For several months now I have been talking with Mike Morgan...

For several months now I have been talking with Mike Morgan / Morgan Florida, a real estate broker serving the treasure coast area of Florida. In our most recent conversation Morgan tells me 'prices have already fallen 10%, regardless of what median prices show. In addition transaction volumes have fallen off the cliff'.Unlike other brokers I have talked to, Morgan is expecting 'further declines in the neighborhood of 20% or so, more on condos'. He is advising his clients that 'The market has changed and that sellers must accept that reality if they want to get their house sold'. Realtors openly telling their clients to expect substantial further declines simply is not the norm. Back in January and February Morgan said that 'Centex was so desperate to close deals before their March 31 fiscal year end they were offering $60,000 select home sites that were not selling well. But that is just the start of it. Centex was also offering 6% commissions to the agency booking the sale plus an additional $10,000 selling bonus to top it off.'Obviously Centex was under extreme pressure to unload some properties ahead of their fiscal year end. A year or so ago builders were offering 1-2% at most to outside agents. Some homebuilders would not work with outside agents at all. On a $400,000 home that is an extra $24,000 in lost profit as compared to six months or a year ago. Factor in the $60,000 off then add in a $10,000 bonus and Centex made a whopping $94,000 less on those home sales than expected. Those deals are now gone, but I suspect Centex and others will be forced to put them back on. The reason median prices have not come down that much is that builders are booking the full value of the sale, before these discounts were granted and calling that the sale. Discounts are attributed to advertising. Prices are now biased on the high side just as they were biased on the low side on the way up. Morgan assures me that 'comparable prices have fallen 10% or so' regardless of stats that show otherwise. Rising inventories are going to continue to add downward pressure on prices. Sentiment was steadily falling from August through December, but a sudden steep falloff in January and February (peak season in Florida), seems to have caught nearly everyone by surprise. Morgan was ahead of the curve by advising his clients to 'take a little less' in November and December to 'get the deal done'. It seems that was sound advice. How does a Realtor Survive? So 'how does a Realtor get business in this type of environment?' I asked Morgan. He explained there are three kinds of Realtors: