Capps Listens to the Worries of Realtors

I think it is ludicrous that banks don't rent out these empty homes! It wouldn't just help them to maintain the houses and keep them safe from vandals, squatters and other lack of use issues but maybe it would help to reduce the overall cost of rent in this outrageously expensive city! As a renter I am disgusted that to rent a 1 bedroom is about $1500 a month when I was able to rent a 4 bedroom house for this amount about 15 years ago, the banks & realtors can do something about it and instead they just whine and continue to try to write the bad loans that got us into this mess!

I find it difficult to have sympathy for realtors as a group. Their industry, along with the mortgage originators, were the front-end that fed the gigantic & complex mortagage securitization system that is arguably one of the primary roots of all our financial woes today.

So its ironic now that real estate agents are so PO'd at their former buddies, the banks that now hold all that excess housing stock, for lengthening escrow times and generally making the liquidation process so painful.

The residential real-estate industry was a virtual monopoly up until recently with their closed MLS system. It used to be you really couldn't play the game unless you hooked up with MLS. Now, with real-estate-related companies wanting to make a buck using the internet, that system is finally opening up.

And do real-estate agents really deserve "standard" 5% fees (remember when it was 6%!)? No doubt there are some difficult transactions where the agent does a lot of work. But in my experience (especially my last transaction this year) agents on the whole get paid way too much for the time/work they put in. That's why outfits like www.redfin.com are getting lots of attention. There will be a place for traditional agents for some time, but with the way the internet has changed residential home sales, you have to believe commissions will drop and the business model will change(ala Redfin).

Stepping off soapbox now :)

"The housing market in California is in particularly bad turmoil compared to other regions of the country."

Oh puh-leeze! "Particularly bad" because prices have dropped from 5 times average to only 3 times average (or whatever)? They are selling houses in Michigan for $1000 on ebay right now. 18 unit apartment buildings for $10,000. In Pennsylvania it's way, way more, like, $20,000! Please specify which "other regions" of the USA can boast a strong real estate market right now.

The writer said "particularly bad turmoil", not particularly bad market, so your comparisons aren't really relevant to his point, Nitz. He doesn't claim there is a better market somewhere else.

But I also was a little shocked that he said that, since my understanding is that foreclosures and under-water mortgages and vacant houses are much worse problems in Arizona, Nevada, Florida--places where the market values of houses increased at the same or higher rates than here, but where the prices were still "affordable" compared to California (and especially our area). Drive through some Las Vegas new home tracts, or Phoenix/Mesa subdivisions, and it is scary how many vacant (bank owned) houses there are. The only places I have seen that kind of thing in California is in Victorville, Lancaster, Palmdale. Probably there are similar areas in Northern Cal, don't know. The places that boomed the most seem to have had the biggest busts, which makes sense.

I agree it's pretty ironic that the realtors are screaming now. They made a bundle on sales (at 6% commission, usually) during the boom years, guess they thought the goose was going to keep laying those eggs indefinitely. They have a lot to answer for, along with the mortgage companies and especially the investment banks that created the mortgage-backed securities.