My Wealth Journey

What a headline for the housing market. Over at CNN, they said a government report said that new home sales saw its biggest decline in 13 years. I’m not getting too concern with my rental properties just yet. A slowing market is actually a good thing right now. Someone has to slow down the number of homes being built. Areas such as Boise are seeing high MLS inventory along with the left over inventory in Phoenix.  I’m hoping for a slow down in new housing while the market corrects itself. If builders keep building at the fast pace, the drop will just be a bit more steeper and people will think a lot harder about buying any home.

CNN Money’s Post

I’m planning to meet with my CPA this afternoon to do my taxes for 2006. I’m hoping with a few investment properties and contribution I made to my own 401k Profit Sharing Plan will actually mean I get a refund back. This is a new CPA that I’m using from the past. The last few years I had to pay my share of taxes from my affiliate earnings and was hit hard with the self-employment taxes since I was doing business under a LLC so this year I had a S-Corp formed to help cut back on the self-employment taxes. This sold reduce my taxes by a decent amount.

Wow, last night, China’s Shanghai’s Composite Index dropped by over 9% because of valuation concern. I unfortunately held a small position in FXI and CHL. This drop just reminds you that some foreign markets can be volatile and to be properly diversified. Oil also dropped because of the perception that China’s demand for oil will be decreased because of possibly slowing in the economy due to possible action taken by their government to curb inflation.

I think this is a healthy correction and still see China’s market heading higher over the next few years.

A coworker that reserved a preconstruction home in the Phoenix area (even after my recommendation not to) told me that his real estate agent called and told him the home he signed a purchase contract at $350k is now being sold for around $280k. I’ve been telling him not to close, which was due for May and now he may actually listen. It is a good thing he only will lose 3k in earnest money.

That is some serious drop! Imagine being a homeowner who closed on the $350k price and now sees the $280k price for a new home!

What do you guys do about people hot linking images off your site? I just noticed that one of my affiliate sites that hardly gets traffic has had its bandwidth used up a little more than normal because of someone from myspace hotlinking the image. I bandwidth is very minimal so I’m not concerned about that.

Am I the only one not seeing the housing market bottom? More and more foreclosures are being filed, especially in the subprime market, prices dropping in areas AND incentives that are NOT factored into the prices. On homes around 300k in the Phoenix area, it is not surprising to see incentives of 25K or more in closing costs and upgrades.

The head guy at the NAR has officially called a bottom and they just released a national advertising blitz saying now is a good time to buy. Isn’t it always a good time to buy according to the realtors?

Novastar (NFI) reported earnings after closing yesterday and BOOM! The stock dropped over 30% and has dropped over 50% within the past few weeks. Novastar is a subprime mortgage company that is facing the fact that a lot of the loans they approved will not be paid back. First New Century, now Novastar, so who is next? HSBC got hit a while ago but not as bad as these two companies.

Even though the markets were closed today, XM and Sirius announced a merger that a lot of people have been expecting. Some people don’t know if the FCC will approve it but I think they will make the necessary change in the law allowing this because of other competitions such as HD radio. I don’t know how much Sirius’ stock will jump because of this but XM’s stock looks like it may jump at least 3 or 4 bucks when the market opens tomorrow. I had some Jan 08 $5  calls for Sirius that I’m hoping will  go up.

http://biz.yahoo.com/ap/070219/xm_radio_sirius.html?.v=11

I fall in the category of those who are waiting to buy a home for me to live in (I do own out of state rental properties) because I think the price levels are insane and cannot be substainable. Just searching through ziprealty’s listings this morning shows some properties have dropped over $80k in a 3 month period and yet there are still no buyers. I have a feeling a lot of homeowners are reducing their prices too slowly or not reducing the prices and simply just relisting on the MLS will get burned within the next year.

I recall a few days ago coming to a listing that had a price reduction of 10K every week for the past 2 months. I kid you not. That is 80k drop in 2 months. Now I bet if they did this all at once instead of trying to get as much as they want (not as much as they can), the home would have been sold already. I’m guessing this homeowner was some flipper who bought the home as an investment and is trying to minimze how much he has lost.

There is nothing like waking up in the morning and seeing your affiliate marketing earnings doing well the previous day. I use a few affiliate networks so I don’t leave all my eggs in a single basket. When I first started, thats actually what I did. I figured, if I’m making X amount, I’m going to stick to it and didn’t think about diversfying too much. One day, Google’s SERPs jumped and pushed some of the sites from page 1 to nowhere and my earnings were cut in thirds. I’m still trying to recover from that and have since created different sites in different niches. I get more happy when the earnings are more evenly distributed across my sites rather than all from one site even if it means a little bit less revenue.