Real Estate Industry Propoganda: Ridiculous.
Seattle Washington’s real estate market has been most immune from the bubble. But slowing transaction volumes are costing real estate agents money – whether the market is up or down. In yet another piece of self-serving propogranda – Seattle’s Windemere Real Estate CEO Geoff Wood publishes an advertorial advertisement in the February 24, 2008 issue of Pacific Northwest (Seattle Times Sunday magazine). We appreciate his contribution (on top of his firm’s other ads) to the Seattle Times advertising revenues to publish his own version of the world as he sees it. Here is some of his laughable advice:
1.) Paragraph one assails the “media” for their “sky is falling” approach to real estate. The facts are that transaction volumes – even in Seattle – have dropped significantly – and real estate prices in Seattle have dropped too. Geoff knows that – and upcoming paragraphs give more clues. Remember – a real estate agent (or firm) makes money on homes changing hands. If fewer change hands (regardless of if prices go up or down) – commissions will go down. Geoff’s advice: “To gain perspective, we need to look past this subjective coverage and understand the realities of the housing market”.
2.) Paragraph two starts digging deep. Using the analogy of a casino gambler who goes up on their bets, and then goes down: did they win or lose? We find it interesting that a leading real estate firm is now using gambling as metaphor for real estate investing. Our advice – walk away from the blackjack table when you are up. Geoff reminds us that if we were lucky enough to “buy low” – we may still be up on our “bets”. Pity the fool (thanks Mr. T) who bought high in this market (ie last year).
3.) Paragraph three reinforces that most people haven’t lost money yet. Since they bought their homes a few years back – they likely made money. There is no facts or analysis of with realistic prices of today (and forecast for tomorrow) whether a buyer would be “up or down”.
4.) Later paragraphs emphasize real estate as a long term investment, and the average holding period of seven years. Just wait – your losses will go away… some day.
5.) The last paragraph speaks for itself. No real estate firm should ever forecast future prices, and any forecast of a future price of stocks or real estate should include numerous caveats. None here today — the exact quote is in bold:
“…And know that if you buy a home today, in seven years it will be worth a lot more…”
Pick up Sundays Seattle Times – the Sunday magazine could be a valuable gambling chip for you in seven years. Windeemere already knows your house will be worth more – and has put it in writing.