Loan business is slowing...so brokers go speculating
We are officially in the "holiday season" and it is typical for things to slow down some. I went to a few offices today, but I really want to talk about what I heard/saw at 2 offices.
In one office, the broker was all happy because they were buying another property! The house they bought in Phoenix has "gone up $200,000 in 6 months!" so the broker was going to buy another "cheap" house in the 250-280 range. They bought their current house for about 375k or so. Another house in the neighborhood just went on the market for 620-640k. So the broker put theirs on the market to sell in the high 500's. Their house is nicer than the 600k one...so they figure buyers will see the price tag on that house, then see their house as a "great deal". They haven't sold it yet...but "it won't be any problem". The broker told me that they can't wait for 2007, because they are going to keep buying properties with the equity...and flip them every 6 months for the next year or so. WOW! I wish I had thought of that. I just nodded, smiled, and wished them luck.
I didn't even bother bringing up the staggering increase in inventory of over 24,000 properties. I told them a while back to be careful with the Phoenix market...but they "proved" me wrong with the 200k "gain" in 6-months. Oh well. It will be interesting to see how it all pans out. Maybe I'm totally wrong and property will continue to skyrocked people into millionairre status by flipping houses for another 12-24 months.....or maybe not.
THEN I went to another office where both of the brokers were out of town. They had flown to Texas to buy some investment property. I think the property that they are buying can actually be rented at break-even, or maybe just a little bit one way or the other. I don't know all the details, but it is just interesting that because the "loan business" is slowing down some, that some brokers are starting to speculate on real estate at this point in the game.
That reminds me...the first broker thinks they are getting "good deals" because people are getting hesitant around the holidays, and they want to get in before things take off in the spring again.
What do you think?!?!?!?!?
In one office, the broker was all happy because they were buying another property! The house they bought in Phoenix has "gone up $200,000 in 6 months!" so the broker was going to buy another "cheap" house in the 250-280 range. They bought their current house for about 375k or so. Another house in the neighborhood just went on the market for 620-640k. So the broker put theirs on the market to sell in the high 500's. Their house is nicer than the 600k one...so they figure buyers will see the price tag on that house, then see their house as a "great deal". They haven't sold it yet...but "it won't be any problem". The broker told me that they can't wait for 2007, because they are going to keep buying properties with the equity...and flip them every 6 months for the next year or so. WOW! I wish I had thought of that. I just nodded, smiled, and wished them luck.
I didn't even bother bringing up the staggering increase in inventory of over 24,000 properties. I told them a while back to be careful with the Phoenix market...but they "proved" me wrong with the 200k "gain" in 6-months. Oh well. It will be interesting to see how it all pans out. Maybe I'm totally wrong and property will continue to skyrocked people into millionairre status by flipping houses for another 12-24 months.....or maybe not.
THEN I went to another office where both of the brokers were out of town. They had flown to Texas to buy some investment property. I think the property that they are buying can actually be rented at break-even, or maybe just a little bit one way or the other. I don't know all the details, but it is just interesting that because the "loan business" is slowing down some, that some brokers are starting to speculate on real estate at this point in the game.
That reminds me...the first broker thinks they are getting "good deals" because people are getting hesitant around the holidays, and they want to get in before things take off in the spring again.
What do you think?!?!?!?!?
posted by SoCalMtgGuy at 5:49 PM
6 Comments:
PTB...
Nope, I never had that handle, and I am not (nor ever was) a loan officer.
I have spent a lot of time lurking various blogs/message boards (cars, news, stocks etc) but I am relatively new to doing my own blog.
The way I see it, it comes down to adding value, and giving people something they can't get everywhere.
Thanks for the post...and keep checking back.
SoCalMtgGuy
I just wanted to say thanks for a good dose of reality. The RE market feels like the beginning of 2000 in the stock market. Seasoned investors are shying away but the newbies keep talking about another great year. The ATM machine is about to cry 'insufficient funds' and when it does the for sale signs will come out in full force. Thanks again for your insight in the lending business.
Cactuscody....
You are quite welcome. I wish I had started this blog years ago. I have so many "good" stories I could have told along the way.
Oh well...I'll just do my best to keep getting the word out about what I am seeing in this industry.
Nobody has a crystal ball...but hopefully time will vindicate those of us who have been saying this is NOT right for the past few years.
I agree, my wife and I moved to San Diego, we tried to buy a small 2bed 2bath condo for 385, they declined, wanting more money, we walked away.
Those same condos are going for 349 right now and sitting on the market for months and months.
I'm so thankful that they turned us down. I'm hoping by 2008 we will be in a more favorable position
I also worked for all the Century21 offices in the san diego and orange county areas.
They are closing offices, having tons of training sessions, realtors are mad because they have so many open houses to do, no buyers, having "keep your chin up" pep sessions.. I just sit back and smile
Oh yes home sweet home it is even if your one hundred thousand dollars or more underwater on your mortgage.
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