Find Us:

A joke about economists for Real Estate Sellers in 2008

For a detailed look at the economy, the Anderson Forecast out of UCLA is a pretty good resource. You can buy their entire quarterly report, but this link will take you to a good summary – the report includes a deep dive into the failure and hoped for recovery by 2009, of the sub-prime market:

UCLA Anderson Forecast December 2007

More information like this, always, at Lots of dry economics. We’ll package it as slyly as possible!

So, lets tell a joke about economists…

A mathematician, an accountant and an economist apply for the same job.

The interviewer calls in the mathematician and asks “What do two plus two equal?” The mathematician replies “Four.” The interviewer asks “Four, exactly?” The mathematician looks at the interviewer incredulously and says “Yes, four, exactly.”

Then the interviewer calls in the accountant and asks the same question “What do two plus two equal?” The accountant says “On average, four – give or take ten percent, but on average, four.”

Then the interviewer calls in the economist and poses the same question “What do two plus two equal?” The economist gets up, locks the door, closes the shade, sits down next to the interviewer and says “What do you want it to equal?”

One of the biggest “know it alls” that I know got a 2.0 GPA with a BS in Economics 21 years ago. Loveable, but a know it all with a 2.0.

He’s now a very successful man.

I would rather listen to him tell me what he thinks of the economy than a bunch of data crunching 3.5 GPA hippie schoolkids in LA. … but I digress…

A lotta times, when you read over and listen to what economists have to say, it all sounds the same. A variety pack of economic indicators that all influence the other and all lead to whatever the economist wants them to lead to for that particular media need. Nevertheless, I’m an economist because my profession demands that I analyze and conceptualize and work with numbers everyday in order to help my clients make informed decisions. I’m an economist too.

I’m a professional and I have to know my numbers, and the reason that you should also know your numbers as a property owner or a property investor is the same reason that I should know mine. If you consider the remarkable difference in life and business between being a professional and in being an amateur, then you’ll want to know the real estate numbers that are relevant to you and your goals.

Here’s what you need to know to understand what’s going on right now in metropolitan Atlanta real estate submarkets:

1. “the great housing boom of the 2000s was fueled by ‘exotic’ finance, and that finance for the marginal borrower, for the most part, is no longer available,” according to an Anderson Forecast report last year. The report stated that mortgages were available just a year ago “to practically any borrower who had a pulse,” including those seeking “NINJA” (no income, no assets, no job) loans.” Mortgages offered under these flimsy conditions are no longer available.

2. If you are a qualified Buyer of Intown Atlanta real estate, then take advantage of this wonderful opportunity, and future opportunities in the next few years, to buy real estate. We are in a Buyer’s market because the market is flooded with inventory. One of the largest contributors to the rising inventory levels is the activity generated by foreclosures of sub-prime loans. Lots of supply, and less demand now – some folks just won’t be homeowners anytime soon, especially if they are NINJA’s! So if you are qualified, then what are you waiting for? Get your real estate on!

3. If you are a motivated, ready Seller who knows their street by street market numbers, then balance your price goal with the fact that Buyers have a lot to choose from, and that you know that there are less Buyers who are truly qualified. If you know what your acceptable net profit or loss at closing needs to be, then remember that you should insist on seeing true proof from a legitimate financial institution, preferably with a local service provider, before you counter a price offer!

4. This is a market to be in for a long term, conservative investment strategy… Sometimes you are up. Sometimes you are down. Buy low. Sell high.

Mr. and Ms. 2008 Seller, with all due respect, you are high if you fight the law of supply and demand. If you must sell right now, sell and go make up for your loss, or your smaller profit than you expected, with a killer buy.

Real estate investing is a matter of maximizing equity preservation. I did not learn that in economics class. I learned that because I’m street smart.

Win / win or no deal is the central tenet of my real estate broker, Keller Williams Realty International. Make it your central tenet as well, Mr. and Ms. 2008 Seller. That’s street smart.

Get a contract and negotiate a win/win. A minimal win for you Mr. and Ms. 2008 Seller, starts with knowing that the Buyer that you are about to get into agreement with is legitimate. You must also question the validity of the Buyer’s lender, and the professionalism of the Buyer’s real estate agent. If your life decisions are based on the fact that there are a helluva lot of average people nowadays, and if you believe that depending on average performers when you make life decisions can be costly, then insist on working with professionals and call ‘em on it when you need to make an on the spot correction. Get your real estate on!

Call The Rootdown Group if you need help.

For the rest of the month of January, the Intown Insider is declaring that supply and demand is a bitch, and shall continue to be a bitch.

Speak Your Mind


« Back to text comment