Coachella Valley will not be affected by a downturn in the Real Estate Market

Lets talk Real Estate
Logic wanders around talking yes but listening even better while living in the Coachella Valley in California. Palm Springs real estate is the largest topic of discussion because real estate is most people largest investment. We question this investment a lot because it is your home you have to live somewhere and the cost to keep these “Quote Investments” up continually.

The title for this story
It is a summary of the title of the business section of the Coachella Valley newspaper The Desert Sun from 2007. We do not remember the exact woirding so we are not quoting it but this is close to the raw raw wording they used when the market was first reporting in 2007 about a slowdown in the real estate market. Remember papers used to be in the business of selling papers but our opinion is with newspaper subscriptions falling ever year nationwide that they have to write stories that not sale papers though it helps but rather to write stories that are good for their advertisers and in the Coachella Valley there appears to us to be two major types of advertisers, Real Estate and Auto Dealers more the Restaurants and other Services.

Economic fundamentals
We have never heard more self justification for why someone owns their house and calls it an investment. If you own two homes then you do have an investment and the true value in that second home is the ability to rent it out. This is because renting the house out is the only true way you are actually going to make money in the global economy. The housing market has really ended when we see over 800,000+ condominiums available in inventory nationwide, and more coming on line this year because of early planning and funding that was awarded prior to the Real Estate Industry went bust.
CNBC this morning reported that there is over 11 months of homes on the market nationwide the highest number in history. This might explain why we are seeing so many home builders selling off vacant land and on started projects being stopped after they just started development nationwide.

Real Estate Industry and Agents Defined
Listen the real estate industry, it’s a great industry and in fact real estate is. They, the industry experts claim that real estate is one of the best investments you can make. Here is what we are going to share about the real estate industry and real estate agents in Palm Springs and the surrounding nine cities that make up this Coachella Valley.
This is because Logic and Catnip live here and have first hand knowledge about the business of real estate in the Coachella Valley.

What did we buy as and investment
Ok we all need a place to live and some people in fact a lot of people bought what are called the “McMansion” house a want to be millionaires
(non-Real Estate area of personal homes the place you call primary residents would not qualify you as a millionaire) bought into this 5000 to 8000 square foot home craze that exploded in California during this last 12 to 15 year real estate market boom.
Real Estate agents would often tell us that the market is going up and (they are still saying this today) you are a fool to not be buying the homes on the market they would say to us and others. In fact these very real estate agents were the very persons buying a house that came on the market then add a coat of paint, put in All New Appliances and call it updated and sell it for a whole lot more then the 4 or push it 5000.00 dollars in efforts and sell it to a flipper as well or believe it our not sell it to yet another real estate again that believed the very hype they were pitching to unsuspecting or greedy 2nd 3rd or more home buyers. You know some players in the real estate business made out good to great. If they got in then got out prior to 2006 they made it money and they kept it, but you will have a really hard time finding anyone that sold and stayed out of the real estate investment game. The greed was to much for most to handle and real estate selling became for years in the Coachella Valley the number one or two industry.

How is Real Estate today
Logic is not going to tell you that things are looking great and there is no need to tell you how bad the real estate market is either. What Logic will share is and economic forecast a prediction of where the housing market is going where it will recover and what will cause real estate to likely never see the gains that see saw for most of the 1990’s to the mid 2000’s.

How did the housing market get so out of control
Lets look at the fact that real estate enjoyed a 15 year plus boom.
People were feeling great, lots of people bought a better home then the one they had, first time buyers got into a house through the credit market easing and hype drove all of the house buyers into a belief that it housing would always go up.

Housing prices rose, but my pay check did not
Here is what tells you in any market that this could not continue. Wages you know those checks you and us receive each week or two for working at our jobs because you see at work the reason you and us have jobs is because we are specialists in what we do. Specialists in our job not in real estate. Wages did not go up to match this real estate price increasing, prices rose because they were driven by hype and it was going up housing however it was being driven by agent buyers and agent resellers also there were the flippers you know there was even a television series named “Flip This House”.

Agent growth in the Real Estate Industry
To many people have a real estate license today and what happened was because you and us were busy doing our specialty jobs we listened to these people and their industry hype lessons about how great your neighbor is because they just bought a home in a new development and it has gone up 20+ percent this year and you would be a real looser if you do not move into that same development like your smart neighbors did just 6 months ago but for 80 to 100000.00 dollars more.
But you Mr home buyer with your secure manageable mortgage do not need to worry because even though your house was almost paid off or certainly the payments were manageable you can be qualified very easily we can get you and ARM (adjustable rate mortgage) and hey interest rates are low and in fact why worry your house will gain 20 percent plus maybe each year, so you can refinance and to cover these newer slightly larger payments. Oh yes and your taxes are going to be higher as well but again you know you will be making so much money on your house you will not have a thing to worry about.

Current Economic Prediction for Recovery
The news here is really bad for a few reasons.
First we think that a recent article in the Wall Street Journal about General motors prediction matches our economic indicators we use to best predict the economy as a whole. Not that we are always right but we did predict with a little bit of Real Estate insider help that the housing market would begin to see the collapse starting in March of 2007. Our prediction was explained to those that would listen in late 2005 and early 2006. It actually started 9 months earlier but the signs were written off by again real estate agents that this is a temporary low in the market but it will pass soon.
This is the most troublesome part of our Real Estate Industry forecast. It is the recovery time return around prediction. We see that General Motors See GM here General Motors says that they in and interview on CNBC and we are summarizing this and not quoting the company, which by the way Viper Logic likes General Motors a lot and we reference them because they are a great company.
They predict that the car and light truck sales in the USA will remain in tougher numbers around and industry total of 15 million units a year and not the 17 million they would like to see return to that they were prior to 2006 until 2012. Our take on this is close to our prediction of and economic recovery for the United States of 2010.
This recovery will be when the economy hits its low in housing prices falling and that when GM says it see all car and light duty truck sales returning in 2012 to the 17 million is that people will be beginning to see better days ahead in 2010 and may stay flat for and additional year then slightly begin to rise and in 2012 auto sales will start to rise first because we are all going to be gaining confidence in the economy that the worst for this cycle has passed.

We all can see higher gas prices that by the way are rightfully due to us the people who invested into the oil wells that are producing these insane profits and we think all people should just live with it because while your homes were rising in paper value unless you sold it we were eating the monthly costs of producing oil that you were enjoying low cost travel and out driving all over gods creation just to be traveling and driving. So it is our turn now to enjoy the wonderful profits in oil as well as the profitable computer software industry we are as well in.
We are all certainly paying more at the markets these days and with a resent price increase released of 6 to 8 percent by Kimberly Clark one of the largest producers of tissue paper, diapers and other essential house hold good Americans are running up their credit cards paying not for travel and driving around eating out and buying stuff just to be buying it but rather they are using these cards to pay for Gas yes (thank you all) and groceries.

Why is Logic blowing off about how great of a life the Viper Logic board is having, it is simple you have to understand that we must lead you to how we see the recovery and justify our prediction of a housing and economic recovery for the United States.

America selling houses is not an industry it is a business yes and a big very profitable business to say the least and hey we own land, buildings, homes, and other stuff like investments as well and we are not immune to the downturn but we are doing great because we have owned these holdings for 10, 15, and 30 years and we did not do any of those refinancing moves that looked like free money, it is not free money you are really borrowing it and using it without a doubt most of you anyways to fund your lifestyle. Why would we say this about your spending? Because if we are wrong then why is it that all of the sudden retail sales especially luxury retail, auto sales, home sales, and Las Vegas all down so sharply. Did you lose your job, NO because look at the worlds lowest unemployment rate America has.
We know that a lot of the money being spent was coming from real estate and mortgage and refinance employees and business owners in these field. Even banks were making money hand over fist and look at all of the bigger bank losses they have been reporting each quarter with figures in the 5, 10, 20 50, and 60 billion dollar range of looses or write downs, which by the way part of those write downs were probably over stated and will partially come back onto the books with some restated values.

One Real Estate Agent Broker agreed about the Real Estate Collapse Prediction
We could only get one real estate agent to agree Charley Stewart with Tarbell, Realtors Palm Springs to understand our findings and that we were right and after it was all said and done the truth began to pour out, and the papers began reporting that the housing market was beginning to strain around the beginning of 2007 and by March of 2007 the real estate agents were complaining that the housing buyers had really started to dry up. Again real estate agents continued and in some cases a year later now still believe that the housing market is nearing a recovery.

Defining a Real Estate Agent
If you are a real estate agent seller or broker you might not want to read this analogy of your carriers but it is important and do not take this personally but what we observe that most of you and all of the real estate agents some of you are our friends and we love you as a person but we truthfully have not to much respect for your work or the industry you are associated with. Here is what we see. You have and had it to easy. Sign in 4 places and make upwards of 50000.00 per sale of a home with no understanding and no caring of what the economy is doing. The protected world of the real estate agent is coming to and end with new ways and options for a person to select and negotiate the percentage points the real estate agent will receive.

Fair Warning Nothing Personal Real Estate Agents and Brokers
Do not read any lower if you are a Real Estate Agent or Broker.
We had to use the information form our dealing with agents and broker friends that we know and we mean no harm but rather to point out things you should be dong to improve your future in Real Estate.

Real Estate Agents and Brokers welcome to Discounted Commission
See there to mention a couple there is Red Fin here Discounted Real Estate Agents and there is Zillow a powerful company ran by a great man Barry Diller here Discount Real Estate Agents our personal favorite is a local Palm Springs Real Estate Guru and his middle name is discount though we call him cheap because we love him Charley Stewart here Palm Springs Discount Real Estate Agent

No Investment and you are an Agent or Broker?
See the real estate agent had it real easy. If you were a car salesman and you took the simple course of a Real Estate Exam you just advanced in your carrier and the opportunity to make some of the largest commissions on the planet today. However the only deference between a car salesman and a real estate agent is this piece of free paper ok a small fee you can call this fee the investment a real estate agent makes into their business. Real estate agents are independent contractors and are not employed by the real estate offices they work out of.
We happen to think that if you can get it then by all means get it, and real estate agents did just that and like us in oil more power to you, however The Party is Over and here is why.

Being a responsible Real Estate Agent or Broker
While most agents and brokers in the real estate industry were making money like there was no tomorrow (tomorrow is here) few actually invested into being a greater real estate agent. In our opinion real estate agents and brokers should have been investing into the knowledge base requirements of being the most knowledgeable agent or broker you could be just like most all other career’s in a job at somewhere USA where these workers are experts in their fields you should have acquired a full understanding of the investment community and economics to better educate the clients.
Real estate agents and brokers do you know that most of those people your one time clients just like most car salesman you never see these same people again usually were buying the single biggest expense of their lives in most cases?

What was your Real Estate Agent or Broker doing with their time?
It could be that if you were not buying the nicest car or cars on the planet as well as you were traveling the planet enjoying your gains, dining out on expensive wines and steaks when you should have been focused on saving your money and advancing your knowledge of the world of real estate investing. Why so that these people your one time clients would be dealing with a knowledgeable and factual agent or broker rather then a boiler room of hype mentality.