Not so long ago I remember reading market analysis reports published by the oil industry’s top experts from top investment banks. Some of the reports were titled: Investment advice-buy. High price of oil is here to stay. Oil prices will reach $200 per barrel before year end. To defend their positions they cited depletion of “old” oil fields, unwillingness or inability to raise output by OPEC cartel, overall political instability in oil producing regions of the world, increased consumption in emerging economies, more specifically in BRIC (Brazil, Russia, India and China). To sound even more convincing, they point to technical analysis with complicated mathematical formulas, equations and economical laws that I call pseudo scientific or voodoo craft.
I do not know what happened with the analysts that lost their high paying jobs after the investment firms that they represented went bankrupt. I am pretty sure that they found suitable employers and forecasting some other economical events defending their point of view with equal zealous.
In today’s modern economy, it is impossible to accurately predict it’s down or upward turn. The truth is that the brightest and smartest did not see this coming, all that one can hope for is to spot the trend and take advantage of that knowledge. The truth is that the majority of the so called experts and analysts know no more than you and I, and following their advice is a sure way to go broke fast. The truth is that top executives know no more than the attendant of the local gas station or coffee shop. How else can you explain the massive mismanagement from financial institutions to the auto industry to the airline industry to construction? When oil prices were high the blame was placed on speculators. Now oil prices are low and we blame the high interest rates. Today interest rates by FED is at a historical low at 1% and likely be slashed to .5%. Do you have anyone to blame now for your ill doings? I don’t.
It was a well orchestrated performance act done by the stewards of industrial and financial giants to impress and mesmerize you with their competence and experience. It is one of the many attributes of a power act to fly in a private corporate jet when the company in their custody is facing bankruptcy. Their sole purpose is to demonstrate uniqueness of vision and to build an invisible impregnable wall between you and them. Rick Wagoner knows less about car business than an attendant at a gas station. How else can one successfully run one of the pillars of the United States’ industrial strength and might such as General Motors into the ground? What specific quality did he posses? Why was the Detroit Big Three unable to compete? It makes me sick to my stomach when I hear nothing but complaints from them: union, oil price, credit crunch. Do I live on a different planet or what? From what I remember, the Europeans and Japanese are paying more for their gas than we are. The European Union has just as powerful an auto union if not more so. Labor laws and regulations are considerably stricter in EU than they are in the US. But our overseas auto competitors do not face bankruptcy.
It is difficult to see the obvious, but it is even more difficult to affirm it. Giordano Bruno was burned at the stake as a heretic for stating that the Sun was at the center of the Solar System and not the earth.
Here are facts for you to draw your own conclusions.
2008 estimated the number of house holds in the US at 112 million. The US homeownership rate is about 68 percent. In 2004 the number of homeowners in the United States reached 73.4 million, the most ever. BLS reports the number of Real Estate brokers and agents at 131,000 and 432,000 respectively and projected to grow by about 11% by 2016.
My conclusion: The number of Real Estate agents will decline for the next few months. You will have a once in a life time opportunity. Fewer agents, less competition and more business for you
Rhonda Duffy sold 819 houses in 2007 making her the number one agent in Georgia, reports the GA FMLS. How did she do it when the media reported an all time low of sales for 2007? Rhonda says that she does it by staying out of the media’s doom and gloom, by turning off bad news and engaging her sellers in a plan of action.
My conclusion: Have a plan of action. Become an expert in technology. Just because sales numbers are down does not mean that there are no activities. There is plenty of action to go around.
Sales of new one-family houses in September 2008 were at a seasonally adjusted annual rate of 464,000, according to estimates released by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 2.7 percent above the revised August rate of 452,000. The median sales price of new houses sold in September 2008 was $218,400; the average sales price was $275,500. The seasonally adjusted estimate of new houses for sale at the end of September was 394,000. This represents a supply of 10.4 months at the current sales rate.
My conclusion: There is not a shortage of homes for sale, nether shortage of buyers.
New Residential Sales data for October 2008 will be released on Wednesday, November 26, 2008,at 10:00 A.M. EST.
Boris Gruzman, CEO