If you own real estate or are thinking of buying real estate then you better pay attention, because this could be the most important message you receive this year regarding real estate and your financial future.The last five years have seen explosive growth in the real estate market and as a result many people believe that real estate is the safest investment you can make. Well, that is no longer true. Rapidly increasing real estate prices have caused the real estate market to be at price levels never before seen in history when adjusted for inflation! The growing number of people concerned about the real estate bubble means there are less available real estate buyers. Fewer buyers mean that prices are coming down.On May 4, 2006, Federal Reserve Board Governor Susan Blies stated that “Housing has really sort of peaked”. This follows on the heels of the new Fed Chairman Ben Bernanke saying that he was concerned that the “softening” of the real estate market would hurt the economy. And former Fed Chairman Alan Greenspan previously described the real estate market as frothy. All of these top financial experts agree that there is already a viable downturn in the market, so clearly there is a need to know the reasons behind this change.3 of the top 9 reasons that the real estate bubble will burst include:1. Interest rates are rising – foreclosures are up 72%!2. First time homebuyers are priced out of the market – the real estate market is a pyramid and the base is crumbling3. The psychology of the market has changed so that now people are afraid of the bubble bursting – the mania over real estate is over!The first reason that the real estate bubble is bursting is rising interest rates. Under Alan Greenspan, interest rates were at historic lows from June 2003 to June 2004. These low interest rates allowed people to buy homes that were more expensive then what they could normally afford but at the same monthly cost, essentially creating “free money”. However, the time of low interest rates has ended as interest rates have been rising and will continue to rise further. Interest rates must rise to combat inflation, partly due to high gasoline and food costs. Higher interest rates make owning a home more expensive, thus driving existing home values down.Higher interest rates are also affecting people who bought adjustable mortgages (ARMs). Adjustable mortgages have very low interest rates and low monthly payments for the first two to three years but afterwards the low interest rate disappears and the monthly mortgage payment jumps dramatically. As a result of adjustable mortgage rate resets, home foreclosures for the 1st quarter of 2006 are up 72% over the 1st quarter of 2005.The foreclosure situation will only worsen as interest rates continue to rise and more adjustable mortgage payments are adjusted to a higher interest rate and higher mortgage payment. Moody’s stated that 25% of all outstanding mortgages are coming up for interest rate resets during 2006 and 2007. That is $2 trillion of U.S. mortgage debt! When the payments increase, it will be quite a hit to the pocketbook. A study done by one of the country’s largest title insurers concluded that 1.4 million households will face a payment jump of 50% or more once the introductory payment period is over.The second reason that the real estate bubble is bursting is that new homebuyers are no longer able to buy homes due to high prices and higher interest rates. The real estate market is basically a pyramid scheme and as long as the number of buyers is growing everything is fine. As homes are bought by first time home buyers at the bottom of the pyramid, the new money for that $100,000.00 home goes all the way up the pyramid to the seller and buyer of a $1,000,000.00 home as people sell one home and buy a more expensive home. This double-edged sword of high real estate prices and higher interest rates has priced many new buyers out of the market, and now we are starting to feel the effects on the overall real estate market. Sales are slowing and inventories of homes available for sale are rising quickly. The latest report on the housing market showed new home sales fell 10.5% for February 2006. This is the largest one-month drop in nine years.The third reason that the real estate bubble is bursting is that the psychology of the real estate market has changed. For the last five years the real estate market has risen dramatically and if you bought real estate you more than likely made money. This positive return for so many investors fueled the market higher as more people saw this and decided to also invest in real estate before they ‘missed out’.The psychology of any bubble market, whether we are talking about the stock market or the real estate market is known as ‘herd mentality’, where everyone follows the herd. This herd mentality is at the heart of any bubble and it has happened numerous times in the past including during the US stock market bubble of the late 1990′s, the Japanese real estate bubble of the 1980′s, and even as far back as the US railroad bubble of the 1870′s. The herd mentality had completely taken over the real estate market until recently.The bubble continues to rise as long as there is a “greater fool” to buy at a higher price. As there are less and less “greater fools” available or willing to buy homes, the mania disappears. When the hysteria passes, the excessive inventory that was built during the boom time causes prices to plummet. This is true for all three of the historical bubbles mentioned above and many other historical examples. Also of importance to note is that when all three of these historical bubbles burst the US was thrown into recession.With the changing in mindset related to the real estate market, investors and speculators are getting scared that they will be left holding real estate that will lose money. As a result, not only are they buying less real estate, but they are simultaneously selling their investment properties as well. This is producing huge numbers of homes available for sale on the market at the same time that record new home construction floods the market. These two increasing supply forces, the increasing supply of existing homes for sale coupled with the increasing supply of new homes for sale will further exacerbate the problem and drive all real estate values down.A recent survey showed that 7 out of 10 people think the real estate bubble will burst before April 2007. This change in the market psychology from ‘must own real estate at any cost’ to a healthy concern that real estate is overpriced is causing the end of the real estate market boom.The aftershock of the bubble bursting will be enormous and it will affect the global economy tremendously. Billionaire investor George Soros has said that in 2007 the US will be in recession and I agree with him. I think we will be in a recession because as the real estate bubble bursts, jobs will be lost, Americans will no longer be able to cash out money from their homes, and the entire economy will slow down dramatically thus leading to recession.In conclusion, the three reasons the real estate bubble is bursting are higher interest rates; first-time buyers being priced out of the market; and the psychology about the real estate market is changing. The recently published eBook “How To Prosper In The Changing Real Estate Market. Protect Yourself From The Bubble Now!” discusses these items in more detail.
You want SEO services but who can you trust to provide quality services?How do you avoid getting ripped off?We have seen it all with SEO and the truth is scary. There are big SEO companies all over like a plague and many are fly by night operations with little or no real world SEO experience. There is also an abundance of inexperienced individual scammers out there that have no real world SEO experience or knowledge in SEO but they have fooled many people and businesses that don’t know any better.We have had businesses come to us, after being ripped off by so called SEO experts, seeking help.One example is a new client that hired us and contacted us on a 3 way phone call so we could listen to what the BIG SEO company was offering to do. The SEO firm promised to make my client #1 on organic Google searches and stated they have special and secret relationship with Google. OK this sounds amazing but the fact of the matter is THIS IS IMPOSSIBLE and this SEO firm tried to rip another company off.To make things more interesting I called the SEO firm on my own and spoke to the same salesman I spoke to earlier via a 3 way phone call and picked his brain to see where the conversation would go. This so called Web Master told me each SEO expert they employ is responsible for managing the SEO for over 100 client websites because they are so awesome!I also asked them about Google AdWords which is something I also have extensive knowledge and experience with. I wanted to know how much do they charge to manage a small & simple Google AdWords accountant and they told me they charge per click instead of a flat rate to just manage the online marketing campaign. Not that I would ever consider outsourcing anything to them or anybody else, I was curious. I know and believe in the old saying if you want something done right do it yourself but that’s not so easy in these types of situations for people with no background or understanding of how SEO and the internet work.OK that’s just another way they choose to bill for a specific service and there is nothing wrong with that but when I asked how much do they charge for every click and they said $50. I researched the specific key words involved and Google wasn’t charging more than $5, yes five bucks, for the specific keywords we talked about.Talk about serious price gouging! And what is really sad, is many businesses fall for these types of scams because they don’t know any better or don’t know who to turn to for quality and sound advice.Not only did this SEO firm promise things that are impossible to guarantee, they demonstrated they are not capable of delivering the one on one attention to detail that is necessary to deliver quality SEO services, and their prices for shoddy work is way over priced. Now I am not saying good SEO comes cheap, because good SEO is very time consuming and requireds a lot of hard work, dedication, knowledge and, most importantly, real world SEO experience.So how do you find a good SEO consultant anyways?That’s a tough question to answer because good SEO consultants are usually very busy catering to their clients and know firsthand that good SEO requires paying serious attention to detail, and managing the SEO for 100 websites is a bad idea for just one SEO consultant.PICK UP THE PHONE and call him or her.The first thing you should be asking for is to meet the SEO consultant in person – face to face for a consultation. If they are not willing to meet you in person then STOP and keep looking.What if the SEO consultant is not near you, IE another state?Now things are different and meeting them in person is not so reasonable, but that’s ok.You can have a phone consultation and ask important questions.Not every SEO consultant will meet you in person for free, and there may be good reason for this. They are very talented individuals and their time is very valuable and most don’t want to deal with tire kickers – you know, the potential clients that ask endless questions seeking free advice, then never spend a dime.After you get that out of the way, ask to see some websites that the SEO consultant is responsible for. Ask to see natural – organic searches that bring up the websites. If the SEO guru can show you this and demonstrate their talent then you are on the right track to SEO success.Other questions to ask are how much do they charge? And what will they do for X amount of dollars? If the SEO consultant tells you they have special connections with Google or they own thousands of websites that can drive traffic to your website then WALK AWAY NOW!Other things to verify which you can do yourself are.Is the SEO consultant a real business?How long have they been in business?Do they have any professional references?Do they have their phone number on their own website? Or do they only communicate via email?MOST IMPORTANTLY, are they located within the United States?NEVER EVER under any circumstances hire a SEO consultant that does not reside in the United States for obvious reasons. Lack of communication skills, lack of legal – laws to protect you as a consumer, lack of quality support. Nothing is worse than being transferred to India when you need help fast.At the lease try to use common sense when in doubt and understand good SEO isn’t cheap.The old catch phrase I live by is cheap is not good and good is not cheap.This doesn’t mean just because the SEO consultant isn’t cheap that he or she is good.Now before you sign any contract or agree to a deal, find and pay a good business lawyer to review the contract to make sure you completely understand what the contract states and ask the business lawyer to clarify anything you may not understand. Spending a few hundred dollars to have a business lawyer review and edit the contract if necessary may save you thousands of dollars and prevent you from signing a bad contract.In conclusion you now know what to look for, what to ask and how to weed out the SEO scammers that are out there.GOOD LUCK with your quest for high quality SEO services!