just be obscenely rich and I'm in the poor house in relative terms.
Despite things slowing down, I did more business in 2008 than 2007 and will do more business in 2009 than 2008, no doubt in my mind, but that does not have anything to do with my argument.
You will be about the only agent who will do more business this year. I think this is very telling of the amount of denial among agents.
Yes we'll see how it turns out, the inflation inducing government intervention might reinflate things - I have doubts though.
All I know is that the W-2 I have in front of me says I grossed $135k last year (and I have no debt to speak of - no car loan, no student loans, pay off credit cards each month, etc), and I can't afford a 3 bedroom house in the towns I like in NJ at the current prices. I can afford to rent though. Note, we're talking towns an hour by bus.train from manhattan but that are *nice*. And no I'm not giving more details, the above is way more details of my life then I want to hand out on the internet.
Of course NJ residents might just be obscenely rich and I'm in the poor house in relative terms.
No savings?
Quite a number of the home sales that I have seen where the purchase price was well above 417K, the old number for a conforming loan, had the buyer only getting a loan for 417K so that they could get the lower interest rate. We did that when we purchased our home, put down like 45% so that we could get a conforming loan. I know of lots of people who own homes that they purchased for 600K to 900K but only got mortgages for 417K.
Currently to borrow 417K your monthly payment would be about $2200.
You will be about the only agent who will do more business this year. I think this is very telling of the amount of denial among agents.
Here is the level of denile most Realtors are in and have always been in. 65% of them do 1 transaction or less every year, does not matter what year you are looking at.
year in year out at least 1/3 of the Realtors are getting out of the business, and replaced by new.
here is the level of ignorance that the general public has about Realtors. Most people think that most Realtors are rich, and make great money. Not the case. In most markets 5% of the realtors will do darn near 95% of the transactions. The other 95% are left to fight over the scraps, and that is part of the reason people have such a bad view of realtors. They think we are all rich and we are all alike, so the are not careful about who they hire to buy or sell and then complain about the profession when they have a bad experence with some Realtor who may not have even done a transaction in a year or two.
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