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Friday, October 22, 2010

Financial Crisis Adjustments

Having to sell a house at this time has taught the CCS a painful lesson. Nothing is impossible. A house once worth 200K more than it was paid for (in 1.5 years) is now selling for 5K less than the original price. And it's not selling!

A few years ago the house would have sold faster and for much more. Same house, different time. In the Yahoo news today the story is that Dubia real estate woes have sent the rent in the worlds tallest building to approximately 60% of what they went for last year. So who is in charge of determining value?

If you are a real estate agent and you made 300K per year between 2003 and 2006 is your job not harder now that houses are harder to sell? Same person, more difficult job, lower pay. You were overpaid (over-valued) and this is an adjustment.

The upper echelon must learn that they are like overpriced real estate. The value they placed on themselves needs to be adjusted. In essence, they are like the top penthouse apartments. Their children, getting advanced degrees in the finer universities, are like new construction that will soon dilute the money pool of executive pay.

The goal is to make the adjustment without destroying as many people as did the real estate market. Place more value back on making a product or providing a service.

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