The Real Estate Broker's Corner

It has been too long, my friends. Forgive my absence. Let us get to the matter at hand.

_____________________________________________________________

LOCAL CONDITIONS: Per the MLSPIN, I put this little table together.

Westport	UNITS	LIST	SALE	DAYS	LOW P	HIGH P
2007	12	459825	425655	216	190000	745000
2008	10	429020	399850	131	240000	800000
%Change	-17%	-7%	-6%	-39%	26%	7%
Dartmouth	UNITS	LIST	SALE	DAYS	LOW P	HIGH P
2007	21	393324	369205	180	160000	749000
2008	25	382668	354344	265	121000	817400
%change	19%	-3%	-4%	47%	-24%	9%

So what does this tell us? The sales units are pretty close. The list price confirms what everybody knows anecdotally, that the prices are coming down. Also, the discounting seems to be stable. Days on market are tightening a bit in Westport. Dartmouth still has a way to go. The range of pricing in Westport is also tighter. I would say this reflects the reality that Westport is a smaller town, with a more homogenous housing market. Dartmouth is bigger, and has a more diverse housing market, so they are experiencing more foreclosures and activity at the lower end.

The real signal for all of us to watch for is in the discounting. When the list / sales prices tighten, then I think we will have our best indicator that we are at a bottom. Until then, the decrease in pricing is likely to continue.

______________________________________________________________

You have probably heard someone say, "Mortgage brokers, that who caused all this! Hang the bastards!", or maybe something worse than hanging. Maybe it was Realtors or Bankers or stockbrokers instead of mortgage brokers. The point is, there is a lot of anger out there about the state of the economy.

Tell me if any of this sounds familiar.

"We got the house! We can't believe we did, but we got it for the asking price. Yeah, 1 million is a lot of money, but it will be worth twice that in 5 years, and if we have to get out, no big deal. We are taking a pay option arm from Washington Mutual, so you know we can make a minimum payment if things get tight. We are going to take all the money we would be paying on the mortgage, and throw it into the stock market. Between the home appreciation and the killing we are going to make in the market, we should be in great shape, just pay off the house with the market gains."

That is a real conversation I had with a fairly sophisticated businessman in 2004.

"Your stuck in the old way of doing things. No one worries about paying a mortgage, the average homeowner moves after three years. Why pay more into the mortgage if you are going to sell in 3 years? The person today wants to pay the minimum, you know, use the leverage that is available. That is how people can get ahead."

That is a real conversation I had with a mortgage broker in 2004.

There is a common thread, between the buyer and broker. Neither contemplated a down market. They both looked at a house as some type of investment instead of a place to live. They forgot the primary activity that one does at home, which is to sleep.

When we go to sleep, we are at rest. The first function of a home is to have a safe, warm place where you can rest, and eat, and do those mundane things that you need to do every day. A home is where you can fall asleep in front of the TV, watch your kids grow up, build the traditions and memories that are priceless. A home will always have some worth, because you will always need one.

An investment can never be priceless. It can become worthless, but never priceless. It exist only to be sold some day. An investment can never be a home.

So I pound this with buyers. Look at the house as a place to live, a place to eat and sleep. Not as a 401k. Trust me, you will sleep easier that way.

________________________________________________________________

I have a friend who is in terrible shape, upside down on the house, ready for bankruptcy. I ask him what he is waiting for.

"I'm not ready to quit yet."

I am amazed. I think I would have quit a long time ago, If I were in his shoes. But I am not, and probably never would have done the things that he did to get there.

Nonetheless, it shows one of great truths about Man, found in Hemingway's Old Man and the Sea, "Man is not made for defeat".

________________________________________________________________

I will be updating more regularly. Visit our listing section, and if you need a buyer's agent, call me. If you need someone to list your home, call me. If I think I can help you, I will, and if I can't, I'll let you know it.