Misconception - Key West Real Estate

As I get older the more I thought I knew becomes blurred. Partly because my memory isn't what it used to be (true), and because things that I grew up believing are true no more. I really did believe in the Tooth Fairy. I really believed in Santa Clause despite the protestations of my big brother otherwise. When Officer Goody came to my grade school and told my classmates about safety, I believed all policemen were good. I believed, for example, that my government would never lie to me. Life taught me that sometimes others say things that are not true: some say things that are not true with good intentions; some make untrue statements because they know not better; some say falsehoods because it suits their needs. The mind is a fertile place to plant a seed of misconception.

The talking heads on TV, the people that write the gibberish we see on our Internet service provider email home page, the blog writers that pontificate TAO of anything, all say things that are not true, sometimes. They plant the seed of misconceived truth in our minds and we let it grow and sometimes turn it into a truism that governs how we look at the world.

I never got mad at my parents for deceiving me about the Tooth Fairy. I still recall the excitement of going to bed at night waiting with expectation that the Tooth Fairy would come and take my old tooth and leave me a dime. Maybe I would wake up and see Her. What a present!

Besides telling me there was no Santa Claus, my big brother told me I was adopted. If one were true, the other must be true as well. I thought. I idolized my big brother. Why would someone I trusted so much tell me something that was not true? I questioned. This is not an insignificant matter for a child or an adult.

It seems like every TV channel has some guru that spouts politics, sports, lifestyle, or news 'information'. We listen. We believe what they say is true because they are on TV.

The big newspapers are now online and many of the great and not so great writers have blogs where they discuss issues of the day in more depth. News and Opinion get blurred. What someone writes in the New York Times or The Wall Street Journal must be true, mustn't it?

I recently learned that school text book authors pen educational texts based on the preferences of local school boards. I guess science and history aren't viewed the same these days as they were when I was a kid. Classics like Huckleberry Finn get revised with the hurtful word 'nigger' removed. Revising the words revised the intent of those words and that changes the context of the book. Maybe it makes the old south and the way white people treated black people not seem so bad. Maybe there are two sides to everything. Or maybe not.

I worked for the Resolution Trust Corporation from 1990 to December 22, 1993 when I moved to Key West. The RTC was the short lived government agency that cleaned up the savings and loan debacle of the first George Bush administration. Every month, quarter end, and year end we would all scramble to put together numbers to show how productive we had been. Government agencies (even like the RTC that had its sunset destiny determined when it was created) have to justify their existence. Statistics theoretically prove progress so part of our ongoing job was to create statistics. I worked with some really smart (I mean really! smart people) and I loved my job. I worked with some incredibly incompetent fools as well. Many of those fools were 'lifers' at the FDIC that were on loan to RTC. They brought their governmental largess with them. They relied on rules and procedures and resisted flexibility and speed. The smart guys won and the statistical accomplishments were noted. Since I was a part of the information gathering, I can say that I doubt if all the information that was disseminated was totally accurate. Later, others would use those statistics to make a political point about what had (or had not occurred). Seeds of misconception were planted. I am sure the last George Bush administration and the current Obama administration required or requires government employees to create statistical data to support whatever it is that the administration wants to prove.

Today we watch TV or read news items or blogs that discuss the housing market or real estate. Some stories on TV or in the press or blogosphere focus on specific locations like Las Vegas, Sacramento, Detroit, or Miami. Other times talking heads on TV and writers of all ilk write about the housing market as a whole. They regurgitate the government generated statistics about sales or new construction starts as an indication of a national trend. People who listen or read may conceive that what they hear or read is also what is happening nationally and where they live or maybe where they may want to buy a place, like Key West.

A state official recently spoke to the Key West Association of Realtors and mentioned the 'shadow' inventory of un-foreclosed mortgages the banks are withholding. I watch TV and I read that dribble. At least one elected official bought into it. Maybe there are two or three or maybe hundreds or even thousands of elected officials believe it. Perhaps millions of normal everyday people believe it. Where is the source of this information and how reliable is that source? And if the statement that banks are withholding filing massive numbers of new foreclosures is true, are those foreclosures spread out across the country or are there specific areas that may be more forcefully impacted by lots of new bank owned properties? The mind can conger up all kinds of scenarios about what could happen.

I have written several blogs that discuss the local Key West sales statistics and the number of new bank foreclosure filings that start the process of taking a house away from its owner. Sometimes the foreclosure process takes just a few months. Sometimes it can take a few years depending on whether the owner hires an attorney and files an answer denying the mortgage is in default. A foreclosure action filed in August 2011 may not be resolved until 2013 or later. Or it could be over with in early 2012. The legal system takes its time to adjudicate each and every foreclosure. That means we will continue to see new bank owned properties hit the Key West mls for several years. Again, it does not mean we are experiencing a continuing calamity. Instead, it is a logical end to a process that was started either months or even years earlier. Don't let your misconception of the process control your understanding of present day reality.

The same is true for short sale listings. Even though the Key West real estate market has begun a recovery, there are individuals who can't take the pressure any more and have decided it is time to sell. Many good houses are now available at greatly reduced prices from the mid 2000's. Some short sales get concluded within a matter of a few months. Some banks are getting very proficient in getting problem loans off their books. Other short sales drag out for months on end. Often the failure to get a short sale approved is a function of a seller or short sale negotiator that does not provide timely or correct information to a lender. Furthermore, there are now loan sharks that bought second mortgages at huge discounts that are demanding sometimes outrageous amounts to approve short sales on mortgages they would never foreclose. Their aim is to create havoc to get what they want. They often achieve their goal and drive up the price of a short sale just enough to piss off everybody. The short sale as a process will be around for quite a while despite a recovering market. It does not mean the market is deteriorating; it reflects the reality of dealing with properties not being worth as much in the present day as when they were purchased.

I think most of us have our share of misconceptions about a lot of things in life. Sometimes people tell us things in the media that may be true or partially true or false. We may believe what we read or hear based on the source of the information. If we can't have universal facts about science or history in the text books or revisionist literature that teach our children, how can we avoid developing misconceptions about 'facts' that get disseminated via the media and the Internet? My only suggestion is to have an open mind and question what you hear and read.