An Open Response to a Whiny Email Writer: 13 Reasons Why . . . Off the Top of My Head . . . There Is a Downturn in Key West Tourism and Housing

" If you and other crybabies would quit complaining about Key West tourism and housing, then maybe this town would get back to what it was a few years ago."

And that was just the warm up first sentence of a nasty email I received from a local reader of this blog.

Being an opinionated person who thinks for himself, it never ceases to amaze me how many"adults" love to blame me for their crowd mentality decisions to buy real estate or business at market highs.

The person in the above email was blaming me and others like me (I am guessing bloggers such as Cayo Dave and Sally O' Boyle) for his badly timed purchase of a Key West business suffering declining numbers.

I wrote back to this person that I did not know who he was in real life, nor do I ever remember wrestling a prospective Key West business buyer to the ground and forcing them to sign a piece of paper requiring them to buy a business . . . or home . . . at a market top.

I've been asking this question a lot lately: "Where are the adults out there?"

When I lost a good deal of money in the stock market at the turn of this Century, I examined my losses in minute detail. I blamed myself for not having taught myself value investing at a much earlier juncture in my earliest years of purchasing stocks. Instead of learning the true value of a company, I simply listened to unabashed cheerleading of stocks by analysts who . . . unknown to me . . . had interests in "pumping and dumping" those same stocks to sell at a top.

For instance, back in the go go days of the dot.com craze, buy side analysts, i.e., cheerleaders of stocks who were making these incredible calls for "Amazon to go to $600" or "Qualcomm target of $1000", were usually from the same investment bank which had issued shares of the companies in which they were making such outlandish calls. There was no "Chinese Wall" between analysts and their investment banker brethern all in the same bank. Hence, the inbred and vested interests of all in the same bank were put above those interest of small investors such as myself.

Had I listened to Warren Buffet, Anotn Van Den Berg, Sir John Templeton, or any other of the great value investors of the 20th Century, who were warning in 1999 about the insane pricing of Nasdaq stocks and what would surely befall investors who believed they hype, I would probably have a million dollars in my trading accounts today.

The dot.com Bust was my expensive education in "following the herd" and listening to sharpies with "vested" interests in keeping a Ponzi Scheme alive where the "Greater Fool" is the next buyer of the overvalued asset in question.

How am I responsible for your stupidity?

If you, the writer of that nasty email to me, are reading this, I want to tell you what you need to do to cut your losses short: educate yourself and admit it is you, not I and others who are trying to help educate you, who is the baby.

I don't even know what kind of business you are in, yet if you were smart, you'd go to town learning how to market your services or wares better than you are doing now.

As it is, the bar where I work has just expanded our size in a major down market. And we are kicking ass in the biggest block of Duval by paying attention to details our competitors give no thought to.

Our hard earned "winners" knowledge has come at the expense of taking notes, experimenting, using the Scientific Method and Scientific Advertising to crush our competitors. You can apply these same methods to whatever business you might be in.

Okay, I'll give you one secret: use headlines in all your advertising . . . and test those headlines over and over to see which work best.

As the DJ in our business, I use "spoken headlines" which I've tested over the years to make our customers laugh, think, and then try out new features in our club, or come back 2 or 3 times a night.

Every winning headline is something I've documented by asking customers and my co-workers, "Are you back because of A or B?" "Did your client come back because of A or B?" "Am I repeating this headline too many times in a night?" "Am I not saying that headline enough?"

Many times, locals will come in and chat for a second or two and tell me, "Yeah __________ Bar is already closed . . . ." and here my bar, in the same business, is kicking ass with 130 people inside at 2:00 AM.

The competitor just down the block has no cover charge, beers are $2.00 cheaper than our place, and still, I keep hearing how they are going to kick our ass when they get their new addition open. In fact, the head carpenter on the property at this bar I'm telling you about recently told me how their new bar was going to "put us out of business." And then he went on complaining about how our drinks are overpriced, how he would never pay a cover to come in any bar in Key West, and so on and so forth.

And I thought, "Yep, YOU, may not want to come in our place, but tell that to the hundreds of people who visit us nightly and who are staying longer." The reason we charge our price (on the mainland stripclubs charge 4 times what we charge at the door, and many charge more for beer and drinks than we charge) is we offer a superior product which people feel no problem paying for once they've seen what we've got. Once you come into our club . . . especially if you visited our two competitors . . . you would gladly pay four times what we are charging at the door and more than what we are charging for drinks for now.

Put it like this: let's say you have a choice of visiting Sloppy Joe's tomorrow night to hear the best generic Classic Rock band on the island. Okay, they might charge you $3.00 cover. Meanwhile, let's say I've got a maximum occupancy of a club space down the block of 300. I hire this little band called the Rolling Stones who owe me a favor from the 60s. I charge $1,000 per ticket. I sell out and have people massing on the sidwalks in such big lots that the KWPD has to close off Duval Street while Sloppy's sits empty.

It's a case of getting your money's worth. Would I pay $1000 to see the Rolling Stones for four hours in an intimate bar setting? You bet I would. And millions more Boomers would do the same.

Hence, you get what you pay for. You can demand more for a superior product. In fact, I will go so far as to say our competitors are stupid in having cover charges only on weekends for the same entertainment you can see free on the other five nights of the week. We don't play no games at our place. We don't have "All You Can Drink - $10" or "Heiniken - $3.00 a bottle" nights or whatever. Why? We don't need to. We've got the best show in town with the best looking entertainers.

Our competitors in this town will never come close to matching our growing business until they learn the hard earned "secrets" of marketing our business correctly. The way they market stamps "Loser" all over their name.

I am telling you this because I not only know you can survive during down times, you can thrive too. I know this as my club is doing just this right now. If you want to succeed like us . . . or the successful mom and pop coffee stand owned by some hard working Mexicans I know and love . . . you simply have to go to school on your business and execute it better than any of your competitors. If you spen your energy whining about outside factors you cannot control, you will not be in busines much longer. Period.

I love competition

What I don't like is for expletive filled finger pointing email from an insecure business person claiming I and other chroniclers of Key West's current downturn in Housing and Tourism are the main reason for your suffering. That's so ludicrous that I laughed many times at your email and wondered how it is, yet again, that another Key West worker/business owner can't understand they are doing something wrong.

Look, I've worked with many good people in this town who got fired for disobeying rules and who made it hard on the good employees who always show up to work on time, sober, and who don't rely on drugs or alcohol to get through a night. Still, to hear it from these employees who were fired, or who quit and badmouthed our club and who now want to come back, you'd think their problems were caused by outside "bad people" who threw them under a bus somehow.

It's like you, you are blaming your bad business on bloggers and negative people from Key West.

If I knew who you were, I would bet I could walk into your place and see 101 things wrong which I would change immediately to improve business. I'll bet you are like 99% of all businessowners who don't even have a monthly, quarterly or even yearly personal message sent to your best customers.

And I'll bet you don't treat customers like clients. And I'll bet you don't know the difference between the word "customer" and "client".

As it is now, there are dozens of things in my successful nightclub which I would be doing differently. But I don't own my club. I can only make suggestions. But the difference between you, the writer of that ugly email, and my bosses of my club is that my bosses are risk takers who never stop innovating and experimenting with the way we do things. We do a little something differently every day.

Sometimes my bosses do something and I go, "What in hell are we doing that for?" And then their suggestion works in Spades and kicks up revenue and earnings another notch. And I learn from their successes as well as their disappointments.

On the other hand, sometimes I or a manager will over-ride one of the bosses decisions which doesn't work, and our change in format, lighting, position of tables, whatever, works better than the initial decsion our bosses made. My bosses don't fight us. They don't feel like we've slighted them.

From my end, I never, ever quit experimenting with spoken headlines pushing our benefits of our club and the whole entertainment complex. What I make look or hear simple, took many years of experimenting in seeing what worked. I also keep our music fresher than any club in town . . . and this includes the dance club down the block, the big bar which hires bands and has a DJ on break, the new hip hop club down by Mallory Square, and all the gay clubs in town.

My next new idea for music is to have cards printed up with our business logo and the words, "Artist" and "Title" printed on the face of the card with a "Thanks for dropping by, DJ Rock" printed at the bottom with my signature in blue. Now this may seem like a small thing to those of you who have never deejayed, but let me tell you, since we've opened up the new addition of our club a few weeks ago with the best sounding PA in Key West and a deejay booth which is more accessible to the public . . . our numbers of clients who come to me to ask the names of songs has skyrocketed. If I as a DJ can take a 60 year old man and turn him onto a new "Gabriel and Dresden" trance fan, I know I am excelling as a DJ. If I can write that on an officially pre-printed card, it tells clients that we are so cutting edge that we are constantly breaking the freshest music in town and going the extra step to provide them with the knowledge of this new music . . . no sweat to the DJ.

I am not the reason we are so successful in this market downturn.

A good business takes teamwork. I am but a cog in the machine. But our machine runs better than our competitors.

Most importanlty, we know what business we are in and how we can keep getting closer to perfection in the selection of our Number One asset . . . which I'm not going to discuss here.

But I am going to give you, the writer of the scathing email to me, another ace suggestion: you need to find your Unique Selling Proposition of your business. You need to push that top selling USP in all your advertising...

And you need to execute better at whatever it is you do.

Here are 13 reasons why off the top of my mind there are fewer tourists in Key West

Again, if you are the owner of the business who cried about your problems and blamed me and others for your downfall and the downfall in Key West housing and tourism, you need to educate yourself.

Here are just a few things you might want to think about:

1. Nationwide, this is shaping up to be the worst Housing bust since the Great Depression. No less an authority than Angelo Mozilo, ( and this blog's first Real Estate Weenie of the Week) CEO of Countrywide Financial, the nation's biggest lender for home loans, said last week this is the worst crash in new housing since the Great Depression.

CEO Angelo Mozilo of Countrywide Financial also said last week:

• The housing market will not "return" until 2009. (Note: In 2005, he said the bad Autumn figures were just a bump in the road and that housing would come back and take off again in 2006. In 2006 he said the worst of the "slump" was already factored in and housing would bottom by 2007. Now it's 2007 and the "Moz" is warning the "return" is not in 2008 but 2009. You see how his cheerleading has been revised time and again?)
• Alt-A borrowers with better credit than sub-Prime borrowers are "starting to miss payments at a higher rate". What the "Moz" did not mention is that Alt-A borrowers are now growing in default at a faster growth clip (percentage wise) than sup-Prime borrowers. (Famous economist Ed Yardeni called Mozilo's confession " the first piece of hard evidence that the subprime mess may be spreading.")

2. If you paid attention this past week, the Stock Markets in the USA all had 5% or greater losses for the week. For the summer, retailer and restaurant stocks have been particularly hammered.

This past Thursday was a big down day. The news which moved the markets downward that day was new home home sales fell 6.6% this past June and that the National median price of all homes has fallen 2.2%.

(Please pay attention to the Key West's NAR sponsored ad in today's Key West Citizen . . . which I will run out and purchase in an hour or so . . . as it will contain the ad with many bullets of lying "facts" to get you to buy Housing today and which they have been running for months without any corrections whatsoever . Among their "facts" is housing median prices are going to go up this year. Never mind the new reality of numbers coming out of the Fed and elsewhere.)

3. America's Gross Domestic Product, or GDP, has been kept alive by the almighty American Consumer who has maxed out credit cards. We are a nation of negative savers and Nationwide consumer debt is at an all time historical high.

4. America's GDP has been kept alive by consumers tapping into what seemed a few months ago was an inexhaustible Housing ATM. Now, however, with declining home prices, many consumers owe more money on their home loans than their houses are currently worth in a declining market of prices. They are "upside down" on their loans.

Realizing that EZ Credit, Liars Loans and Home Equity Loans are drying up, you will begin to understand another important reason for the disappearing tourist: You cannot borrow from your house by refinancing yet again if your $555,000 starter home is now only worth $400,000 on today's open market. There's just no way it's going to happen. Hence, the "wealth effect" is turning into a "poverty effect". And when Americans can't borrow more to live a lifestyle they are accustomed to, they cut back on expenses.

One of the first things to always go is that "expensive" vacation far from home. Instead of Key West, well, if they are in Virginia, they might do daytrips to the beaches up there, Busch Gardens, Kings Dominion, etc. Vacationing close to home is the new reality this summer. Just read USA Today.

5. Margin loans for stock purchases are at an all time high. The majority of this margin (as documented in Barrons Weekly last week) in this market has been used by big time funds and firms, not individuals such as myself. This is a reverse from the days of the NASDAQ wipeout in 2000. Back then, everyone you knew was margined to the hilt and we were all going to become millionaires because "it's different this time."

Why is this larger misuse of margin by Wall Street important to understand? Because Wall Street uses black box modeling to buy and sell stocks. Hence, future downturns are likely to be more dramatic than past volatility if a panic to sell ensues. Firms selling millions of shares of an issue their black box says to sell will play havoc with our markets, crushing stocks which are assigned to companies which use Crack Cocaine Accounting.

6. Leveraged hedge funds are using Great Depression type margin of 10 to 1 or 15 to 1 on their overexposure to deriviatives in stocks, bonds and especially mortgage backed securities. A few weeks ago, we saw the first pop in Hedge Funds when Bear Stearns saw two of its hedge funds become basically worthless as their over-leveraged bets on Mortgage Backed Securities dressed up as CDOs went wrong. If you were a big investor, say a doctor, lawyer, or CEO of a company, who bet millions of dollars by handing all of your investment money to either of these two Bear Stearns hedge funds, today, you have nothing.

7. Peak oil is a certainty. And more oil is becoming nationalized while 3 billion new Capitalists are helping demand outstrip supplies. I feel $100 a barrel oil is just around the corner.

Goldman Sachs recently said they feel $100 a barrel oil will happen in the next 2 years.

Matt Simmons, respected oil analyst and writer of "Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy" was quoted this week on Bloomberg TV saying he feels $200 a barrel oil is going to happen sooner than most analysts think. As oil prices continue to increase (we are only $1.00 and change away from another all time high) people see "vacation" drives or boat excursions as some of the first "expendables" when looking for ways to cut expenses from their housing budgets.

7. Boat repossessions in Florida are at an all time high. Inventory of used and new boats in marina yards are at an all time high. If you own a house, a car, and a boat, the first thing to cut loose is the boat when you are a strapped homeowner. Stocks for boat manufactureres are down 60 to 80% across the board. This is one durable goods sub-sector of the stock market which is actually in the crapper with homebuilder and lender stocks.

8. Last week a front page article in the Key West Citizen told of Scientists discovering raw sewage in the waters of our reefs. As documented on this blog and others by first hand observations, our reefs are dying quickly. Complaints are numerous on sightseeing snorkel trips to Sand Key and other nearby reefs which now look like moonrock instead of the heatlhy colorful coral which was flourishing and protecting many fish species just a short 15 years ago.

9. In 2004 and 2005 we had 8 hurricanes brush or directly hit the Keys. If you don't think foreigners and American tourists who lost deposits due to forced evacuations haven't traded stories on Internet travel sites, then you simply ignore one of the best "free" business research methods I know for any business anywhere. Find out what people are saying about our product or service. Go online.

10. Foreigners hate George W. Bush, and right now, America is the nation most feared on the planet thanks to an uncompromising, stupid, foreign policy directed by corporate policy. There has never been a time in my life where "The Ugly American" has been bigger in Foreigners minds. Thanks to Neo-Cons expending all the 9-11 good will the world sent our way, we no longer are a country where foreigners feel wanted, nor do they love us for our meddling in other countries.

11. As jobs get tighter in Construction due to the fall off in housing starts, you will hear more and more calls to boot immigrants out of the country. Indeed, without the immigrant workforce in Key West, whether illegal or legal, this town would fold as more businesses would not be able to find Americans who are willing to work for minimum wage or thereabouts.

11. Minimum wage increased, by law, from $5.15 to $5.85 just recently. This time next year, that will rise to $6.30 per hour. Two years from now, minumum wage will be $7.25. (Senator Ted Kennedy is calling for a minimum wage of $9.50 by 2009.)

This is the fastest rise in minium wage ever. And this will pressure inflation of prices on everything you buy at the store and if you own the store, from your suppliers. As minimum wage forces more cutbacks on businesses everywhere in the USA, unemployment will rise sure as the sun rises and sets every day. Get ready for massive layoffs and further rising prices.

12. The goverment has inflation clocking in at 3%, give or take a few percentage points. However, Austrian school economists see US inflation running at a current real rate of 8 to 10% at this time in history when oil and food stocks are seeing double digit gains in prices year over year for the past four to five years. Tell a local cab driver that "inflation is in check" (as the Fed would have you believe) after he or she has to fill up their gas tank at the end of every shift with Key West gas which costs 100% more than it did not even three years ago.

13. Lastly, fewer hotel rooms are on the market. And the new ones coming online will cost more to stay. Look at the Santa Maria condo/hotel. It is empty during the week. Its $400 a night rooms draw no buyers while a half-block away, rooms going for $150 at any of six smaller motels are busy. Although there are plenty of "vacancy" signs all over Key West . . . even during season this year . . . the hotel and motel rooms which are more reasonably priced were selling out during high season.

This week, the Key West Citizen ran a front page photo of the demolished Atlantic Shores with accompanying story of rooms which used to cost $175 during high season tells us the new prices of the new rooms will go for more than double.

Question: Do you think the owner of the Atlantic Shores is doing the right thing when he could simply look right across the street at those empty Santa Maria condos which aren't renting during the week?

A price wall has been hit. $300 to 400 a night in Key West is way too much. Tourists are voting with their wallets. A room is a room. You don't come down here to spend all your money on a room which sets you back 3 or 4 C notes a night. A room doesn't entertain you. It doesn't get you actively invloved with our beautiful outdoor surroundings. Who needs to overspend on a room when you can rent cheaper digs and use the savings to buy a four course meal at one of our 5 star restaurants, or pay for a couple of jet ski rentals for a few hours?

. . . and there are other factors I could quote to you, Mr. Whiner, the writer of the nasty email to me.

But I feel just these few facts I've stated to you will go right over your head. You strike me as the type who expects riches to come to you easily, as long as observers of failing economics will shut their mouths and not try to to warn others of the new reality. By blaming me, instead of market and ecological forces, for your downturn in business, you show an immaturity that sets you up to be fleeced by moneyed people who study markets, marketing, business and money.

All I can say is "educate yourself".

Smarten yourself up.

And always question authority.

Especially question those who look at you as their next commission check.

And don't believe a damn thing coming out of the mouths of our politicians . . . especially this dangerous bunch in power for the past 7 years. These guys have set you up . . . and tens of millions more hard working Americans . . . as their fall guys by using your ignorance against you.

Blame me all you want, but if you persist in your stupid prejudices and short sighted opinions, you will only continue to wipe out your wealth.

Be a man. Look yourself in the mirror. Admit your mistakes. I didn't bend your arm to buy your business in a declining tourist market with the worst Housing Crash since the Great Depression while oil and food prices are skyrocketing. I am not the cause of your pain. You are.

'Nuff said.

p.s. Buy any number of books from either Gary Halbert or Dan Kennedy on marketing. Put their smarts to work for you in your business. Quit blaming others for your immaturity and sloth.

A Simple Look at Key West MLS Data: "I Hear Housing in Cuba is Cheaper?"

"I Hear Housing is Cheaper in Cuba?"

Hello friends,

Just a very quick update on Key West by the numbers as scooped from today's MLS Listings . . .

But before plunging into the quick data look, I want to explain the reason I and other bloggers are focusing on housing is primarily one of self-interest. We don't wish to engage in Schadenfreude . . . except in the instances where arrogant developers are about to have their come-uppance.

If I could wave a wand and take away the pain from all co-workers, friends and acquaintances who bought Real Estate at a time I was trying to tell them . . . politely . . . that they would be sorry soon enough for their rushed purchases . . . I would certainly do it.

My reasons for following Real Estate so closely is this is a once in a lifetime wipe out of wealth. This is bigger than the Stock Market meltdown in 2000. Housing has been trumpeted . . . incorrectly . . . to be the one safe "investment" bet, the American Dream.

The Housing Crash is leading to a Crash in Credit Markets. The Crash in Credit Markets is leading to a Crash in Hedge Funds. Hedge Fund Crashes will lead into Crashes on Wall Street. Wall Streets woes will lead to pain on Main Street.

This is big.

This is history in the making.

We should pay close attention to what is happening right now so that we never repeat these mistakes again in our lifetimes.

The lessons you younger readers are about to learn here should be indelibly stamped upon your frontal lobes. This hard earned knowledge should be called upon anytime you have someone offering you outsized gains with promises of a lifetime of EZ riches all built on Crack Cocaine Accounting.

Smarten yourself up. Learn from this wipeout of wealth. Teach your children what you learn.

Better yet, struggle to keep your wits and good credit standings intact. Live below your means. Cut back on expenditures and save money.

Think like an businessman or businesswoman. All this pain will lead to once in a lifetime investments for those of us who are saving to buy assets for pennies on the dollar.

This is why I follow the Housing Crash so closely.

Everything happening today will affect our economy, our Country, our planet and our local lives. To live through this, we must sharpen our thinking and learn from our mistakes.

That said, here is the data which tells you how it is down in Key West as far as Housing goes.

I am not going to make any other comments. The data will speak for itself. Have a great evening. Get out there and enjoy your life.

History of the Past 14 days in Key West Real Estate Dealings as Shown by the Key West MLS

(July 12, 2007 through July 26, 2007)

Sales of Home or Condos: 0

New Listings Added to Inventory: 44

Price Reductions: 39

Price Increases: 0

Removed from Inventory: Don't know, but I will follow this from now on

Number of Houses for Sale in "Old Town": 268

Number of Condos for Sale in "Old Town": 244

Number of Houses for Sale in "New Town": 142

Number of Condos for Sale in "New Town": 175

Number of multi-Family Homes For Sale: 30

Number of Key West Duplexes For Sale: 36

Total of Key West Housing For Sale: 895

Parcels of Vacant Land for Sale: 146

Key West Commercial Property For Sale: 112

Key West Business Opportunities For Sale: 25

Guesthouses/Hotels for Sale: 19

Restaurants/Bars for Sale 19*

* In an earlier blog this week, I mentioned Croissant de France as a Restaurant not showing in the MLS. It is there now in the Restaurant/Bars sections of the MLS. It has an asking price of $5,950,000.

Disclosure: These numbers are subject to change if the caretakers of the MLS have done sloppy work. I have found several entries under incorrect headings. For instance, in the case of Bars/Restaurants For Sale, I count only 13, not 19 as stated. The other six listings are guesthouse or empty building properties with no restaurants or bars or licensing for such attached to them.

Lastly, this inventory is not all there is for sale. Again keep in mind what I pointed out in earlier post this week "Key West Bargain" about "hidden" inventory. (I list 6 reasons why MLS invenotry is not all there is for sale down here. Look under the subheading "There Has Never Been a Better Time to Buy a Key West Home!")

Scottsdale, Arizona Housing Inventory Up Like a Giant Sized Er . . .

I know some of you are thinking,

"Can I click on that picture to make that thing bigger?"

Scottsdale, Arizona Housing Inventory Up Like a Cialis Overdoser . . . or Somethin' Somethin'

Just browsing some online content when I came across a short piece in USA Today about Scottsdale, Arizona's inventory of unsold homes for sale.

This is the part which blew my mind:

Some sellers on Scottsdale's tony north side who have homes priced over $1 million are having to shave several hundred thousand dollars off their asking prices, but most are still selling in less than 40 days, says Karina Magana, an agent at Help-U-Sell Desert Vista Properties.

That's impressive, considering there's a record 45,175 single-family homes for sale in this bedroom community of Phoenix. When sales peaked in Scottsdale in March 2005, there were only about 2,900 homes on the market. "We've gone from an all-time low to an all-time high in supply," Deuitch says.

Still, the sales volume at the top end of the market isn't enough to make up for the skidding sales for homes priced below $700,000. Compared with May of last year, single-family-home sales in Scottsdale overall are down nearly 23%.

And I thought Key West's 500% or more inventory growth in the past two years was large? And I thought our Real Estate Cartel was impressive in its Sunny Day Real Estate outlook all the time?

Five things I took away from this short blip on housing news in Scottsdale:

1. Scottsdale's housing inventory has risen 1600% in two years time. Despite this, expensive homes have held steady in the minds of their rose colored sunglass wearing Realtors.
2. Home sellers in Scottsdale's most expensive homes are having to cut prices on their asking prices by a hundred thousand dollars here, a hundred thousand dollars there, just like in Key West. As the article states, most of these expensive homes are taking only 40 days to sell. Why, this is even called "impressive" by an agent at Help-U-Sell Vista Properties. (And you think my Sunny Day Real Estate allusions sound funny?) If this is what Scottsdale Realtors call holding steady . . . i.e. shaving hundreds of thousands of dollars off your home price to make it sell in 40 days . . . then all of them can find work in Key West as spinmeisters for our local NAR.
3. Scottsdale homes in the sub-$700,000 range are the ones selling the slowest. Maybe, just maybe, it will one day enter the minds of potential buyers this is why the "median" home price is flat or rising. What I mean is the wealthy are the last hanging fruit on the Real Estate tree. If more $1,000,000 homes are selling for $750,000, while fewer $750,000 homes are now selling for $600,000, then of course, the median will stay in favor of the NAR spinmeisters who want everyone to believe "There's never been a better time to buy Real Estate."
4. Meanwhile, and this is worth repeating, overall inventory has grown 16 times in two short years. As the president of the Scottsdale Area Association of Realtors said, ""We've gone from an all-time low to an all-time high in supply." But this is no need for alarm, right?
5. Actual home sales for all Scottsdale homes are off 22.7% year over year.

Question to those of you who think for yourselves: What is wrong with this picture of slowing sales, growing giant sized inventory, and the shaving of prickly $100,000 pricing here and there for upper end housing which is keeping the mythical median prices at flat or slowly rising levels?

Answer: It's like having having a giant cactus for an erect penis. You can't spin the outcome into anything good.

Key West Bargain?

(click on photo to see a future Key West Realtor ad)

Hello friends. Rock coming atcha from out of the blue in the Watchworld.

For all of those wondering when is the time to buy Key West Real Estate, let me assure you, it is not now.

When is an "Original" price in the MLS not the first asking price by the seller?

Realtors and sellers alike are now playing this game with listings whereby the homes which are not selling at just reduced prices are suddenly taken off the market. There are several benefits for listing, de-listing, and re-listing the exact same property so as to keep the unknowing and shrinking flock of Snowbirds from figuring out this game of 3 Card Monte.

Case in point:

The complex where I rent was For Sale in 2005 for only $5.5 million.

When I moved in to my place in September 2006, the new asking price for the whole compound of three cottage style homes, with a smaller cottage in back and community shared swimming pool was $4 million.

In the MLS listings, you did not see Original Price: $5.5 million, Reduced Price: $4 million because my landlord took the complex off the market before re-listing at $4 million.

Recently, my landlord took my $4 million listed housing complex off the market in April or May of 2007. He then changed Realtors.

He told me before he listed the new price he would be asking $1.95 million for the complex. A few days later, it was officially listed at $1.885 million in June 2007.

So in a few months time, the asking price was shaved by more than a cool $2 million, yet this price reduction never showed in the MLS listing. On top of that, there was a previous drop of $1.5 million asking price and that reduced price never showed in the listings.

So what was the last thing showing in the MLS for this property?

You got it, $1.885 million with a start date for Days on the Market in June 2007. Nowhere is there any mention in the MLS how many real reductions have taken place. Nor was there a true accounting for Days of the Market which by this time would have shown over two years on the market.

Now what?

Last week, after only one month on the market at this new price, our complex was taken off the market again. The brand new Realtor sign has been removed.

To make the "math work", you would have to drop the price on this complex by over another $1 million so that your rentals could help you cover your mortgage for the whole shooting match. Of course, if you are a dumb rich kid who isn't in the market to make money or buy sanely, come on down, buy the whole shooting match, and open up an Animal House campus of your own. Just give me my two months notice so I can move to a cheaper place which is bigger. (A future blog will show photographic proof of the new realities of renting in Key West. There truly hasn't been a better time to rent in this town in my 17 years of living here.)

"There has never been a better time to buy a home in Key West!"

Is the local chapter of the NAR kidding?

We have a loooooooooooooooooooooooooong way to fall in pricing.

It's not prospective buyers sitting on sidelines who are on Ecstasy.

Happy Day Real Estate aside, demand for Key West condos and homes only hit the skids in mid-2005 after years of above normal appreciation, and 5 to 6 years of super-leveraged appreciation. There is a whole lotta excess to be squeezed out of this market yet. (A tip of the cap to Led Zep for my lame attempt to combine imagery from "The Lemon Song" and "Whole Lotta Love".)

Today is July 24, 2007. Not a single house or condo has sold on this island proper since July 12th. If you batted 0 for 12 in baseball, you'd be benched.

Seven homes or condos have sold since July 1st. That's it. And as Dave Barry would say, "I'm not making this stuff up."

Think about it: twenty-four days of July have elapsed. And only seven condos or homes have sold all month. Woo hoo! This is a sign the market is bottoming?

Maybe the Real Estate Cartel isn't on Ecstasy. Perhaps they are sharing a hookah filled with crack. I don't know. Although recently, the Key West Crime Report carried a story about a 59 year old Real Estate Agency owner who was arrested for DUI. Her husband, a local lawyer, tried to intervene on her behalf . . . but the cops didn't listen . . . and off to jail she went. So alcohol abuse is still on the table as to what is making these crazy people tick.

The Key West MLS is showing a slowing down of inventory growth. On the other hand, sales are declining more quickly than inventory growth. Hence, sellers who cannot sell at the price they want . . . or make that . . . the price they need . . . are taking their homes off the market to play to the Realtor's hopes of jump starting sales again by making housing more scarce.

The problem with all this stinking thinking by Realtors is this: home ownership is not a commodity need. It's simply a want. If I want to live with a roof over my head, I don't need to buy an overpriced home or condo. I can rent.

Still, with sales only averaging 26 to 30 homes or condos a month in Key West for the first 7 months of 2007, we are looking at enough remaining inventory in which it would take an easy 36 months at the least to sell it all. My guess is we have enough inventory to take 5 years to sell off.

Yes, I see 410 houses in Key West listed on the MLS today. I also find 419 condos on the market via the MLS. But what the average web surfer/potential buyer is not taking into account is the "real" inventory floated for sale in Key West.

Here's the rub on real Key West inventory:

1. Massive amounts of new condo/hotel conversions are on the market and not showing on the MLS rolls. We are talking hundreds of extra dwellings which have price ranges of $1.0 million up to $3.0 million. If you want an idea of what is missing from the MLS, go no further than the top of the island where the old Holiday Inn once resided. Look at all those brand new empty condos and the high rise parking garage which was built to accomadate hundreds of cars. None of these units are on the market's MLS rolls because this is new construction being sold by local developers at their development-o-rama offices at Fleming and Simonton.

More simply, all one must do is view the big mounted posters on easels in the development-o-rama windows to see for yourself that there are four or five developments with hundreds of new built condos with no mention of them in the MLS rolls.

2. We have hundreds of do-it-yourselfers with "For Sale By Owner" signs in front of their place. As most of you know, FSBO's do not show up on the MLS. (A few months ago, I traveled up to Venetian Drive where out of 14 houses in a 2 block stretch, 3 were for sale with a Realtor sign out front, and 3 had "FSBO" signs out front. That's almost 50% of houses in that 2 block run are up for sale. A Realtor friend of mine in Atlanta tells me that when 10% or more of houses in any block are up for sale, you have a distressed market.)

3. And let's not forget all the businesses, condos, and homes for sale by Realtors who are discretely not showing their hands on the MLS. As an example, take Croissant de France, one of Key West's oldest and most established restaurants/bakeries. It's in the Key West Sunday paper with a $5 million plus price tag. (Wishful thinking, but ain't gonna happen with anyone who studies this sour Tourism Recession.) That's a big notable restaurant which isn't showing in MLS rolls.

4. Certain out of town "Seller" realtors are repping big homes and businesses down here which don't show on our local MLS rolls or in the Key West Citizen. I've seen one famous bar advertised in the Wall Street Journal classifieds. I've had people tell me they've seen Key West condos for sale in their local newspaper classifieds. Keep in mind that many gated and planned communities do not allow homeowners to plant "For Sale" signs in their front yards (think Truman Annex). The same can be said for all high rise condos. Many times, the seller is an out-of-towner who is attempting to sell their badly timed purchase of Key West Real Estate in a Northern newspaper to people who don't know what is going on down here.

5. Certain homeowners are not planting FSBO signs in their yards and are instead opting to market them via the internet only. Many are using Craigslist. The amount of Florida Keys Realty on Craigslist for rent and sale is growing leaps and bounds as the new Craigslist heading for the Florida Keys is less than one year old. (If I were a code enforcement agent trying to curb illegal rentals in the Keys, I'd certainly find enough miscreants in a month on Craigslist to keep me busy.)

6. Furthermore, foreclosures, auction represented homes, and bank owned homes in Key West are not showing up on MLS rolls.

At this moment, Realty Trac is showing 59 homes in pre-foreclosure. This means 59 owners of Realty are at least two months behind on their mortgage payments.

Six homes are about to be auctioned off by lenders in Key West on the Court House steps.

And 65 homes or condos are now back in the hands of the banks who lent the shaky borrowers money to buy a place they could not afford.

So, that's 130 "distressed" properties not being shown on MSL rolls in this town.

(Memory pause: Last year this time, I was a subscriber to Realty Trac. I could actually puruse the listings minute details, but soon thought it was a waste as I realized this Crash has many more years to attain its old historical median. Still, at that time, only 12 or 13 homes were in pre-foreclosure . . . most of them at the Key West Golf Club. None were being auctioned off. And maybe 5 or 6 were in the hands of banks.)

The take away from this small bit of trivia and snippets is this: Key West Real Estate's Crash is only in inning 2, maybe 3, of a 9 inning game which may go into extra innings.

Just keep in mind that Japanese Real Estate peaked in 1990 and went down and sideways for the next 15 years. Today, Japanese Real Estate is only back to 1981 prices. This means if you bought Japanese Real Estate back in 1990 (at their Housing Bubble top) you'd still not be back to your purchase price seventeen years later. And one more thing, even if prices do get back to 1990 prices, you still haven't figured in what normal inflation would have done to those 1990 dollars spent on your initial purchase. (I wonder how one says "Oh my aching scrotum" in Japanese?)

You say a Real Estate Crash can't happen in Florida because everyone wants to retire here? Better Google the great 1928 Florida Real Estate Crash which preceded our nation's Great Depression. There are mansions on the mainland of Florida which still haven't gotten back to their 1928 inflation adjusted values.

Sic Semper Greedheadus

And as I have predicted in the past, the butt-sucking moneyed class of gluttons who want all of Key West to themselves is about to be spanked hard . . . just like the Roaring 20's Cigar Smokers who bought Florida Real Estate in 1928.

(In due time, I will be speaking out on an interesting development in expensive Key West Real Estate which I have been observing for the past month. Something major is afoot in that big money bets are going awry. I can't believe the Key West Citizen hasn't run a front page photo with story showing how the mighty are beginning to fall. I will place photos on this blog soon to back up my observations and opinions about how Prime money is beginning to implode . . .)

Realtors down here keep pounding the table to buy Real Estate now. The same ad running in every Sunday paper keeps inaccurately stating that Key West Real Esatate goes up in price year after year. My answer is, "Why say one thing in print ads, when data is showing prices are rapidly falling while sales have hit Deadman's Curve at 120 MPH?"

All those unlisted and unsold condos taking up valuable Real Estate . . . who is going to buy them as "investments" when the numbers simply don't work?

Since the Housing Boom has gone Bust, people with a few candle powers of brain cells have quit listening to their emotions, greed glands and especially those cheerleaders from the Real Estate Cartel who look at potential buyers as just a commission check. With the bust finally taking up headlines in hometown papers all across America, potential buyers have gone back to doing elementary school math on the back of envelopes before rushing into a lifetime purchase which makes no sense whatsoever.

Rule No. 1 in purchasing a business or home: If you can't do the math, find somebody who can 'splain it to you.

Here's an example of stupidity in advertising: a "beach biz" is on the market for $69,000. This would get you 1 of only 25 vendor licenses for all of Key West. This vendor biz is located on Smather's beach.

This particular business sells blow up life preservers, cheap flip flops, sunscreen, etc. The nice woman owning this business is out there at Smathers Beach every single sunny morning of the year. Let's say, 300 days out of the year.

Now her Realtor says in the ad:

Profitable business on Smathers Beach. The Beach Store grosses over $40k/year with a net of over $30k. This turn-key business includes a City of Key West Mobile Vendor License permitting rentals, sale of retail goods and food sales. The City of Key West only issues 25 of these Mobile Vendor Licenses; they rarely become available. Comes with two parking spaces and over $10k of inventory including a custom painted & outfitted truck, rafts & chairs, and a generator & air compressor. Work by the beach with no boss, no fax machine and no corporate middle manager telling you what to do every day!

I'm going to be very generous here and estimate her inventory, truck, generator and other salable assets don't even hit the $8,000 mark. I don't care what the ad says, I can eyeball what's she's got and a lot of it is inventory which is not moving. It's dead inventory. In fact, in all my years of passing this Step-van truck on my daily jaunts at Smathers, I've never seen this woman in the process of selling one single thing to anyone. But I digress. The ad says she nets over $30,000. I'm willing to bet dollars to doughnuts that she's lucky to net even $30,000 this year with the way vacancy signs in front of hotels, motels and guesthouses have become the norm.

Okay, for illustration purposes, I will be generous and say she nets $30,000. Divide that by 300. She nets about $100.00 per day.

Now who in their right mind will pay this woman $69,000 for a business on a stretch of skanky beach with muck on the shoreline, polluted water, and which depends on a declining tourist base of disappearing lower and middle class tourists while only netting $100 a day? Tourism numbers, year over year, have been declining since 2003. (I wish the Chamber of Commerce would could break down bed tax numbers on hotels and motels to show what is happening to weekenders from the mainland.)

There are fewer hotel rooms on the island due to condo/hotel conversions . . . and way fewer cheap rooms for people who would venture to Smathers where one would also have to ignore the usual "WARNING" signs about fecal colliform bacteria being at above normal levels. (I don't know about you, but I am mystified by literate or aliterate . . . I did not say illiterate . . . people who ignore such in your face red warning signs and who wish to bathe in sewage.)

You net $2,500 a month, and you still have that loan to pay off on your business while paying rent or a money sucking mortgage on an overpriced place to live in the Keys? Hell, my ex-roomate pays more on insurance and real estate taxes on his Key Haven home per month than this Beach Biz nets. And there are plenty of $500,000 condos for sale right across from Smathers (and those are the cheap ones) which have monthly maintenance and tax fees which are $1500 and up. So how would a retiree live off just $2500 net every month? You think they can "build" the business as tourist numbers decline?

And with hotel to condo conversions, you are gambling against the trends of marketing to upscale tourism which our boneheads in power are trying to force on the Keys. Hoity toity tourists don't spend their day at Smathers. They charter boats, the spend time at their pool, and they don't mingle with lesser mortals who would spread a towel at Smathers, Higgs or South Beaches.

Even more, lower and middle income people are opting for cleaner beaches and cleaner waters elsewhere where more affordable motels and hotels beckon, and the proof in the pudding is how many businesses everywhere in this town are For Sale today. Look at the numbers for Monroe County's population exodus. People are not moving to the Keys . . . we see our population decline year after year since 2005. Yet this poor woman has this idea sold to her that her business should fetch $69,000?

Her realtor had to be the one selling her on this totally misconceived price.

And her ad has been running in the Key West Cititzen's paper since last Autumn?

The only way to sell her business is to start dropping her asking price.

I'll put it like this: only a retiree who is bored staying at home will buy such a business. And how many retirees can afford $69,000 for an overpriced business in a declining tourist market today? Well, that pool of potential Baby Boomer buyers is declining weekly now as their Housing Miracle wealth up North continues evaporating into thin air.

I have to wonder about this woman's Realtor: how long does one keep running the same ad, same price, and keep seeing the same results of No Sale before they decide to drop the asking price? Nine months of ads and that business is still on the market. Nine months of watching the Real Estate market further deteriorate and you can't see it's time to drop your price? Doesn't make sense to me. And the same can be said about many Key West properties which have been on the market for over a year now which show no reductions in price. The homeowner and Realtor are crazy not to experiment with lowering the asking price . . . especially when the MLS listings are loaded with "Reduced" prices falling like prices in a Wal Mart flip chart commercial.

The most overused expression by Key West Realtors

"Everybody wants to move to Key West."

Yeah, but if they can't sell their homes back in BF, Kansas, how can they "afford" to go way out on a limb to buy a full time residence or "investment property" in Key West which is still today extremely overpriced when you figure in mortgage payments, maintenance fees, insurance and taxes?

And let's not mince words here: Key West is being eviscerated of its charm as developers push the glut to shorelines, making us look more and more like Anywhere, USA. We can't swim in our polluted waters. The government keeps expanding sanctuary boundaries to help cut back on overfished species. Tourism is down, way down, from just five years ago. And one great business after another goes down for the count. (Valladares Bookstore, the Deli, Dennis Pharmacy Lunch Counter, etc., R.I.P.)

My retort to the Key West Real Estate Cartel is "So where are all these people who absolutely must own Key West residences? Why hasn't one single buyer bought in the past two . . . almost . . . three weeks?"

The rotten sub-prime fruit has been smushed into the ground by pushers of mortgage fraud rioting at the base of the Consumer tree. The easy Alt-A fruit has been picked and churned in Lender's blenders. The Prime fruit requiring the ladder is beginning to rot on the tree. There isn't any more easy fruit to shake from the Borrower Tree. It's gone. The tree is bare, and this season, and next season, and many seasons to come, the harvest shall be skimpy.

As condo and home prices do not bottom in Key West . . . and as more panic ensues . . . I predict what I see in the stock market every day after a "Dead Cat Bounce": mass dumping of overbought assets.

Changing and mixing metaphors and analogies, the picture isn't any better.

Sub-prime stuff was simply the fuse which ignited the Housing Bomb.

The explosives packed into the bomb are the Alt A and Prime owned properties. It's the stuff the nouveau riche had been buying hand over wine glass back in 1990 through 2005. The big hunk of C4 packed into this bomb . . . i.e., housing which was in demand three years ago when high rolling developers decided to mow down hotels and put up expensive $1.2 million 800 sq. ft. tubes to resell to the unshorn sheeple with new money . . . is now exploding outward in slow motion . . . like that famous scene from the movie "Zabrinksi Point".

My latest prediction which I will flesh out in another blog soon . . .

Prediction: very soon, before this year is up, the game will end or turn against a greedhead or two who has destroyed the charm and charisma of Key West. And I'm refering to local greedheads, and not the outsiders such as Cay Clubs which my buddy Cayo Dave talked about in his blog post of May 14, 2007 . . . "Has Cay Clubs Bit Off More Than It Can Chew?" (Click on red highlight, and when Dave's blog opens, scroll down to the May 14 post which I can't directly link to today.)

Mark my words. A hard rain's gonna fall on local developers. And as Jimmy Cliff sang in one of the best reggae songs of all time, "The Harder They Come, the Harder They Fall, One and All."

Buy Key West Real Estate here and now? Don't delude yourself. Don't save a greedhead's ass. Save your own.

Save money, go fishing, get together with the few old friends who haven't left town for upstate New York, the mountains of Carolina, or the desert in Santa Fe, and party like a rock star when prices return to a mean which is 50% or more below this summer stupor of falling sales prices and stalled sales.

When some of the big developments blow down, it's going to take out all Real Estate in this whole town. We will see massive government layoffs as the tax base shrinks. (I'd like to see County Mis-Manger Tom Willi keehauled off a schooner in the Bight.) We will see many more businesses go bankrupt. We will have old timers remebering, "This is what it was like when the Navy pulled out of Key West in the 70s."

In the stock market, I have seen the unthinkable happen dozens of times to formerly stalwart, impregnable and arrogantly run companies such as Tyco, K-Mart, Winn Dixie. Brokerage analysts cheerleading those companies were as wrong as today's Key West NAR cheerleading housing on the way down. What we are waiting for in Key West Real Estate is an Enron or Globalstar type collapse where the company never comes out of bankruptcy. What we want is to buy a condo or house for 30 cents or less on the dollar. What we want is to chase the Destoyers out of our town's real wealth, i.e., it's cherished slices of Old Key West which weren't shrink wrapped in hermetically sealed blister packs for the masses waddling off cruise ships, airplanes, and doorsteps to Humvees which make our narrow streets impassable.

Make no mistake: We have bigshot local developers with dollar signs for eyes about to have their heads fed to the sharks down here. One family of developers who own controlling interest in one of our biggest local banks has to have such tight sphincters at this time that atoms could fuse in their rectums. My question is how do we harness this free energy?

Hence, it's never been a better time to fill the cooler, head out on the water, and forget all the lies from the Key West Real Estate Cartel and all the problems the Big Shots are facing. They created their own Big Lies so as to enrich themselves. But karma is coming back like a huge drill sergeant's steel toed boot about to kick them in the ass.

Caveat emptor,

Rock Trueblood

The American Myth About Home Ownership

(click on photo for a bird's eye view)

Be A Man, Buy a House?

I came across an interesting Forbes piece on the Internet this morning. The title of it was "Don't Buy That House".

Among the amusing items I found was this gem from the cheerleading NAR of the time (the 1920s) . . . which makes David Lereah's recent pep rally soundbites seem a bit, well, tame.

Homeownership has been touted as civic responsibility, "moral muscle" and a bulwark against communism. A 1922 pamphlet from the National Association of Real Estate Boards even promised that it would put the "MAN back in MANHOOD." Over the years, it has been claimed that homeowners vote more, join more voluntary associations, take better care of their residences and have better-educated kids.

That one made me laugh out loud.

Back in the 20s, there was no Viagara. But there were cigars and homes to buy to make a man feel more "manly." Whoever was in charge of the NAR at the time didn't use a legendary spinmeister economist such as David Lereah. Instead, he (women had no positions of authority in those days) had a copywriter who knew how to sell without a bunch of numbers involved. And the two of them probably smoked big cigars over every line of copy just to make sure they hit that one emotion which really sells: fear.

Go for the penis instead of the throat. Go for flag waving patriotism in your copy. To buy a home is the American thing to do. To rent is to possibly show your neighbors (and women) that you are a limp dicked Communist.

What bullshit! But it is brilliant copy, it really is. It hammers at the fears of men with low self-esteem with an insight Sigmund Freud must have admired. That copy sold a load of homes in the 20s. (And if you know how the run up in Real Estate during the Housing Bubble of the 1920s added to the good feel of "The Roaring 20s", you would also know that Real Estate crashed in Florida in 1928 . . . one year ahead of the biggest stock market crash of all time.)

While the nascent NAR was urging men to become more American and manly by buying a home . . . they got help from the lenders: the Roaring 20s was the decade where EZ Credit was established. People financed washers, RCA radios, cars and more for the first time.

And here's another fact about American brainwash in the 1920s which was never a myth . . . The Roaring 20s indelibly stamped on frontal lobes of American consumers that one question which still prevails today: "How much is the monthly payment?"

For Roaring 20s homes, a special new product was invented for men with bigger ambitions of Manhood: the Adjustable Rate Mortgage. EZ Credit was the Viagara and Cialisis of the Roaring 20s. So much for having a nation of big swinging dicks owning homes, farms and stocks which they soon lost to foreclosures, bankruptcies and margin calls.

I'm going to give Forbes some props for bringing up the following factoids at the end of their article:

What about all the social benefits attributed to homeownership? It turns out that many of the supposed benefits of ownership are likely due simply to family stability, for which homeownership is an excellent proxy.

For instance, while it is true that the children of homeowners have scored better on standardized tests than the children of renters, there's little to suggest that ownership per se is the cause of better performance.

"Some research has suggested that it isn't whether parents own or rent, but the mobility of the household," says Rachel Drew, a research analyst at Harvard University's Joint Center for Housing Studies. In other words, it's likely that families who stay in one place for a long time (renting or buying) are doing better by their kids than families that move often.

"All of these things we say are benefits of homeownership in the U.S. I think would also be benefits of long-term rental tenancy," says Bourassa.

Certainly there are plenty of stable, wealthy, well-educated places in Europe, at least, where homeownership is far rarer than it is in the U.S. Nearly 70% of all Americans own their own homes; only 34% of the Swiss do. Thriving cities like Hamburg, Amsterdam and Berlin have rates of ownership of just 20%, 16% and 11% respectively, according to the United Nations.

So if something in your gut--or on your bank statement--tells you that now is not the right time to buy, resist the pressure. There may be no place like home, but there's no reason you can't rent it.

I can buy that. A feeling of "rootlessness" is not good for any kid who is bounced from school to school on a regular basis. And which child would grow up with fewer problems: a kid living in an apartment or home rental where the parents are not in debt and are putting away money to further the education of the child? Or a child stuck in the suburbs in a home where ma and pa are now working two jobs to keep the exploding ARM paid and the sheriff from nailing a Foreclosure notice to the door?

Screw the NAR: I'm Comfortable With My Manhood . . . And I Rent

As an adult with no children, I am not locked into staying in just one rental for the sake of my kids either. (Not that I think moving from one rental to another in the same town would be detrimental to children's health as long as they had the same schools and friends to keep.)

And today, renting makes more economical sense than buying a home. Read the whole Forbes article to get a sense of what they are explaining in common sense terms or read my blog where I said the same thing in much lengthier words.

To which I will add: I'd rather save a ton of money by renting. I'd rather take those savings from renting and re-invest them in safe dividend paying stocks, with gold, silver and oil as hedges. And if things ever get tight, I can always find a cheaper rental to live in without destroying my credit.

Furthermore, I will not be renting a house a hundred miles from my workplace.

It may sound un-American, but I'd much rather live in a old Berlin house rental or upper floor Seattle or Prague warehouse apartment rental than live in an American suburb where there is no culture . . . other than that which I can find on my TV . . . and where I struggle to meet the exploding payments on my ARM.

Screw the American Mondo Condo Shopping Mall Hell

Americans put down European living all the time. Usually, these very critics have too often never traveled outside our borders.

I once rented an apartment in downtown Frankfurt, Germany for three years and I cherish those memories of living in early 70s Deutschland. I saw The Who, Led Zepellin, Deep Purple, Pink Floyd, name a great band of the era, just steps from my apartment's door. I owned a Norton 750 Commando Motorcycle which took me to Heidelberg, Munich, Berlin and to countries like Scotland, France, Denmark, etc. I was immersed in culture.

More often than not, I'd buy a monthy "Eurail" pass which allowed me to hop on any train going anywhere. Sometimes, I and a couple of friends would get drunk in a good downtown bar at the beginning of our 3 or 5 day pass, go to the Hauptbahnhof, and simply jump on the first train leaving to see where it would take us. It was magic. Wake up stone sober in say Dusseldorf and run around that city for the day. Or find out you are in Switzerland at the border as your passport is checked.

Forbes mentions Berlin.

I pulled guard duty once in Berlin. That city was the swingingest city in Europe at the time, more so than London or Paris, IMO. And this was a city which was surrounded by Russian troops. Yet the people in West Berlin lived like there was no tomorrow.

The very best symphony I ever heard in my life was in West Berlin, 1971. That's where I heard Dvorak's "From the New World" symphony. To this day, I hold that piece of music as my favorite classical music work because it takes me back to West Berlin.

The Forbes article states that only 11% of my beloved Berlin's current population owns their home. Who cares? Berlin is alive and jumping. Berlin is the city I think of as the new "Capital" of Europe. If I moved there, I would be able to walk or catch a Strassenbahn (electric streetcar) to the incredible art galleries, stores, concert halls, beer halls, coffee shops, and outdoor political rallies and festivals (like Oktoberfest, Fascing (sp?) and the world's biggest Dance Music festival) which make the City fun, young and vibrant. I could spend years just losing myself in lengthy walks of its streets to stop and view inspiring architecture.

On the other hand, one of my visions of hell (I am an atheist, so I am speaking of hell from a contextural view) would be for me to be "stuck" in a $500,000 American suburb or exburb house (which cost me $550,000 a few years ago) and where the closest culture center is the indoor mega-mall.

That mega mall would have maybe one or two outdoor cafes where you could buy a watered down beer and which overlook a 50 acre parking lots. Or maybe you would overlook the nearby Interstate. The closest thing to an art gallery would be the Crafts Connection Poster and Frame Store. My only connection to music would be the salesmen at Sam Ash playing the same metal riff over and over. The only coffee shop would be a Starbucks. And the closest cinema would be the indoor multiplex showing "Diehard 12", "Star Wars 15", "Home Alone 4", and "Scary Movie 7".

When I think of Mega Malls in the burbs, I think of Mojo Nixon's 80s Anthem, "Burn Down the Malls".

America has been so dumbed down that we believe it's a dream to "own" a house miles away from where we work. We are constantly brainwashed to become a good little homeowner miles from nowhere in a development which has no soul.

The NAR's current campaign, "Now is a great time to buy a home," is nothing more than big cigar smoking men . . . and women . . . with vested interests in the Real Estate Cartel patting your head, whispering, "Now be a good little consumer and buy a home." Pat, pat, pat. "Credit is tightening up, but you can use your credit cards for a downpayment." Pat, pat, pat. "And don't pay no never mind to the ARM which kicks in a few years from now. By then rates should be lower, and as you know, home prices always go up." Pat, pat, pat.

The NAR doesn't care a bit about how indebted we might become in our chase of the "American Dream". Their job is to sell homes so they can line their pockets with your hard earned cash. So they lull you to sleepwalk into buying a home which you really cannot afford . . . unless you become their girly man or dumb blonde who never questions their authority.

Note to the NAR flacks: more and more Americans are waking up to the fact of a newer reality - their home owns them.

The more Americans admit their recent home purchase is the biggest mistake of their lives, the more people are adding to the misery index. It's not the naysayers on overpriced housing who are un-American. It's the Real Estate Cartel pushing Liars Loans, overpriced homes, and developments with no longterm planning who are undermining America.

People don't really relish the thought of a one or two hour commute to and from cookie cutter homes. But the NAR doesn't discuss this in thir adverts or billboard ads. People move way the hell out into nowhere because they fear not being able to afford the American Dream which keeps moving further out and farther away.

"Where do you live?"

"Over the mountain pass in that new sub-division which is cheaper than housing near here."

Who wants to live where no one knows your name, where neighbors don't know neighbors . . . unless they are reporting you for breaking Homeowner Association rules such as flying a flag from your lawn, parking a pickup truck in the driveway, or seeing your kids ride bicycles without crash helmets on?

Screw that Home Owners Association Hell

Give me a rental in a garret of an home built in the 1700s in the great city of Berlin which is an accessible, inspiring, cosmopolitan and freethinking vibrant city and society. Or let me find another spacious Key West rental which allows me to almost never need a car as I walk to work and bicycle around town. My neighbors in either locale do not and would not think the less of me for actually, heaven's forbid, renting a place.

Today, we still have Americans biting on "Now is a great time to buy a Home. " But deeply ingrained in that thinking is the American myth that home ownership is a right, that it is a dream to chase at any cost, that it really is a measure of your worth . . . male or female.

Screw Hours of Commuting to and from Work

To the NAR I say you can keep your two to four hours of daily satellite radio listening in your car added to an eight hour day on the job just so you can afford that overpriced, ball and chain, sleep/eat cocoon in the suburbs or exburbs.

No question about it NAR, NHA, and Lenders, you can keep your home in "Misty Meadows - Putting the Magic Back into Homeowning" (as the billboards on the highway describe that place to which you hope to sell me into indentured slavery).

So I sign off with an old adage to members of the Real Estate Cartel: you can fool some of the people some of the time, you can't fool all the people all of the time.

I got my manhood right here. Shake, shake. And my money spent on rent saves cents.

Thankuvurymuch,

DJ Rock has left the building