My New Blog

With the current housing slump, property owners are seeing their once pot of gold slipping away. Nationally and in the Tampa Real Estate market, Housing inventories are way up, prices are down and foreclosures are increasing. Then there’s Wall Street where any stocks associated with housing are sliding and the media is screaming that the world as we know it is coming to an end.

Tampa home ownership traditionally has been one of the most stable investments an American could own…until recently. So just who is really to blame for America’s housing debacle? Well I feel that there is plenty of blame to go around but you maybe surprised who is the biggest villain.

Let’s begin with all the Tampa Buyers, the very people who purchased homes in the past three years. I often hear older folks say how difficult and expensive things are for the young people. It’s true that competition is increasing for some things but we have to consider the realities. When I was growing up most families had both a dad and mom, three to four kids, a mutt dog and maybe a couple of gold fish all living in a three bedroom one bath house often no bigger than 1500sf with one car in the one bay garage. Today’s family consists of one or two children, a pure bred cat and dog and often just one parent. The average new home is 2000sf or more loaded with all the newest appliances, toys and other “got to haves”. The two to three car garages are often piled up with so much stuff they can’t even close the doors while two leased cars park in the driveway.

As the media spread word of the surging housing market, especially in communities like Tampa, Brandon, Riverview, Wesley Chapel and Apollo Beach, people of every shape color and creed got their Real Estate Licenses and instantly became real estate experts. The most innovative salespeople held seminars touting the latest and greatest “investment opportunities” and people ran to various new home communities buying homes they could never afford. Other real estate agents were more than happy assist families in fear of not having their dream home. Tampa Buyers scrambled to buy homes before they were priced beyond their reach. Local real estate organizations doubled, tripled, and even quadrupled overnight. Many of the newfound experts made loads of money being little more than order takers. Standards, ethics and sales commissions dropped with the increased competition from newbie’s who nothing about the commitment, time or expenses involved in real estate sales.

The Mortgage Industry grew as well during the big boon. The vague laws in many states, allowed someone to become a loan originator with little more than weekend class and a computer. Banks all over the country saw the opportunity to make money and convinced the regulators to back away from established guidelines. Times were good and almost anyone who could breathe was able to obtain a mortgage loan for nearly any amount. All you had to do was say that they made so much money and fog a mirror. Among the most popular loans was the “liar loan” aptly named the “stated income” loan and then there was the popular “interest only” loan. Naive buyers everywhere chose these loans because they were told of how much equity they would gain without putting a dime of their own money into the purchase.

Wall Street saw the writing on the wall and the possibility of having all their minions pull ‘their” money from their stock market. Stock funds were created using the mortgage companies as players and pawns. Anyone not stupid enough to invest into a long range investment for the short term, sank hard earned money into housing industry stocks while the smartest Wall Street players gambled on hedge funds just waiting for the collapse of the market. If you think about it, doesn’t it sound exactly like the dot-com boom and bust? Hmm. Today, as the rest of America wrestles with how to fix this mess hedge fund players like Steven Cohen and George Soros are worth billions at the expense of stupid Americans (his words not mine).

The glue that binds this entire mess is none other than the all powerful American media. Under the safe and secure First Amendment they were always on the ready to assist anyone with enough money control the hearts and minds of the American public. During the rise of the marketplace they were relentless in feeding the frenzy. Experts popped up everywhere telling everyone the errors of their ways in holding all their new found equity away from their hands. “Refinance” or “lines of equity” were latest buzzwords among “smart investors.” Nearly everyday, articles were found in the wall street journal or New York Times totting the need to invest before it’s too late! Now that the collapse has occurred the media is working to again exploit all the once smart investors turned losers. I think ole algore is on to something with the carbon credits and blaming America for the entire world’s pollution. Can you say global warming?

As the dust settles in the collapsed housing market, Wall Street will begin their next method of making money from the greedy little wannabes. Today the media is placing all the blame on the politicians while the real criminals walk away free of any responsibility or blame. New York and Hollywood will continue advertising the latest and greatest wrapped up in “news” articles and documentaries and the majority of America will go on with their lives not having learned a thing. Who are the biggest criminals? Is it the buyers? the real estate agents?, perhaps the mortgage industry? Don't forget Wall Street and the American media? Who do YOU think is really responsible for the greatest loss of American assets in history? Perhaps a more important question should be; Are you sick of being played enough to want to do something about it?