Real estate agent hysteria

A few weeks back, I published a post highlighting how real estate agents seem to have turned from ‘talking-up’ the housing market to ‘talking it down’ in order to boost sales.

I provided some recent email reports from a Ray White real estate agent that set a new benchmark for bearishness. Well, today I want to share with you the latest reports from this agent, which makes interesting reading.

The first email report is from Thursday 8 September 2011;

Domestic and global conditions form an integral part of buyer sentiment and must be considered in conjunction with local market conditions. The media last week was dominated by the continuing speculation over interest rates and rising unemployment.

An article in the Sunday Telegraph quoted Reserve Bank (RBA) governor Glenn Stevens saying recent job losses are not only a sign of the times but a signal of worse to come. The comment came after Bluescope Steel announced the retrenchment of 1000 workers and Qantas, Westpac and One Steel reported further job cuts. Official job losses for the month of August now number 9000, although economists say these figures are the tip of the iceberg and could jump drastically to 100,000 by Christmas.

An article in the Herald Sun said the RBA now needs to cut rates, but is unlikely to do until unemployment rises.  Dr Ed Shann director of Prime Value Asset Management said the RBA has been keeping rates on hold due to global uncertainty but that rates may fall next year.  A Sydney Morning Herald article quoted Commsec economist Savanth Sebastion as saying financial markets have factored in two rate cuts over the next twelve months.

The latest Australian Property Monitors (APM) data has shown median house prices fell in every capital city during the July quarter. Perth suffered the greatest fall, down 2.7%, with Melbourne and Sydney the most resilient, down .9% and 1.1% respectively. An AAP article quoted senior Westpac economist Matthew Hassan as saying the weakness in the residential property market is concerning, as it suggests most sectors are experiencing significant price corrections rather than just price slippage.

Professor Steve Keen wrote in the Property Observer that three bubbles in Australian housing in the past 50 years have been driven by accelerating levels of private debt. He believes prices need to fall by 40% just to counter the effects of the latest bubble which began in 1997…

In light of the current conditions and the high level of market uncertainty going forward, we urge you to carefully consider the activity around your property this week.

The next email report is from Thursday 15 September 2011:

In the current environment of uncertainty, macro conditions may overshadow local market conditions and the two must be considered in conjunction for their impact on buyer sentiment. The Reserve Bank’s (RBA) decision last week to leave the official cash rate on hold at 4.75% came as little surprise, the tenth consecutive month rates have remained stable.

While the RBA is adopting a wait-and-see approach, Governor Glenn Stevens has cautioned that there is no way of knowing what will happen in financial markets over the coming months.  Stevens said any number of hurdles in Europe or the United States could serve as a catalyst for increased anxiety, a situation that could persist for the foreseeable future.  An article in the Sydney Morning Herald reported financial markets are now pricing in 1.35% of rate cuts over the next twelve months. Westpac chief currency strategist Robert Rennie said he senses an increasing sense of deterioration in the global economy.

The Herald Sun reported almost 10,000 jobs have been stripped from the workforce, with the jobless rate rising to 5.3%, the highest level in ten months. Official employment figures show the ailing retail and manufacturing sectors are shedding jobs in a contraction which was largely unexpected by economists.

The Sydney Morning Herald reported on new data released by researcher SQM Research which predicts house prices will continue to decline in 2012. The report said while an economic catastrophe in China or a second global financial crisis could result in a major price crash, it’s more likely prices will continue declining as buyers avoid a falling market. Director Louis Christopher said he believes Melbourne, Brisbane and Perth prices will be as much as 15% below their 2010 peaks by June next year, assuming rates remain on hold…

In light of the current climate and with an overwhelming uncertainty hanging over the future direction of the market, we encourage you to carefully consider any activity around your property this week.

Despite the real estate agent’s bearishness, which borders on hysterics, they are probably correct to be concerned with the state of the market and the negative impact that poor sentiment is having on sales volumes. The below chart from RPData shows that the trend in consumer sentiment and national sales volumes has shown an 84% correlation since the start of 2008:

And rising unemployment and mortgage stress risks dampening buyer sentiment even further. From Bloomberg:

The number of homeowners facing mortgage stress has jumped from 21 percent in March, mortgage insurance provider Genworth Financial Inc. said in its September Homebuyer Confidence Index, based on surveys conducted from July 30 to Aug. 5, and released today…

“As the market slows, people just take their properties off the market and delay their decision to move, rather than renting it,” said Matthew Hassan, senior economist at Westpac Banking Corp. in Sydney. “We see a significant rise in unemployment in the next 12 months, so in the near term, we’re likely to see more stress in the mortgage belt”…

Rising consumer prices, even after seven interest rate increases by the Reserve Bank of Australia, are putting more pressure on homeowners with mortgages in the market with the most unaffordable homes in the English-speaking world…

Homebuyer confidence fell 2 percent from March, while 36 percent think now is a good time to buy a home, the Australian unit of Richmond, Virginia-based Genworth, said in today’s statement.

About 85 percent of borrowers are still managing to make mortgage payments on time, and more than 45 percent have overpaid their mortgages over the past year, Genworth said. First-time homebuyers in particular are cutting back on luxury goods, clothes and groceries to own their homes, the group said…

The Ray White real estate agent appears to be walking a fine line. Whilst their alarmist statements might encourage stubborn vendors to ‘meet the market’, thereby potentially increasing sales, the same statements could very well dissuade potential buyers from making offers.

[email protected]

Unconventional Economist


  1. I suppose all those Audis don’t pay for themselves.

    They need sales on the books and the best way to do that is to drop prices.

    I wouldn’t want to be a realestate agent these days. Neither do they, 2 have closed in the main street of where I live.

    • a mate of mine went a RE sales conference here in Melb the other week with about 300 other agents. Said the tone this year couldnt be more different from last. Last year the focus was on how to get buyers to pay up for property, this year was all about how to lower vendors expectations so they lower their price to get a sale done.

  2. Agents are now quoting Steve Keen! I think they’re really in a spin at the moment and not many realise they’ve dug their own grave with the endless growth spruik over the last 2 years.

    I had one agent argue that a swathe of recent finance knock backs weren’t the result of incompatible valuations, but rather banks were limiting LVRs to 70%. But all was well though as they’d seen a few sales that week and prices would naturally rise with that.

  3. The use of the words ‘alarmist’ and ‘hysterics’ in your article suggest that Ray White are overstating the actual level of risk, but I don’t get that impression myself. They might just be brutally frank about future prospects for house prices. And do we not want RE agents to start taking some level of responsibility for their financial advice?
    One of the issues facing RE agents is that many vendors still believe they are entitled to make a squillion in this market, simply as a reward for their decision to own a house. Thus many of the houses on the market are still unrealistically priced….and any reduction in asking price is reluctant. I found one the other day where the ad trumpeted a massive reduction in price of $10k….on a house they still wanted $1.6million for? Was I tempted by that price slashing? No.
    It’s early days yet, with many vendors taking homes off the market, or sticking stubbornly holding to unrealistic prices ….but if interest rates don’t fall and unemployment rises, they will eventually correct sharply as the swell of vendors who must sell rises.

    • There is an older lady (70+) that owns the holiday house across the road from ours at Rye (Mornington Peninsula). She has had the house on the market every summer for the last 3 years.

      She is not willing to accept any less then the value the neighbour got for his back in 2008. She can afford to hold the property until she dies, but will not sell until she receives ‘her price’.

      I think people underestimate how stubborn the 70+ age bracket in this country are.

        • They already are. I know of many people (mainly friends of my grandparents) that have over $2 million in assets. They claim the pension as they have shifted the holiday home to the kids name. They live off the pension running two properties while skimping on food and healthcare.

          Why do people in retirement deserve a pension when they have to properties? How is that fair to young people who cannot access the property market?

          $2 million is ridiculous. It should be $500,000 tops. This would encourage pensioners to downsize bigger homes in the inner city and move to ‘treechange’ areas to enjoy retirement.

          • I think we should create lovely new cities using the latest technology such as electric cars that are designed to be very friendly for old people to live in. In these cities superb geriatric hospitals could be built.
            These cities would probably encourage pensioners to move out of the capitals solving the shortage of housing near jobs. If not, their pensions could be means tested against house values, and they be forced out that way. I prefer the carrot to the stick though.

        • Or they can get a ‘reverse mortgage’ where they capitalise a portion of their house for an extortionate price & the bank wins when they sell the deceased estate – Banks Win Again!

      • She’s not the one setting the price. It’s the person who has to sell that does, both on the way up, and the way down. If she wants to be stubborn that is her choice.

        Being stubborn can cost you though. I learnt this lesson selling a car once, knocking back a decent offer on the “advice” of mates, only to have to accept an even lower one much later.

        Good example of how the bubble mentality has distorted many peoples thinking though, delaying getting on with their lives over some imaginary paper values.

  4. Tell us more ‘William’.

    If there was 10% more upside on your property, you would think the market would have found that level. How do you rationalise that you got duped 10%?

    What sort of sale was it? Private, Auction?

    Did the agent decline offers 10% higher than what you received?

    Did the agent sell to a relative or into one of their own shelf companies? (very common)

    Or were they simply too lazy and coerced you into accepting an inferior offer?

    IMO, make them work, especially if you have no financial imperative to sell. And for god sake don’t step on them, you’ll never get the 5hit out of your shoes.

  5. Like any sector, real estate has peaks and troughs. The last ten or twelve years have been really exceptional historically speaking; huge unprecedented gains in capital cities with corresponding increases in agent’s wealth. At times the increases in prices were almost hysterical and people speculating on investment property were making obscene amounts of wealth for doing nothing other than holding onto rental properties just outside the capital gains tax periods.

    The thing that I love about living in a free market economy is that nothing lasts forever. People making huge amounts of money also stand to go broke if there’s a prolonged slump; as I have posted here before, I know lots of casual aquaintances who have loaded up on investment properties and seem blissfully unaware of the potential dangers.

    Its about time things went back to more of a long-term status quo anyway; houses are for living in NOT speculating fortunes on. People playing the property game had it way too good for way too long and maybe for ordinary folks there’s a chance of actually being able to buy your own place in a capital city without committing to a lifetime of painful debt. And agents will just have to get used to driving Commodores instead of X5’s.

    • I agree generally, but don’t expect the ‘free market’ (which we don’t have) to make things suddenly fair.

      Houses are for living in, company executives are there to ensure companies run well, Governments are there to ensure we get basic services and a working legal system, the banks are there to facilitate basic business and economic functionality, and the RBA exists to manage bank reserves and other basic monetary functions.

      None of the above are working at all. Houses are being gambled, company execs are taking big paychecks for little service, Governments are not supplying basic services (and are taxing us more?), banks are gouging everyone and creating systemic economic risk, and the RBA has some strange agenda we may not be privy to.

      Fair doesn’t even come into it. Utopia is where things are fair, but I haven’t figured out where that is yet.

      • Pete, I’m sure that Judgement Day isn’t far away…If it all goes to crap then the public will be looking for who to blame. Let’s start with the free and easy lending that began in the early 90’s and helped to inflate this huge bubble we have at the moment. Then move on to the regulators who sat on their hands since Keating despite the fact that the risk of a crash was always there. Finally, greedy people owning multiple rental properties borrowed against each other… and rewarded with loads of tax incentives like negative gearing (which in turn goes back to our gutless politicians). So all in all I guess we are all to blame except people like me who have been forced to sit it out on the sidelines because I’m not willing to borrow three hundred grand for a fringe dwelling.

  6. There is a always going to be a difference (+ve or -ve) between a valuation and what someone will actually agree to pay for a property. Therefore the current value of a property is only realised at the moment of sale. If the difference between a valuation and a sale price was 10% then I don’t think you have much to fret about.

  7. I have been needling RE Agents over all this, for years. I have been suggesting that their professional bodies “wise up” about urban economics, and work out where their best interests lie. Their best interests are NOT served by regulatory regimes that are promotive of cyclical volatility.

  8. Well it is alarmist compared with the langauge they were using a few months ago. Agents just want to turn listings over. At 2% comission, if your house sells for $850,000 instead of $1m, they receive $17,000 instead of $20,000. They are down $3,000, you are down $150,000. Get the picture?

    • I noticed a new real estate agent opening up in Main St, Croydon on Saturday. I think it was called “Homebrand Real Estate”.

      It was spruiking a flat fee commission of $7000, regardless of how much the property was worth.

      Could this put pressure on existing Real Estate Agent’s % commission aspirations?

      The average house in Croydon is about $450,000 , so that is about a $2,000 saving if you consider a 2% commission.

      However many of the houses in surrounding areas (such as Wonga Park) would be around the million mark….

      • The Go Gecko RE franchises had a similar model – capped commissions. They went broke as soon as the volume dropped. A lot of the extra normal commission REAs are slowly following, by the sounds, so I am not too sure how well the particular new REA you mentioned will go…

    • Hi X,
      The key is the “selling speed”. If an agent can sell you house out at 500K in one month, then the agent is able to work on another property from the second month. But if the agentt wants to sell you house out at 550k, this may take him 3 months. So certainly, the agent will focus on a quick sell instead of a best sell

      • Well of course- the marginally higher commission for two months extra work actually means that the agent gets paid more for their time when it sells within a month.

  9. Diogenes the CynicMEMBER

    It is a refreshing change in language.

    The other thing I have observed in recent advertising material are agents asking for more properties for their rent roll. Cashflow streams must be drying up in agent land.

  10. Outside Southern Cross station this morning they had people in “” shirts handing out leaflets on property investment.

    I’ve never seen anything like that before. Desperate times call for desperate measures.

    • It’s just not the REAs who need turnover – it’s also the data and service providers, like APM, domain (both Fairfax),, Residex, etc etc, even RP Data. If people are not buying, then people are not buying their reports.

      Most of these organisations (RP Data being the notable exception) have positioned themselves in the “buy now” bull camp, as there are “bargains” to be had. Just look at the breathless spruiking by APM types like Dr Andrew Wilson…

    • Lots of that sort of thing going on. Things I have seen lately.

      1. ANZ mobile lending officer has set up a booth in the Perth Qantas lounge. Who suddenly decides they need a loan?

      2. Real estate development mob set up a display in the mess at the camp I stay in. Obviously marketed at the most sophisticated of property investors, the Cashed-Up Bogan.

      3. Commonwealth bank set up a stall in my local shopping centre, handing out balloons and leaflets. I got a balloon. I was very excited. It was yellow. Handed the leaflet back.

      They’re everywhere and they’re desperate. They won’t leave you alone. Hang on, someone is knocking at the door…

        • Thank you, but there’s nothing funny about television.

          You know, numbers two and three I can understand…even if it is just throwing darts into a crowd to find a sucker.

          But number one? WTF? Is some dude gonna decide he likes the aircraft he is flying on so much he decides to buy it? There must be an ANZ type on here reading this. I demand an explanation.

  11. Has anyone seen any articles on insurers not supplying Professional Indemnity insurance for property valuers anymore? I’m not sure whether I heard this right -are they now trying to cover their arsetts against poor valuations on the downside?

    • I haven’t seen it in Australia, but I understand there is a big issue in NZ as a result of many valuations being a long way off the mark subsequent to the Christchurch earthquakes. Part of the problem was a misunderstanding between the type of value the valuer supplied and the rebuild valuation that the insurer/customer required.

    • Pointe Gourde Principle

      Here is a link to the API press release:
      As I have said in earlier post, alledgedly “sub-prime” lenders in the market (like Genworth) are having a wonderful time suing Valuers at the moment.
      For sure in some case there is an element of negligence by the Valuer – in a lot of cases it is buck-passing for a loan that should not have been made in the first place.

  12. Family friends sold in Glen Waverley too around 3-4 months back. They actually ditched Ray White and went to another agent because Ray White were not willing to get the price they originally wanted (first auction passed in).

    The second agent promised a higher price, and advertised heavily in Local Chinese, and Chinese Chinese newspapers to attract interest from overseas investors. These people thought they were on a winner.

    After 2 more months of private negotiation, they ended up selling for $20,000 lower then the highest bid at the passed in Auction. They also ended up selling for $140,000 less then what they thought was the ‘value’ of the property.

    I think you will find that Glen Waverley in particular has come off the boil over the last 12 months, and Chinese demand which boosted in the area in late 2009 and early 2010 is little to be found.

    • Chinese Chinese newspapers to attract interest from overseas investors. These people thought they were on a winner.
      Too bad even the overseas Chinese investors seem to have caught on to what is going on with the property market here.

      • Too bad, and possibly not only for the Chinese. While investment in Oz RE may be a small drop in the sea of Chinese overseas investment, wouldn’t it be indicative of where the Chinese investments go?

        If significant share of Chinese money goes into speculative RE in China and overseas, the bubble bursts may create a chain reaction. It won’t matter then the macroeconomic indicators they publish (whether they are real or forged), the demand for Aussie commodities in China will drop further.

  13. Unconditional Sales generally attract a lower price anyway – given most sales are “subject to finance”.

    I would dare suggest that the fact you wanted a “speedy” sale, and wanted it “unconditional” probably impacted your ability to obtain a higher price.

    • No Jason, I didnot want a “speed sale”. I am very clearly told him I am nto very clearly know my house vale. so I want the sale to be done in sept when there are more selling on market then I can know clearly know how much my house worth

      The agent digged a trap there. he misled me to put a very low price as “vendor price” on the authroity (I am silly chinese i donot have experience in selling house in Australia so i don not know what exactly the vendor price mean. very shortly he got a un-condtional offer in which is above the vendor price. Then he expained to me what the vendor price exactly mean. “As per the authority, even if I rejected that offer, I still need to pay him full commission”. I feel very angry with him. But after consideration, i still signed the contract. At that time, I did know the offer was not good one. But I still signed the contract and persuade my wife signed as well. My wife is sick and I donnot want to bring her to Tribunal to fight with the agent as I donnot want to bring any impact on her.

      Now I realized. From beigning to end, the agent is working more hard “on” me than for me. He knew my wife was sick. He plotted to push me sign as quick as possible. He knew i could gradually relize about my house market-vale and
      he just focus on quick sell. If the offer is a conditional offer, i will reject it without anyy question. But due to the offer is un-conditioanl offer, so he is entiled to “full comission” even if i rejected it as per the authority.

      private sale”

  14. For decades agents have been talking up ‘the house’ and behaving like parasites with buyers.
    Now the source of bigger fools is run dry as buyers get informed about the Oz RE Ponzi.
    What choices are left?
    Hang on and absorb losses as prices fall or sell now?
    You made your choice, so relax in the knowledge you got out before the real rout begins.

  15. Real estate agents are in business, and like any business , some will target volume and some will target premium. In my area, the Ray white franchise gets the bucket load of listings, but is also gets the sales and they are generally the ones where the vendor has to sell ( generally auctions & IPs), and there is a bit of discounting, another agent gets listings because he wont discount and on average it takes longer to sell but he gets what the vendor wants and these are generally 70+ who are in no hurry.

  16. The internet is facilitating the private selling of homes and is dead easy. Once you have a buyer ie. a proper offer, just refer it to your solicitors to sort through. No legal issues the last two times I did it and buyers appreciate the knowledge you have of your own home. You don’t have the pressure of a RE agent trying to get you to lower your expectations from the inflated price they gave you in order to get your listing. Read Jenman and learn.

  17. I don’t see why William is so keen to delete posts. Maybe there is a fear within the “new Australian” (see Chinese) community about speaking out when they feel they are not getting value. This fear of ‘speaking out’ would be ingrained in them from a communist upbringing. If the Chinese people & Government say everybody should be satisfied with property investment – then it might be difficult for people to complain about it.

    William’s posts do make me wonder how many Chinese in Australia are ‘upset’ or ‘regretful’ of their property purchases in Australia. Maybe they feel that they have been ‘bullied’ or ‘pushed’ into investments because they felt they couldn’t speak out about them. Does anyone think this could be the case?

    • Maybe the moderators can explain? One of mine has disappeared. I wouldn’t have thought there was anything prickly about it.

    • Overseas Chinese investors (i.e. Mainland Chinese) do have to jump through a lot of hoops before they can invest in property here.
      1. PBoC/Chinese government has a number of capital controls in place. I believe they can’t send greater than a set amount overseas. So they use all sorts of loopholes to get around this.
      2. Australian government has its own FIRB restriction on purchase of existing property. So they either buy off-the-plan from High-Rise Harry and other developers OR
      3. They use loopholes (via relatives here or thru children on student visa) to get around FIRB restrictions to buy an existing property.
      If they can jump through all these hoops, I would expect them to dig a little deeper and understand the market here before investing their hard earned cash. To those who jumped in because Mr Tan down the road also bought one, I have no sympathy for them.

      • Maybe it’s the other way around.

        If they have to jump through so many hoops to actually purchase property – they feel compelled to pay extra to ‘please’ all those that helped them?

  18. Re Agents would have gone extinct with the advent of the internet…the only reason they are still around is that they were fortunate enough that a debt-fuelled bubble allowed people to pay them commissions in a rising market.

    Now the market is falling, people will see the ability to use websites like Allhomee and do a private sale.

    I would never ever pay a RE Agent to sell my home. The RE Agents I know are total morons who have no idea of economics and lack even the most basic understanding of the legal issues involved with buying and selling homes.

    They are pretty faces in suits, that talk slick…yet they earn more than most people I know. Its disgusting

    • Hi Stavros,

      I agree with you. Vendors should not hire agents for selling the house under “private sale”. why should the Vendor pay massive commission to hire a person to agressively lower their expectation and even cheating them.

      I have learned a big lesson this time

  19. Paragraph 3 from Bloomberg
    “homeowners with mortgages”
    One or the other.
    Help me Jeebus.
    If you own it you don’t owe
    money on it.

  20. I was at a friend’s house last night. Lovely house, not far from the river. Currently on the market asking $1.6m. My friend rents it for $700 a week. That’s c. 2¼% gross yield. Madness.

    • My place was sold last year for $430,000 and only collects $270 a week in rent.

      This is 3.3% raw yield.

      Factor in Body Corporate fees, Water Rates, Council Rates, and Building Insurance – and I calculate the Real ROI to be around 2.2% per annum.

      Or I could just earn 5% on my cash in the bank?

    • Well the last place I lived (which just needed to be pulled down) was on the market for 4 months asking high $600ks.
      Rented at $320/week.

      Strangely enough didn’t sell. Didn’t offer value to property investors, wasn’t desirable enough for the knock down and rebuild crowd

  21. I was at a friend’s house last night. Lovely house, not far from the river. Currently on the market asking $1.6m. My friend rents it for $700 a week. That’s c. 2¼% gross yield. Madness

  22. Most of Australia experts and economist have kept saying: Houses in Australia are under supply for decades. this means there are a lot of homeless people in Australia. right? where are they.

    • The people who missed out on housing in Australia are not being housed in Australia.
      You will find many of them living overseas. It takes a little bit of thought to realise this. I will run you through it if you like. Let us put ourselves in the shoes of a typical young person who wishes to buy a house. This person might be 25 years old, lives with their mum and dad, has a job and is about to be married (or defactoed if you like).
      This person investigates the housing market and discovers that prices are too high to be able to comfortably purchase a decent home near enough to one’s job.
      This person then investigates their options:
      1) Move out of mum and dad’s and be homeless on the street.
      2) Move overseas to a better job and cheaper housing (eg Texas).
      Now I think the choice made by this person is fairly clear, don’t you?

  23. “Whilst their alarmist statements might encourage stubborn vendors to ‘meet the market’, thereby potentially increasing sales, the same statements could very well dissuade potential buyers from making offers.”

    ah, yes. Deflationary mindset: that which ruins bubbles – prices fall because they are falling.


  24. People who were living in Australia, Britain or America during the property downturn of the early 1990’s retain a (distant) memory of those events, which makes them at least a little bit cautious. People who grew up in mainland China and moved here in the late 1990’s have lived their entire lives without ever witnessing a property downturn. This may explain why some of them have a less cautious attitude to property investment.

    • I agree with your excellent point, however I would change your statement to: “People who grew up in the late 1990′s have lived their entire lives without ever witnessing a property downturn.” (not just people in China). Which is why the Ponzi got so much traction for so long…..

  25. it always surprises me to see and read so many people thinking that houses will keep on going up forever..i mean do people seriously think their house will be worth a million in a few year…well who is going to be able to efford them,do they think all the world millionairs will come and live here or something…i mean australia doesnt even have a world city for a start..go anywhere in the world and i can bet u most people have never evn heard of australia and i dont mean go to england -i mean the WORLD

  26. Not sure about the ‘hysteria’ however in the current ‘changing’ market, more and more property consumers are visiting Rate that Agent to find out how other people rate their real estate agent.

    Consumers are obviously hungry for instant knowledge (about local agents) which will help them choose an agent that’s the right fit for them and their property in this ‘new market’.

  27. I am a Ray White agent and my current news letters are all doom and gloom. What else is there to report? It’s in my clients best interest to hear the truth in the good times and in the bad.
    I quote Steve Keen, David Collyer and others who believe the bubble has burst. From what I am seeing they are right and I think real estate is a poor investment, but houses make fantstic shelter from the elements.