The Smell of Desperation

The title of this post had been reserved for comments about visiting a few open houses in an area far north of here not long ago, but, it applies equally as well to the promotion of this weekend's Real Estate and Wealth Expo in Los Angeles, put on by The Learning Annex.

As for the open houses, it was an odd sight indeed. Older realtors spoke plainly of the slowdown in second home sales over the last year while younger agents attempted to instill a sense of urgency - that the bottom might be in - perhaps motivated by the inevitable arrival of next month's Escalade payment whether they sell anything or not.

Not that there are any thoughts of buying any real estate in 2007, but being in an area where open houses were held, it provided a great opportunity to look a little closer and to talk to some realtors about rentals.

Seeing inside some of these homes after just driving by for many years, it was nice to see what some of these places really looked like.

Like many other areas, some people went to excess in recent years. A $5,000 chandelier in an otherwise typical home seemed to serve no function beyond what a $200 one would provide but, what the heck - a couple years ago, money was falling from the sky.

What was most surprising (aside from the price reductions) was the length of time on the market for some of these residences. Six months seemed to be typical with one year or more not at all unusual. It must get tiring lugging those "Open House" signs around every Sunday afternoon when just a trickle of seemingly uninterested potential buyers stroll through along with the usual gaggle of nosy neighbors. Inquiring about rentals must make them thrilled.

With few sales in the last few months, a spring face-off is sure to develop between motivated sellers and a dwindling supply of buyers. The paltry number of deals that have been made over the last few months show a very steep decline in sales price, a fact that both buyers and sellers will likely be aware of as the weather warms.

Cue The Donald!

Down south, the LA Convention center braces for an underwhelming crowd of real estate and wealth enthusiasts. Well, not really. Given the trend of the last two years, the entry price for next year's session will likely be negative (i.e., they'll have to pay people to attend.)

Having written about this show last year, it's clear that the price of admission is plunging right along with real estate prices in some parts of the Southland. Robert Kiyosaki is noticeably absent this year, having been replaced by the likes of Magic Johnson and "Mega Grill Entrepeneur" George Foreman.

Last year they had a special "DONALD" code that could be utilized to reserve a spot at a special low price of only $99 and they made it sound like it was a bargain. In today's LA Times they advertise the price of admission as $49 (discounted from $179) - an even sweeter deal.

If you are on the LA Times mail list, it gets better still - the irony is rich when Donald Trump's mug sits just above something priced at $10.


They're giving away 3-hour Peak Performance Training sessions with success coach Tony Robbins along with the largest SPEED NETWORKING EVENT in the world, whatever that is.

"Finding, funding, and flipping foreclosures" is number two on the list of 52 "nonstop classes on every wealth topic imaginable".

How quickly times change.

Becoming an "eBay entrepreneur" is number four on that same list, surely a growth market in the years ahead as all the useless stuff purchased to fill up new homes over the last couple years gets resold at much lower prices before bank-owned properties go up for auction.

The smell of desperation is probably going to linger for a while.