Lehmans and Fannies and Bears. Oh My!

For most people, the failure of Bear Stearns, the reorganization of Fannie Mae and Freddie Mac, the failure of Lehman Brothers,the sale of Merrill Lynch and or the survival of AIG is more than a bit confusing. Wall Street and quasi governmental lending instituitional failures have little resonation here in the heartland, but they should.

Right now, the crisis of confidence in the American financial markets is the overwhelming challenge in Today's New World Of Real Estate.

Selling homes is about one thing: Getting the Money. Right now getting the money is becoming more difficult by the day. Every failure at any magnitude erodes the belief that consumers and investors have in bank liquidity. That makes getting money that much harder for the average consumer. That makes selling homes that much harder. That makes value recovery that much harder. That makes any of us in the business of real estate that much crazier.

Make no mistake: It absolutely affects everyone involved in the real estate business.

While things will stabilize from what they are as this is written, the psychological affect will linger long after the fact and potentially be an instigator in future bank health. How many more will there be? How much tougher will it get in the credit markets because of the newest failure (Lehman)? If AIG fails in the next week what other bad news will that propel into reality?

Essentially it all summarizes what I've been saying for the better part of a year. If you are a seller, you had better price aggressively and get out. We are close to the bottom but there's far too much instability to trust things will improve before mid 2009 and then only in guarded measure. If you're a buyer, the time is right both in value AND in terms of interest rates, now hovering in the upper 5% range which can no longer be taken for granted.

Fasten your seat belts......it's going to be wild ride that's not for the faint of heart.

Questions...Comments....Donations...Greg@GregCooper.com or 317.848.GREG (4734)

Coversation Of The Week:

Expired Listing Seller: "I'd like to speak with you about listing my home"

Me: "Certainly....tell me about your property's history"

ELS: "Well it's been for sale for a year with no showings and no price adjustments."

Me: "Are you aware of the available inventory, how many homes have sold in your price point and location?"

ELS: "No....but I built homes for several decades and I know what this property's worth."

Me: "Have you had an appraisal?"

ELS: "No....by the way you're not going to be one of those agents that keeps telling me to lower my price, are you?"

Me: "Why would I actually want to waste your time with nonsense about supply and demand, inventory absorption and silly little things like how buyers actually feel about your property?"

ELS: "Good....I think we're going to get along just fine...when can you come out?"

Me: "I can be there just after nine on Monday, July 21st, 2010. Looking forward to seeing you. One more question Mister ELS....are you aware that we're in the most challenging real estate market since the '70's?"

ELS: "No but I've got the entire Pable Cruise collection on vinyl. I loved the '70's!"

To think some people believe we Realtors are overpaid.

Questions? Comments? Donations? Greg@GregCooper.com or 317.848.GREG (4734)