February 2008 Archives

By now everyone has heard or experienced the current issues with real estate markets first hand. There are lots of home owners having tough times these days. Some of it is their own fault. Some bought too much house for their income. Some took on zero-down loans with low teaser rates that were only destined to go higher. Some speculated in property and thought they'd flip and get rich. Others used their home's imaginary capital gains as a cash machine to fund a high lifestyle.

A variety of villains have emerged during this time when many are realizing that home ownership was not the guaranteed investment that many thought it was. At least, its not a good investment when you're in for a short period of time with a variable rate mortgage. There's no question that banks, mortgage brokers and home builders played to the base desires of people and happily took advantage of the situation. We see it time and again. People get a little taste of financial success and then they get greedy.

One segment of the real estate profession that seems to have escaped scrutiny are the realtors themselves. They don't lend people money and they don't make any real promises. Yet I'm very sure that they played a key part in this mess. And many are playing a key part in dragging out this down turn longer than it will need to go on.

Realtors are cheerleaders for property sellers. Most realtors are in the game to get the highest price for the seller at all costs. Higher prices mean higher commissions. Unfortunately sometimes higher prices mean that buyers end up with a really bad financial investment. On top of the cheerleading there are loose connections with mortgage brokers. And quid pro quo deals with inspectors who promise not to be too harsh in their reports. It's a dirty game but it doesn't look too dirty. The subtle fibs that realtors tell are harmful as well. Bright people who are on their toes can see through this stuff. But most of us kind of go a little crazy when we're shopping for a house. So we miss the small stuff.

So I think that some of the blame for the way things got with real estate needs to be placed with realtors. There are too many who are too poorly trained while lacking real ethics. I'm sure that many a realtor will disagree with me. Most of those folks are full of it.

Anyway, now that the markets have taken a turn south a lot of these hacks have been forced from the profession. That's a good thing. With any luck they will never return. The good ones deserve to get more commissions. In some areas the drop in real estate values has not been so pronounced. But the market is slow. And realtors in these areas just might be (aw what the heck they probably are) screwing it up for their clients who want to sell.

You see, I had been shopping for a house in Albany for several months until a deal fell south a couple of weeks ago. The experienced sucked. Every single house I looked at was over priced by at least $25,000. I'm not kidding. I used websites like Zillow, Trulia and Eppraisal to track down comp sales and prior sale prices on all the homes I was interested in. I did my homework on the true market value of homes. My realtor was pissed that I was doing this.

I was originally supporting Rudy Giuliani for the 2008 Republican Presidential nomination. Most people felt differently and now the presumptive nominee will be John McCain. As soon as Rudy dropped out of the race I decided to support Senator McCain.

Why John McCain?
I feel that Senator McCain is the strongest candidate in the Republican field. McCain has a lot of experience in Washington. And those years of experience have yielded results in the form of legislation passed with support from both sited of the aisle. McCain's ability to work with both parties is an important asset and one that we need to see more of from the next Presidential administration.

Fiscal Responsibility
John McCain has a strong record on fiscal responsibility. I think that Washington has spent way too much money on wasteful programs over the last twenty years. Spending money on preserving and protecting the country is money well spent. But too much federal taxpayer money goes to pork barrel programs that only benefit certain states. State-level projects should be paid for by state-level taxes. McCain is committed to reducing pork wherever possible.

Terrorism And Foreign Policy
John McCain has a strong position on terrorism and dealing with rogue dictators. He believes in a well funded military, strong intelligence and takes a hard line position when dealing with rogue dictators. The job of the American President is not to placate our enemies and do what Europe wants so they like us. The job is about representing the interests of the American people. I believe that John McCain has proven via his record that the needs of Americans, and not the opinion of European leaders, will drive policy decisions.

Dedication To Public Service
John McCain has dedicated his life to the service of our country for almost fifty years. Senator McCain showed great will and loyalty to the country while serving over five years in a Vietnamese prison camp. He could have gained early release but he wouldn't give the enemy the propaganda they wanted. That sort of proven courage counts for a lot in my book. Senator McCain's service in the Navy lasted twenty-two years. And he has spent twenty-six years representing the State of Arizona. Given his strong record and universal respect across party lines, John McCain could have gone into the private sector and made a lot more money long ago. Senator McCain has chosen to serve and the people have chosen him over and over again to represent their state.

McCain vs. Barack Obama
It appears that Senator Barack Obama will win the 2008 Democratic Presidential nomination. And at the end of the day it's a choice between two (and perhaps three) major candidates. I strongly prefer John McCain over Barack Obama for a variety of reasons but I will only mention one now.

Barack Obama's vision of a bright future for America seems to be contingent on him being elected President. Senator speaks frequently of hope while highlighting the current absence of hope in our country. This is quite hypocritical in my opinion. It paints a picture of a man ungrateful for all that America has allowed him to achieve. Barack Obama has things that most people will never have. He has an Ivy League education. He has an income of nearly one million dollars per year. He occupies a powerful position as a United States Senator. Barack Obama is also a published author of a best selling book.

Barack Obama's achievements are partly due to the fact that he has lived and currently lives in a country where everyone has immense opportunities to improve their lives if they work hard enough to make it happen. I don't hear him acknowledging that. I see a man who refuses to acknowledge the greatness of our country. And it seems that he is doing so in order to scare people into voting for him. You see, I read Barack Obama's message of hope as a message of fear. As if hope for a better life and a stronger country is only possible if Barack Obama is elected President. I strongly disagree.

In contrast, John McCain is proud of the United States and doesn't deliver a message of hope that is contingent on his election. Hope in this country is a given. That doesn't mean that we live in a nirvana where everything is perfect. Every nation has problems. it does mean that we realistically acknowledge that no one person determines the possibilities in our nation.

Spread The Word
If you think that John McCain is the right choice for President please speak up. Don't be deterred by the shrill and angry responses that you might get from those who disagree with you. Your speech is very important. The New York Times has already begun to wage war on John McCain's character by running a three-thousand word hit piece on the front page that hinted at faults in John McCain's ethics. The story claimed nothing outright because there was zero concrete evidence of wrongdoing on the part of Senator McCain. The story was based on anonymous sources and circumstance.

It is now obvious that the New York Times will stop at nothing to derail John McCain's candidacy. That's why it is very important for you to speak your mind when and where appropriate in order to ensure that John McCain gets a fair shake from the American people come November.

I have been following the campaigning on both Democratic and Republican sides very closely over the past week. I know for sure that I am supporting either John McCain or Mitt Romney. I'm going to have a to make a decision on that before voting next Tuesday.

I'm not allowed to vote in the Democratic primary but I can tell you that I'm hearing some scary economic stuff from Hillary Clinton and Barack Obama.

In the Democratic debate on CNN this week Hillary called for a moratorium on home foreclosures along with a cap on interest rates for mortgages. Talk about a blow to the gut of the financial industry. The foreclosure moratorium would cause a sharp spike in mortgage rates due to the increased risk borne by the lenders. Hence the rate cap. This is dangerous territory as the fate of mortgage lenders would be in the hands of the government.

I feel bad for people who are losing their homes. But many of those people knew the risks of taking out mortgages that they might not be able to afford if they lost their jobs or if home values declined. I've been more fiscally responsible. So why should I pay (via my taxes and increased mortgage rates) to reverse bad decisions? I hope to be a homeowner again in the next year but if rates are pushed to seven or eight percent it might not be worth it to buy a home.

The proposal reeked of political pandering. Both sides do it and it makes me ill. California has been rocked by foreclosures due to their crazy housing prices and that's obviously an idea that plays very well with the locals.