Bankruptcy Momentum

The only momentum worth betting on right now is financial ruin in real estate and bankruptcy lawyers.

I was chatting with the top bankruptcy firm lawyers this afternoon in Phoenix. My wife used to work for them. They are my pulse on business. They are always busy but I just knew this was THE year. I did not need to ask, but of course it was my second question after how’s the family?

Although they are lawyers, these are indeed good people :) and not the types who like to see the pain their clients are in.

The housing numbers in this city are brutal with average days on the market up over 90 from 30 just a few years ago and 95,000 homes for sale today, up from like 25,000 at this time a few years ago.

Those numbers just don’t seem high to me, despite the percentage increase. I offer simple advice to friends not personally on the hook for their speculation…walk. Now. It is the calm before the storm, the storm of TIME.

It is definitely harder than selling a stock at a loss but why pour good money after bad if you are not personally liable. The banks are big boys…no?

Before you yell at me, those smart enough to consult bankruptcy attorneys will get pretty much the same advice for a $2,500 retainer. Don’t shoot the messenger. I am seeing the foreclosure list from local banks and it is FILLED with names of developers I recognize. People I see at basketball games on weekend.

The one thing you WON’T see is speculation like this again in our lifetimes (at least in Phoenix real estate). The city is booming and the combination of sun and air conditioning puts us in a long term everlasting bull market, but the cycle is a powerful thing. EVERYBODY, including me, has problems in their real estate portfolios. Even if you are short, you lose. Somehow and somewhere it affects us all. You just don’t get everybody back on the bike again after a reality shock like we are getting.

Fear and Greed creates momentum both ways.