Wow! Such controversy. I always knew that real estate was extremely emotional for people; right up there with divorce and death. But the interest and debate generated by "Flipping Out" is unreal! I deal with clients' emotional roller coasters daily and believe it or not, what you see Jeff going through on the show and how crazy he gets is everything that Mr., Mrs., Miss, or Ms. experiences while going through the process of buying or selling their homes.
Good Market/Bad Market. It makes no difference. During the last upswing in the market (1997 to 2006) prices were too high, houses sold before open houses and multiple offer situations with no contingencies were the norm. Buyers were miserable unless they "got" THE house and if they didn't, the agent was at fault. But they kept on BUYING. Sellers also found things to stress about too: "How come my house sold so quickly, it must not have been listed high enough..." Agents struggled to keep sellers realistic about not overpricing because even in the good market houses that were overpriced for what and where they were sat on the market for months.
Interest rates. The favorite topic of conversation everywhere these days. As far as I understand it; the drop in the rates was not due to the rising home prices. I believe that the Federal Reserve Bank lowered the interest rates because they determined the economy warranted lower rates. They set the rates and made money cheap to buy and everyone was happy! Jeff started his business just as all of this was happening; the LA real estate market was coming back and interest rates were moderating. He paid market price and often for homes that were not only at inflated prices over the previous year, but house that needed work! His costs in were no different than the rest of the buyers. He also put money into the homes and actually not only improved the product for future owners but for the banks holding the paper. He raises the value of their asset. He is no different then the businessman who finds a need, fills it, develops it and then sells it at a profit.