Sage Auction Blog

Happy New Year - Be safe and have fun in the new year.

This a fun video wish I could fly as well.

GOVERNMENT WORK, IT’S NEVER EASY

 When offering any kind of product or service to a Government agency a learning curve presents itself in the form of the Agency’s SOP, which stands for standard operating procedures.  In the case of a Government guaranteed loan, the SOP must be followed in order for the financial institution to receive it’s loan guarantee.  If they do not or the Agency does not believe they have followed the SOP then the financial institution will suffer the loss, which in this economy only adds insult to injury.  

As you can imagine an auction company working in an area of the country where auctions have never been used before will cause the lender of Government guaranteed funds to look to the government agency for approval of our services.   The situation gets even more complicated when the agency can not legally recommend one particular company over another.  However, we are not asking the agency to recommend our company over another but rather the service we provide be approved as part of the liquidation plan. An interesting aside to all this is the fact that the Agency’s SOPs allow the guaranteed lender to use auction sales to sell their collateral.  It’s kind of like that software manual that came with your PC, we don’t read them.  We depend on a friend or colleague or attend a seminar, but we don’t actually read the manual. Same often seams to hold true for a Government Agency’s SOP. 

 Jason Rose a real estate auctioneer from down under. Posted a great video explaining RSS feeds. If you've ever wondered what the heck is an RSS feed take a look.

RECOVERY FOR SOME MARKET’S YEARS AWAY

 That was the headline of a recent story in the Phoenix Business Journal, written by Mike Sunnucks.  He interviewed an economist Elliott Pollack who states that Phoenix is tied with Riverside CA area for underwater mortgages at 50%. Las Vegas being the leader with 70% in a negative equity position, which is stunning when you realize, according to one asset manager I spoke with recently, that real estate values in Las Vegas have fallen 55-60%.  Stop and think for a moment, how many years of appreciated values will it take that market to regain it’s losses? Even if their market suddenly appreciated 10% a year it would take 4 to 5 years and at this point the market is still dropping.

Additionally, ASU economist Lee McPheters said Arizona’s official unemployment rate is 9.3 but is probably closer to 15 percent due to the large number of unemployed who are no longer looking for work.  His conclusion, “it may take until 2013 for the state to rebound from its recession job losses”. In my humble opinion that is being aggressive but it depends on his definition of “rebound”. Especially when the Associated General Contractors of America predicts another 430,000 construction jobs will be lost in 2010. Bringing the number of unemployed construction workers to nearly 20%   Add to that fact people without jobs don’t buy homes. And people who loss their jobs usually find their credit scores going way down which means, in todays credit market, they are effectively eliminated from qualifying for a future loan when they do find work. 

Pollack added this bit of great news, (which for some reason is missing from CNN or MSNBC’s reporting) “distressed home loans in Maricopa County in the foreclosure process stands at 50,000, compared to 28,000 in 2008 and 10,000 in 2007”. Really sounds like the Phoenix market is racing back and the recession as a whole is over, huh.  He concludes with this comment, “This is a downturn of Biblical proportions”.  If it is a crisis to rival the plagues of the bible or the Noahatic flood then why isn’t the media referring to it as such?