Morning Folks!!
I live in a town of about 80,000 where there are 20 homes on the market between $10 Million and $25 million. There are also 70 homes between $5M and $10M. Then from $2.5 Million to $5 Million there are another 125 homes. Finally between $1 Million and $2.5 Million there are another 460. It’s even worse than that. Under $1 million has just under 4000 listings.
Yesterday I drove down every street in the city in the primmest of areas. I saw things that I really don’t like. I saw a number of homes in addition to the above that were just vacant and not maintained. Obviously bank owned. No for sale sign either. Dozens and dozens of them. What I saw that disturbed me even more was the observation that in an area where folks really maintain their lawns and plants and trees, they were no longer paying their gardners. It was quite obvious in many homes and many of these are not on the market. YET!
I was truly stunned to see what I saw.
You all know what I have been talking about for the past 18 months or so but this even put me back on my heels. This is disturbing. This is the beginnings of a possible catastrophe.
What is coming in the housing market will affect EVERY homeowner in the country. The market is about to take a plunge the likes of which we have never seen and it will take the GOOD stuff with it.
What is coming will undercut the market in a way nobody has imagined. I am sorry my friends, even your homes are likely to suffer in a way you may not see coming. How much could your home go down? Well that depends. Let’s say you and your neighbor both bought a home worth $750k 3 years ago. Let’s say the bank foreclosed on your neighbor. The banks job is to dump that property asap and get that liability off the books. They really don’t care what they are going to leave behind because it is about to spin out of control regardless. So the house next door that you owe $700k on sells for $350k. What is the value of the home you owe $700k on? Or even $600k? Or $500k. Many will just walk away refusing to throw good money after bad. That will undercut the market even further and the $350k becomes a HIGH WATER mark, not a low water mark. So prices continue to go down.
This all creates further problems that begin to compound themselves as tax collections go way down and then services go with it.
Like I have said for a while, there is this small window of opportunity before the collapse, meltdown and the catastrophe’s that I believe will follow. That window appears to be getting shorter and smaller.
When you filter out the noise and listen to the business people on the front lines with no political agenda, there is no question things are about to get dire. So they can say all day long that the recession is over. I think it is nonsense. If you are in the desert with no water and some schmuck declares the drought over before giving you water to drink, what would you call it?
The numbers prove they are wrong. The numbers prove real pain is coming. The numbers prove that it may be a very long time before we rebound from all this. The numbers don’t lie. Corrupt bean counters do. Stockbrokers do. Bankers do. Everyone with an agenda lies. Numbers have no agenda. They just paint the most VIVID picture and in this case few really want to deal with the reality about to come. They don't do it now and they did not do it last summer. I DID!
If you want to know how this will affect the domain industry, then you can read my interview at DNJournal.com. Not for the faint of heart. I tell it the way I see it.
Have a GREAT Day!
Rick Schwartz
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