Hoppin' mad!

I was Googling some ideas for creative incentives during this crazy time in real estate and I stumbled upon an article in the San Francisco Chronicle, written just this past February, that made me very angry.

The article was actually about "stimulus" money incentives that were or were not distributed to the real estate sector. An economy "expert" was interviewed and here is the segment that bothered me:

Chris Thornberg, economist with Los Angeles research firm Beacon Economics, said the stimulus package is necessary to help revive the economy, but that the home building industry doesn't require or deserve any special consideration.

"The housing industry broke first, but it was only a symptom of the underlying problem in the U.S. economy ... a 12-year spending binge based on overinflated values of our homes," he said.

I am not an economist myself but I am SHOCKED that an "economist" would not acknowledge the concept of supply and demand. If supply is low and demand is high, it's not the builders who set the price, it's not the car dealers who set the price, it's not the flat-screen TV makers who set the price. The market sets the price.

Let's say Mr. Thornberg sells candy bars. Let's pretend it costs him 5 cents to make and wrap the candy bar but that there has developed a sudden demand for candy bars because Barney Frank says that folks who haven't been able to afford $2 candy bars in the past deserve to be candy bar eaters.

Let's also say that in places like Atlanta, people can't get enough of the candy bars and that folks who previously could afford the $2 candy bars are now demanding $5 candy bars because they are in a bidding war with other folks and the price has skyrocketed. Is that Mr. Thornberg's fault? Should Mr. Thornberg start making candy bars faster and faster and more sloppily and at the original $2 price just because some sociallist thinks that's the right thing to do?

I say that if the public is willing to pay, there is nothing wrong with making a profit. It is not the builders', entrepreurs', or widget-makers' fault that the public was willing to pay more for real estate in 2005 and that the bubble burst.

Shame on you, Mr. Thornberg, for implying that builders had some kind of control of the current recession that they don't deserve help. My husband is an honest, hard-working, builder and has been in business for more than 20 years and it is mentality like yours that make people think that he was price gouging the public.

If you only knew. My husband can name you at least a half dozen "customers" who have taken advantage of the kindness of him and his dad over the years. Don't tell me they don't deserve help.

Edited to read: This is a great quote from Atlas Shrugged-

"Do I wish to sell my product for less than my customers are willing to pay me? I do not. Do I wish to sell it at a loss or give it away? I do not. If this is evil, do what you please about me, according to whatever standards you hold. These are mine. I am earning my own living, as every honest man must. I refuse to accept as guilt the fact that I am able to do it and do it well. I refuse to accept as guilt the fact that I am able to do it better than most people - the fact that my work is of greater value than the work of my neighbors and that more men are willing to pay me. I refuse to apologize for my ability - I refuse to apologize for my success - I refuse to apologize for my money."

Green Sweepstakes

In the interest of survival, I am entering sweepstakes and stumbled upon this one. Enter to win!

"Throughout the month of May, I will be hosting a giveaway to reward my regular readers and those who are active on my site. Similar to the February giveaway, the winner of this giveaway will a gift certificate to your favorite green store. This time it will be $50 either in the form of a gift certificate or as cash, to spend the money at a local green store."

What's the worst that can happen?

It always strikes me funny that folks are so tentative when they talk to real estate agents. Perhaps many people think that if they reveal what they can or cannot afford, they'll be embarrassed. On the other hand, I wonder what's the worst that can happen?

I imagine a real estate agent brainwashing someone into buying a house and then, six months later, someone realizes they hadn't intended on buying the house they are in at all!

In reality, what happens is we get your name, maybe follow up. If you can't afford the house you were inquiring about or you're just not interested... TELL THE LADY! It's OK. You're not going to hurt our feelings. We're not going to put you on a spam list where you get junk mail for the rest of your life.

I think one of the hardest things to deal with regarding the increase in email, blackberries and Facebook is that people aren't as personalized anymore. We have now been trained to use and discard more than ever. Few people have the personal skills to handle being direct and honest anymore. We feel we have to dodge, evade, and hit-and-run.

The economy is alive and well...

Yet more proof that the economy is doing just fine. Don't even think about considering a depression when folks have enough time on their hands to consider suing someone over a logo that doesn't even remotely look like another logo! My favorite part is when the guy tries to describe why the "h" looks like an "m."

This makes my blood boil! First of all, part of the reason someone would sue someone else over something like this is that someone would risk confusing the second logo for the first one. Has anyone ever heard of Rehava? I guess because the logos LOOK NOTHING LIKE EACH OTHER are so silmilar that is what the LAWYERS fear is "Rehava" getting so popular and some dim wit actually believing they were going to Remax when they were entering the Rehava office.

Coldwell gets folks all the time calling us about Prudential agents. I guess because our signs are both blue and white. If things were headed for a depression like the gloom-and-doomers want you to think, things like this wouldn't be happeing. That lawyer would be building a fallout shelter right now and hoarding food.

Oy vey!

In response...

In response to an interesting "article" written by a blogger about Realogy, the CEO of Realogy Franchise Group had this to say to our fold:

• During the past several years Realogy has moved aggressively to mitigate the impact of the economy on our company. We have successfully reduced our overhead by more than $350 million and continue to focus on maximizing the effectiveness of our cost structure.
• As we have focused on costs we have been equally focused on growth. In spite of the woes of the housing market we have made great progress in advancing our company. From franchise sales to the retention of the top-tier sales associates to signing new clients at Cartus and Title Resource Group, we continue to be forward thinking, highly focused on the future of our company and the industry.
• In 2009, we expect to benefit from considerably lower interest rates since a significant portion of our bank debt is tied to LIBOR;
• None of our corporate debt is due until at least 2013; and
• Unlike many companies in today’s economy, we have the support and commitment of one of the best financed private equity firms in the country, Apollo Management.

Too bad both of the sides of the story couldn't be shared. Just goes to show you that you need to do your own homework- can't believe everything you read, including this!

The Big Energy Gamble

So, Steve and I were watching WUNC-TV the other night and they had a program on called The Big Energy Gamble. It was about California and how the governator has high hopes for energy efficiency. His plans are ambitious and many are skeptical about the ability for the public to achieve his goals in the near future.

I thought it was particularly interesting that Steve is proposing to do exactly what the show said: that sealing outlets, installing more or better insulation, and replacing dead bulbs with CFLs will make easy, inexpensive, and marked differences for most than doing more extreme things like solar panels and turbines.

Steve's plans are to be able to evaluate someone's house, make the improvements where they need to be made, and then get an energy rating for the house so someone can say "My house is Energy Star Rated and here is my HERS number."

Irrational Anxiety

I am a new fan of Will Wilkinson! I heard a fantastic commentary on Marketplace this morning on WFDD and I would love to share it with you. Here's the origin if you prefer to read it that way:

"Penny-pinching is a time-honored recession tradition. For those who've lost a job, are dealing with reduced hours or wages, or face a real risk of economic pain, it's plain sense to do what it takes to make ends meet in lean times. Cancel Showtime, pile on the sweaters, go unto the checkout armed with coupons. When you have to do it, belt-tightening's no joke.

But, gladly, most Americans don't have to -- not even in this economy. Most of us won't lose our jobs, won't face a pay cut. Yet we tighten anyway. Dollar-stretching tips circulate even among the most comfortable. But if your paycheck's intact and you're still cutting back, you may be part of the problem.

When home values surge, we tend to feel richer and spend a bit more, even if we don't plan to sell the house. Economists call this "the wealth effect," and it's got a recessionary flip side. So when our 401(k)s dive as the economy hits a rough patch, we feel a bit of a pinch and rein in consumption -- even when our incomes and the long-term value of our investments hasn't changed a bit. In short, we don't always look to our personal financial fundamentals when choosing whether to splurge or scrimp.

But just as "irrational exuberance" can keep a speculative bubble afloat, equally irrational anxiety, and the ethos of austerity it produces, can trap us in the doldrums. So maybe you went a bit crazy during the boom, and now's the time to return to financial sanity. Good! But if you were living comfortably and responsibly within your means last year, you probably don't need to cut back now.

Of course, none of us is duty-bound to stimulate the economy by snapping up 50-inch plasma screens just because we can afford it. But if you're blessed with good fortune in these hard times, you're not helping anyone if you let frugality chic stop you and yours from having a very Merry Christmas indeed."