Patrick Foley

I hate to whine, but it sure does seem like the Texas Longhorns got screwed by the BCS, in what will surely cause even greater hatred of the BCS system. I know that I'm biased, but I fail to see how you can say that Oklahoma deserves to be in the Big XII championship, and on the way to Miami (barring any unforseen circumstances).

I for one am rooting for Mizzou this weekend, and a small Florida win, in which Texas may not be jumped by the Gators. Likely? No. But it is the holiday season, and we are all allowed to have hope, right?

I was reading a real estate publication the other day, and it had a little blurb about commercial brokerage. Naturally, I was immediately drawn to it, as the majority of real estate writings tend to focus on the residential side of the business. In the rather short blurb it said that commercial agents often cut their commissions in the negotation process in order to get a deal closed.

I have never done this, and I haven't talked to anyone who has specifically mentioned that they have (of course maybe we wouldn't want to admit to it). That being said, there was a deal I worked earlier in the year where the other agent and I discussed using some of our commission dollars to fund some improvements in order to appease all parties. Fortunately, it didn't come down to that.

I'm curious, have you ever cut some of your commisison to close a transaction? If not, would you consider it?

I've been noticing a thaw in the nationwide housing market, and I wonder if it is just from my experience, or if there is actually something to all of this. I'd love to hear your comments/thoughts/opinions. My evidence comes from the numbers being publicized by the Bloombergs/CNBCs/Reuters of the world. The other is from my Dad, who is a residential broker in Northwest Arkansas.

The Numbers

As I mentioned, over the past 3-6 weeks, I have noticed some good news coming across the wires regarding residential real estate. Home sales in Southern California actually increased in September compared to August, though prices continue to decline (as well they need to, they were vastly inflated in my opinion). I think that's important because some attribute the problem in Southern California as the precursor to the nationwide problem. YOY home sales are up 1.3% in September nationwide, though this isn't the growth we all are looking for, it points to some stabilization in the markets.

In September, the Commerce Department reported that Housing Starts are at a 17-year low, and building permits are down 8.3%, a sign of further slowing in future housing starts number. This is helping draw down inventory, which is beneficial to the real estate industry, and also affects existing home sales and values.

Enough with the numbers, you get the idea. Things are not all bleak out there.

The Story

Things could be better, but according to my Dad's business (which I know is not a national economic indicator), things are looking up. The number of listings, and properties set to close are up. Business isn't exactly booming, but it is up considerably over the last several months. This was one of the hottest real estate markets in the earlier part of the 2000's as the population growth began to explode with the growth of companies like Wal Mart, JB Hunt, Tyson and others. They too saw massive developments that began to flood the market with supply, but as we saw with the numbers above, supply is beginning to be drawn down as construction slows.

Commercial Implications

What kind of commercial broker would I be without writing about the implications to the commercial real estate market. Obviously, a healthy economy is very important to keeping commercial real estate afloat. It certainly does not help us when businesses are contracting and laying of personnel. We are also facing problems of oversupply as developers became very overzealous. Eventually the banks will foreclose on properties and they will be snapped up by distressed/value investors who will make a ton of money. So while things will rebound, I think commercial is going to lag behind residential (as it usually does) and the worst is yet to come. That being said, there is going to be A TON OF $$$$ MADE by those with the cash on the sidelines to put forward and buy these distressed assets. When that comes to pass, commercial guys with the knowledge of the market are going to be able to get rich with the investors.

As always YOUR COMMENTS are welcome, and greatly appreciated!

I don't pretend to judge, and my political feelings are generally very well known, even to those on AR. The question I do have though is, are the traders on the Street discounting failed Obamanomics with the 1000 point decline we have seen since the election? I'm certainly willing to give the guy a chance, even though I do not agree with his proposals, but I can't help but wonder, does the market know better than you, me, or the electorate?