I’m a Realtor, but i’m also a big fan of Patrick.net, which is loaded with anti-Realtor diatribe and invective.  In my copious experience, there’s all kinds of Realtors, from excellent to abysmal, from Realtors who will actually save or help make money for their clients, and Realtors who will cost their clients tens or even hundreds of thousands (millions, even?) of dollars through sheer incompetence in pricing, marketing, and negotiation.


Aside from all the fear and loathing of Realtors exhibited on Patrick.net, they do provide a daily e-mail blast of housing news – and it is universally negative, or so many would view it.  There’s article after article explaining how in most parts of the country real estate is still over-valued with more declines to come, it’s better to rent regardless, that government interference in the mortgage market is largely to blame for this whole “crisis.”  Here is a selection of choice articles they linked to in today’s e-mail:

U.S. House Prices Face 3-Year Drop as Inventory Surge Looms

Bank Repossessions of Homes Hits New Record in August

Home Price Double-Dip Begins

My anecdotal evidence from the field do indicate that in fact, inventory is surging, more homes are reverting back to lenders as REO foreclosures, and that in many areas here locally, prices do indeed seem to be on their way down again.

While many in America might read those headlines and see bad news, I see the opposite.  I see a long-overdue and very necessary correction in the housing market.  At least here in my slice of gorgeous Northern California, housing affordability has been so poor for so many years, it seems logical in retrospect that housing prices had nowhere to go but down.

And that’s a good thing.  Unless of course you bought some real estate at the peak, or re-financed your home and sucked out a lot of vapor-equity and blew it on travertine tile, granite slab counters, a Mercedes and a few lavish trips to Mexico and Thailand.

I got a new REO assignment yesterday, and I took my assistant along with me to go and do the occupancy check, and so we could chat and talk about the business, what’s going on in REO, and real estate in general.  My assistant is also my buyer’s agent, and we got to chatting about how one of his clients had bought a home in the area last year, and was loving being a home owner.

His client had, of course, purchased an REO – a big (2000+ square feet, that’s “big” here) house with plenty of space for his growing family.  He’d bought it for about $250,000 – which was about 50% less than the peak price of $500,000 for that same house.  His housing payment is around $1300 a month, which is much, much less than it would cost him that very same house, and of course about 50% less than if he had to pay twice as much for the same property.

The net result of that is this homeowner has a lot of extra money in his pocket than he otherwise might.  This is money that he is very likely to spend in the local economy – going out to eat, buying clothes for his kids and movie tickets and home maintenance and improvement supplies from the local hardware store, etc. – instead of seeing this money funneled un-productively out of the local economy and into the hands of out-of-state or extra-national mortgage bond investors.

So I welcome further home price declines.  I see low prices as opportunity, I see them as engendering stability and solvency – and I think this is really important if we want strong families, neighborhoods, schools, and society.  So even if you are one of the unfortunate people who bought at the peak and are paying through the nose on your mortgage and the government hasn’t given you a loan modification or a principal reduction because, ironically, you’re a good borrower and make your payments and therefore don’t deserve a reward – be at peace.  These are transformative times, and better days are maybe not on the horizon, but they’re at least over the horizon and we’ll get there some day.

Meanwhile, bring on the correction and let’s set the economy right, and we’ll see the housing values rise organically when the time is truly nigh.  But that time isn’t now.  Now, it’s time for me to get cracking on those 3 BPOs I have for my pre-marketing listings.  I’ll write again soon.