On vacation last week I watched a lot of real estate reality shows and realized just how quickly they can get outdated in this horrible housing market.
Some of the shows do reflect the post-bubble reality. A show on HGTV called Real Estate Intervention follows a guy who looks and acts like a tough-as-nails police detective as he convinces homeowners that they can’t sell their house at the high price they hoped.
The worst example was HGTV’s House Hunters International which told the tale of a couple selling their small condo in Carlsbad, Calif. for an expansive townhouse at a new beach development in Mexico. I kept watching, thinking the show would end in disaster. Pay $400,000 for a townhouse in an empty, half-built development in another country? And they had young kids! Yet, by the end of the show the couple was shown happily enjoying dinner with their new neighbors, even though, oddly, neither family spoke the others’ language.
Sure enough I Googled the development, Loreto Bay, and found out the developer has since defaulted on the property and there are many unhappy owners wondering what will ever become of their homes.
I’ve always thought the best of the real estate shows was Bravo’s Flipping Out. This season is definitely reflective of the bust. Star flipper Jeff Lewis says he sold his last two properties at a loss and he’s been forced to take humbling remodeling jobs to make ends meet. Even still the season opener seemed out of date on the day it aired. Lewis is forced to live in his last remaining house, which he is still trying to sell. He tells his Realtor “No more giveaways” and “I’m going to build a wheelchair ramp,” meaning he’ll live there forever, if need be.
When the Realtor suggests listing the house in the “mid to high 2s” –meaning $2 million—Lewis says high, not mid. But check out the property’s current listing. Lewis has already had to lower his asking price from $3.1 million in April 2008 to $2.29 million today. Considering that he paid $1.7 million for the house in 2007 and did a ton of remodeling, he’ll probably take a loss if he sells it now.
Worse still was the overall sadness of what used to be a funny show. Jeff and his sidekick Jenni don’t spar in a good-natured way like past seasons. Instead, they just fight. Hard times will do that to people.
BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.