Tuesday, 28 September 2010

Eastbound and Down



On Hobart's eastern shore sits this 4x2 - now begging for a bid at 440k.See nothing was forthcoming at an ambitious 500k and reality soon set in.

Well not quite that much reality, this house is two weeks off chalking up six months on the market - one of those dubious milestones, that can only signal one thing - buyers must be stupid!

That's what it is, right? Not your agent actually levelling with you, very bluntly and suggesting you're well overpriced. Or you actually considering your price might be too high.

No it must be those morons who want you to give it away!

Unfortunately, in these circumstances, modesty prevents a discount, because back in late 2007 the princely sum of $430k was paid. And we all know real estate only goes up, so how can anyone expect to sell for less than they originally shelled out?

Things get very sticky around this point, with saving face the prime objective, but ask yourself a question - when Dun & Bradsteet reports that referred debts for the June quarter have moved above a $1000 average (the highest since 2006), are things looking up with buyers more likely to meet your pricing?

As D&B says: referred debts are traditionally the first sign an individual is facing financial trouble.

Or should you be sucking it up? Accept that you're selling for less than you paid and finally learn that old Tasmanian saying, one I hear is also a favourite in Tennessee and apparently Texas.




Don't get fooled again.

Monday, 27 September 2010

Monday morning thoughts....

A rainy Monday here in Richmond which is great news for those of you who have already seeded your lawn. Not as good for those that haven't...power seeding comes at the end of the week at our house.



Check out this cute home...which is such a great buy for someone at the new price of $259,900. Well-maintained by the owners, this house has new HVAC, Hot Water Heater, Windows, Washer/Dryer and Appliances. With an updated kitchen and bathrooms, move right in and call it home.

Blogging Break...I got involved with HandsOn Greater Richmond last spring. I started as a volunteer for HandsOn Day and now have been hired as a contractor to manage one of the service projects at Maymont Pre-school. HandsOn Day is a city-wide day of service with over 1,000 volunteers and 40 projects. It takes place October 16 and there is quite a bit to do to get ready so I am going to take a blogging break until after the event. If you are interested in volunteering, click here.

Saturday, 25 September 2010

Realty or Reality?

In 2005 it probably seemed like a good idea - $560k for this 3x2 in Devonport. Five years pass and at $500k, no one seems to think it's a good idea any more. 

This, after an initial listing at $569k, six months back.

I can only speculate what was happening back in June 05 when over half a million was laid down for something, that frankly looks like a block of flats, but I suspect there was a lot of real estate agent bluster and a whole lot more of rampant house hormones on behalf of the buyer.

It wasn't a $560k house then and it sure as hell isn't a $500k house now. So how did the owner find themselves thinking $560k was a good buy?

It's here I'm reminded of a article written by Peter Schiff back in 2004. Schiff visited a rental house in Orange County, California. Out of interest, Schiff asked the agent how much the house was recently bought for. The agent replied 1 million dollars, Schiff then inquired as to the holding costs and taxes, adding them to the loan costs and subtracting from the rent the house would bring, Schiff quickly figured the owner was losing several thousand dollars a month.

Schiff asked how the hell can the owner afford to lose so much money a month? (no negative gearing rorts in the US) The agent, bold faced, told Schiff the house was $500k a few years back and will easily sell for $1.5 million in a couple of years more - it's just what property does.

Schiff's next question - what happens if the price falls?

Agent: (in disbelief) Real estate prices don't fall, they're not making any more land, you know.

And you know how that ended.

Peter Schiff is a smart guy, an investment manager and can think on his feet - he can easily pull apart any real estate BS in record time. But it's not Peter Schiff anyone has to worry about, it's the young couple, fed every real estate boogeyman and now scared witless that their future is a caravan, with a very small annex, if they don't buy now.

So, back to Devonport, Tasmania and more broadly Australia. Over the past year, Devonport has lost a pulp mill and now a carpet factory is doomed. Tasmania barely has 1% population growth and the percentage of Australian households without debt has crashed from 43.2% to 36.2% - the lowest in nine years.

People are either supremely confident in taking on more debt - if the newspaper says your house is worth 20% more than last year, it must be time for a home equity loan, right?

Or they're in the midst of doing a dangerous juggling act with their finances.

Whatever the case, if you were in the market for a Devonport 3x2, that resembled a block of flats and just missed out a few years back, you might be in luck.

That's if you think $69k is the first and only discount.

I wouldn't bet on it.

Thursday, 23 September 2010

Believe it or not


I pulled the covers down and flicked on CNBC this morning, just to catch trader, Mark Fisher being asked how he’d get the US housing market moving again. While I found his answer slightly odious, it was clear he’d nailed how to get anyone to buy anything.

Make them believe it will be more expensive tomorrow and they’ll buy it today – which let’s be clear, also pushes up the prices today.

Fisher’s plan was simple – hand out green cards to any foreigner who wanted to live in the US and intended to buy, and live in (no renting out), a house.

If people had no incentive or concern pushing them to buy today, they wouldn’t – especially if they thought prices would be cheaper tomorrow.

The idea green card would probably work – high net worth individuals having access to US residency on the purchase of a house, clearly there would be some house price pressure.

Yet, it’s the psychology behind the ‘more expensive tomorrow’ idea that the real estate and building industries understand and continually hammer. Think every sold off inch of column space, sponsored dollop of airtime, uncritically recycled  press release and fudged piece of data.

It’s the propaganda model in action, and it works well.

How else do you explain why otherwise sensible people begin to parrot ludicrous statements that property doubles every 7 years, or a warning like: if you don’t get in now, you never will.  

Make them believe anything – just don’t let them believe they could buy cheaper tomorrow. Occasionally, someone with a conscience, like this guy in Vancouver, strays from the herd:

A South Surrey developer “cornered” into offloading unsold inventory at below-market prices says consumers are being misled to believe the housing market is stronger than it really is.

“In contrast to this situation, which is clearly indicative of a sagging market, realtors… are blogging about how ‘hot’ the market is,” reads a statement issued Monday by Watermark Developments.

“Some realtors are putting the wrong perception out there,” explained Salome Sallehy, hired to help facilitate a sale this weekend at Watermark’s 2970 King George Blvd. project.

“Inventory is just not moving because the market isn’t willing to bear those prices. Developers aren’t really acknowledging that.”

Imagine, the real estate industry talking of a ‘hot’ market, in Vancouver – currently teetering on the edge of the cliff.

Now back to Tasmania, where the HIA has dropped their usual ‘shortage’ clanger to an uncritical media, who swallowed it like a Bangkok hooker. Unfortunately, some naive fool may well swallow that whole and think it’s time to buy.

So it’s time to look at what they forgot to mention - Sales in Tasmania are down 25%; listings are up between 20-30% depending on your market; there’s a new dwelling currently built for every 1.84 people added to the state population, and there’s now an unnerving amount of spec houses and units sitting on Domain, empty and unloved.    

Oh and a Devonport carpet factory and 150 jobs are about to evaporate.


A shortage of what? Only contrarians.

Wednesday, 22 September 2010

Front Steps Plantings

I am in the market for some window boxes to help enhance the curb appeal of our home. In the meantime, I planted some bright pansies on the front steps over the weekend. One problem I have with my front steps is they lack direct sunlight. I am hoping the pansies make it.

BEFORE


AFTER



In my dreams where I grow money trees in my backyard, I would purchase a six panel glass door like this one


or possibly paint the front door yellow like this


and paint the brick of our house and replace the aluminum siding


In the meantime, window boxes will have to do...another project for the list.

Breaking the seal


It was a momentous moment. After four months and two discounts, the pictured house dropped below the 400k price level. Why is this so momentous? The house sits within one of Burnie's McMansion estates, where eight houses, equating to over 20% of this estate are up for sale, and all houses were listed over 400k.

That was until this week.

It's now at $399,000 (I'm sure that $1000 was a true psychological barrier for buyers) down from $425,000. Reluctantly this owner has seen the writing on the wall and offered a token discount, while no doubt the other vendors keenly observe. Only one other vendor has seen fit to discount, and this amongst a group of houses that have sat, without interest, from two to seven months.

The pictured vendor may still walk away with significant gains, the house was purchased in 2002 for $179,500, but it's the newer owners in the estate who will be getting edgy. When you shelled out 400-600k over the past couple of years and the guy across the road is struggling to get 399k, that's more than his equity evaporating, it's yours too.

Of course it's your house though, and it's always worth more, but c'mon - 399k for that solid brick home above, or 450k for ugly blueboard, sloshed with render, now warping and cracking in less than 6 years?

Well, they're still both overpriced, so I'll pass.

In the end, it's stubbornness that will be the undoing of all of these owners. Seven months without a discount shows the belief: property can only ever appreciate, has been well drummed into their heads.

With interest rates predicted to rise five times before the end of next year, and almost assured next month, the amount of potential debt a buyer can hoover up is reduced. Meaning less will be paid in the future than will be now.

Or you can take the property council's word that retirees from all over Australia will wheeze into the state over the next few years, pushing up prices for the next boom.

I can only assume we'll then be expected to become in home caregivers to the hordes of mainland codgers when our health system fails to cope.

And wasn't that always your dream? Washing the scrotum of some cantankerous old bugger in his own home, while you can never afford your own.

I'll get my sponge.

Monday, 20 September 2010

Halloween is coming!



I have gotten into the fall spirit and Camille and I created a bat tree similar to the one above. It was pretty easy. I found this project in the Halloween Special Edition of Woman's Day. I did just have to relocate the tree to the dining room because it is of great interest to Clyde and to our cat.


There was a bat template in the magazine that I looked at and then free-hand drew the bats. I used black posterboard from the Dollar Tree. After cutting the bat out, the edges were a little white so I went over them with a black magic marker.


I found the branch from a dead bush in our backyard. I cut off some of the ends to make it the shape I wanted. I had the planter in one of my cabinets. I bought styrofoam from a craft store to put inside the planter.






I printed the trick or treat from my computer. I burned the edges and then glued it on cardstock or leftover poster board.


I cut small triangles from printer paper and hole punched eyes out of orange paper.


Oh and we added spider webs to our tree!

Sunday, 19 September 2010

Menu Planner

Sunday - Cavanna Pasta and Homemade Sauce from our freezer.
Monday - Angela's Awesome Enchilada's
Tuesday - Pork Chops with Maple Mustard Sauce, Risotto & Spinach
Wednesday - Black Bean Soup, Salad, Blueberry Muffins
Thursday - Not sure yet :)

Black Bean Soup
Saute medium onion in olive oil
Add 2-3 cloves garlic

Add:
1 can diced tomatoes (I use tomatoes with jalapenos)
1 can chicken stock + 1 can water
2 cans black beans
1/3 - 1/2 cup salsa
Chili powder - to taste
Cumin - start with 1 tsp and taste
dash cayenne

Simmer for 30-45 minutes.

Serve with any or all"
Sour cream
Shredded cheese
Taco Chips
Scallions

Saturday, 18 September 2010

Backhander


Some worrying stats regarding family violence were released this week, these could be linked to any cause - if you were so inclined to draw long bows. So like any blogger worth his salt, I'll interpret them on behalf of the barrow I'm pushing.

Overpriced housing.

Reports of family violence in Tasmania are up 500% in the past decade. Scary statistics, but thankfully Ruth Forrest MLC was on hand to interpret the reasons for the rise. Predictably, unemployment and drug use got a run, along with the vague and redundant term 'life pressures'.

If you can't be more specific, why bother giving throw away quotes to the media? Considering Forrest sat on the Housing Affordability Select Committee, you'd expect she may be able to offer a little more insight as to what 'life pressures' consist of.

During those hearings, in 2007, the HIA acknowledged that:
...Tasmania is now sitting around seven times the household income so we are actually rated as one of the least affordable  places to live in the world.
Now all credit to the HIA copping to that one, I suspect they never expected anyone to read the transcripts, but they then went on to talk shortages being the problem, like any good building association.Something already refuted.

Since 2007, when Forrest sat through eight days of hearings, listening while witness after witness spoke of costs out of control and the associated strains put on people, Tasmanian house prices have continued to outpace any wage growth. So much so, that Tasmania is now sitting at eight times income - Vancouver's title is clearly in our sights.

So what happens when housing grows nearly 350% in the space of a decade, when your income doesn't increase even 30% in the same space of time?

I guess amongst trying to provide shelter, those life pressures happen and family violence reports sky-rocket 500%.

Am I really drawing such a long bow?

Thursday, 16 September 2010

Dressing Table



I purchased this dressing table at my friend Becky's yard sale a few months ago. I really like the lines of it and the scale. It fits perfectly between my closet doors. It needs some TLC and I am trying to determine what color to paint it.

Here are some inspiration photos.


I would like to find a stool just like this one to put under. I am searching yard sales and craigslist. (Source: Little Green Notebook)


(Source: Good Bones Great Pieces)

Blue is one of the main colors of the room so I was thinking of painting it a pale blue color. I would also love to find some cool and interesting new knobs. Hopefully, I will get to this project in the next few weeks. Stay tuned. Oh and if you have suggestions...let me know.

Tuesday, 14 September 2010

Cannon Fodder


It was an act of treachery, the likes of which this country had never seen.

In the midst of a global financial crisis, investment banks were falling, countries were going broke and people were losing their life savings to scam artists. Just at this time, the leadership of the country decided to throw $14,000 packages out of the trenches, into the battlefields, and hope its most financially illiterate citizens would chase them.

It worked.

Thousands chased the money, chased up house prices and grabbed themselves a big debt backpack right when interest rates were at extreme lows.

Of course in defending this, we found that truth was not the first casualty of war, truth became the first casualty when Kevin Rudd and Tanya Plibersek opened their mouths. Gone was the talk of the first home owner's grant causing unaffordability, now it was the one thing helping kiddies buy their own house.

And most nearly anyone with a dollop of grey matter between their ears knew what the real game was - propping up house prices.

Rudd spelt out the pervasiveness of house mania to the country, albeit in his mealy-mouthed way.

"Our policy action here, given the significance which private dwelling investment represents in the national accounts, is to ensure that we maintain activity in the sector. That is why these one off measures have been embraced."

It was in the midst of that First Home Buyer Boost activity, in May last year, someone put down $335,000 for this 3x2 in Launceston.

One year on and it was listed again. No bites. Two and a half months, and one discount later, you can have it for $325,000. Now either those high tension electricity wires in the background have evaporated the owners, or they seriously want out.

We shouldn't draw too many conclusions here, but I will anyway. What are the odds? A house bought during the first home buyer's mania, six interest rate rises, and now a listing below the previous price?

I'll be ever grateful for Kevin and Tanya's contributions to public life.

Monday, 13 September 2010

Menu Planner

Monday - Chicken Broccoli Casserole
Tuesday - leftover Lasagna (from the freezer)
Wednesday - Cheddar Bacon Ranch Mac & Cheese (carryover from last week)
Thursday - Chicken Parmesan

Just realized as I typed this...lots of chicken this week!

I had a great open house yesterday on W Grace Street. Lots of people out and about looking at homes. Check out my new listing link to the right of the page.

Sunday, 12 September 2010

Shortage



Being the simpleton I am, it be-hooves me to ask a lot of questions. Maybe I'll come to an understanding, maybe I won't, but people are less likely to spin a line if you want a couple of facts to back up what ever excrement is dribbling down their chin.

Apparently there's a housing shortage in Australia, which in turn must mean there is a housing shortage in Tasmania. Well, if you're a real estate agent and you want to snag that sale and justify that price tag, just throw that one into the mix. Putting the fear of god into a buyer, subtly hinting their commodore station wagon could be their long term abode, is a good way to close the deal.

I had the misfortune of stumbling across this blog, which as it happens, is probably infinitely more well read than mine, but thanks to the 4 people who've stopped to visit.

A short summary, if you're too lazy to look, we were graced with the regular staples:

- now is the time;
- property is low risk;
- use the equity in your house;
- and there is an ongoing supply shortage;
 
No data to back that last one up of course, but being it's the time to buy an investment property, using the equity in your house, why would you even investigate it? Take the word of a salesman, who conveniently also has a property management service available - of course it's the time to buy.

So here's some rough stats I peeled off the ABS.

In 2006 Tasmania had 189,100 dwellings vs 489,951 people - 2.59 persons per dwelling.

From then, till the period ending February 2010, Tasmania had built 9690 new dwellings, while its population had grown by 17,848 (projected Sep 2010). As you can see I'm erring in favour of the population growth.

A new dwelling for every 1.84 persons added to the state population. By any measure, there's no shortage - unless of course people are now building houses for primary school aged kids to live in.

But hey, keep up the building and keep up the spruiking, you might even find yourself a fascinating reference point in a couple of years:
The California Building Industry Association (CBIA) continues to express alarm over what it calls an ongoing housing crisis in Southern California. Alan Nevin, the association’s chief economist, projected in a 2006 CBIA Housing Forecast that only 185,000 to 205,000 building permits will be granted this year, far short of the 240,000 new homes needed each year.”

"Southern California has been experiencing a massive population boom in recent years and it's believed that 6 million new residents will be living in the region by 2020. The population increase, coupled with the housing shortage, has the CBIA worried that it will be increasingly difficult for first-time homebuyers to find a moderately priced unit.
A shortage in Tasmania, a state with barely 1% population growth. Real estate agents say the darnedest things.

Friday, 10 September 2010

Birthday Recap

Yesterday was my birthday. I had a great day that included lunch with my mom, grandmother and sister as well as some bargain shopping at Marshalls, Ross Dress for Less and Forever 21. My day ended with a great dinner at Zeus Gallery Cafe with Michael. Here is a picture of my birthday dinner outfit....



Necklace...Forever 21...$8
Tank Tops...Old Navy...bought earlier this summer
Jeans...7 for All ManKind Roxanne...$99 at Marshalls
Shoes (not wearing in the picture but they were ballet flats in a pinkish metallic color)...Old Navy...bought last spring for $14.99
Clutch...Forever 21...$3.80

I also got the clutch in silver. They were so cheap and perfect for an id, phone and lipstick.

Wednesday, 8 September 2010

Declaring a Loss


In the port side city of Burnie, someone's had a gut-full of being a landlord. Two and a half months ago these two units were listed for sale at $315,000 and potential buyers were being lured with the promise of a  property that represents income plus growth.

While the income remains, that growth has quickly become the stuff of Santa Claus, the tooth fairy and a reformed Brendon Fevola. Like sands through the hourglass, so are the discounts on this property.

$315,000, quickly became $299,000, quickly became $290,000. And with that, evaporated the chance this vendor was going to experience any growth. Previous purchase price? $282,500, back in early 2008. Factor in the $10,000 or more in closing costs and the agent fees this time around and I'm not sure all those tax deductible, negative gearing losses are quite working out on this one.

Just remember, this is water off a duck's back. And you'll be reminded of such, next time you see a property story on news.com.au - after all it's you bum renters who are paying off this guy's mortgage....;-)

Tuesday, 7 September 2010

Flips Flops continued

How many times can I blog about J.Crew flip flops...I guess one more time. My friend, Lindley, found these flip flops for me at the J.Crew outlet in Lynchburg. Yea...they were $10! She was so sweet to remember that I was in the market for some new flops.



And speaking of the J.Crew outlet, click here to learn about the new online outlet they are launching this month. I am excited to check it out.

Credibility


Fairfax is losing trust and respect at an alarming rate, leading more readers to question if they are bought and paid for by the real estate industry, a new survey has shown.

Only a quarter of readers and potential readers surveyed in the Media Landscape Confidence Index thought Fairfax still had any credibility on real estate matters, down from half the respondents in 2009.


"The vast majority of readers find Fairfax real estate reports to be little more than comedic, myth filled love letters to the real estate industry. An indictment on those writing the reports and an indictment on Fairfax itself for giving column space to industry 'experts' to push sales," the report found.


By any measure, spruiking is on the rise as the real estate industry pushes into spring, attempting to jump start the market, through fear, paranoia and even blame on the buyers themselves, for not chomping down enough housing debt at the peak of the market...

And so the so the story goes.

As anyone might have noticed, it's spring, as the baby birds begin to chirp, the flowers begin to bloom and Fairfax's credibility continues to wither on the vine.

Spring is some sort of magical season where apparently everyone wants to buy a house and if you don't, well you're going to be asked to, told to, scared into doing it, or told you're a loser if you don't.

All for the benefit of not you, of course, but the real estate industry.

It's why Fairfax, so indebted to the real estate industry through ad spending, clears space for buyer's advocate, Catherine Cashmore, to tell a glib tale of: if you can't buy a house, it's your fault, you've got too much debt! And if you do buy now, you're set for good returns - so get in anyway.

Well I'd agree, debt's the reason you can't buy a house, but it's certainly not yours. Credit explodes, morons find themselves with 100% loans to bid up prices beyond any reasonable measure and apparently it's your fault for not taking part in such madness.

I'd go into further detail, but the best rebuke to Cashmore's rubbish was from Garth Turner's blog today, (yeah I stole this idea from him).
In short, the entire tilt of public policy in both countries has been towards home ownership – resulting in a stunning 70% or so of the population having one, with the overwhelming bulk of their net worth now in a single asset.

And maybe that’s exactly the problem. Maybe seven in ten people didn’t deserve to have houses in the first place. Couldn’t afford them. Should never scored mortgages. Were strung along, lured by house porn, cheap money and a bar that was far too low.

Why does anyone have a right to buy a $400,000 home when all they have is $20,000? Why should the government stand behind an idiot lender willing to finance a deal like that? Don’t pro-housing policies just drive prices higher and responsibility lower? So why should taxpayers move in and save a derelict homeowner’s ass when the inevitable happens?
If you want some buyer's advocacy, I'll save you the time and money from bothering with a buyer advocate: learn use to Refind, hold your nerve and enjoy the discounts.

Sunday, 5 September 2010

Back to School Menu Planner

Sunday - World's Best Lasagna (this is the highest rated main dish recipe on allrecipes.com)
Monday - leftovers
Tuesday - Pepperoni Calzones (variation on this recipe)
Wednesday - Bow-tie Pasta with Sausage
Thursday - Chicken Chilaquiles (I am going to put this in tortilla's instead of serving over tortilla chips.)
Friday - Bacon, Ranch, and Chicken Mac and Cheese

Saturday, 4 September 2010

Lest We Forget


Over the weekend we've been dealt divergent stories on the Australian real estate market. One essentially misplaced from the daily horoscopes, Libra and Scorpio: buyers will be madly snapping up houses in Sydney over your birth months. The other regarding Queensland's dying property market and the resultant carnage ripping through real estate offices, with many agents now dead on the battlefield.

According to Andrew Carswell and Vikki Campion in the Daily Telegraph (yep, it took two minds to cobble this tale together)
MORE than 100,000 Sydneysiders are waking from winter hibernation ready for a spring home-buying spree that experts predict will jump-start Sydney's property market.

 Real estate agencies are anticipating a record flood of inquiries in coming weeks.
What follows is a series of quotes from agents, one more laughable than the next, based on their hunches and assumptions. The kind investment analysis you'd hear at the bar after four pots, is now passing for news in one of Australia's biggest newspapers.

The underlying message here? Fear. To scare the buyers: Believe all these people will come out of the woodwork and snap up a property before you do. And very scared agents: If you don't all come back, we're going the way of Queensland.

Where Ellen Lutton, of Fairfax, tells us:
Queensland real estate agents are struggling to make ends meet in the current property climate, slashing staff, costs and even closing their doors for good.
Normally I'd have sympathy, a lot of sympathy. Losing your job is horrible and finding your business in trouble even worse, but the real estate industry has long relied on a favourable run of bull dust press releases, full of unsubstantiated predictions to be turned into legitimate stories in newspapers, just like the Telegraph example.

The result? The most unsophisticated are duped into believing a maddening number of myths, chow down on monster debt and find themselves well and truly on the skids. As you can tell from the May 9, Sunday Telegraph.
MELINDA Mifsud is the face of the so-called Australian dream which is at risk of going sour as interest rate rises and falling property prices in Sydney's southwest force homebuyers into negative equity.

Ten months after buying a house and land package for $407,000, Ms Mifsud, 25, and her partner Stephen Holland have been hit by six consecutive interest rate rises. To make matters worse, the value of their Spring Farm home is falling.
Supermarket worker 21-year-old Danielle Simpson is going for a promotion at work to help her and her partner Lee Mansell, 24, repay the $315,000 home loan they took out with only their First Home Owner Grant of $14,000 as deposit.
Jean Evers, 52, and her husband Garry, 45, fear losing their home.
In January, only four months after they purchased their $415,000 new home on the edge of Narellan Vale with a 100 per cent loan and $24,000 First Home Owner Grant, Mr Evers was retrenched. Since they purchased their home, their repayments have risen by $400.

As Jean says, "...they lured us in with a false sense of security and then hit us with everything. I hate to think how many people have bought like we did."

And I hate to think how many others were dished 100% loans at the bottom of the interest rate cycle, but alas, unlike America, we have lending standards in Australia.

At least Jean can take comfort, she's not the only one doing it tough, Alan Guyder of Harcourts in Queensland can relate,  "It has actually helped us to re-think our strategy and given us a chance to re-think how we do things, cut costs."

Just like first home buyers who now share dog food casserole recipes.

Minor rumblings from the industry have called for another doubling of the real estate agent's body armour - the First Home Buyer's Grant. If the Queensland carnage spreads, those calls will only get louder and the next time around someone better ask the question - for the benefit of the agent or the buyer?

Thursday, 2 September 2010

Truth in Advertising



There's a terrible misconception out there: real estate agents stretch the truth.

So whenever you hear that falsehood in the future I expect you to furiously step into bat for the poor reputation of real estate agents. Afterall, the pictured house sits in Shearwater a beach retreat not far from the city of Devonport. The going price for that pointy 4x2? $565,000.

Now about this truth...

Well, how the hell does the agent market something so insanely priced? Just like this: Looking for families - 1,2 or 3 to purchase this great home. Yep, when you're faced with such unaffordability it's straight down the line, you may as well tell the truth - it's going to take 2 or 3 families to buy this one.

Of course the cynics out there will cry "inadvertent balls up by the agent, too stupid to even understand what they've written!" But only the truly jaded could think such a ridiculous thing.

See, despite being described in another listing as a 'tightly held location,' Shearwater has had an industrial strength dose of metamucil. So you'd understand an agent trying every weapon they've got to close, including getting 3 families to pay the mortgage. 

Back in the 2006 census Shearwater recorded 427 private dwellings. I'll be a generous man, so between 2006 and 2010, I'll allow for a building boom and round that figure up to an even 500.

And how many of those 500 are currently for sale? The big nine-o. 90 houses are for sale in Shearwater. 
What makes this such an interesting statistic? Many of those were acquired at a time when you could snag a house or land there for under 50k. Some now have an asking price in excess of 700k.

Sitting on massive paper gains, the smart money is now rushing for the exit. Yet as credit tightens and buyers become more considered, many vendors are relying on that two, or three family commune to become a reality.

Wednesday, 1 September 2010

The deluded



As the agent says, it's a prime investment - for the vendors. It cost them $47,000 in 2001, no you're not reading that wrong. Mind you, this was way back when houses were somewhere you lived and not something you got an erection for, then ran to the bank asking for 30 years to life.

See things were a little different in Tasmania, there was honour, innocence and common sense. You bought a house, you sold a house, you might have even lost a couple of bucks, but it was only ever a couple and it didn't matter - because your neck was never on the line.

Then credit exploded and mainlanders arrived, buying up every house they could and renting them back to the locals. That's how someone had the audacity to ask $319,000 for that heap just over six months ago. Thankfully no one is that stupid and it's just been knocked down to $265,000. Still, there can only be one loser in this situation - the buyer.

Cause it's important to see where this house has come from, then ask yourself the question - does even this discounted price make sense?

1984 - $33,500
1986 - $34,500
1991 - $50,000
1991 - $57,500
2001 - $47,000

2010 - $319,000 - $265,000 - I pity the fool.

Now I'm not even going to pretend those prices are worth it.
It's big - electricity is going up 16% have fun heating it.
It's old - hello money pit.
And the windows look like they need a crowbar to open.


Six months and no bid, maybe honour, innocence and common sense are returning to Tasmania.