Category Archives: General

Bubble blog roundup

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Good news for people who like bad news:

And a couple of articles:

And if those aren’t enough, I suggest the tongue-in-cheek There is no Housing bubble!

It sure is easy to be a hater, isn’t it?

I think both sides are taking a foolish black-and-white approach to the bubble question; clearly there are some indicators that there is a real estate bubble, but the consensus seems to be that the risk of home prices plummeting is low. Home prices will probably be flat until inflation brings prices back to “normal” levels. My concern is that if house prices do pop precipitously, there are going to be serious consequences for home owners and non-homeowners alike.

A similar scenario, different context: A few years ago, the Fed found itself with a small risk of Very Bad Thing happening. That Very Bad Thing was deflation (remember that?). Few economists were convinced that actual Japan-style deflation would occur, but because of the potentially devastating effect of deflation on the economy, the Fed moved aggressively to combat it (giving us the cheap money we used to buy expensive homes) even though the solution could cause other problems. Why? Here is the economist (login required) in 2002 (slightly out of context):

… however small the risk of deflation, the economic cost would be so high that policymakers should respond as if it were a central risk.

Someone who is looking at a home today or who has a sizeable mortgage on their home today should look at all this bubble talk in the same way; the risk is low that your property value will decline 25% or even 10%, but the risk is certainly there. Specifically:

  • Do you have enough savings or equity to stay above water if your house loses 10% in value?
  • Is the risk of falling property values worth the potential upside?
  • If it isn’t a bubble now, what metrics or signs will you use to tell you if or when it is a bubble? (A corollary: Will those metrics tell you when it is a bubble or when the bubble is popping?)

Perhaps house valuations have fundamentally changed over the last 5-10 years and we there is no risk of house price declines. The one argument I do not buy is that our land use laws are making property more expensive; builders are cranking out hundreds units and making loads of money on each unit, meaning they could continue profiting even at lower price levels.

Galen

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[photopress:heathbillboard_1.jpg,thumb,alignright] Russ and my exchange regarding whether or not Broker’s will ultimately have to deal with complaints about an agent’s blog, reminded my of this “Got Real Estate” Billboard.

It had mixed reviews nationally. Given Wendy works in Belmont Shores where lots of people have seen her with her husband and children, and dog of course, in her bikini, it really wasn’t a big deal. But it made national news when she was fired because of the billboard. Another broker picked her up immediately (no pun intended) and she actually got a lot of business in support of her, when people heard she was fired.

In agent forums, a lot of people from those landlocked states thought it was indecent and unprofessional. But in Belmont Shores CA, someone walking around in a business suit and pumps would actually look weirder than someone walking around in a bikini. When I worked in Manhattan Beach, I had to change my whole wardrobe. I actually stopped traffic when I walked around in my East Coast business attire, pinstriped business suit and white sneakers, like Melanie Griffith in Working Girl. My broker told me I had to ditch my Philly digs if I was going to “work the beach”. I compromised and bought some really cool black Sketchers.

What do you think about Wendy’s billboard ad?

If anyone ever writes a real estate survival kit….

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Here are some of the things I’d add:

  1. Needle nosed pliers to use after you’ve broken the key off in the lock
  2. Toilet paper when you simply gotta go gotta go right now
  3. GPS for directionally challenged (men)
  4. Candy bar (the days get soo long)
  5. Buyer vitamins (Aspirins)
  6. A working pen
  7. 50 acceleration clause forms
  8. List of 25 baby sitters available with 15 minute notice.
  9. Hide-a-key for your car
  10. List of 5 friendly agents who can open the house when you lock your key access insde
  11. If you take a digital camera, make sure your husband puts the card back in it
  12. 3 prepared speeches for when the alarm goes off

Instant Real Estate Gratification

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[photopress:sasha_skyping.JPG,thumb,alignright]Our operators are standing by ready to take your call!

Here at Rain City Guide, we do our best to answer your questions before you ask them (at least that is a major part of good blogging!).

However, I know that we’re barely touching the surface of answering all your Seattle real estate questions and I doubt you want to wait around until we write a blog post about what’s on your mind right now. So, today, I’m releasing an “instant gratification” feature!

Notice how a few of the contributors (on the right panel) have a button under their name that tells you if they are online… Every time you reload a page on Rain City Guide, my server goes out and checks the status of these contributors. If they are online, then making contact with these contributors is simple, using free software called Skype.

So far, I have four RCG contributors who have agreed to take part in this experiment:

  • A Real Estate Agent (Anna Luther)
  • A Real Estate Lawyer (Russ Cofano)
  • A Mortgage Broker (Russ Shulman)
  • A Real Estate Tech Guy (myself)

I’m not sure what I have to offer via this medium, but if you want to talk with an agent, a mortgage broker, and/or a real estate lawyer, they are available to talk with you any time they are online. (By the way, we’re not going to stop here as more RCG contributors should be coming online soon…)

Contacting any of us is very simple and if you already have Skype, you can skip the first step:

  1. Download and Install the Free Skype tool
  2. Return to Rain City Guide and click on the button under anyone whose status says “I’m Online” and/or “I’m not telling”.

This will bring up a pop-up menu that starts the process of calling us over the internet.

Why Skype?

  • It’s free! Anna has been using it for almost a year to talk with her friends and family in Russia (Here is an article she wrote about Skype last September.)
  • The quality of the calls are awesome! They are much better than a cell phone and akin to a land-line.
  • No fancy equipment is needed. Assuming you have speakers and a mic on your computer, it just works. Honestly. I’ve set it up for friends and family on five or ten different computers, and assuming they have a mic (every computer has speakers nowadays), it has worked immediately after installation. Note that even if you don’t have a mic, you can still use Skype to send instant messages, so still consider using Skype to contact us…
  • Did I mention it is free? Skype will cost you nothing and there is no spyware or anything nasty in the software, so go ahead, download the software and start making calls to friends and family around the world.

One last note… The status of some of the people is displayed as “I’m not telling” which is just no fun. The reason is that the status of Skype users can only be displayed on a website if they are connected to Skype through a PC. Anna and I are using a Mac. Nonetheless, I’ve included these buttons because you can still use them to contact us. Assuming I’m online, I’ll definitely answer your calls. Assuming I’m not online, I pay Skype a few dollars a year for voicemail service, so you can always just leave me a message.

[photopress:little_skyper.jpg,full,centered]
(this is a photo of our daughter using Skype to talk with her grandparents in Russia!)

UPDATE:

I added both Ardell and Galen (and two more contributors said they were hoping to join up soon)!

I also had some great questions from people about how Skype works. The system is essentially the same as a telephone conversation except it is over the internet. If you call up one of the contributors, you will be talking with them and only them. You are not entering a group conversation, a group chat, or anything like that… It will really just be you talking with them. Simple, but powerful!

Duvall – Single Family Home – $350,000

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WOW! Robbie’s new super duper Zearch site is very, very COOL! But let’s put it to the test. I checked my listing in Duvall and I didn’t have a light blue dot. Seems to me a single family home for $350,000 should have a light blue dot, no? Now I’ll do a post on it and see if the post link shows.

[photopress:1.jpg,thumb,alignright] First error is that the photo that shows in Zearch is not the photo that shows in the mls as the main photo. This is a glitch in the mls system and not in Robbie’s search tool, so I have to go into the mls and erase all of the photos and reload them to correct it. Even though when I pull up the mls, I see the photo shown here of the actual house, downloads, including Robbie’s, pick up the OLD photo number one. The only way I know to fix this is to empty the entire photo cue and start from scratch. Let’s see if that works.

[photopress:2.jpg,thumb,alignleft] One of the problems with all of the available public sites is that people who are looking for reasonably priced single family homes think they do not exist. If you are not familiar with Duvall, for example, and do not realize that it is within “target range” of Microsoft and other densely populated areas, they might never search Duvall. All search engines should allow you to put in a radius of where you WORK!

[photopress:3.jpg,thumb,alignright] Here’s a question. I took this great photo of the flowering plum tree on the front lawn before I listed the property. A couple of weeks later when I put it on the market, the flowers were gone. Early spring flowering trees sometimes only bloom for a few weeks. But I love this tree in bloom! Do I have to go take a picture of the way it looks now with all reddish leaves and no flowers?

[photopress:4.jpg,thumb,alignleft] Also, I took a lot of the photos before it became vacant and before I listed the property. Do photos need to show the way it looks today, without that table and chairs?

[photopress:7.jpg,thumb,alignright] This was my “original” photo number 1, which is the view FROM the house, not a picture OF the house. I have since changed that some time ago to photo number 7 or so. But the dowloads, including Robbie’s, show it as photo number 1 as if the mls has some kind of memory bank that doesn’t update when I change the order of the photos in the mls, and only remembers that this is photo number one when doing a download.

When agents pull up this listing they see a completely different photo (the first one above) than the public sites. Again, I think this is a Rappatoni glitch, and not a Zearch glitch. I also think I know how to fix it.

Woohoo…I feel like a techie fixing download problems! Not bad for a “Granny”!

Inman asks – Not Allowed to Blog?

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3/23/06 “Hi Ardell — I was reading the RCG today and noticed a comment of yours under Russ Cofano’s blog entry that I thought was really interesting and something I’d not given much thought before. You mentioned about joining the big brands and said they won’t let you blog so you’re not jumping on board right now.. is that true? Do brands really dictate stuff like that? If so, I think Inman News might look into this more. With all the push for blogging in the industry lately, this seems peculiar..Just wondering.. thanks! Jessica Swesey, Inman News.”

While I told Jessica almost a month ago that I would do a blog post on this topic, I have to admit I thought the question was a little naive. Almost every truly vocal person in the industry is either a designated spokesperson for a company or a “one man show”. The people I know who have been on Good Morning America or quoted in the paper, are usually the owners of the company. This is true in every industry. If you are an employee of a large company, you are told that if anyone from the press contacts you, you have to refer them to the one person in the company who is designated to speak with “the press”. There are exceptions, especially if your are spouting out only GOOD things, like “There has never been a better time to buy a house!”

So the question isn’t can everyone blog, but who can pull your plug? This goes back to blogging being public and in many ways a form of adverstising. Under State Law, in every state in the country, an agent must have the name of the broker/company on every “advertisement”. Consequently an agent either has to have an anonymous blog where the agent’s name does not appear, or a blog with both the agent’s name and the broker’s name. An agent, though an independent contractor, cannot be a “cowboy” and do things on their own without supervision. The broker retains the right to both see anything that the public can see, usually in advance, and also retains the right to veto its printing.

So how do you blog everyday if the broker doesn’t have time to review and OK your content every day? You can have an insipidly bland blog that simply backlinks to other news items. Even then, many companies do not want you to “advertise” their “competition” or “discounters”, by mentioning them by name. So all of the HOT news on Zillow and Redfin and Lending Tree, could be off limits, because they don’t want one of “their own”, boosting the popularity of these other companies by mentioning them at all.

In real estate forums, when agents want to talk about Zillow, they call it “Z”. Theory is that by even whispering their name in private, you send out spiders into the search engines that cause Zillow’s name to be spread and the website’s popularity to be expanded exponentially.

Anyone who wants to truly discuss the future of the industry in a way that does not simply spout out accolades and full service fees, cannot blog via first person in a blog unless they do it anonymously. But is this NEWS? Can an AT&T employee blog about the future in a way that points out that there are improvements to be made by their employer? Can even a Microsoft Employee be quoted in print that they think Google should win the Inman Award for Innovation? Very naive of someone to think that the First Amendment applies to the little guy who has a “BOSS”.

Back around March 23rd, I interviewed with a company that treats their agents as employees. They weren’t sure if I could blog, but they were sure that I couldn’t “talk to the press” ever. Since your blog entries can be lifted and quoted by the press…they felt that it was possible that blogging activities would be limited or possibly even prohibited.

So the question isn’t whether or not you can blog, the questions is what are you allowed to say in the blog? I’m sure even Jessica has to run her content by someone to be approved, before it can be “printed” and available in the public eye.

RCG’s Zearch is Released!

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Robbie has just released what may be the most addictive home search tool I have every used!

Search Tool Codename: Zearch!

Some obvious highlights include:

  • Dynamic map of color-coed listings
  • Geocoded Rain City Posts

I know the search is addictive because earlier today I showed this to a friend who is in the market to buy a home in Seattle and we couldn’t pull ourselves away from bouncing around the map. To get an idea of what I mean, follow this link to the detail page of this listing in Ballard.

You should see a few things:

  • Photos of the listing
  • Lots of color dots
  • Raindrops

The color dots all represent different homes that are currently on the market in the nearby area. Light blue dots mean the house is far below the average listing price while dark red mean it is far above the average listing for that area. The addicting part is that you can click on any of these dots to bring up the home details (and photos) for that home. With my friend sitting beside me, we kept searching for light blue dots amid lots of red hoping to find a “deal”. Very interesting stuff.

You might also notice on the map that there are some raindrops. These represent Rain City Guide blog posts that have been geocoded. This is subtle, but very powerful, as it essentially represents a mapped-based archive page for Rain City Guide’s posts. The cool part about this is that as you’re searching for background on a home, you can see what RCG posts have said about the neighborhood! And as we continue to add more neighborhood content on Rain City Guide, I’ll continue to geocode the posts, which will automatically add more background data to the home search tool…

[photopress:zearch_screenshot.jpg,full,centered]

What else has Robbie done?

For starters, he didn’t mess with the stuff that works well. You can still use the site to:

Some other things to notice about the new detail page is that whenever you move around on the map, all the nearby active listings show up. More impressively, you can also toggle on the nearby schools, gas stations, grocery stores, and other points of interest associated with every day living. Again, the color coded pushpins show that homes in Medina are bright hues of red, many homes in Renton are purple, while most of the homes in this area of Tacoma are blue. So much cool stuff, so little time!

On a side note, today was my last day as a transportation engineer! For the next few weeks I’m unemployed! 🙂

HIT ME WITH YOUR BEST SHOT!

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OK Rain City Guide Contributors! It’s time to PUMP UP THE VOLUME! IT’S “SWEEP’S WEEK”!

[photopress:puv_1.jpg,thumb,alignright] Actually it’s “Sweeps MONTH!” Everyone start posting away to show those Inman judges what a multi-faceted group we are!

And RCG FANS, go into that Inman site and nominate away!

I’ll have to come up with some insider juicy stuff…or controversy…what do you think will get the judges attention?

Nominations for Real Estate Innovators?

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Ever since I accepted the position of Director of Consumer Innovations a few weeks ago, I’ve been paying a little more attention to the concept of innovation. Innovation seems to imply something more than simple “ideas”, and mean something much closer to a new way of thinking. While flying to LA two weeks ago, I was happy to see BusinessWeek take on the topic of innovation until I realized that now I’m involved involved in two fields that will quite possible suffer the Curse of the BusinessWeek Cover: Blogging (Blogs Will Change Your Business) and Innovation (The World’s Most Innovative Companies). (I don’t think their recent cover on real estate, Buyer (and Seller) Beware, counts since they seem to advocate running away from this insane industry, whereas I’m jumping in!. 😉 )

This ramble on Innovation is meant to introduce a series of innovation awards that Inman is going to announce at their Real Estate Connect 2006 in San Francisco.

Here are the categories Inman has included and the sites that I would nominate (Do I need to mention that this is a very biased list?).

Most Innovative Real Estate Blog

  • Rain City Guide. First to figure out a way to bring a group of real estate professionals together to market themselves by providing unique and interesting content.

Best Business Models

  • Redfin. Like it or hate it, someone was going to light a fire under the bums of real estate agents to ensure that agents are providing value to tech-savvy clients.

Most Innovative Real Estate Data Site

  • Zillow wins this hand’s down just for their uber-confidence in a complete data-centric solution.

Most Innovative Technology

  • It looks like Google Earth won this last year. If Google Earth won out over Google Maps, then Inman should “right” a clear “wrong” and give this award to Google Maps this year. Google Earth may have more “wow” factor, but nothing sparked more innovation in real estate in this past year than Google Maps.

Most Innovative Mortgage Companies/Services

Most Innovative Brokers/Franchises/Realtor

Most Innovative Web Service

  • I’m not sure what this means… However, if I had to describe the innovation that will most change real estate over the next year, I’d keep it simple and vote RSS.

Most Innovative Media Site

  • No one site should get this award. Instead it should go out to all the real estate bloggers who are creating their own diversified media through blogging (Inman included! 😉 ).

Best Rental/ New Home Online Service

  • I’m really not too familiar with this category, but I’ve seen some of the stuff that Move is developing, and it seems quite impressive. I’ll hold off judgment for the time being, but welcome your suggestions.