That’s great, it starts with an earthquake, birds and
snakes, an aeroplane and Lenny Bruce is not afraid.
Eye of a hurricane, listen to yourself churn – world
serves its own needs, dummy serve your own needs.
Feed it off an aux speak, grunt, no, strength, Ladder
start to clatter with fear fight down height.
Wire in a fire, representing seven games, a government
for hire and a combat site.
Left of west and coming in
a hurry with the furies breathing down your neck.

Team by team reporters baffled, trumped, tethered cropped.
Look at that low playing! Fine, then.
Uh oh,
overflow, population, common food, but it’ll do.
Save yourself, serve yourself.
World serves its own needs,
listen to your heart bleed dummy with the rapture and
the revered and the right, right.

You vitriolic, patriotic, slam, fight, bright light, feeling pretty
psyched.

It’s the end of the world as we know it.
It’s the end of the world as we know it.
It’s the end of the world as we know it and I feel fine.

In 1987, Micheal Stipe and REM released a song that many have interpreted in many ways. When REM played the song live they were actually very surprised. In playing a song about the end of the world, the audience actually reacted with great enthusiasm. So much so that the fun vibe threw off the band. They thought the apocalyptic lyrics would create a more subdued response.

What does this have to do with real estate? Well yesterday the newest housing numbers came out and it’s sounding the end of the real estate world…yet I feel fine.

The S&P Case/Shiller Home Price Index, which tracks 20 of the largest housing markets, showed prices plummeting by 12.7% in the 12 months ending February. That’s the biggest fall since the index began tracking prices in 2000.

Of those same 20 markets, 17 of them posted their largest declines ever recorded and 50% of the metro areas posted double-digit declines.

“There is no sign of a bottom in the numbers,” S&P spokesman David M. Blitzer, said in a prepared statement. “Prices of single family homes continue to drop across the nation.”

“This is huge,” said Dean Baker, co-director of the Center for Economic and Policy Research. “Back a couple of years ago, people were saying, Housing prices are not like stocks; they change slowly,'” he said.

If this news wasn’t bad enough, the declines posted could be even more Revelational as you look further. It seems the decline is actually accelerating and economists are saying that an additional $6 trillion dollars (that’s trillion with a “T”) could be erased from home valuation across the USA.

While the message is not all doom and gloom, the good news is like being still alive after the comet hits. Charlotte, North Carolina actually saw their numbers increase.

Up in the Northwest, the decline was quite modest as Portland and Seattle only experienced drops of 2% and 2.7% respectively. Maybe Glenn Kelman was onto something by launching Redfin up there.

The “Big Apple” stays afloat as well with only a 6.6% decline. However, there seems to be a veritable race to for the title of “Ground Zero” of the housing debacle. Las Vegas (-22.8%), Miami (-21.7%), Phoenix (-20.8%),Los Angeles (-19.4%) and San Diego (-19.2%) seem to be the contenders vying for the ominous declaration of being the worst housing market in the Country.

Think you’re out of the woods if you are not in these markets? Think again. As these major markets continue to decline, they shape the consumer’s mindset and throw off an effect that could doom the rest of the markets.

Peter Schiff, the president of the investment firm Euro Pacific Capital said, “As housing price losses extend, the fall-off in demand for homes will deepen. Schiff expects to see a national price decline of 30% – and by as much as 50% in the worst hit markets.

“People wanted houses as vehicles to make money,” said Schiff. “Now that they can’t make money, they don’t want the houses anymore.”

From the “It Can’t Get Any Worse Department”, new data was also released today regarding foreclosures. Over the same period as the Case-Shiller report, foreclosures exploded 112% in the first quarter of 2008.

Anyone working in the real estate business realizes that the continuing flood of foreclosed homes onto the market is continuing to negatively affect home prices.

If you take into account just the vacant properties on the market, the numbers are staggering. Presently there are over 2.28 million vacant homes on the market. According to the U.S. Census Bureau, that’s the highest level in over 50 years! (report)

The number of vacant houses on the market is especially troubling, according to Pat Newport, a housing economist with Global Insight, a consulting firm. “I’m not surprised [by the record price declines], given the inventory numbers that came out yesterday,” he said. He called the vacancy statistic “the best measure of excess supply.” (source CNN Money)
(Yeah..I’d want to be a Listing agent in this market…good luck with that)

Many of these properties are owned by very motivated sellers, builders, banks and speculators who want to sell as quickly as possible in order to avoid having to pay to maintain them.

That’s going to make these owners willing to take substantial losses just to get the homes sold. “It means prices will have to drop a lot more,” Newport said. (source CNN Money)

So with all of this doom and gloom in the market and the apparent end of the real estate world upon us, why am I not lamenting and reciting a Novena?

Why? Because the other side of this information tells me and others like me that this is the time to buy and all of this information is fantastic data to use in obtaining the best deal I possibly can.

These are the types of numbers that become “chum in the water” for those bargain hunters looking to make a deal. Is www.firesale.com available? If you are a real estate agent and you are not looking aggressively for buyers in this market you have to wonder why you are in business.

This isn’t the market for the faint of heart or the easily insulted. The dread felt by most Realtors regarding the perceived “low-ball offer”, better be dealt with in a hurry!

Not only should you expect offers below list price. You may want to get used to seeing offers 25% – 35% or more below list price. Seriously..as banks dump current REO properties to be ready for the onslaught of the next round of foreclosures, the prices will continue to fall and the inventory will continue to rise.

We’ve had the supply and demand argument here before but suffice it to say, it’s time for Realtors to become realistic and earn the moniker of professionalism that many have sought to impose for so long. I believe that there are 5 steps that Realtors need to take right now to help stabilize the market:

1. Answer the phone! If you are not going to commit to the business, please get out of it. There are buyers out there ready to pull the trigger on deals and they can’t even get a hold of the agents listing the property. We hear this time and time again. We even hear it from other agents.

2. Terminate Unrealistic Listings! If the property you have on the market has no chance of selling and your seller is “seeing what they get”, then drop the listing. There is already enough inventory on the market. I know this is a tough one but why waste your time on a property like this when you know it’s not going to sell.

3. Wrap your arms around the data! Become a projection and data junkie. If you are a professional then you need to know the symptomatic ideology that is driving the market. It is your job to understand that which is driving prices and act accordingly. The Mary Kay style agent is done!

4. Immerse Yourself in regression analysis data! It’s nice and somewhat easy to pull a flowery, rose-colored CMA, but it is more professional to understand the maxims of regression analysis. Repeat after me..I’ve done the numbers and I understand there is no such thing as a low-ball offer! By even blogging about it, whining about it or lamenting publicly about it, you are negatively influencing your seller. It’s not a low-ball offer, it’s your ONLY offer.

5. Fan the flames! Shout it from the rooftops, blog about it constantly, tell everyone who will listen, take out full page ads..let everyone in your market know that you are hosting a full blown fire sale! No reasonable offer refused..everything must go! Create a frenzy!

Right now there is a force to be reckoned with if only the force would come together. 1 Million Realtor voices would be really strong and really loud if it weren’t such a fractured voice.

I truly believe that collectively, we could turn this around. A lot of people ask me why I am so hard on Realtors. One of the reasons is because they don’t stand up for themselves. You’re an easy target, you can’t and for the most part won’t respond.

In another 30 days there will be another Case-Shiller report. I bet we can all pretty much predict what it will say. The media will pick it up and then there will be a slew of Realtors complaining about all the news being doom and gloom.

What’s the media’s alternative? Are you giving the media cause to seek other data? Has there been a turnaround, has there been an upward tick in sales nationally?

Create the news. Implement new sales techniques. Fight for your business, your profession. Begin aggressively searching and marketing for buyers. The buyers are out there, they’re just not responding to what you have to offer. Don’t list high and then step it down over time. Informed buyers see right through that lame attempt at getting a higher price.

In this information age, buyers are also reading about the techniques Realtors use to operate. You have to be smarter than that in this market.

Suffice it to say that you need to be relentless right now. I’m absolutely pumped. This kind of data means there is substantial profit to be made. Properties are nearing cash flow basis in many markets. The Internet has made the concept of virtual investing a reality. The Fed is lowering interest rates again. It’s a great time to be in real estate.

Call it what you want. Bottom feeding, vulture capitalism, bargain hunting, profiteering, opportunity seeking, call it whatever you want.

It’s The End Of The World As We Know It And I Feel Fine!