Daily Fribble: The House Is Down Again!? [Fribble] May 5, 2000

Fribble Daily Fribble: The House Is Down Again!?

By Randy Befumo
May 5, 2000

"Holy smokes! The house is down again today!" cried Burt Cambell as he peered at the ticker tape scrolling across CNHC.

His wife, Dottie, called out from the kitchen. "What's wrong, honey?"

"The house. It is down again today. The ticker is reporting the quote for 121 Maple Lane as down $5000 today." Burt grimaced angrily and pounded on the arm of his recliner with a balled-up fist.

"Could it be a mistake? You know, last week you were following 120 Maple Lane for three days before you figured out what was wrong." Dottie turned off the kitchen faucet and proceeded to begin loading the dishwasher.

"Dag nabbit, I am positive it was 121 Maple. There was breaking news on the whole development earlier today." Burt stood up and began to pace back and forth across the sparsely decorated living room. Boxes strewn about from their recent move still littered the common area. "It appears the Homeowner's Association is talking about raising fees again for the swimming pool -- knocked the snot out of the entire street, down 5% on the day."

Burt listened for a few minutes to the sound of dishes being racked together in the new dishwasher, shook his head in an expression of frustration and went over to the dining room table. Sprawled out on its surface was a carefully drawn chart entitled "121 Maple Lane," showing daily price information on a graph. He grabbed a sharp pencil and began to draw in today's close.

"Honey, what's the house worth today at the close?" Dottie was dropping the last few pieces of silverware into the small rack in the dishwasher. She paused to scrape a desiccated food particle off of a fork with her fingernail.

"$120,000. It is down $20,000 since we bought the house three weeks ago."

"Well, we have had the whole Homeowner's thing, and then the neighbors did get a pit bull, and we did scratch up the house a bit in the process of moving in." Dottie closed the dishwasher and turned it on, desperately hoping Burt would not do anything rash.

"My goodness, the house has broken critical support at $121,000 and just fell below its 200-day moving average. The bids are drying up for houses in this neighborhood as well, Dottie... by golly, the market knows something here that we don't."

"I'm sure it will recover, honey." Dottie strode out into the dining room to rub her husband's neck. Burt was putting the finishing touches on his point-and-figure chart and did not look very pleased with the results.

"That's it. We're selling." Burt suddenly rushed for the phone, dialing their 24-hour real estate broker. "I refuse to see our life's savings mashed by a downturn in the real estate market."

"Burt, we just moved in."

"And we can move out just as fast. Cut your losses, let your winning houses grow." Burt had already dialed and Ken Smith's brusque voice barked out a greeting on the other end. "Ken, Burt Campbell here... we are going to sell the house... yeah, I saw it broke the 200... and I am not sure what kind of quarterly report we can put out... I mean, the kitchen was just refinished."

"Honey... don't you think we should talk this over..."

"Good, $119,000 on the bid? I'll take it." Burt hung up the phone, moving to the bottom of the stairs to bellow at his kids. "Alice? Charlie? Pack up your stuff, kids. We are moving out of this house tomorrow." A few fleeting groans floated down the stairs, but from the footfalls Dottie knew the children had gone to comply with their father's wishes.

"Burt, I am just not sure about this. I mean, we have only been here..."

Burt cut her off entirely. "Dottie, I have seen the price of a house fall as much as 50% in a few days. They are a necessary evil. When you see one going south on you, though, you absolutely have to get out." Burt went to the living room to retrieve the newspaper in order to scope out a new abode. "I think the houses on Ventura Avenue have been rising lately. Maybe we should buy one of them to live in."

Dottie knew it was pointless to argue. Thankfully, any loss would be made up by their retirement portfolio. Although quotes for the stocks came out very infrequently, she knew that they had been faring handsomely over the last ten years. They had purchased the portfolio and mortgaged 90% of it, doing quite well in spite of the high margin interest. Over the last twenty years, their portfolio had more than doubled in spite of the fact that the margin interest was 8%. Thank goodness stocks did not have daily quotes, she reflected for a moment. Otherwise people would buy and sell them as frequently as they did houses.

[Editor's Note: This Fribble was originally Randy Befumo's news column on August 8, 1996.]