C Lloyd McKenzie, MBA, e-PRO, CDPE

Frankly, I am disappointed to say the least, about the above headline, "Loan Giant Overstated the Size of Its Capital Base." Once again, the Government will have to clean up this fiasco. According to the authors, Gretchen Morgenson and Charles Duhigg, "The cost of the government's intervention could rise into tens of billions of dollars and will probably be among the most expensive rescues ever financed by taxpayers."

Yes, it's Fannie Mae and Freddie Mac! You might have been holding your breath!

This article is very reveting, and a must read for financial and real estate practitioners alike. Where do we go from here? If we continue down this slippery slope, I fear the worst. Please take tsome time to checkout the below link.

http://www.nytimes.com/2008/09/07/business/07fannie.html?hp

Now I don't know about you, but these days I am being inundated with offers from lead generation companies. It's not like I haven't had my share of dealings with them, God knows I have. The interesting thing is that everything is now repackaged and the exclusive buyer and seller leads are much cheaper than 3 years ago when I had my runnings with Top Producer, House Values and Agent Connect.

I consider myself an openminded individual, so I would like to invite the comment of those of you who are currently using lead generation companies, those who have tried and then canceled their service, and those like me who are on the fence.

Let me say, I am not totally opposed to lead generation companies, but when you have a company in California trying to tell me about the realities of the real estate market in New Mexico, then there is a problem. I live here, I deal with people here, and I study the market here. The only reason I have considered lead generation companies is if I believe that they would provide an added layer of efficiency to my business. In other words, instead of door knocking for three hours two times per week, I would buy 10 leads for example. Three years ago when I got involved with these companies I actually drafted a series of questions that I provided the folks at Top Producer, if they wanted to generate viable leads. The response I got was that they would have to charge a lot more per lead. The fact of the matter is that I wouldn't mind paying more for a lead if the return on investment was adequate.

So I pose this question to you: If you had to pay $1000 per lead for a person who was going to buy a home for $300,000, would you purchase the lead? Certainly you would! Why then isn't there a company out there that is doing exactly that? Or is there such a company? Taking it one step further, if a lead generation company charges that kind of money for a lead, would they be willing to be paid at the closing table? I am curious to hear what others have to say about this subject.

I have yet to get a plausible explanation for what's really going on in the Albuquerque Real Estate Market. For those of us who pay close attention to trends, let's take a brief walk down the Albuquerque market. I will make a few observations, then share my opinion. My primary objective is to get some dialogue going on this subject

Observation 1: January to August 2006...High demand, limited supply and prices going through the roof. Recall, the average daily inventory was about 3000 in the MLS, while the average days on the market was 30 to 45 days. There were so many examples of multiple offers situations...life was great for many agents.

Observation 2: Fall 2006 to present...Demand pregressively trends down, price has dropped a little or remained relatively unchanged. Supply is about doubled, the average days on the market has increased way beyond 60 days to over 11 months in many cases.

Observation 3: 2006, market was being saturated with agents. 2007 to present many agents are seeking alternative employment.

Real Estate is local, so I do not expect that all markets will trend exactly like Albuquerque. Understand though, there are factors (notably the sub prime issue, foreclosure, etc) that affect all markets. They difinitely caused shifts in both Supply and Demand. But the untold story is that the price of homes is being kept artificially inflated. The law of Supply tells us that excess supply places downward pressure on price. That did not occur in the Albuquerque market. With the inventory more than doubled, why didn't we see a bigger drop in price? The Albuquerque market is a contradiction to this principle. How long will this go on?