Those with nose for bottom prices detect odor of fear


October 17, 1990|By ROGER SIMON

"Actually, this house was already sold," the real estate agent is telling me. "To a member of the Supremes."

I don't say anything. I want to see where this story is going.

"The singing group," he says. "You know, 'Stop in the Name of Love.' Motown?"

Yes, I say. I am familiar with the Supremes.

"Well," he says, "she bought this house."

This house, in a Maryland suburb of Washington, is selling for nearly $700,000.

And I suppose a former member of the Supremes, had she continued her career or invested wisely, could easily afford it.

OK, I say. I'll bite. How come you've got this house for sale if she already bought it?

"The deal fell through," the real estate agent says, "because she couldn't sell her house in California."

Which is entirely believable. For some months now I have been going to open houses on Sundays and talking to people about real estate.

I am not really looking for a house -- certainly not a $700,000 house -- but I figure at open houses you don't really use up anybody's time and the people are always happy to see you. They are happy to see anybody walk in the door.

That's because in the last few months, the homeowners of America have been experiencing a feeling they have not experienced in decades. Many have never experienced it at all.

It is called fear.

The fear that your home, which you have always looked upon as your nest egg, could instead be the albatross around your neck.

The unthinkable is happening: In some parts of the country, home values are going down. That's right. They are not just failing to rise the way they once did in those happy, stratospheric days of just a few years ago.

They are not just leveling off. They are going down. And people who bought homes in the last two or three years might be forced to take a loss. Or might not be able to sell their homes at all.

I go to the open houses on Sunday and I talk to people. And on Tuesday or Wednesday, the calls start coming. The asking price has been lowered, the people say; am I interested?

I'm not really looking, I say. I just go to open houses.

You're a hard bargainer, they say. What if we dropped the price another $5,000?

No, no, sorry, not interested, I say.

And then they ask me why.

Well, I say, even if I were interested, it seems to me that homes that are worth about $250,000 and were selling for $600,000 are now down to $500,000. That's still not much of bargain, is it?

"Oh," a real estate agent said to me, "you're a bottom feeder."

I beg your pardon, I said.

"No insult intended," she said. "But that's what we in the real estate business call people like you."

People like me?

"People who wait for the market to fall to its absolute lowest so they can get houses at their absolute cheapest," she said.

But doesn't everyone want to do that? I asked.

"But the whole market would collapse if everybody did that!" she said. "If everybody looked for bargains, where would everybody else be!"

I don't know. That is the great fear. Actually, the fear is worse than that. The fear is that Americans will stop buying things.

That they will stop buying houses, stop buying cars, stop buying microwave ovens and 1,000-watt stereo systems. On Monday, watched an economist on "The MacNeil/Lehrer NewsHour" say just that: that in all previous bad times, American consumers had continued to spend, and this really helped the economy.

But now there is the fear they won't spend. There is the fear they will save their money instead.

There is the fear that people will start being afraid.

And when people are afraid, they stop buying things. Which puts other people out of work. Which adds to fear. Which starts the downward spiral into the abyss.

But surely somebody will save us. Hasn't somebody always saved us? So who will it be this time? The president? The Congress?

Don't make me laugh.

We are now seeing the price we pay for modern campaigning in America. Modern campaigning has nothing to do with leadership. It has nothing to do with taking strong stands or suggesting strong, and possibly, unpopular solutions.

It has everything to do with ripping apart your opponent and building a warm and fuzzy image of yourself.

George Bush didn't win the presidency because he suggested solutions to our economic woes. The only thing he promised was: "Read my lips -- no new taxes." And even that slender pledge turned out to be a phony.

Congress won't take a strong stand because each congressman is afraid of doing anything that can be used in a TV ad against him by an opponent.

So instead of leadership and courage we get paralysis and fear.

I have an older friend who actually claims to understand the stock market. He says if you handle it right, you can make a lot of money on total disaster. And that is how he is investing. He is planning on -- looking forward to -- absolute chaos.

But things are not that bad, I tell him. And they are sure to get better. Things always do.

"You're a baby boomer," he said. "Your generation doesn't remember the Great Depression. You're not scared enough yet. But you will be. And when you are, the whole house of cards will tumble at once."

I think my friend is wrong. But I think he is wrong because I want him to be wrong.

A member of the Supremes cannot sell her house. Could this be a sign?

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