10. After years of promoting “It’s a great time to buy,” the National Association of Realtor (NAR) predicts that ’09 will be a terrible year in real estate. Millions of buyers take this as a “buy” signal and flock into the market;
9. President Obama, recognizing the depth of the problems with the Big Three automakers, signs an executive order requiring HUD to acquire all vacant and/or distressed homes in Detroit and to give them to members of the UAW. Inventory disappears overnight and home prices start to climb for the first time in 20 years. UAW agrees to accept lower wages in the form of Starbucks gift cards. Starbucks stock skyrockets setting off a market rally. CNBC’s Jim Kramer calls the move “brilliant” and hereafter names it the “Detroit Effect.”
8. California Governor Arnold, sensing the success in Detroit and needing his own stimulus package, convinces the State Assembly to pass a law requiring all applicants for a drivers license to also pass the California real estate license exam. Sellers now have millions of (more) choices of agents, driving home sale commission rates down to a $25 Starbucks Gift Card and resulting in a 6% increase in every sellers’ net proceeds. Home sales and Starbucks stock skyrocket.
7. Ben Bernanke and the Federal Reserve Board, desperate to bring down mortgage interest rates and running out of options, convinces Hugo Chavez to invest heavily in mortgage-backed securities, thus pulling the 30-year fixed rate mortgage down to -1%. Home buyers rejoice in receiving a rebate on every monthly mortgage payment. Defaults drop sharply. Chavez, ever the opportunist, decides to buy homes in Las Vegas, Stockton, San Bernardino and Orlando assuming he can flip them for a huge profit to employees of Exxon Mobile, BP and Chevron who, at the last minute, condition removal of their contingencies upon the de-nationalization of the Venezuela’s oil industry. Chavez, wanting to protect his capital gains, agrees and oil prices plummet. Stunned Royal families from Saudi Arabia, Kuwait and Oman immediately rebalance their U.S. stock portfolios by buying massive amounts of Starbucks stock (see Detroit Effect”);
6. Zillow changes their algorithm and, overnight, Zestimates nationwide are accurate to within 1% of true value. Agents delight in not having Zestimate printouts waved in their face at every Open House, thus eliminating agent/buyer conflicts. Home sales skyrocket.
5. Banks, still trying to regain credibility, not to mention solvency, offer Starbucks gift cards for every new depositor. Reserves triple and the credit crisis ends.
4. Wall Street investment firms, sensing a new source of profit, acquire Starbucks on a leveraged buyout. Starbucks Investors (the UAW, Arab oil interests, etc.) short the stock and make billions that are reinvested into the real estate market. Capital gains taxes paid by investors takes the government budget deficit down by 50%.
3. The Federal government, fearing job losses and widespread economic repercussions, announces that “Starbucks must not be allowed to fail.” A new stimulus package is introduced wherein billions are double-pumped into the industry. Fannie and Freddie begin underwriting the now-worthless gift cards in a three-tiered system. Talls and grandes are poured into the system for a modest 10% down and documentable income; if you want a Venti, good luck with that.
2. The Cup of Joe Six-Pack campaign is a success. Millions of licensed agents with no visible means of support are put to work at the steaming station. There is enough business for everyone! With agents now able to afford their association dues, a rejuvenated NAR sees it’s membership and revenues skyrocket and announces that “It’s a great time to buy coffee… and maybe a house!”
1. Consumer confidence hits an all-time high. Buoyed by renewed optimism (and a little too much caffeine), consumers start reinvesting in the American Dream. People begin moving again “just for the hell of it” and resume the stupid spending habits which made this country great (fire pits and Chevy Malibus). Home prices continue to climb, and the green apron becomes the new symbol of NAR.
In the spirit of the Holiday Season, if you are able to come up with a better reason that real estate will be improving next year, submit it to us here. The best one gets the swag which, you guessed it, is a Starbucks Gift Card. The winner will be announced whenever we get around to it in January.
Kris and I hope you all have a great and safe Holiday Season!