Monday, May 26, 2008

Who Are the Speculators?


My wife and I hit on an interesting theory this weekend, as we were looking at yet another Realtor used houses salesperson-owned property featured above(MLS #8051133, 3807 N. Borthwick Ave.).

I believe that more and more Realtor agent-owned investment properties are going to go on the market to raise cash, as the typical Realtor used house salesperson's income has been slashed by 40%

This property just came on the market while still being renovated. We did a quick drive by and noticed the massive amounts of peeling paint, the inch of moss on the roof, and my wife commented that the front porch looks like it's about to fall off. At first I was surprised to see it was owned by a Realtor agent, but then it started to make sense.

The gravy train is over. Lots of Realtor used houses salespeople bought income properties over the past few years during the years of double-digit appreciation. Now that sales are off 40% I imagine a number of them must be hurting for income. Hence they are selling off the investment properties to raise cash. And I assume they need cash badly enough to not even invest a little effort into curb appeal before trying to sell it.

The irony of course is that the more Realtor used houses salespeople that start dumping properties, the more it's going to drive the market down, continuing the cycle. I don't have facts to prove that more investment properties are on the market than usual, but based on our looking it feels like there are.

This is yet another sign that things are going to get a lot worse before they get better.

17 comments:

vos said...

Appreciate the humorous post PDX, but I missed the one from a few years back that was praising Realtors for investing so heavily in the Portland real estate market that it cause double digit growth for quite a few years.

Perplexed said...

I am watching the core area condo market and have noticed Realtor is the seller comments too.

Anonymous said...

The notes on the Borthwick property say that the seller is related to the agent, not an agent him- or herself. Also, you should do a little research about what a Realtor is. An agent is not necessarily a Realtor. Realtor is an earned designation.

Anonymous said...

Earned? How? Pass a test on using the word "stunning"?

PDXOutsider said...

"The notes on the Borthwick property say that the seller is related to the agent, not an agent him- or herself. Also, you should do a little research about what a Realtor is. An agent is not necessarily a Realtor. Realtor is an earned designation."

I thought being a Realtor just meant you had joined the NAR. So it seem to be more a bought title than an earned title.

But I could be wrong. How does being a Realtor differ from just being an agent?

But you're right, I should start referring to agents by their proper titles. Used houses salespeople.

Anonymous said...

That was quite bitchy for you, pdxoutsider!

Just promise you won't get as bitter as Clint.

skeptictank said...

Oh my, the Realtors(R) and agents are getting a bit testy. Too many of 'em competing for shrinking sales?

Kirk Coburn said...

realtors have all types of fancy and ridiculous (albeit EXTREMELY prestigious) "enhancements" to their already glitzy and sexy job titles of realtor. CRS, GRI, ABR... Does anyone outside of this close-knit community of rEAL eSTATE pERFESSIONALS know or care what all the abbreviations are for? The funniest thing is when a realtor actually has educational credentials beyond a GED... (I.e. associates degree, bachelors, MASTERS...) That makes about as much sense as getting a doctorate in polymer science and engineering, then pursuing a career as a bus driver.

Perplexed said...

"Earned? How? Pass a test on using the word "stunning"?"

Or the descriptor that makes me nauseous, "fabulous"!

Do they know that one of the definitions is: lacking factual basis or historical validity as in "the fabulous unicorn".

PDXOutsider said...

"That was quite bitchy for you, pdxoutsider!

Just promise you won't get as bitter as Clint."

I'm not bitter. I find it amusing when realtors demand the same level of respect as a doctor for what is in reality a marketing gimmick.

I've even seen realtors go so far as to put the stupid trademark symbol after the word. Talk about full of themselves.

But if I want to be bitchy occasionally I think I have the right (but you'll rarely hear me whine). Especially when people don't even have the balls to pick a screen name.

Anonymous said...

Relax, bitchy wasn't an insult. It was said out of admiration. So much is lost without vocal inflection and facial expressions.

Using a screen name opens one up to abuse.

Glenn said...

Can I vote for not using strike through text? Drastically reduces the readability.

PDX Renter said...

We have some young friends bought last summer after being scared out their wits by the Willamette Week.

Their Realtor told them she owned six properties and was going to buy more.

That didn't end well I'm sure of it.

Our friends paid 269k for a 1200 sf condo at 60th and Glisan. I see SFR's in that neighborhood going for 50k less this year.

PDX Renter said...

I find it amusing when Realtors demand the same level of respect as a doctor for what is in reality a marketing gimmick.

I do IT Security for a hospital and have reviewed the internet histories of countless medical professionals and can tell you most of them work about 20 minutes out of every hour...the balance is spent surfing the internet looking for nice things for their houses.

Doctors don't work nearly as hard as they want you to believe.

PDX Outsider said...

PDX renter, how did WW scare them? Was there an article I missed? Funny, I was also looking to buy last summer, but glad I didn't.

re: doctors... I'm not saying they are all hard working, but if you have a Dr. in your name somewhere I at least know you have put in the time and effort. Even an associates degree is more difficult to achieve.

Anonymous said...

"I've even seen realtors go so far as to put the stupid trademark symbol after the word. Talk about full of themselves."

So I'm a former Realtor - I'm still obsessed with houses, but the nature of the business wasn't for me.

At any rate, I was a part of the National Association of Realtors (NAR) because it was required if the company you worked for was a member...so most agents are. You have to go through courses on new laws, codes, & other training to earn "x" amount of credits per year to maintain your membership (as a lot of professionals do). Also you pay your yearly dues and get to have nifty "R" pins and the use of the name on business cards/promotions & such.

- The Realtor name is a registered trademark and should have the symbol attached if it is used in advertising.

p.s. There are many fine individuals that choose to work in real estate - many honest, knowledgeable persons with the client's needs & limits in mind. I just couldn't deal with all of the lenders and $ hungry principals.

PDX Outsider said...

"p.s. There are many fine individuals that choose to work in real estate - many honest, knowledgeable persons with the client's needs & limits in mind. I just couldn't deal with all of the lenders and $ hungry principals.
"

I agree. I've met plenty of knowledgable, ethical and extremently competent people in the business. I like to pick on bad marketing because I'm in marketing. And some agents just make it sooo easy. Lord knows there are plently of bad marketers out there as well, as in any profession.

My goal is just to help keep them honest, which is sorely lacking at times. Use the word fabulous, spacious, etc all you want. But if you misrepresnt a neighborhood or other critical info I'll call BS in a hearthbeat.