Questionable Career Moves

Submitted by Rich Toscano on July 21, 2006 - 1:05pm

As suspected, there has been a fairly serious media response to the first year-over-year decline in median prices.

We've known for a while that home prices were on the decline, thanks to the Shiller index and to numerous examples of specific properties selling for less than their prior purchase prices. But I guess that there's nothing like having it all wrapped up in a single stat like that (despite the previously noted issues with using the median to gauge actual pricing power).

Despite the recent spate of concerned commentary, including some backpeddling by no less than the chief economist of CAR, there are still plenty of optimists out there. As my man Calculated Risk has helpfully charted, California real estate salesperson licenses are up 14% over last twelve months. Brokers licenses are up 8%.

So not only are there still plenty of buyers, there are actually still plenty of people who are bullish enough on real estate to actually be entering the field.

That's optimism. And it underscores my point that, despite a recent directional shift in pricing momentum, we are just at the very beginning of the housing bubble aftermath. This correction will probably not be over until sentiment is almost universally pessimistic on housing. As the continued rush into the real estate industry clearly demonstrates, that day is still far in the future.

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Submitted by mimigerstell on July 22, 2006 - 7:46am.

Amazing they still think they can make money. My husband and I bought a house in 1972 for 6 or 7 times the annual rent. My next dwelling I sold in 1996 for 11 times the annual rent. Too bad I missed the irrational exuberance, but that's the way it goes. Just now I have bought and "flipped" a house in Maine, selling it for about 20 times the annual rent. (Proving Rich's point that there are still optimists out there, e.g., my buyer.) No more homeownership for me; going back to Calif but will pay an annual rent that is perhaps 1/25 or 1/30 of asking price.
Thanks to all of you whose bearishness has made me feel less isolated during these past six months. Mimi Gerstell

Submitted by MikeD on July 22, 2006 - 9:55am.

Getting a sales or brokers license is not a 1 week exercise. Many of the licenses granted in the last 12 months were the culmination of processes that began a few years ago - particularly brokers licenses. Provisional sales licenses are granted more readily - I'm not sure if the figures you quote include provisional sales licenses. I got my sales license last year (not for work reasons - just to learn about RE from the realtors POV) and the teachers at college a year ago told me their class numbers were way down from 2004 and 2003.
There is a lag between commencing the process (which includes education, testing and experience) and then ultimately getting the license.

Submitted by lindismith on July 24, 2006 - 7:37am.

That's interesting about the lag time to getting the license. And it makes sense.

I've had 2 friends get their license simply so they could do their own paperwork on their transactions, and pay less fees.

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