Thursday, February 23, 2006

A Conspiracy Theory

I try to limit posts that support conspiracy theories about the housing bubble or stories and anecdotes that require the reader don their aluminum hats; lest the CIA or Masons read our minds. I’m not a believer in a Fed-led Plunge Protection Team that buys Toll Brothers stocks when it gaps down too much on the open; nor do I believe the new bankruptcy laws enacted last fall are a precursor to debtor’s prisons run by our new Chinese leaders.

However, I did start thinking about the “stickiness” of housing prices in the face of rising inventories and why we haven’t yet seen a convincing move to the downside. Yesterday I commented that some of the stickiness might be due to too many inexperienced Realtors who grab a listing without regard as to whether the house will sell at such an unbelievably high price. After reading this story though, I think there might be another, more nefarious reason why asking prices remain higher than they should be.

This story from Florida reveals that condo projects down there are being cancelled. Interestingly, in my view, one of the “investors” in a cancelled condo project is also a real estate agent. Further down in the article is another real estate agent who is also an investor in another condo project. This story and others like it leads me to believe that many of the “investors” and flippers in various condo projects throughout the country are also real estate agents. Now comes the conspiracy part.

What if some of these Realtor/investors are more interested in getting out of their investments with a profit (or a small loss) than they are in making sure the listings that they represent are priced accordingly? Imagine a situation where a Realtor owns in a building where they also represent sellers. If both the Realtor and the seller are trying to dump their properties at the same time, would it be that strange if the Realtor was not aggressive with the seller they represent to try to get them to lower their price. I don’t think it would be that strange.


Anonymous Anonymous said...

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Thursday, February 23, 2006 7:40:00 PM  
Blogger dohsinbebe said...

It's a lock the housing market in the near term is scheduled for a slow down; however, i honestly think the major cities are the one's that can expect real estate prices to be stable. people are going to want to move out of the burbs and into the city. the next generation is all about convenience and simplicity; hence, why condo's have been the major capital appreciation in the last few years.

Friday, February 24, 2006 3:13:00 AM  
Anonymous Anonymous said...

hi silver. interesting. i heard that a lot of the condos in long branch were bought by real estate people. any truth to that?

Friday, February 24, 2006 10:51:00 AM  
Anonymous Anonymous said...

I just back from the gym where I was talking to another Shore realtor. He thinks with interest rates still low, the market will stay strong and prices will not come down. The new listings I have seen are still unreasonably high, plus all of the homes are in need of much work. I truly believe the market has leveled off and prices will drop after sellers and realtors see they aren't being snapped up. I just cannot get any relaible info. from most of the realtors. I keep searching for accurate data to base my decision on. The one refence I use is They have the houses I've seen valued at least $150k less than the asking price, and unlike a paid appraiser, they have nothing to gain by giving you the facts.

Friday, February 24, 2006 11:12:00 AM  
Anonymous Anonymous said...

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Friday, February 24, 2006 11:20:00 AM  
Anonymous Anonymous said...

What a deal! You go girl...sell those houses!
Posted in (Monmouth)
Reported by Gail Kritch, REALTOR, GRI

As of February 19, 2006....

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Friday, February 24, 2006 12:09:00 PM  
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Tuesday, March 07, 2006 12:22:00 PM  
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Tuesday, March 07, 2006 12:42:00 PM  
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Tuesday, April 25, 2006 10:21:00 PM  

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