Sure, I’ll take that challenge! It should be interesting. We’ll see where the market goes and I’ll be the first to give credit where credit is due.

For the record, I’ll go with cutting your prediction in half. 15 - 25% reduction in value through the end of 2008 followed by 1 - 2 years of a flat market.

Good luck. Hope you’re wrong!
Let me know if you want me to take your email address off your comment. It’s hanging out there for the world to see (not like the world reads this blog, but we do get our fair share of visitors…)

Good post. I do enjoy debating as well.

I’m in Florida. You can’t tell me anything about winter visitors. I’m not bragging, I’m complaining.

Here is a little challenge. We should stay in touch and see who is most correct. I think it would be fun. I actually have this situation with several other knowledgeable individuals. My email for this is mhmosieur@yahoo.com

Like I said, I say 30 to 50% depreciation in value by the end of 2008 followed by 3 to 5 years of a flat market. I am including Phoenix and most of Florida in this prediction, as well as most other hot areas, So Cal, the Northeast in general, New England specifically to name just a few.

My post was not directed just at you, but at your readers as well. I’m sure you have a handle on things.

I’ve lived thru enough markets that things become obvious to me. It is playing out as expected. It pays to be the old guy every once and a while. My math was off in my previous post. I bought my first house at 19 and I am 55, giving me 36 years and several hundred houses, apt bldgs and commercial bldgs experience.

It is going to be interesting to watch this train wreck unfold.

Best of Luck! Mike

First, thanks for visiting and commenting. I appreciate all comments, even those I disagree with. Debate is healthy. I offer this in response to your last comment…

You wrote, “Everyone thinks their little corner of the world is special and immune to real estate fundementals.”

Please go back and re-read my comment. I said, “Our mass influx of winter visitors seem to find something special about Phoenix, but you’re right, it’s not immune.”

The reference to winter visitors was an attempt at humor. I suspect anyone living in an area that has winter visitors got it. Perhaps those without winter vistors didn’t get it. I’m a real estate agent, not a comedian. However, I never said Phoenix was immune to real estate fundamentals. In fact, I clearly said it wasn’t.

You wrote, “You should have a good market and a bad market startegy.”

Thanks for your concern, but you can rest assured we have strategies in place to cover any market. We’ve done better this year than in any past.

You wrote, “In case you hadn’t realized it yet, that ain’t quite normal.” (in reference to the past market)

Clearly I realize that. This blog is filled with posts and comments about the non-normalcy of our recent market.

You wrote, “Don’t be stuck on stupid. By repeating the Mantra over and over “Phoenix is differant, Phoenix is differant” doesn’t make it true.”

Again, I’m not sure where you are getting that I ever said Phoenix is different. Last years market WAS different than the majority. Most markets in the country did not experience 50 - 60% increases in home values. Most markets did not have homes selling in hours, at well over list. That IS different. However, again, I’m not saying that Phoenix is immune to the forces of a free market. Of course it is not. Last years market was NOT normal. All markets tend to move to equilibrium. The Phoenix market is correcting, and yes it will continue to correct. Some say it’s crashing. I don’t think it is. I’ve said several times that I may be wrong. ANYONE, including you with your years of experience, can be wrong.

You seem to be guaranteeing a 30 - 50% drop in prices in 12 - 24 months. I won’t make guarantees about things I have little to no control over. I make it crystal clear to my clients that there are never guarantees when it comes to real estate. Telling them otherwise would be doing them a disservice. You of course are welcome to do whatever you want. Despite your guarantee of a 30 - 50% drop in 12 - 24 months, one fact remains certain — we won’t know if you are right for 12 - 24 months. You may dead on. You may be dead wrong. Time will tell.

Finally, you said, “Incidentally, you should do some research on the Phoenix market. It has had it’s ups and downs.”

I sell real estate for a living. It’s how I feed my children and pay my mortgage. While there are certainly agents out there that do no market research, I’m not one of them.

Everyone thinks their little corner of the world is special and immune to real estate fundementals. Dangerous thinking!

With 39 years of real estate investing experience, I can honestly say if you are not a millionaire after 5 years in the Biz, in almost any market, in good or bad years, you ain’t paying attention. By that I mean Realtors see most of the good deals first.This is not a critique of you personally just a general statement.

You should have a good market and a bad market startegy. Realtors (of which I am also one) tend to resist change (normal human reaction). To be truly self discipline is not to ignore reality or try to rationalize it, especially when in the last few years all you had to do was put up a for sale sign and you had three bids in 24 hours. In case you hadn’t realized it yet, that ain’t quite normal.

The market is truly adjusting and the facts are inescapable. Don’t fight it, rather, embrace it. You should have a good and bad market strategy. By bad I mean, slow sales.(Hint: Thats when you buy.) If you do, than you will not have the tendancy to allow “non reality” to control your actions/decisions. Such as clinging to the “it’s only a market correction…it’ll go away..”. It ain’t coming back for a long time.

If you give this some thought, you will see the wisdom in it. I’d like to claim this philosophy but while I live buy it, I cannot claim to have authored it. It was passed on to me by a guy who could buy and sell any three guys you know.
Fortunatly, I was young enough so that it has benefited for many years.

We are on the brink of perhaps the greatest opportunity we will see, certainly in my lifetime and probably yours, to make multiple millions in residential real estate.

Don’t be stuck on stupid. By repeating the Mantra over and over “Phoenix is differant, Phoenix is differant” doesn’t make it true.

Incidentally, you should do some research on the Phoenix market. It has had it’s ups and downs.

Our mass influx of winter visitors seem to find something special about Phoenix, but you’re right, it’s not immune.

I may be wrong, you may be wrong, we all may be wrong.

Only time will tell.

You talk like it’s over. The “correction” / “crash” has only just begun my friend. Phoenix residential will loose 30 to 50% of it’s value over the next 12 to 24 months and the market will be in a funk for 3 to 5 years following.

RTM, return to the mean. Real Estate will over time appreciate by 3% per year. Some markets a little less and some a little more. Pick a subject property that sold in 2000. Appreciate it at 3% per year compounded and that is where prices will go.

Price is determined by three elements: 1- What it will rent for (ROI), Median Incomes and prevailing interest. The median income will be able to by the median house in any market except during abnormal market fluctuations.

I am 55, bought my first house when I was 19 and have flipped over 350 houses since. These factors have not been wrong yet. Phoenix is not special, nor immune to these economic principles.

“…Jay writes about everything from the current Chicken Little ‘the sky is falling’ school, to posting videos about a guy putting on a bizillion T-shirts.”

Let me also say that I admire Seth for re-appearing in this thread. Seth, you will come to find that there are plenty of very dependable real estate agents in any market… and in reality they aren’t that hard to find.

I think the problem that many real estate agent critics have is that they don’t shop around, they don’t negotiate for terms and services, and they don’t believe in themselves. Real estate transactions are not that difficult in most cases, but they do require attention. Not everyone has the time they might need to give the transaction the proper care, so there end’s up being a need for an agent on a clients behalf.

Real estate agents could simply be thought of as lackey’s for all I care. I know that I do my clients bidding and nothing more. I take any and all direction from my clients… my clients always make the decisions. I do offer my expertise in situations though because I’ve done more transactions recently than any of my clients (including investor clients). There is a premium for not only my expertise, but for my time. That premium can be bargained for though… it is certainly not set in 6% stone.

I comment on bubble-blog sites. I never get into flame wars (even though some real horrible things have been said about me), I simply state the facts and point out the poor generalizations that get thrown around. I’m a bigger person than most of the commenters (and even the bubble bloggers) first and foremost and because of that I notice the threads I get involved with die out fairly quickly.

The housing bubble blog mania is just that… a mania. Bad news is more interesting than good news it seems and the bubble folks have plenty of bad news. The bubble folks love to tell you the future… a competent realtor does not have a crystal ball and won’t pretend to know what the future holds. I leave that to financial advisors (who can be wrong) and to bubble heads (who can be wrong). Heck, I don’t even know who is going to win the World Series… and that is merely a game, why would I know what the market is going to be like a day, week, month, year, or decade from now??

Lastly, this David Lereah character that everyone hates so much, he is paid to guess the future. He is paid by NAR, a trade association… what do you think he is going to say?? While I have had the opportunity to meet Mr. Lereah (he is a nice guy), none of his information is ever included in any of my presentations to a client. In fact I’ve never had a client that even knew who David Lereah was. He is a talking head to the media and to the Members of NAR. When Mr. Lereah talks… I hear him but I don’t have to listen. Neither do you.

Next time, just call Jay and negotiate for the service you need and deserve.