Category Archives: General

Deep thoughts & a shameless plug

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Happy 2008 everybody

For most of the past 6 months, I’ve been working too hard writing e-commerce software at my day job. So, in case you’re curious why I’ve had a lower profile than usual, it’s because I’ve been spending too much time living in e-commerce land, instead of real estate land. On plus side though, our big project is nearing completion and my software engineering skills are approaching Ninja Warrior levels, so I feel good about the year that just passed. Fortunately, I’ve still been reading RE.net blogs actively, despite the fact I haven’t been writing as much as I’d like. Frankly, my brain is kind of tired from trying to co-develop an Amazon clone for the past year.

As 2007 has come to a close, I’ve had to a chance to reflect upon what the past year has given us and where the future may take us. Despite the bearish real estate industry outlook nationwide, I’m an optimistic that 2008 will be a very interesting year. Here are my thoughts on the year ahead

Inman missed somebody

Although, Inman’s list of 10 people to watch is insightful, I personally would add Michael Wurzer of FlexMLS to that list. His recent passionate and tireless efforts to be an advocate for RETS, and his current efforts to bring many of the players of the industry together is very encouraging. I’d almost be willing to say 2008 will be the year of RETS, like 2005 was the year of the blog, 2006 was the year of AJAX maps & 2007 was the year of the feed. I’m starting to feel like RETS will be like NBA basketball in Seattle (just because it’s not here, don’t mean it’s not the real deal elsewhere), which is a marked improvement to how I felt a year ago. Perhaps, I need to write an Open Letter to NWMLS brokers, agents and vendors, similar to what Michael & David Harris have done to toward the industry?

Will data visualization be the next big thing?

I also think that Real Estate data visualization or analytics is bound to become a real big deal in the near future. The efforts of Altos Reasearch and Zillow are making it easy to convert market information into pretty pie & bar charts, and the heat maps from Cyberhomes and HotPads are very insightful. Granted, Wall Street has been doing some of this for quite some time, but I think the real estate industry is ready to take the next step. In order to create cool charts, you need the raw data, and RETS will make that possible (or at least much easier). Once Joe Broker can get at the raw data, the cool charts can come courtesy of Microsoft Office, Google’s new charting API, or something a bit more powerful. I get giddy just thinking about the possibilities.

I think it’s going to take more time, but I think heat maps are going to get much bigger / better too. With Microsoft finally adding first class geospatial support to SQL Server this year (finally joining the party that Postgress, IBM DB2, and Oracle were already at), and Microsoft’s & Google’s ongoing battle for control of digital earth becoming a fertile playground for other map/data vendors, I think the MLSes / big brokers will probably start embracing data visualization on their web sites, since the technology is becoming more affordable, easier to use, and because most brokers / agents want pretty charts & maps with their name & brand on it, instead somebody else’s.

The glass is still half full

Having lived through the great tech wreck (or dot.com bubble if you prefer) I think it’s helpful to remember that someday the mortgage meltdown and real estate slump will come to end. If you believe in the future of real estate in your community (and most of you wouldn’t be reading this blog if you didn’t), now is a great time to invest in your business or yourself while your competitors exit the business in bad times. If that means adding great people to your staff, encouraging the less effective agents to get out or get better or finding better opportunities elsewhere, learning more about technology, or just plain blogging more often, just do something, to make yourself better. When the market turns around, you’ll hopefully be more successful than ever with fewer competitors.

Also, despite the fact I often complain about the state of MLS data in the industry, the real estate industry aren’t the tech laggards they portray themselves to be. After the tech industry, real estate is probably a very close second in terms of blogging and consumer transparency. You’re probably among the leaders in using mobile technologies, you’re your helping push the limits mapping technology and helping vendors define the direction. For example, a typical e-commerce store finder is way inferior to the AJAX maps so many real estate web sites now have.

Warning: Shameless plug ahead

My star client (Gordon Stephenson of Real Property Associates) finally set up his Real Estate from the Trenches blog at http://blog.seattlehouses.com/. I especially enjoyed his predictions for the new year post. I also had next nothing to do with it (I only helped w/ domain black magic and added links to their blog from their main web site), he did all the heavy lifting himself (see anybody can set up a blog). I also want to thank him for his business this past year, and introducing me to Rod Mar’s (Seattle Times Sports Photographer) – Best Seat in the House blog. I have a new appreciation for photography & the Seahawks thanks to his entertaining blog. Anyway, add them both to your favorite feed reader.

Who Needs to Register as a Contractor?

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There have been some questions and discussion here on Rain City Guide about the changes made on July 23, 2007 regarding who needs to register as a contractor.  This change was made as to who has to register as a contractor and:

“Requires property developers, consultants, and some property owners to register as contractors: Owners that build and develop multiple structures, e.g., “spec” houses, construction consultants and property developers who make improvements to property for sale must register as a general contractor.”

Russ Cofano posted about the changes in “Are YOU a Contractor? “on October 3rd, and Eileen Tefft posted another in “Home Owner Quicksand ” on October 10th, both sparked comments and questions.

The Department of Labor and Industries has posted a “Frequently Asked Questions about changes to the Contractor Registration Law”  (pdf, page 2) which answer a few of the questions that came up on the earlier posts. 

The most basic question that I had was do homeowners have to register as a contractor to get their home market ready? 

#1:  “I have owned my home for three years and am fixing it up to sell.  Do I have to register to be a contractor?  No, if you have owned your home for more than 12 months, you are exempt from the contractor registration requirement”

I have also found out that there may be some exemptions to the 1 year rule regarding improvement work a homeowner has done to their home.  The exemptions would be due to circumstances that cause a homeowner to have to sell in less than a year, such as a divorce, sudden job transfer or loss or other circumstances that fall outside of a homeowners control.  The Department of Labor and Industries will evaluate, and do some background research to determine the validity of the circumstances to determine if the homeowner would be exempt from having to be registered as a contractor.

Another question I had was if you recently purchased a house as a rental property and it needs work before leasing to tenants, do you have to be registered as a contractor?   

#3:  “I am purchasing a residential properly that I am going to remodel or make improvements and then rent it out.  Do I need to be a registered contractor?  No. 

When I called L & I (800-647-0982) to find out more, I spoke with Dennis Yonker, who told me that they are scheduling Public Hearings to get feedback from the public.  While the dates are not scheduled as of now, I have been told that they will be scheduled sometime in the last week of February and/or early March of 2008.  I will do a follow up post with dates for the public hearings when available. 

Dennis (or someone else from the dept.) would also be available to “large groups” to explain and answer questions regarding the changes.  Please remember that they would need at least a 2 week notice to schedule it in.  Dennis has allowed me to post his phone number, and can be reached directly at 360-902-6303.

Because the law is still so new, there is much uncertainty regarding how the law applies to homeowners.  For specific questions, Dennis can help with answers by calling the number above, or contact your attorney to determine the answers to your particular circumstances.

UPDATE: I got an email from Dennis with the dates for the Public Hearings and the message to contact him to check for any changes:

Public hearing dates for testimony on sub House Bill 1843 and changes the 18.27 RCW Contractor Registration Law are set for:
Feb 26-08 10:00 am start in the L and I Tukwila service office. ( 12806 Gateway Dr. 98168)
Feb 28-08 9:00 am start in the L and I Tumwater service office. ( 7273 Linderson Way S.W. 98501)
Mar 6-08 10:00 am start in the L and I Moses Lake service office. ( 3001 W. Broadway Av. 98837)
These dates may change, so contact me, one to two weeks prior to the first testimony/hearings  for updates

 

Seattle Real Estate

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I left December out, since most of the month end closings aren’t posted yet, and month end could be a large percentage of a month’s sales.  But we want to start off 2008 with some kind of benchmark and expectation for the year in front of us.

I could have called this “and then came September…”, but the single family market actually had a double whammy.

Condo sales in 2007 actually started out UP 3.8% over 2006 until we hit September closings.  (that’s units sold, not pricing)

Single Family Homes were conversely DOWN by 9.4% under 2006 when we hit September closings. (again, # of units sold and not pricing)

So first we had people priced out of the Single Family Market moreso than the condo market, and then the Mortgage Crisis hit both markets in August which reflects in the September and subsequent month closings. 

I posted most of the data for King County for 2005, 2006 and 2007 over at my blog, for those who want to pull the data and draw their own conclusions. 

[photopress:2007_sfh.jpg,full,aligncenter]

[photopress:2007_condo.jpg,full,aligncenter]

I’ll come back to this topic, and include inventory issues, after December closings for 2007 are posted.

Dustin Luther and ARDELL's butt make "the news"

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[photopress:dustin_1_2.jpg,thumb,alignright]The BIG news today is that Inman named Dustin Luther, Owner and Founder of Rain City Guide among many other things, one of the Top TEN People to Watch in 2008

  1. Errol Samuelson, president, Realtor.com
  2. Sheila Bair, chairwoman, Federal Deposit Insurance Corp
  3. Lockhart Steele, founder and publisher Curbed.com
  4. Sam Zell, Chicago billionaire
  5. Kerry Killinger, CEO, Washington Mutual Inc.
  6. Andrew Cuomo, New York attorney general
  7. Dustin Luther, founder, 4realz.net
  8. Lawrence Yun, chief economist, National Association of Realtors
  9. Ben Bernanke, chairman, Federal Reserve
  10. Kurt Pfotenhauer, CEO, American Land Title Association

Those with an Inman subscription can catch it here for those who can’t see that link, the blurb on Dustin is reposted here.

Of lesser import, my butt appears to be the opening shot of Joe and Rudy’s great video posted yesterday, over at Sellsius of  San Francisco Inman Connect/end of Blog Tour USA.

Congratulations Dustin!!!  I agree that you are clearly one to be watching in 2008.  We certainly will be watching you.  I find myself becoming addicted to 4Realz.net very quickly, though I think that site is just a speck of what we will be seeing and hearing from you in 2008.

Happy New Year!

 

Washington State Loan Originator Licensing Update

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[photopress:LOLicensing_1_2_3_4_5.jpg,thumb,alignright]As of November 14th we had roughly 15,000 loan originators who had received an interim license during the year 2007. These licenses expire on Dec 31, 2007 and license renewal is conditioned upon them passing their competency exam and completing two continuing education courses, one of which must be an ethics course. At the November 14th Mortgage Broker Commission meeting, we were told that out of 15,000 LOs, there were only about 5,000 who had taken their competency exam.

The new loan originator exam was introduced in June andthe exam candidates were given a 600-question study guide along with the answers to the test questions. The LO exam is 100 questions long and candidates must pass with a 70%. One to two percent of the students that attended my exam prep course had actually read the entire 600 question study guide. Less than half of one percent of the exam candidates that came through my classroom had read the state law to which they’re subject to, the Mortgage Broker Practices Act. The pass rate for the LO exam currently sits at 89%. This means the exam is too easy. For those that did not pass the first time, the second try pass rate for them was 71%.

As of December 19th, WA State Department of Financial Institutions (DFI) reported that only 1,900 loan originators had renewed their license. At this point, we can try to project attrition numbers before the actual figures are released from the state which will likely be at the next Mortgage Broker Commission meeting, date TBD.

If there were 10,000 LOs who had not tested between mid November and now, and if we know that 1833 LOs are not physically located in WA state and could likely find a Promissor testing center near their city, then we’re left with 8,167 LOs that needed to take their exam before Dec 31st. I suppose if every testing center across the state was filled with exam candidates between Nov 14th and today, they all could have made it. I think not.

LOs were reporting up until mid December that many of the testing sites were not completely booked when they took their exam. I had been predicting LO attrition to be about 2,000 since the meltdown began. Now I believe we could see further LO attrition, up to 4,000. This will consist of LOs who haven’t closed a loan in many months and who have found other employment, LOs who were only originating subprime, LOs who have chosen to work for a retail bank or consumer loan lender not subject to licensing, LOs who were not able to pass the background, fingerprinting, and felony checks, and LOs who have just simply de-prioritized the licensing renewal requirements.

LOs who do not pass their exam, complete their two required courses, and renew their license online must stop originating (scroll down to numbers 18-22) at midnight on Dec 31, 2007 and transfer all files in process to their broker or another licensed loan originator. LOs will have 45 days to pass the exam and complete the required CE classes while originating NO loans. After Feb 14, 2008, if a LO has not passed the exam and completed his or her required CE, the interim license will expire and the LO will need to start the application process all over again from the beginning and must wait until their new license arrives from DFI before being able to do the job of, and earning fees from loan origination. There are no exceptions; not even one loan. New LOs entering the industry on Jan 1, 2008 may not originate until they pass their exam and receive their license from DFI.

I receive an interesting phone call from a student late Sunday afternoon. She was once again canceling her attendance at the Dec 31st ethics class, and for the third time, was asking me to move her into another class. I made sure she realized that if she didn’t finish up by midnight on Dec 31st that she would have to stop originating. Here’s what she said; “Oh, yeah, I know. I haven’t taken my test yet either. Can you put me into a Jan class please, and sorry to have to reschedule on you again.

Christmas Neighborhood Round-up….

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….December began with snow flurries and we had a (brief) White Christmas too!

Holiday parking woes in Ballard at Large  and it’s a Blue Christmas on Alki on Beach Drive Blog.   

On Capitol Hill The Northwest Film forum and Santa partying it up, Mid Beacon Hill and The Year in Review photo story part II. 

A different kind of man in a different kind of red suit on Capitol Hill Triangle , another Red Suit (Mayor Rosemarie Ives) in Redmond Nieghborhood Blog.

Give One Get One program is touched upon in Cosmo Seattle , and a Holiday gift idea from Broadway Seattle.  

Christmas lights in Week 50 in Kirkland 52 , and the Christmas Star returning (?) on Beacon Hill Lights.

Kirkland dogs are dreaming of a Dog Park in Kirkland Weblog , and Winter Solstice at Miller Park Neighborhood Association. 

Christmas in Issaquah in Issaquah Undressed , World Peace and the Scary Santa in SammaMishmash.

Dreaming of a White Christmas came true in West Seattle Blog , and my Seattle’s Urban Villages Christmas Lights tour….