There are over a dozen comments on it already, and what really pleased me is Hal O' Boyle, husband of Sally O' Boyle, wrote a response in Key West the Newspaper also. (Click here to read Hal's online version in KWTN. Hal's piece is titled "Free OFMP, Get Yours Now")
Anyway, I finally have a name for what I called "The Sally O' Boyle" Method. This is the way to quickly develop interested buyers to call you about a property you are trying to sell. Hal calls it a "Fast Dutch Auction" and he gave props to local Real Estate muse, Curtis H. Wild, who drummed a great maxim into both Hal's and Sally's heads when they were learning Real Estate. That saying is,
"There is a price at which
that house will sell today"
Is there ever! And as Hal aptly explains in his column, "...that price, by definition, is the market price."Hal is talking about a price that is not artificially propped up by appraiser fraud, loan fraud, government fraud, NAR manipulation of the MLS, government offices reporting "false data",etc.
The real market will tell all sellers who are still in denial what buyers will bear in these times of double digit unemployment, mushrooming foreclosures, tighter lending, new appraiser rules, growing "stealth inventory" on insolvent banks books, and so on.
The market does not lie. Government statistics lie. The NAR lies. Vested interests in the FIRE Economy lie. All this fraudulent interference artificially props up markets, but the market always wins out over time because of the moral hazards introduced and the unintended consequences of those moral hazards restore equilibrium by chopping off more heads the next go round of bubbles.
To get back to sanity, people are saving more than ever in the past decade and they are beginning to actually live below their means. And credit is tight right now, real tight, and it's going to get tighter. (I'll explain why credit from lenders is about to evaporate for many banks and how it's going to further affect housing later this coming weekend.)
That said, Hal (and I infer his wife Sally thinks the same way) and I and many an observer of Key West and Florida Keys Real Estate believe the "bottom" is not here.
If A Bottom Were Here, Would We Not Be Seeing A Rise On Most Price Changes For Real Estate?
Let me give you a stat right off the top of my Excel spreadsheet, and this is an eye-opening stat which is growing daily to the minus side, or devaluation side:Out of 160 price changes on Lower Keys properties since the first week of June when I started my Excel Spreadsheet, only 3 of them were increases in price from the original listing price. The other 157 Price Changes were decreases in price from the original listing price!
And then there is all this "stealth inventory" on developers's and banks's books still being carried at "mark to fantasy" pricing which isn't factored into the hidden deleveraging by the high rollers. Nor does this stealth inventory show on the MLS. Yet every once in a while, a developer of lender has to offload one unit at what they consider and insane price, but a price which is really closer to what the market will bear at this time.
(There's a developer out here with a row of ultra-expensive condos which have not been lived in since 2005 when they were built. A friend of mine told me the developer recently filed for Chapter 11. His plan to come out of bankruptcy was to sell one of these units at a time at a devalued price and then take the money from the sale to keep current on his taxes, insurance, and carrying costs. The judge threw the filing out of the court telling the developer, "That ain't no plan. You're simply living on hope. File for Chapter 7." My bet is these condos will eventually auction off for less than what they cost the developer to build.)
When you got everybody in the FIRE Economy and the US Government using every trick in the book to keep prices artificially propped up, while Price Change after Price Change shows "lowering" of prices from the "listing price", well, you can say with assurance, housing has not bottomed in the Keys.
More proof that sellers are now in the panic mode
As Hal points out, I am noticing more people using the "Fast Dutch Auction" method just by observing my own Excel spreadsheet which is now 2 months old. (I haven't missed a day in two months of painstakingly typing in all the data.) The picture developing from my data not shared with buyers by the local NAR is getting oh so sharp and clear. And what I see is direct manipulation of the data by FIRE Economy teat suckers wanting to reinflate the Bubble.
You think the powers who control MLS data would list every price change of every house for "browsers" on all their online MLS search data bases? Dream on. Hell no, these are the same "advisors" who flogged people to buy homes during the maniacal buying panic of the last three years of the Housing Bubble. These people are trying to save some face. Another bad down year in Real Estate and we'll halve the Realtor Corps again in the Keys. The local NAR can't have that.
That's why I started my own Excel spreadsheet: to help citizens understand why housing is still too expensive and non-affordable. And by showing incremental price changes and the amount of price changes, tire kicking buyers can get the idea it makes way more sense to rent now and save money. I want to help people stay out a market which has not fully let out all its excess.
I'm not saying there aren't any deals out there. I am saying, however, the market for more than 95% of properties has a long way to go before reaching bottom
That said, I found one new Fast Dutch Auction type of deal today. I'll post about it next week.What I want to do now is revisit the first of my examples from my post a few days ago. The exact words will be highlighted in violet. And then I'll add this week's price change:
Here are the original words I wrote for this Santa Clara condo unit . . .
Example 1
In our first example, a condo seller has been dropping his/her price by $5,000 every week. Here's the scoop:
MLS #111141
This is a 2 Br/1 Ba Santa Clara unit.
Listed 1st week of July, 2009 for $179,000
Price Change 7/9/09: $174,000
Price Change 7/15/09: $169,000
Price Change 7/21/09: $164,000
Price Change 7/27/09: $159,000
And by the way, the owner of this reverse auction unit paid $162,500 for it on 5/1/02 . . . so the seller is trying to sell at a lower price than what they paid for it seven years ago. We'll keep our eye on this one and see if it falls another $5,000 next week.
I printed all that just a few days ago on 28 July 09.
Here's the latest update, and as you can see, the seller did not even wait six days this time to make his/her next Price Change. Now the change has come only three days later:
Price Change 7/30/09: $154,000
This is a prime example of the O'Boyle's "Fast Dutch Auction". And trust me, I'm seeing this type of selling develop with high end stuff in the millions of dollars right here and now, not just low priced condos.
I see no bottom at this time. I don't forsee it next year. We're going to a place we've never been before in Real Estate, except for maybe the Florida Real Estate Crash of 1928. If you think prices can go no lower, take a chill pill. What's the rush to buy when 157 reductions are showing in the past two months with only 3 higher price changes in that same time. Oh by the way, 2 of those 3 price increases were for brand new "Affordable Housing" up on Stock Island. I kid you not.
Is this the crazy world of Arthur Brown ("Fire") or what?
Caveat Emptor,
Rock
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