Does This Seem Like 2001 All Over Again?

From a financial standpoint, does this feel like 1999-2002 all over again? Does to me.

In case you were not around the real estate and investment industry back then, here's a capsulized version of what was going on back in the day.

We were having a recession and traditional paper and equity investments -- like stocks, bonds, mutual funds, savings accounts, commodities -- just were not paying anybody anything. The stock market was up one day and down the next -- and most days it was down. Many people with money couldn't make any money with their money. It was frustrating as the dickens for most of us and some people lost fortunes in the stock market.

Since people who had some money couldn't make any money on their money with traditional paper investments, many of them began to look outside the box and search for other ways to make money with money.

Somewhere along the line, some enterprising soul may have said "Hey, real estate is undervalued in places like Florida, Arizona, New Mexico, the Carolinas, and a place out in the desert called Las Vegas. Let's go to those places, invest in property, rent it for a monthly profit and then sell it to other investors and make money on our money. We don't even have to put much down because we'll use 'creative financing' that allows us to only pay the interest on the mortgages and defer paying anything toward principal. Who cares? We'll sell these rental places in two or three years when the stock market comes back and reinvest the money on Wall Street anyway. By then, real estate values will have gone up and when we sell the properties we'll all make a handsome profit."

For a while they were right. Then, in 2008, the roof fell in. The rest, as they say, is history.

Okay, so why does this feel a lot like 2001 again?

For one thing, is anybody able to make money with money right now?

We're seeing the Dow Jones Industrial average swing wildly from session to session -- down 268 points yesterday alone. S&P is down. NASDQ is down. Equity investors are taking it on the chin and losing money hand over clenched fist. Fear of European debt, uncertainty about China's economic power, national unemployment and underemployment, retail sales jitters, and mis-trust of government economic policies are combining to create an atmosphere that makes it virtually impossible for investors to make money on money.

That's what makes me feel like it's 2001 all over again.

So, I wouldn't be too darn surprised if droves of investors don't start looking to real estate again as a safe haven.

After all, that's exactly what they did in the first half of the decade.

Buying real estate back then was little more than an investment alternative. Real estate became a commodity to many of these investors. For Pete's sake, you didn't think that all of those people who invested in real estate really wanted to own property, did you?

Most of those investors didn't care a rats patootie about owning real estate, and probably would have been happier without it.

What they cared about was making profits. And last time I checked, they call that capitalism -- and I'm 100% in favor of it. But lets be realistic about buyer/investor motivation back then.

You see, what those investors soon found out was that there is a downside to owning income-producing real estate rather than stocks and bonds. Know what it is?

The downside of owning investment real estate is that you have to take care of the property, or hire somebody to take care of the property. If you don't, the property deteriorates and drops in value. Taking care of property means a lot more involvement with the investment than most of these people wanted. With a stock portfolio all you have to do is jump on the computer and see if you're up or down for the week, and then make a nice clean paperless transaction on E-Trade.com. All those real estate investors back then didn't really care about real estate. Their objective was to make money. Real estate was just the tactic that had the best chance of making the largest profit with the smallest downside risk.

Investors want the same thing today.

The most common advice I'm hearing from financial strategists is for investors to "park their money in cash and sit on the sidelines until things straighten out". Sorry, but parking money in cash means the money is not earning more money. Investors want to make money on every dollar every day. So, many investors are none too happy with their financial advisers and brokers who offer such guidance.

Given this kind of financial world, something tells me not to be too surprised if those investors don't start showing up again in the Southeast and Southwest with their checkbooks loaded with money salvaged from ailing stock portfolios. Now, that sounds like 2001-2003, doesn't it?

They'll be looking for bargains and heaven knows there are plenty of those out there right now, offered by desperate sellers all across the country. The reason? Investors know that of all the investment opportunities that exist, only one has consistently moved upward in the long run: real estate. Investors may not really want to own real estate -- it's not very liquid -- but once again it is becoming fairly stable in price and is easily leveraged due to low mortgage rates for those who qualify for the loans. It's perfect for the long term investor, but probably not suitable for the short term day trader-types who thrive on faster action and love market volatility and risk.

So, here's what I'm thinking. With mortgage rates very low, real estate inventories very high, home prices devalued, and the paper investment market tanking, we just might see another real estate buying frenzy from investors who want a better, safer return than Wall Street has been able to provide.

If you're a buyer who is on the fence about making a real estate versus a stock market investment, remember this: I heard on CNBC recently that $100,000 invested in the stock market ten years ago would today be worth $100,000. In other words, there has been no growth in equities for the past decade. As the Wall Street guys would say, the retail investor who only plays equities long has been profitless in the last decade.

So, how's the growth outlook for your equity-based 401-K look now that you own that little factoid?

Despite the recent problems with real estate, I'm quite sure that a home bought ten years ago would today be worth more than the amount paid. Mine is. Plus you can offset your costs of ownership by the monthly rent profits. And you can get some hefty tax deductions, at least for now. Pretty nice, eh?

If you are a real estate agent, the investor market just might be a good place to start looking for new business once you know how to talk investor-speak and understand what an investor is really looking for. Candidly, I did pretty darn good working with investors in the "good ol' days" and believe we just might be seeing a return to that kind of buyer. Why not give it a try?

Happy Selling!

-30-

Three Important Things Happened Yesterday

In case you missed it, here are some important things that happened yesterday in real estate ...

• It appears that the U.S. Congress is going to extend the tax credit for home buyers. If a home buyer had a signed contract by the end of April, it looks like Congress is going to give the buyers until September 30th to get the transaction closed. That's good news for about 180,000 buyers, 15,000 of whom are buying properties in Florida.

• U.S. home prices rose 0.8% in April according to the Standard & Poor's/Case-Shiller report. The report tracks the sales of the same homes in a 20-city study. The only cities that did not see price increases were Miami and New York City. Nationally, prices remain down some 30% below their peak in July of 2006. It's a shame this info is so dated. We all already know what happened to real estate sales nationwide in May. I'm going to be interested to see the results for June as well.

• Florida consumer confidence fell 3 points in June according to the University of Florida. The reasons? Worry about the BP oil spill in the Gulf of Mexico and the impact it may have on business throughout the state coupled with fear of devastating environmental problems. Also contributing to the state's blues is double-digit unemployment that does not appear to be improving despite the so-called economic recovery. People without jobs don't buy property.

Anyway, just thought you might need to know these things.

Happy Selling!

-30-

Maybe Builders Need To Do Some Advertising

I've just been thinking about the last article I wrote regarding the huge drop in new home sales in May (see next article down), and it got me thinking about the tough recession we had in the late 1980's.

At that time, I was CEO of an advertising and marketing firm and had held many different positions in the advertising agency business over the years. At this agency we had a number of developers and builders as clients. When that recession hit, we urged each of our clients (and not just the real estate clients) to continue with their marketing programs just as if there was no recession.

Some did. Some didn't.

When it was all over, here's what we found out:

• Clients, including real estate developers/builders, who continued their advertising programs with us, did better during the recession than those who reduced or eliminated their advertising programs. Those who continued to advertise controlled a larger market share during the recession than their competitors who cut their budgets in the recession.
• Clients who continued their marketing programs recovered from the recession earlier than those who cut or eliminated their marketing activities.
• Clients who maintained their marketing programs gained an even larger market share during the economic recovery than their competitors who cut their budgets.

I think those who kept marketing actually stole business away from those who did not continue marketing, although I don't think we ever got any direct marketing data on that point -- it's just a feeling of mine.

What I am not seeing much of anymore is good old-fashioned advertising from developers and builders in this recession, and I haven't seen much of it since the real estate bubble burst in 2006.

I know financial times are tough for builders now and sales are way off. But you have to maintain some kind of media exposure if you want to come through this in any kind of shape at all.

There are still buyers out there, you just have to work harder to find them. Plus, you need to maintain and build your reputation so that when the economy improves people will still think highly of your company and your products. Advertising can do that for you.

If you don't do it, somebody else will and they'll take your customer base, reputation and livelihood along with them.

I've worked for a lot of builders and developers. But I used to do a lot of work for various divisions of one major U.S. developer who had simultaneous projects underway all over the southeast in the 1970's and 1980's. I was always very favorably impressed by their corporate culture and dedication to superior marketing activities. I'm going to give you the basics of their advertising rules. It was quite simple yet extraordinarily effective, and I urge every developer/builder to follow it.

They said every ad must include three things:

1. Product
2. Price
3. Floor Plan

Product: The product is the community in which you are building. Buyers want to live in a nice community, and your ads must always stress the positives of living within that community. Think of it as stressing the lifestyle advantages of the community in which you are building.

Price: Most buyers are shopping within a budget. You have to show that within that community buyers can own a lovely home and still stay within their budget.

Floor Plan: Every ad had to include a floor plan and exterior elevation drawing of at least one home. You can use photos of homes and product, but you need to have a floor plan. People love to review floor plans. They spend time envisioning themselves living in the house within that floor plan. So, every ad had a floor plan ... period.

If we didn't include these three elements in every ad, the ad got rejected. Period.

Look, advertising stimulates markets. That's really its sole purpose. The one thing builders/developers need now is to have some market stimulation to get prospective buyers excited about buying one of your homes in the community where you are building, and to keep your reputation positive and your name in front of people. Advertising is why the companies we represented did well during the 1980's recession and those who did not follow our recommendations to continue marketing, quite frankly, didn't do as well.

I know business is tough now. I know new construction just had a bad month -- the worst ever if you believe the reports. But now is the time to jump in with both feet and take advantage of a situation which may help you grow big-time during the next year or so while the market recovers.

What situation?

Simple. Your competition may not have read this blog article and might be cutting their advertising and marketing budget in order to save a few bucks.

Now's the time to assault your competitor's customer base by continuing your marketing program. You'll increase your sales by converting his customers. You'll improve and expand your reputation at his expense. You'll start coming out of the recession now while he wallows in it even longer. Most importantly, advertising throughout this recession will allow you to set your sights for even higher expectations in the future while your short-sighted competition is still looking for a way out of this mess.

You can do all that by stimulating the market with a well-orchestrated marketing/advertising plan. How do I know? I'm old. I've been there before. And I've done it for builders and developers all over the place.

Happy Selling.

-30-

More Fuel For The Double-Dippers? Maybe.

Those of you who believe that real estate is looking at a double-dip recession -- or believe that the first recession is still with us -- got a little more fuel for your fire yesterday.

The United States Commerce Department announced that new home sales sank almost 33% in May. This is the largest one month drop ever recorded. If that pace continues, the government estimates that the country will build only 300,000 new homes in the coming year. That would be the slowest new home sales rate since 1963. New home sales have now fallen 78% since reaching their peak in July 2005.

The reasons for the drop in new home sales? You probably already know them, but high among the reasons cited are ...

• end of the federal tax credit program;
• high unemployment;
• low job security among those currently employed;
• tight credit conditions.

The backlog of unsold new homes across the country now stands at 213,000 -- about an 8-1/2 month supply given today's sales pace. A healthy level would be about a 6 month supply of unsold new homes. The median sales price for these homes stands at $200,900, down 9.6% from a year ago and down a full 1% from April to May.

Here's something interesting: Before the housing bust in this country, new home sales made up roughly 15% of the housing sales. Today, new home sales only account for about 7%. Clearly, the nation now sells less than half the number of new homes that we did a few years ago.

So, if you're among those real estate bears who think we're looking at a double-dip real estate recession, this data tends to support your opinion.

If you think this is just a continuation of the old recession, this data might lend support to your bearish view.

But if you're bullish like me and think that this drop is what you should expect after having a couple of fairly strong months in sales resulting from the tax credit stimulus, then you may not be quite so pesimistic. I think at any given time, there is a finite number of qualified home buyers. Many of those buyers bought or built property in the late spring to take advantage of the tax credit program. Now, we have to wait for a new crop of buyers to come into the market, get qualified for their mortgages, and start shopping for new and existing homes.

Look at it this way. Suppose you had a shoe store and for a couple of months you had a sale where every pair of shoes was 25% off the regular price. The sale comes to an end. What happens? I'll bet that sales in the following month fall off substantially. Why? Because everybody who needed new shoes bought them during your sale. Now you have to wait for new buyers to enter the shoe market -- and they will eventually.

Sound too simplistic? Well, maybe. But only if you believe economists and real estate pundits who make a living from overly complicting simple market conditions.

At least, that's what I hope is happening. Give the market a little time before you start predicting more doom and gloom for Pete's sake!

Happy Selling!

-30-

This Talk Of A Double-Dip Recession Might Be A Bunch Of Baloney

Having had a night to mull on things, this talk of a double-dip real estate recession may be a bunch of baloney, at least for the Tampa Bay area.

It might be a bunch of reporters trying to sensationalize the effects of a little step backwards in the recovery in an effort to build ratings and improve lagging circulation -- like that never happens. I can tell you from my days in media that nothing builds ratings and sells papers like news of a disaster.

Or, it might be some high profile real estate gurus who want a little face time on TV so they can blow things out of proportion, scare the you-know-what out of everybody, and justify their overpriced existence.

Sure, sales may have dropped 2.2% from April to May nationally, but the results around here weren't that bad.

Consider this: In Tampa Bay, 2,921 homes were sold in May. Heck, that's up about 20% from the same time last year, and down only 1% from April's sales figure. The median price for May of this year in Tampa Bay was $135,600. That's an increase of 2% from April.

I'm not an economist but this just does not sound like another real estate recession is headed to Tampa Bay anytime soon.

And remember, the only real estate market trend that counts is the trend for the location of the property. That's because real estate is not portable. You can't pick up all the properties that are for sale in a bad market area and magically transport them to some hot market location where sales are more brisk and prices are higher. It seems to me like Tampa Bay real estate is not setting the world on fire, but by the same token we're doing a lot better than other places right now.

Sure, there are a lot of bad economic signs for the nation as a whole right now, and Tampa Bay has it's share of economic stress, but the local housing trend for May just doesn't look that dismal to me. And after all, it's local sales that matter.

I suggest staying optimistic about things and keep on doing our best in these tough times. Oh, and let's all (including me) stop paying so darn much attention to these real estate gurus who may actually have a different agenda than just reporting the real estate news!

Happy Selling!

-30-

More Evidence Of A Goshdarn Double Dip Recession In Real Estate

Okay. Here's what you might hear on the news this evening. Or, you might read it in the newspaper on Wednesday.

But remember, you heard it here first. (Finally, I get to scoop the St. Petersburg Times!!!!)

Numbers just released about noontime today indicate that existing home sales took a 2.2% dip in May compared to April. That's a big goshdarn drop in one blanketyblank month. (Remember, this a a G-rated blog.) That number is for the nation as a whole, not just for Pinellas County. Think it is serious? The housing news drove the Dow down about 150 points this afternoon on fears that housing will lead the country into the aforementioned double dip recession. So, I'd say the news was devastatingly bad. And remember, this is on top of that terrible report last week about new home start-ups taking it on the chin in May as well. So, both new construction contracts and existing home sales fell sharply in May. Dadgumit!

If you read my last story about a double-dip recession for real estate, I kinda played it down and was hopeful that it was just the pessimists in the world who were seeing the dark side of things and concluding that the real estate market was once again sinking into a recession.

Well, this drop in sales -- and the size of the drop was much larger than expected -- may indicate that my optimistic hopes for real estate may be wrong. Here's why:

• We have a weak economy that is not improving as rapidly as the President would like.
• We have huge unemployment.
• We have funky things going on in Europe with their euro currency and sovereign debt.
• Many European countries are about to have a big austerity program which will restrict their financial ability to buy much real estate here.
• Loads of houses are still on the market nationwide and millions of people are upside down in their current mortgages so they can't sell their house and buy a new one.
• Mortgagees are holding hundreds of thousands of homes off the market. When they release these homes for sale, the danger is that those homes will drive prices down even farther.
• Bankers still continue to make it very difficult for mortgage holders with distressed properties to close a sale -- which is why I read recently that only 1 in 10 short sales successfully close. (Frankly, I don't know if that statistic is accurate, so don't quote it too much.)
• And, on top of all this, the United States is going to see higher taxes beginning in 2011 so people will be taking home even less income.

Boy, this does sound kind of gloomy doesn't it?

Happy Selling!

-30-

Is Real Estate Heading For A Double-Dip Recession?

Boy oh boy, just when I thought real estate was starting to move up a little the real estate gurus on TV and in print media are hedging their bets and saying we should all be prepared for another recession in real estate -- or at least a continuation of the one we haven't gotten out of yet.

Frankly, I wasn't expecting the real estate market to bounce back in a V-shaped recovery like some were predicting two years ago. But I did not think we would have back-to-back recessions in the same industry.

The gurus are looking at a couple of things that they say indicate more trouble ahead for real estate across the country. Here's what on lady reported in a "round-up" story on cable TV this past week ...

First, housing starts fell 10% in May as compared to April. They say that means real estate is headed downward. They also point to a drop in orders for lumber by builders. That means construction companies are not getting contracts for new homes. Blame all this on the end of the tax incentive program, say the gurus.

Second, employment reports in April were disappointing and included a lot of part-time jobs for census-takers instead of regular jobs in private industry. If folks don't have jobs, they aren't going to buy houses. I think that's a fair observation, although not particularly astute.

Third, mortgage rates are flat. The woman on TV said that since mortgage rates are not going up anytime soon, there is no financial incentive for people to hurry out and buy a home now. According to that kind of logic, I guess we should beg the bankers to take more of our money so that the real estate market can be stimulated -- can you believe that kind of logic?

Finally, the euro versus the dollar thing is an important matter. Since the euro is falling against the dollar, Europeans are not coming to the United States to buy real estate since it appears so expensive to them. Okay, maybe that's true. But how big a percentage of gross real estate sales are European sales anyway?

Naturally, I've got some comments on these points.

First, I think housing starts and home sales in general fell in May because so many people took advantage of the tax stimulus in April. At any given time in this country, there are a finite number of people who want to buy or build a new home. Once they've taken advantage of the incentive and contracted for their new home, what can you expect but a reduction in contracts during the coming month? Now that the incentive has been removed and things are back to "normal", there's bound to be a reduction in home buying activity. We simply have to wait awhile to let new buyers enter the market in coming weeks or months. To me, this is just common sense and any first year marketing student understands it. But perhaps real estate gurus and journalists don't get it.

Here's something else about this drop in real estate sales in the past month. I think this oil leak in the Gulf of Mexico has cast a shadow over the entire Gulf region and put people who live in the area in a big blue funk. I think they are worried about the effects of the on-going spill on lifestyle, property values and envoronmental quality. I think those worries have an adverse effect on real estate sales. To me, it's just another reason to thank BP.

Second, unemployment is a bona fide issue for real estate. This country simply must generate more jobs in the private sector. So, while unemployment is an indicator of things, the real problem is the economy in general which needs a shot in the arm so that more Americans have good jobs. In fact, we could go back to the first matter and say that the reason housing starts and contracts fell in May had a lot to do with the overall economy, not the tax incentive. Just look at what happened to the stock market in May! It certainly took the incentive away from buyers of many items, not just real estate.

Third, I think raising mortgage rates as a way to stimulate immediate home sales is just plain dumb. If you want people to buy homes during a period of economic crisis, you have to make homes more affordable, not less. Raising the monthly mortgage costs is a dis-incentive to home sales, not a way to speed up purchasing.

Fourth, this thing about the euro makes sense to me even though I don't really understand why foreign exchange rates move up and down. I think a lot of it these days has to do with the amount of sovereign debt the European countries are holding, and the amount of confidence other countries have in their ability to make their bond payments and pay other debt instruments. But I do understand how it can affect home sales by Europeans in the U.S. and believe it could have a negative impact, so score one for the lady guru on this issue.

So, I think some of these fears of a second recession or a prolonged current recession are legitimate, but some of these guru comments are not legit in my humble opinion. It all just proves to me that many journalists reporting on real estate have never actually SOLD real estate for a living and don't even understand the basics of marketing or economics. I think that to them, real estate reports are just another "beat" that they have to file stories on -- like the "police beat" or the "sports report" or dozens of others.

Hey, if you don't have to understand anything about economics or market conditions or business, maybe I should get a job reporting on real estate!

Happy selling!

-30-

Short Sales May Not Solve All Problems

If you think a short sale or foreclosure will solve all your real estate financial problems, you better think twice.

Recently, mortgage companies have been more and more active in trying to collect ALL the money owed. They may approve your short sale, but that does not mean you're out of the financial woods.

In Florida, lenders have the right to pursue borrowers for the difference between what their house sold for and what the borrower actually owed on it. This is called a deficiency judgement. Even though your house has been sold through a bank approved foreclosure or short sale, the deficiency claim can still be filed by the lender.

From what I am told, the lenders don't always file a deficiency suit. They kind of wait-n-see who has assets that are worth going after. If you have assets, you might receive a shocking letter in the mail that says the bank wants the balance due.

The other thing I have been told is that if there is a second mortgage on the property, you are more likely to face a deficiency claim. The second lien holder often gets virtually nothing from the short sale or foreclosure sale. In fact, they are generally last in line to get money from your sale. These lenders are much more likely to to pursue the deficiency suit.

Remember this: Just because the property has been sold in a bank approved short sale or sold by the bank through a foreclosure sale, borrowers should never assume the amount of the deficiency has been forgiven. You should always check with your attorney to receive advice on how to avoid a deficiency claim. It might be that bankruptcy can help you or a written waiver from the lender stating that the shortfall has been forgiven. Discuss these options with your attorney.

-30-

April And May Sales Report

One of Tampa Bay's best real estate agents, Debbie Deeb of Prudential Tropical, called me to ask why I have not written my monthly real estate listings and sales round-up article for Pinellas County for April and May. Gosh, it's nice to be missed!

Truth is, I decided to act like a big-shot business writer and prepare one of those super-insightful, multi-faceted, in-depth "think pieces" that would make me a candidate for a Pulitzer. This article would delve into the mysterious underworld of real estate sales versus government tax rebates so we could see the effect of the loss of rebates on real estate sales. You know, one of those "comparison and contrast" stories everybody likes to read so much.

Well, to put it in journalistic terms, I got scooped!

Apparently I was not the only writer out there who thought it would be an interesting and insightful story. In fact, the guys down at the St. Petersburg Times used the idea and put it on the front page of Section B today. Just look for the huge headline reading "Housing Revival Fleeting". The subheadline gives you an instant summary: "The first-time buyers credit expires and so do positive bay area sales and price trends."

To put it in a nutshell, the newspaper has reported that Tampa Bay home sales fell 5.4-percent in May compared with April, and home prices dropped another 3.1-percent. The Times got this info from an outfit called Home Encounter based in Tampa.

So, perhaps the housing meltdown is still with us. Perhaps the recent spurt in real estate activity was directly linked to the tax credits. I think the only way to know for sure is to take a look at listings and sales for April and May and see just what has happened. And remember, this data is from MLS for Pinellas County -- not for "Tampa Bay".

First, let's look at the Absorption Rate (AR). AR as you know is the actual inventory turn and is calculated by dividing the number of units sold in a month by the total number of listings in the MLS system for the county.

For single family homes, the AR for April stood at 13.0-percent. The AR for May dropped to 12.5-percent. So, a larger percentage of listed single family homes were sold in April than in May.

For condos, the AR for April was 10.6-percent. The AR for May fell to 9.1-percent. So, a larger percentage of listed condos were sold in April than in May.

The AR for those two months tends to support the information in the Times article that without tax credits, sales are starting to lag.

By the way, there were 6,057 single family homes in the MLS in April and 6,270 listed in May. In April, 786 single family homes were sold, and in May 786 single family homes were sold. So, we had the same number of sales in both months but April had fewer single family listings, thus the slightly higher AR. So you could question the validity of the conclusion that tax credits had a real influence on sales from April to May, couldn't you?

Condo's had 5,351 units listed in April and 5,375 in May; that's virtually identical. There were 568 condos sold in April and 489 sold in May. While the number of listed condos is pretty much the same for both months, the number of sales is quite a bit different, and that explains the big difference in the AR for April to May for condos and tends to support the theory that the loss of tax credits did have a negative impact on condo sales.

The reason we need to know what is going on related to the impact on sales of the loss of tax credits is to know if the real estate market was ARTIFICIALLY stimulated or not, and if the stimulation given by the tax credit is sustainable.

If sales start tanking once again without the tax credits, well, we know the answer to those questions. It then remains to see if we can do anything about it. If we can't, we may be headed for a double dip recession in real estate ... something that a lot of other gurus and commentators think is very possible and quite likely. Just tune in to CNBC and listen to the real estate reports several times daily and it doesn't sound real good for real estate nationally.

Locally, the Times writer quoted Stan Humphries, chief economist for Zillow, as saying that prices in Florida are still inching lower and will continue to drop until 2011 whereas the market nationally will bottom out in September of this year. So, recovery in Florida will lag the rest of the nation.

Humphries may be correct. But he could just as easily be wrong and it could be longer than 2011 before we bottom-out. He's probably looking at real estate data ... you know, things like inventory, short sale reports, foreclosures, housing demand and the like and trying to project how long it will take to sell off all the listings and ghost inventory around the country.

To me, that's a real estate guy trying to project the end to a real estate problem without taking into account all the other economic conditions that impact the real estate industry. Most notably, he may not be accurately projecting job loss and how long it will take people to find gainful, non-government employment at salaries that are large enough and stable enough to qualify for a mortgage.

Maybe he's not talking about the terrible problems associated with sovereign debt in Europe and the horrible pounding the Euro is taking versus other currencies in the forex markets which will likely have a negative impact on European real estate sales in the U.S.A. Those problems will ultimately impact us in Pinellas County real estate.

And frankly, I'm wondering if Humpries really appreciates the negative impact of all the foreclosed properties that are in Florida. By some estimates, banks are currently shielding over 1-million foreclosures in Florida alone. I wonder if Humphries has factored that into his 2011 forecast?

So, what do I think? I think we sold a bunch of houses as a result of the tax credit program and I think that's a good thing. Now it's gone. We'll know the full impact of the departure of the tax credit program in another month or two. I have a feeling that what we will discover is that we've sold fewer homes to people who want to live in them, and more homes to investors who want to do a little speculating in real estate -- especially so if the stock market continues to be volatile. Gosh, this is starting to have a familiar ring about it. Kind of like 2003 and 2004.

And I think one other thing. I think real estate agents, brokers, and prognosticators need to broaden their view on real estate recovery. To a great extent, the problems being confronted by local real estate involve two words -- Global Economy. Many of the problems faced by real estate today have as much to do with world economic conditions as they do with local sales volumes and pricing.

Don't believe it? Do this. Go home one afternoon this week and turn on CNBC -- they're all about business news. Keep track of how many times you hear the terms "Sovereign Debt", "Euro Crisis", and editorial discussions about foreign exchange rates and the effect they have on imports, exports and purchases by Europeans.

Along with that, keep track on how many times you hear the term "non-government employment".

Then, apply what you hear to the concept of having foreign investors buying property here. Foreign investment has been a very important part of Pinellas real estate for many years. What you will hear now is frankly quite discouraging. It all has to do with the falling Euro. I even sat in on televised discussion a week or so ago when the question was if Europe and the European monetary system can survive for more than another year or two. Right now, it appears that nobody has much confidence in Europe in the long term. It's a shame.

As far as U.S. employment goes, keep in mind that the so-called economic recovery in the United States is not creating many non-government jobs within the country. Without jobs and the stable incomes that accompany them, real estate agents won't have many buyers who can qualify to buy a home. Where are all the jobs? Well, let's just say they are America's favorite export.

The problem is, the real estate industry can't make large contributions to solving either of these problems because global economic recovery, job creation and foreign exchange rates are not our areas of expertise. But all these problems impact local real estate sales.

I think it would be best if we all broadened our outlooks when discussing the problems and possible solutions to the real estate problems, but as real estate agents and individual homeowners we also need to recognize our limitations. We need to think globally and act locally. Gosh, that sounds kinda like a bumper sticker, doesn't it?

Happy Selling!

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