Wednesday, February 14, 2007

L.A. Times: It's their default position - "The rest [of the real estate agents] are looking for side jobs at McDonald's. It happened overnight."

This February 13 story by David Streitfeld gives us a glimpse into the lives of some realtors who are being realistic about the future. Home Center Realty services the Inland Empire area.

David Hennigan, one of the realtors featured in the story, looks over the list he gets from United Title Company of the homeowners who have recently received notices of default, and spends his time trying to cultivate relationships with these homeowners. Hennigan gets a list every 10 days. He looks for homeowners whose homes still have substantial market value, and who he figures he might be able to help come out ahead in a sale. He ignores the homeowners who owe more on their homes than they are worth - he can't save them.

Hennigan thinks the market is going to get a lot worse. You don't hear that from a realtor very often, do you! When Hennigan makes surprise visits to homeowners in the afternoon, he brings along another agent to sit behind the wheel of the car and keep the engine running, "Just in case someone comes out with a shotgun."

Amusingly, Ron Barnard, the chief executive of Home Center Realty, and whom Hennigan has been working with side by side, is the optimist. He figures buyers are sitting on the sidelines but that "they'll come back" in the summer. But he has a strong plan B in place "just in case" the market does not come back. He wants his agents to learn everything possible about foreclosures. Home Center President Jason Bosch actually believes the market will soon resemble that of the early 90's, and then get even worse.

How's that for a different kind of realty?


Blogger Mike said...

i was really surprised to see this article in the la times after all of the fluff pieces i've seen recently. too bad it wasn't in the sunday RE section.

but i imagine that most readers think something like "well of course it's happening in the IE, but never here [on the westside/in south bay/san marino/whatever other nicer part of town one may be in]." but we all know that a down market takes place on the margins, and that what's happening out there will eventually ripple this way.

8:00 AM, February 14, 2007  
Blogger GoBig said...

Yes...very true statement. The run-up in the IE was high and so was the use of sub-prime loans. But, the OC and the South Bay will suffer the same effects very soon. The rising tide eventually catches all. A realtor friend of mine told me that we should expect to see REO's like we did back in the 90's...and yes, this was for the South Bay. There are many over leveraged people in the South Bay (and the OC) Just have a look at the property tax delinquency rate...this is a first sign. see
yes this is the OC, but I look at the OC and South Bay as almost parallel societies.

2:31 PM, February 14, 2007  

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