Jeff Kroll

Now we have this global credit crises. One of the reasons banks don’t have any money to lend is because of Mark To Market accounting . One problem leads to another doesn’t it? Can you imagine if someone knocked on your door and expected you to pay them 10% of the value of your home tomorrow, just because the value of your home dropped 10%, and regardless of when you planned to sell your home? Most people couldn’t do it, and that is what the banks are expected to do right now. It doesn’t work. It’s an ugly scenario and we’ll see how it plays out. Some think this method of accounting should be banned for now due to the situation. We’ll see…

This Blog is dedicated to Parker Colorado Real Estate, Parker Colorado Homes, Elizabeth Colorado real estate, Elizabeth Colorado homes, Franktown Colorado homes, Franktown Colorado real estate, Lone Tree Colorado real estate, Lone Tree Colorado homes, Highlands Ranch real estate, Highlands Ranch homes, Castle Rock real estate, Castle Rock homes, and metro Denver Colorado real estate property listings. Search the Denver MLS directly for properties and homes at http://www.coloradodreamhomes.info/ and access a huge real estate resource at http://www.coloradodreamhomes.net/

House Of Cards

House Of Cards

Do you know what a:

CDO is?

Credit Default Swap is?

Mortgage-Backed Security is?

Do you know we are in the middle of a Darwinian Flush ?

If you don't know what these things are, you owe it to yourself to watch this program on CNBC. There is a program called "House of Cards" by David Faber (from Squawk Box every morning on CNBC) which basically is the history of the housing market (and the entire US economy) since 9/11. I've seen it twice now, and I'm calling it a "must see" program for every Realtor. It's absolutely mind boggling, and at least you will be better educated if you see it, and you will REALLY know why things are the way they are in our business right now.

It happens to be aired tonight from 6-10PM, and 10-12 PM. CNBC is channel 46 on Comcast, and I don't know what channel it is anywhere else. Please watch it if you can.

Simply put, it's the complete history of the housing market (and U.S. economy) since 9/11. It's a story that is absolutely mind boggling and a must see for History Classes and Economics Classes for years and years to come. It's possible that Allen Greenspan will go down in history as one of the catalysts to the housing bubble, because of his influence and direction. Here he was the one standing at the podium recommending that lenders and Wall Steet make housing more affordable and accessible. In the end, lenders did just that. It's amazing to think that most (if not all) of the reason for the run-up in housing prices/demand since 9/11 (and consequently the entire collapse of the US economy and worldwide recession) is due to Wall Street greed. Greed runs through the entire documentary. Even Allen Greenspan at the end admitted that what happened will happen again at some point, and there is nothing anyone can do about it, because it’s human nature to be greedy, bottom line.

There are people in there that should be arrested tomorrow. What they did seems to border on criminal to me. We are talking out and out fraud and deceit. Most didn't seem to have any remorse whatsoever-it was just a way of life to them. Wall Street investment banks packaged up these "securities instruments," which were basically a large block of mortgages, and then Moody's and Standard and Poors (companies that are 100% trusted to give ratings and guidance on investments) labels them a full AAA rating, even though within these securities lies a decent amount of BBB- and lower risk mortgages. Who wouldn't want to buy something with a AAA rating from Standard and Poor's? It's a lock. It's a no-brainer. It's very low risk. Then firms like Bear Sterns (now gone forever) sell them to investors all over the world and reaps huge profits. It becomes a money making machine. And the assumption and the reason for the easy sell of these (by the brightest financial minds in the world) was that A) Housing prices would ALWAYS continue to go up 6-8% a year and B) people would ALWAYS pay their mortgages. PLEASE!

It just proves that housing will always make the world go round and round. It’s at the core of our economic health. It's seems to me that most if not all of the large banks in the US have to be insolvent, or at least they will be. If all of the home loans in the US went down 10%, factoring in millions and millions of homes, you would think that would a loss in the multi-trillions of dollars, and the whole banking system would collapse. They would be bankrupt. Even the US treasury could not pump enough money into them to save them. You might as well wipe them all off the face of the globe and start over. Maybe that is their fate.

I hate it when people point fingers and say "it was the lenders fault" or someone else was responsible for homeowners getting into mortgage trouble. Remember it was all about greed, so everyone has to share in the blame. Don't tell me that buyers didn't know what they were getting into. Homeowners could not say no to a good deal. Lenders could not say no to profitable loans that were easy to qualify for that Wall Street then took off their hands and sold to someone else at a profit. And could Wall Street help themselves that what they cooked up worked, and made a lot of Wall Street guys rich, at the expense of the world? Wall Street has mortgaged our future and we will pay for it for generations.

This Blog is dedicated to Parker Colorado Real Estate, Parker Colorado Homes, Elizabeth Colorado real estate, Elizabeth Colorado homes, Franktown Colorado homes, Franktown Colorado real estate, Lone Tree Colorado real estate, Lone Tree Colorado homes, Highlands Ranch real estate, Highlands Ranch homes, Castle Rock real estate, Castle Rock homes, and metro Denver Colorado real estate property listings. Search the Denver MLS directly for properties and homes at http://www.coloradodreamhomes.info/ and access a huge real estate resource at http://www.coloradodreamhomes.net/

How is Parker Colorado doing?

Average Days on the market 2007: 89.5

Average Days on the market 2008: 90.3

Hmmm...doesn't look that bleak.

Existing home sales September 07: 149

Existing home sales September 08: 153

Hmmm...this is not a negative thing at all.

Average single family home price 2007: 338,598

Average single family home price 2008: 286,065

Hmmm...seems like the world is coming to an end? Hardly. This number is meaningless. It does not mean that your home has fallen in value by 54,000! It probably only means that the homes selling for 250,000 or less have increased, while the # of luxury homes sold has decreased. Everone that sees these kind of numbers always thinks the sky is falling. This number changes monthly and the only driver of this is the mix of homes that sold in that particular period. If Parker's 22 million dollar home sold, what do you think that would do to the average? It would probably single-handidly raise the average!

This Blog is dedicated to Parker Colorado Real Estate, Parker Colorado Homes, Elizabeth Colorado real estate, Elizabeth Colorado homes, Franktown Colorado homes, Franktown Colorado real estate, Lone Tree Colorado real estate, Lone Tree Colorado homes, Highlands Ranch real estate, Highlands Ranch homes, Castle Rock real estate, Castle Rock homes, and metro Denver Colorado real estate property listings. Search the Denver MLS directly for properties and homes at http://www.coloradodreamhomes.info/ and access a huge real estate resource at http://www.coloradodreamhomes.net/

I was shown this web page and was stunned by it, and thought it was worth sharing:

http://www.dailykos.com/storyonly/2008/11/12/155056/91/449/659578

It might not have a lot to do with housing, but it has everything to do with our credit crisis and that my friends impacts everything. A couple of the charts here really make you pause. Its insanilty really and I can't really blame the ecomonists who study this stuff and are so pessimistic about life and the world.

To me this is the key phrase:

"a parabolic spike is unsustainable"

And that has EVERYTHING to do with housing. Think California, Arizona, Nevada, Florida. Think of housing prices going up 25% a year for multiple years in a row. Think of greed. Its all there. I kept telling buyers coming in from those other markets that their growth was not sustainable! Not in a million years can housing prices double in 2-3 years. Duh.

Housing in Parker Colorado didn't follow this trend of course, so we are lucky! I'll take 2-5% yearly growth anyday!

There were two recent articles regarding the economic strength of the Denver economy and the overall strength of the Denver real estate market. The negative press concerning our national economy has been non-stop. Unfortunately, people believe what they read, and I'm afraid that general fear has spread to our local level, when its not warranted.

The two articles provide a dose of goodness concerning our "Jewel of the Rockies"!

Highlights:

1) Job growth increased by 2% in 2007 with 45,500 new jobs. Continued job growth is forecast for 2008.

2) Unemployment dropped to 3.8% in 2007, the lowest since 2000, and well below the national average of 4.6%.

3) Wage & salary income rose 6% in 2007 and is projected to increase an additional 5.5% in 2008.

4) Denver didn't experience the run-up in prices and construction, and is now ranked as the 7^th best city in the nation to sell a house (Forbes Magazine)!

And the above doesn't even touch upon the ongoing impact of Fastracks, the Union Station Redevelopment, the surging oil & mining industry, the growing alternative energy industry, and the Democratic National Convention!

Spread the word! Denver is the Place To Be!