Making deals...

Yeah, yeah... we are in the worst economy of all time... since the last time.

One share for today. IndyMac is about to be bought up. That is correct, somebody is going to buy that bum of a bank.

Paulson & Company, led by John Paulson, has been one of the biggest winners in the subprime mortgage crisis, having reaped billions of dollars by betting against risky home loans. Paulson recently indicated to investors in his hedge funds that he was prepared to start buying up low-price debt like prime mortgages and investing in financial institutions.

Buying low, and probably selling high some day. The same as it ever was.

Soon, sometime, I bet we start seeing investors buying up low-priced property in the Kingman/Mohave County area. It is only one of our advantages in our region. Lots of money is sitting on the sideline... and we obviously have more to go to attract that money here. Supporting more infrastructure projects would likely make it happen sooner.

BHC Blog takes a look at Homes vs. Stocks...

My pal, Evan Fuchs of the Bullhead City Blog, has a nice post worth reading. Linked here.

Alternative proposal for bail out...

Folks... this subject is way over my head, but I have been following along. I'm not going to start a republican vs. democrat thing here (both crapped the bed it appears anyway).

I ran across a couple of links to a letter written to Representative Virginia Foxx of North Carolina from the head of Branch Banking & Trust Co., John Allison.

The first link is a letter that includes 'key points on "rescue" plan from a healthy banks perspective'. Read all three pages.

The second link is a follow up proposal for an alternative to the Bernanke/Paulson plan. Read the whole thing.

Just thought I'd share a different perspective than what I'm sure many of us are watching and reading in the media. The only thing I'm convinced of is that the national media covering this issue is clueless.

Here's some reading material

I yield to the BawldGuy on these financial outlooks and prospects, he certainly has more confidence since he's been around since the Hoover administration -- practically. I yield to others as well, but they don't have the same knack for entertaining me with their writing.

Here is the latest from our friend in San Diego (read the comments too)

Digging out??

I'm always trying my best to get a clear understanding as to what comes next as it relates to my business... the buying and selling of real estate. As I've stated before, this is my first 'go-round' as a professional in a down market. I really do not know what happens next but I am making efforts using real time data (in our local market) and relying on the experience and expertise of other folks that I have come to know and respect... others that have been around the block before and are in better positions to know what to look for.

Of course, now that we have access to the Internet any one of us can spend some time looking for the latest news about what others are preparing to do on a more macro level.

Today I find this article linked here about Goldman Sachs preparing to purchase gobs and gobs worth of private-equity investments.

A few points from the article below...

While the mainstream media reminisces about the heady days of the private equity bubble with all the fondness of a first-date discussion of past romances, Goldman Sachs is betting big that the unwanted, unloved deals of the past few years are still valuable.

...

This -- and the fact that Goldman has more money lined up for similar investments -- signals that the smartest investment bank in the world is bullish on the prospects of many of the recent buyouts, and is taking advantage of sellers willing to unload the illiquid equity stakes at a discount. That's bad news for the sellers but good news for the market: in spite of the aggressive leverage used and the market's downturn, the equity is still worth buying. The aftermath of the private equity boom appears to be playing out with a resounding "plink" rather than the crash that many had forecast.

Also this...

Further evidence of how relatively well the aftermath of the LBO boom is playing out comes from the recently filed quarterly earnings of Century 21/Coldwell Banker parent Realogy. Taken private at the height of the private equity and real estate booms, this highly-leveraged deal would seem to be a great candidate for a blow-up. For now that doesn't appear to be the case. The company reported EBITDA of $161 million and a net loss of $27 million -- nothing to brag about but, given the size of the company, not a total disaster either, given that this is the toughest real estate market in recent memory.

So do I know what all this exactly means?? Nope but I find some of the wording somewhat positive. I know that at this point that I've basically fallen for all the 'doom and gloom' hype. All bad news all the time sort of takes its toll on me as it has for many others. Yet like I said at the top, I am learning as best as I can during this downturn. You see, I fully expect that real estate markets will one day, some day, bounce back and 'normalize' again and the cycle will begin anew.

Maybe the cycle won't have the record highs and the record lows the next time, and hopefully the future rise and fall won't be nearly as dramatic... but as one person worthy of my respect always says... my crystal ball is as cracked as anyone else's. I realize there is nothing I can do to affect the cycle on a macro level... all I can do is better prepare myself and my business in the future to be better able to serve my clients in the best possible manner.

So is what Goldman Sachs planning to do going to help 'dig out' the real estate market??

I've had a few interesting discussions with some folks that have tried their best to explain to me what may be happening right now at this moment... and how it may help to, at the very least, stabilize the market. Now don't take that as meaning that folks are going to move money around just to save any market... nope... investors are going to make opportunities for themselves (i.e. put large sums of money in their pockets) and it may lead to stabilization of said real estate markets.

Here goes my best explanation... anyone that feels the need to correct my line of thinking or add to it in any way is welcome to in the comments. I'm not an expert on this stuff (and I don't even pretend to play one on TV).

Investors will be looking to purchase portfolio's of non-performing loans from current holders of paper that qualifies as such, and do so for pennies on the dollar (let's say 25%). This will be done in huge volumes of dollars with thousands of non-performing loans in the mix. Keep in mind that the original holders of the loans have probably already written down the loans and taken huge losses (somebody has to bleed).

Now the new holders of the loans will contact the non-performing borrowers and inform them that they can inquire to get a new loan on their home for perhaps half the amount that they owe on the original purchase. Example... a buyer bought a home for $200k in 2006 using a crazy toxic loan program and now rates are resetting putting the borrower in jeopardy of foreclosure. The new loan holder is telling the borrower that if the borrower can get a loan for say $100k on a refinance that the borrower is good to go. Hopefully with a new mortgage that is affordable to them and life can go on.

Keep in mind that the new loan holder bought that $200k loan for $50k and is willing to now sell that $200k loan for $100k. If the borrower manages to get a new refinanced loan for $100k, the new loan holder (who will no longer hold the note if the property is refinanced at $100k) will come out with a $50k gross profit.

The home buyer in 2006 that is facing foreclosure might find themselves in a position to keep the home at a more affordable rate, less foreclosures take place, prices still ease as time goes along, but markets begin to stabilize as a result.

While the home purchased in 2006 probably doesn't appraise for the price in 2008, it likely will appraise for half the original purchase (probably higher than that amount actually). This means that lenders will be able to lend... maybe this leads to sellers will be able to sell... buyers will be able to buy (once a bottom is established in the local market buyers would probably be more likely to buy in greater numbers).

That was probably a overly simplistic explanation... I'm sure I left out technicalities. I wanted to share though because I'm finding those conversations very interesting (even if I don't fully understand all the technicalities). Could this actually be a plausible scenario that leads to market stabilization??

Foreclosures affecting rental tenants...

Sometimes I post information about the rental market since I have the best source of information on the subject in the office directly next to mine.

Linked here, you'll find an article that speaks to what is happening locally with some investment property/rentals and the tenants that are living in those homes. I said some, not all. In fact I doubt anyone is sure how deep the problem may be or may end up being.

Also notice that the lovely, gracious, and uber talented Helena (property management extraordinaire) is featured in the local article. (She also happens to be that best source of information about the rental market in Kingman... in my opinion).

From the article...

Helena Baughman is a property manager and Realtor with RE/MAX Preferred Professionals in Kingman.

She said that while it's not a common occurrence for renters to be evicted because their landlords can't pay the bills, it has been happening here, as well as across the nation.

"It is rare, but it only has to happen once or twice for it to be just overwhelming," Baughman said. "Unfortunate as it is, we do have investors, the majority of them out of state. Most own more than one property, and so it's a ripple-down effect."

Baughman said that while a number of factors contribute to landlord foreclosures, the primary culprits are the adjustable-rate mortgages many took out on their investment properties when they initially bought them.

"The big factor was, with a lot of these loans, they were reset," she said. "In essence, the landlord if you will, their payment may have gone from $800 a month to $1300 a month. Rents came down, owners' payments came up - some of them were exorbitant."

Be sure to read the whole article.

Thinking about real estate investing??

If you are, you may be like me and wonder where to get some advice. There are always many sources or 'investment guru' types willing to charge you some hard earned to hear what they have to say.

I ran across this link recently and thought it'd be good for anyone who is thinking of relying on a 'guru' of their own. The list is very long and has praise and criticism for the players out there that you may or may not have heard about. Even Donald Trump is critiqued.

Quite a read.

News about local rentals...

This morning, the ever so lovely property manager extraordinaire here at RE/MAX Preferred Professionals and I had a conversation about the state of the rental market in Kingman.

The discussion wasn't pretty.

The property management here does complete credit and criminal background checks on applicants that wish to rent properties represented by this firm. There is a noticeable change in the applicants.

Helena (the property manager extraordinaire), estimates that one in every five applicants has a felony criminal record including such crimes as theft and drug use. Checks are also made for sexual predators and the like and they too are submitting applications. The noticeable change probably started about nine months ago and before then applicants with a criminal history might have made up one in about twenty or more.

Around the time frame of nine months ago, Kingman probably saw the pinnacle for single family homes that were available for rent (it hasn't changed much either). As a result we have seen owners of rentals fiercely compete for live bodies to place as tenants, monthly rents have dropped. To sweeten the deal many times the first month rent is offered for free. The available rental list is still large in comparison to where it was last year and certainly in years past.

Yes the price of a home since early this decade has boomed upwards spurred on by demand stemming from easy financing and low interest rates. Another large factor in the rise of property value was demand from the investor sector who intended to purchase property to offer as rentals.

There are not many typical high density apartment complexes in Kingman. Because of that, a good portion of single family homes have been available as rentals. That good portion exploded upwards in the last few years especially.

It is less expensive to rent on a monthly basis than it is to purchase a home at today's home prices. There are still advantages to owning over renting but so often these days people make decisions based on monthly cost... and renting sure is a lower monthly cost.

So here we are. Who are we attracting to the community??

Mohave County is actively looking to place another prison in our backyard near the what once was sold to the community as a low security level DUI prison that actually turned into something more on the lines of a maximum security prison. The convicts there are not your typical 'one too many' drivers to say the least. They are hardened criminals from metropolitan areas in Phoenix.

Kingman also hosts the Mohave County lockup for criminals from Bullhead City and Lake Havasu (as well as Kingman). Where do you think the criminals are released?? Yep right here near Kingman. Where do they look for a cheap roof over their head?? Yep right here in Kingman, and there is plenty of very nice single family homes to choose from.

I normally have to be careful when talking about 'people' because of my status as a Realtor, but I am a concerned citizen that is running for city office in the next election. I do want 'people' moving to Kingman, but we must make every effort to attract something other than what we have been attracting.

Sometimes we are the product of the market and it is very difficult to control a market. Markets have a mind of their own based on the minds of buyers and sellers, but in the end markets are never wrong.

I cover the sales market in Kingman right here on this blog. It is easy for me to do so because I have access to pretty dog gone good data. For the rental market I don't have the access to the same kind of hard data. I simply have a list of available properties, and I've been shown enough scary rental applications to know that Kingman is not attracting an ownership society at this time.

Another market that has a higher degree of difficulty for me to follow on is the coming foreclosure market. We know foreclosures are in the news and we've been told that Mohave County has the highest percentage of pre-foreclosures compared to all other counties in the USA. It really shouldn't be a surprise though, Arizona's foreclosure laws allow for an easy out in most cases to property owners. From this...

A note regarding Deficiency Suits: A lender may not bring a deficiency suit against a person who lost a property that is 2.5 acres or less at a foreclosure, provided the property was a single one-family or a single two-family dwelling. This is so even if the high bid at foreclosure was less that the balance due on the loan.

The real risk on the property owner is their credit the way I read the source I linked to. I am beginning to see what may start to happen. We may start to see secondary property owners simply walk away from their rental investment properties. Current rents are very low and I doubt that most even cover the mortgage payment. Add in the other expenses that a property owner is liable for (repairs, taxes, etc.) and many such property owners could be very upside-down on things. It wouldn't make sense for these owners to sell the property because they would be bringing money to the closing table.

If this does indeed start to pan out this way, it is doubtful in the current sales market that the banks would find takers at trustee sales in the foreclosure process. This means the banks themselves will have to sell the property in a Real Estate Owned (REO) sale. It is also likely that the banks will offer the properties for much less than current sales prices (not asking prices). This will have effects on the real estate sales market, the market prices will be reset by this.

Like I said, none too much sounds all that great does it??

The key will be who the buyers are for those REO properties. I believe that the buyer needs to be primary residents, not simply a churn of investors with intentions of rentals. What can Kingman and the community do to attract interest for primary residents??

I have my ideas and visions on this, and since I have declared my intention to seek city office I will be sharing them in the coming days and weeks. I'm always looking for suggestions though so feel free to join the discussion. Lets collaborate and make this community attractive to the owners, the folks who will take ownership of the community, the folks who will be great neighbors.

We can do this.

Happy belated birthday to Jeff Brown's blog

One of the classiest bloggers ever had his blog's first birthday on this last Wednesday and I missed it completely.

I missed it even though this was the same gentleman that invited me to San Diego last weekend to catch a major league baseball game featuring my beloved Philadelphia Phillies.

I missed it even though he has shown an interest in this blog and the local political issues that continue, and has even tried to convince me to be the next mayor around these parts.

Please do me a favor... click here... and wish his blog a happy birthday... even though it is belated.

Jeff Brown is the BawldGuy Talking.

Local lenders take note, Jeff is not the normal Realtor. He helps his clients reach a healthy and wealthy retirement through the use of real estate investments. Read his blog first and it will help you get an understanding. Be sure to call him if you have investor clients, he will increase your business.

Annual Sales Report (2006)

Gee, I'm finally getting to this in the second week of the second month of 2007. I have a series of three charts that I'm going to share with you with comments on each.

First the disclaimer...

Disclaimer... all data compiled for this report comes from the WARDEX Data Exchange and does not include any sales activity from outside that resource. All research is done only on single family homes and there is no inclusion of modular homes, commercial properties, or vacant land. The geographical area researched includes; all areas within the boundaries of the city of Kingman, north Kingman, the Hualapai Mountain area, and the Valle Vista subdivisions. Click here to see maps of the included area's.

As you will see below, a lesser number of SFR's sold in my research area than in the previous two years... yet sellers still managed to squeeze out a better average sale than in those years. The gain slowed somewhat but I was still surprised at the final number.

Here are the average sales price figures for the last three years...


As you can see the average sales price jumped up 17.4% from the previous year. If you compare the average value in 2004 to 2006 you will see a 52.6% gain. Wow...

Here is a look at the units sold...




Whoopsie... we lost 32% of the buyers we had in 2005 over the course of 2006. Gone are the great many of investor class buyers that we saw in 2004 and 2005. Gone also are the ultra liberal lending practices and the record low interest rates. Unfortunately I think the local buyers are now feeling the price pressure enough to stay out of the buying market until either prices start to come down to their level or until they can earn more money to afford a home at these prices.

Plenty of new residents move into the area all the time, but not enough to equal the kind of pressure on the market that we saw during the hot sellers market of 2004 and 2005. Clearly this is a buyers market and seller must do more to attract whatever buyers there may be out there lurking to buy a home. It is almost a broken record at this point since I've been saying much of the same things in my monthly sales reports.

Here is a look at the total dollar volume comparison...


In 2006 the total dollar volume dropped approximately 20% from the year before. I can confidently say that there are more SFR's in my research area today than there were in previous years because of many newly constructed homes. There are simply less sales and I believe that the current price point is the main culprit.

Storm clouds on the horizon unless some improvements are made to infrastructure around these parts. Making Kingman a convenient community would certainly help weather this storm that I am thinking of. I believe that people would rather pass on a home in a certain area of town because of the time it takes today to get to and from the neighborhood they would like to live in. This is one reason I believe the Kingman Crossing Interchange is vital to this community. It would open up different areas that would lead to more demand for property because of convenience.

Right now there aren't that many places in Kingman where someone would say, "I have to live there," where ever there is. We are not giving buyers an incentive to make a move on property and homes, so the buyers are responding by either not buying or settling on the lowest possible price. Settling on low prices or not buying bodes ill on a growing community like Kingman.

I don't like to make predictions but if I was pressed on a guess, if prices continue to go up less homes will sell. And if there are no real improvements made by the city then values will drop.

I'd prefer to see values hold steady and the sold units in 2007 gain on the 2005 number.

See you next year!!

December Sales Report (2006)

Hard to believe that this is the last installment of the sales reports for the 2006 year. Where did the time actually go??

Disclaimer... all data compiled for this report comes from the WARDEX Data Exchange and does not include any sales activity from outside that resource. All research is done only on single family homes and there is no inclusion of modular homes, commercial properties, or vacant land. The geographical area researched includes; all areas within the boundaries of the city of Kingman, north Kingman, the Hualapai Mountain area, and the Valle Vista subdivisions. Click here to see maps of the included area's.

Unit sales were steady in December and I was surprised to see the numbers actually. I thought we might end up in the same place we were in October. Somehow, even with the holidays, 64 single family homes sold in December. The other bright spot I noticed was the average days on market (DOM) for these sales was down to 57 days. Earlier in the year the average DOM had been as high as 147 days.

Click on graph for larger image



The average sales price dropped slightly again but remained over $200,000. The average has been fairly steady all year long, dropping below $220K only once over the last 12 months. There still hasn't been a single family home on the Data Exchange that has sold for more than $400,000 since October though. It appears buyers are buying what they can afford and sellers are lowering prices to meet that point. The clear trend is that listing prices are coming down, while the average price sold is flat.

Click on graph for larger image



Unit sales compared to the years 2004 and 2005 are not nice. Again, I don't have a way to get the records for 2003, but my gut says that 2006 was better for sales in this area than 2003 was. So this year wasn't a record, but sometimes you have to be pleased with a bronze medal (if I was an Olympian I would be).

Click on graph for larger image



December 2006 had a lower sales average than did the month of December in 2005. It was close though. The boom, no the record boom in rising property values is clearly over... for now at least. The hope is that the market can recover and somehow it finds a healthy balance.

Click on graph for larger image



I wouldn't be surprised to see some of these price numbers ease downward a bit into 2007. The key number is the unit sales in my opinion. While it was slower this year than in the previous 2 years, the area continues to grow. New neighbors move into the area every day. The hope is that these new neighbors find reasonable prices on homes that they can afford.

Stay tuned all through 2007 to find out. Also, I still plan on rolling out a year end report in the days ahead so please check back for that.

Now it's time to head for the gym to get in a good workout before the Philadelphia Eagles play in their playoff game tonight. I'm extremely nervous as my team takes on a tough New Orleans Saints team that has most of this country pulling on it's heart-strings with all that has happened to that region. I visited NO in November of last year. I love the people of NO and wish them the best... not so much for their football team though... at least not tonight.

E-A-G-L-E-S.... EAGLES!!

October listing numbers report (2006)

Today is the first day of the new month and as usual I am offering this listings report like I have for some months now. One big change has affected my ability to reproduce this report in the detail I have over the last few months... that change has been documented on this blog a few times. Yes I'm talking about our new data base conversion that we just went through last week.

The only major change that I am facing is that I won't be able to give reports with separate information on new construction homes and existing homes. See there is a toggle box that is not mandatory on the new system that asks if the home is new construction or not. I'm hoping to make this a mandatory category that other agents need to enter the correct information. But for now I'll just give the overall numbers and not separate new construction from existing homes until the data clears up.

So on to the report...

Listings:

Today total listings available for single family residence equals 703 (down from 757 in October).

There were 109 new listings for the month of September (110 in September). 1 home has entered contract and zero homes have closed. The average asking price for these new listings is $236,055 (that's up from $2225,539 last month). The median asking price is $192,000 (up barely from $191,750 in September). Very similar numbers from last month with the exception of the increase in the average asking price.

Units under contract:

48 homes entered into contracts in the month of October (up from 37 in September). The average asking price for homes that received contracts was $205,523 (down from $216,683 last month) and the median asking price for July was $194,900 (similar to last months $195,975 figure).

Conclusions:

Well, it is nice to see us eating into the total listings available for the last few months, at this rate we will be in the 600's next month. The fact that more homes entered contract in October is also a good sign. I have noticed more activity on the home sales front in recent times, still it is normally a slow part of the year for us and I'm not expecting huge increases in sales volume later this month when I do my sales reports.

Also without being able to split new construction from existing homes it has made this report rather short than in months past but I'm upset about it because I have been tracking that kind of data all throughout this year and now suddenly I won't be able to. I'm guessing that will change as we tweak the new system moving forward.

As I have told many other agents (and even the newbies at orientation yesterday), feel free to use this data as you see fit as we still do not have an official source from the Association or the new Data Exchange (WARDEX).

Yeah... no duh!!

MOST U.S. HOME MARKETS are in bear mode as anxious sellers growl and buyers are scarce. All of the leading indicators now painfully confirm that.

To all the existing indexes, I'd like to add one more: The Donald Trump Index. This is mostly a psychological measure based on the popularity and price of real-estate-oriented "wealth-building" seminars headlined by the property mogul and TV star.

Last year, when the home market peaked, the Real Estate Wealth Expo, featuring Trump and 70 other money mavens such as Suze Orman, charged as much as $499 per person and attracted more than 60,000 participants, according to the Learning Annex, the New York City-based education company that sponsors the shows.

Recent ads for the event offered a price as low as $99 for similar seminars that are scheduled in cities such as New York, Chicago, Boston, Los Angeles and Toronto. Is there any connection between the 80 percent drop in the Trump Index and the measurable decline in the market?

Everything is plenty peachy when the market is on the way up, even the profit margins. Read the rest here.

Baby Boomers and real estate

Came across this report this morning.

Boomers not only believe strongly in accumulating real estate, they intend to keep doing so even as they head toward the traditional retirement years. An extraordinary 1 out of 4 boomers between the ages of 50 and 60 consider it very likely or somewhat likely that they will purchase some form of additional real estate within the next 12 months.

And a fine time it may very well be for those buyers.

The rental market...

I was reading this article at the Matrix blog (not to be confused with our recent 'Matrix' land split program that was defeated) about rents going up. Keep in mind when you read it that Mr. Miller is in New York City which is vastly different than my own little market.

I spoke with our Property Manager, the lovely Helena Baughman (I have to write a blog about her someday), about the local rental market. The news is not good.

There is thought to be about 300 rentals available right now in this area, sitting vacant and waiting for new tenants. Couple that with the over 700 listings on the market for sale and it is a touch scary (just in time for Halloween).

Helena tells me that many of the tenants were in the construction business and since the layoffs have begun the tenants are moving on to where there are some jobs. Kingman's recent success was in very very large part due to the money generated by construction. The new Wal-Mart distribution center is suddenly on hold (and could end up being scrapped). That was one ticket this area had for more jobs AND for more people moving to the area. In fact many other business opportunities are likely on hold as well because of the Wal-Mart delay.

Rents are very low right now, certainly lower than would be mortgage payments on a newly purchased home. Landlords are being very competitive for whatever would be tenants that might be out there. Rents are coming down. Last couple of years saw plenty of investors buying up SFR's to put on the rental market and that has led to an oversupply.

September listing numbers report (2006)

Extra! Extra! Read all about it! Listing units are down significantly in September!

It's almost like someone is listening... for a change. There is some good news but before we get too excited, there is some not so good news as well. We'll leave that for a bit.

Listings:

Today total listings available for single family residence equals 757 (down from 785 in August). 290 are new construction homes and 467 are existing homes on the market.

There were 110 new listings for the month of September (168 in August). 1 home has already closed and 7 have entered contracts. The average asking price for these new listings is $225,539 (thats down from $266,750 last month). The median asking price is $191,750 (way down from $229,900 in August). It's great to see less number of units hitting the market and it's even better that they enter the market at a much more reasonable number. This is the lowest entering average price this year.

31 new construction homes listed (average asking price of $204,662, median asking price $195,001). Zero of these have closed this month and 2 have entered into contract.

79 existing homes listed (average asking price $233,720, median asking price $190,750). 1 of these has already closed and 5 more have entered contract.

Units under contract:

37 homes entered into contracts in the month of August (down from 59 in August). The average asking price for homes that received contracts was $216,683 (up from $227,619 in August) and the median asking price for July was $195,975 (up from $225,000 in August).

16 new construction homes entered into contract (average asking price $235,438, median asking price $209,950). These price numbers come back down to earth a bit as I did review the reasons to why the average and median prices for this category were so high last month. I've yet to see the final sales prices recorded on those new construction homes that made a large difference to the subset of numbers from last month. Look for that in the sales report in a couple of weeks.

21 existing homes entered into contract (average asking price $198,738, median asking price $185,000). The average and median prices are flucuating a bit here but are within an expected range.

The downside is there are less units that entered into contract than I expected. It seems the market is adjusting down to meet the buyers expectations yet the buyers still seem to be on hold (however we must remember that the usual best time for sales of homes has ended already and it is typical for less activity at this time). The silver lining may be the fact that there are less sellers entering the market overall, but more are entering at a better offering price ready to play ball and sell their property. If this is the start of a trend I think we'll see market balance around the corner. Good news for both buyers and sellers and hopefully it pans out that way.

I'm optimistic with the listing report and neutral on the homes under contract report. I have a feeling that sales will be down for August as compared to July but I won't know that until I do the report (and as always I need to wait for the data to settle on the MLS before I produce that report). If sellers really want to sell then they are heading in the right direction as far as I can see. Even the builders have reduced prices and I think that we all know that new construction sets the price for the market.

We'll still need to absorb the excess inventory and that could still take many months to accomplish, so buyers will still have the upper hand in negotitations well into 2007. Though I should say that while I'm not an economist, I play one on my blog (and it's plenty fun).

A house is a home, not an investment...

I've been saying this. Here's another that is saying the same thing.

(hat tip to Jonathan Miller of Matrix for the link)