Category Archives: Seattle Real Estate Stats

Snow is Seattle's Kryptonite

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And it snowed a couple of inches last night. It’s the not-quite yearly snow that sticks around through the morning, wreaking havoc on the commute and closes schools.

It’s also the day when people with SUVs spin out because they don’t realize that four wheel drive doesn’t actually help you stop any sooner. Tomorrow, the conversation at many work places will turn to “why people in Seattle can’t drive in the snow,” a conversation that always omits our hilly terrain and slushy snow.

My recommendation to new Seattle residents: live on Capitol Hill or in Queen Anne. The slight increase in elevation from sea level means more snow and the steep streets are impassable when we get a half inch, so can play hooky and enjoy the snow days guilt-free.

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Hotpads: A Slick Search Tool for Apartments, Rentals, Sublets and Roommates

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[photopress:hotpads.jpg,full,alignright]Thanks to John Cook post on Real estate timeline debuts, I found the greatest site for Apartments, Rentals, Sublets and Roommates I have seen. HotPads.com provides users with the ability to find dwellings based on Density, Per Capita and Median Age/Renters/Rent. They even use census data to color code their maps based on this data. For the property owner they create listings on HotPads is free and easy! If you are a landlord, they eve send your listings to Oodle and Google Base.

HotPads currently uses census data to color code our map based on a few different statistics:

  • Population Density
  • Per Capita Income
  • Median Household Income
  • Median Age
  • Percent Renters
  • Median Rent

Here are some examples from Seattle: Seattle, WA

Per Capita Income
[photopress:wa_seattle_perCapitaIncome.jpg,thumb,centered]

Household Income
[photopress:wa_seattle_householdIncome.jpg,thumb,centered]

Median Age
[photopress:wa_seattle_age.jpg,thumb,centered]

Percent Renters
[photopress:wa_seattle_percentRenters.jpg,thumb,centered]

Median Rent
[photopress:wa_seattle_rent.jpg,thumb,centered]

Even though rail stations are not available in the Rain City yet, with HotPads maps you can see various points of interest that might help you decide where to live:

  • Subway and Train Stations
  • Public Schools
  • Private Schools
  • Universities

[photopress:hotpads2.jpg,full,centered]

Points are added to the map with their nifty icons:

Colleges
[photopress:university.png,full,centered]

Schools
[photopress:schoolhouse.png,full,centered]

Train and Subway Stations
[photopress:trainStation.png,full,centered]

They are currently listing the following rail systems:

  • New York City Subway
  • Washington, DC Metro
  • Bay Area Rapid Transit
  • Bay Area’s Caltrain
  • Boston’s MBTA
  • Chicago’s El
  • Los Angeles County Metrorail
  • Denver’s Light Rail
  • Dallas’s DART
  • Miami-Dade County Metro

As John Cook pointed out (looks like Galen has added Shackprices‘ GREAT search to the list), their Real estate timeline is pretty cool too:

[photopress:hotpadstime.jpg,full,centered]

Agents rarely "feel the love" when someone new and interesting joins the party…

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The contributors at Rain City Guide (RCG) have been falling over themselves talking about the folks at Redfin. Don’t know who they are? Not a shock. They’re a real estate firm based in the Seattle area with offices in the Bay area of San Fran which has a discount model for services. Earlier this week there was a conference in NYC that Glenn Kelman of Redfin attended and he was slammed by a REALTOR(R) representative. To me, having come from the tech industry, it was the old school getting pissed at the new school and not necessarily playing nice.

Before you think I’m a big fan of Redfin – stop! I don’t really like anyone that is my competitor. Granted, I can actually “like” the people involved but of course I’m also competitive and I’m focused on becoming a top player as well so any competition is considered friendly competition – and competition doesn’t play in my sandbox, so to speak.

I actually had a woman from my office pull me aside Tuesday and ask me to share my business plan with her. My competitive nature kicked in and my first thought was, “why would I share a plan that I carefully crafted and have been tweaking and developing for almost 4 years and which I have a 5 year plan staked out for the future, with you?” Did you mention that there’d be some form of payment for my consultation services? Did you say that perhaps there was some other motivation other than you wanting to succeed after stealing my concepts (which she’s already doing) such as a large donation to my non-profit? Of course not.

The way I know I’m making progress and getting market share, and therefore being noticed, in my field is to watch others copying me. It’s supposed to be the most sincere form of flattery and to a VERY small degree I do like it. However, for the most part we know we’ve hit a new segment when others start chasing us with the same ads, asking our vendors to stop advertising with us, steal our exclusive speakers, and more. But if you want to really get me going then show me your cards by saying something like this gal did to me. I won’t share the full details but I think you get the drift. Redfin, I feel your pain – I just don’t need to give away a chunk of my commission to feel it.

Investigating Preapproval Letters

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(Editor’s Note: Today I get to introduce yet another contributor! Rhonda Porter is a successful mortgage broker from the Eastside who has been a frequent and much appreciated commenter on RCG as of late. I’m definitely excited that we get to learn more from her years of experience in the industry… She was formally a title representative before getting into mortgage. You can learn more about Rhonda on her personal blog or her website. She can be reached via email or by simply leaving a comment below!

Yesterday, I received a phone call from a Listing Agent regarding a preapproval letter I had prepared for one of the buyers I’m working with. She wanted to confirm that my clients are indeed approved and to find out a bit more information about me since, if she did accept their offer, we would all be working together. She informed me that she calls on all preapproval letters she receives and that often times, lenders may seem not to have all the facts straight on their borrower or respond as if it’s the only transaction they have in their pipeline. Regardless, she gets a better idea of who the lender is that might be involved with her Seller’s transaction. I am really surprised I don’t receive more phone calls from Listing Agents to check out preapproval letters.

[photopress:j0403639.jpg,thumb,alignright]When I sold my house last year, I actually called on one of the preapproval letters we received. The Selling Agent who was presenting the offer thought it was “highly irregular

Redfin vs. Establishment

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Redfin creates Red Faces

With Redfin I think they create red faces in the market, mostly from competitors, not their very own clients. With all the debating taking place (see last few comments) about variations of service levels and discussion about saving $20,000 in commissions but losing $100,000 in price for an agent’s (implying Redfin or similar models) lack of negotiation skill —an argument I disagree with—maybe the only way for consumers to feel like they are being well served is to set their own benchmarks for the people they entrust to help sell and buy homes. Realtors have exceptional value, but as an industry have allowed foolish internal cultural policy to dim the light. Instead of setting benchmarks for delivery of value that consumers get, industry insiders have to spend copious amounts of time trying to tell each other why a model will fail. If you want meaningful debate, invite consumers on a panel telling why one model worked for them vs. another. APB to Brad Inman…. try that.

No industry benchmarks

The real issue, in my opinion, is that consumers are given no tangible and bonafide benchmarks for placing value received for commission they pay. Why should consumers pay an identical commission like the “negotiable

Interview with Michael Simonsen of Altos Research

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I first met Michael in person back at the Real Estate Connect conference in SF last summer and was immediately impressed.

[photopress:mike.jpg,thumb,alignright]The Altos Research blog has been rolling full-steam ahead with really solid analytical posts about changes in neighborhood value up and down the West Coast. At the same time, I could tell that his business running Altos Research must have been taking off because his widgets that track market value by neighborhoods were showing up all over the real estate blogosphere.

Needless to say, Michael’s posts just keep getting better and I’m extremely excited he agreed to this interview…

What inspired you to start blogging?

In mid-2005, the Altos Research platform was really kicking in for the first time. My co-founder, Jason, and I loved seeing the output of the analysis – geeking out on the data. The blog seemed like the best channel to start letting people know what we had. So in October 2005 we started. The process of blogging, it turns out, is crucial for me to actually figure out what we had and how people like to consume it.

[photopress:altos_logo.jpg,full,alignright]Are there any special topics or issues that you enjoy covering?

Altos Research is all about analyzing real estate markets in real time. I think our blog is at it’s best when we identify and publish market information that no one else has.

What have you done to personalize your blog?

Despite the fact that our blog is first and foremost a marketing channel to interact with our customers, the content is intensely personal.

There’s a fascinating disconnect between traditional corporate marketing and sales processes. Corporate marketing (or real estate marketing for that matter) is planned, structured, and homogeneous (read: stiff and impersonal). But everyone knows the adage that people buy from people they like. Sales is about personality. The blog is really the first time a marketing channel leverages personality. Many of my customers know me before they ever speak with me.

Do you have any favorite posts?

A couple months ago I did a quick post on our stats tracking flipped properties in a market (quick remodel and back on the market for more money.) I cited San Jose. The post got picked up in TheStreet.com and some other heavy-traffic investment sites. We had huge (huge for us) traffic spikes.

What are some of your favorite blogs (real estate or otherwise)?

I read Paul Kedrosky’s Infectious Greed every day. I’m an unabashed Silicon Valley-phile. I love the ethos and dynamics of the technology startup/venture capital culture and Paul is like mainlining for that addiction.

What tools/websites do you find most helpful in putting together your blog?

I’m a huge fan of HitTail. More than any other analytics tools I’ve found, HitTail provides a clean, clear presentation of how people find you and guides thinking about what people want you to write about.

How does blogging fit into the overall marketing of your business?

Blogging, believe it or not, is nearly 100% of our marketing to date. Our sales come either from our passionate clients recommending our services to their friends or from people who read the blog. We’ll augment our marketing with other techniques as we grow, but it’s hard to imagine any single approach more effective.

What plans do you have to improve your blog over this next year?

The biggest key for me is to post more. I tend to be a long-form poster: I try to find a topic, formulate a thesis for a post, construct the argument, get supporting images and links, edit, edit, edit. That process takes me several hours, when I’m thorough. I need to sleep less or something.

What is the one tool or feature that you wish your site had?

I wish the damn system of trackbacks or Technorati or something worked reliably. The effectiveness of these types of features is just plain random.

What do you think real estate blogging will look like 3 years from now?

We’re still really, really early in real estate blogging. Real estate is a relationship business. You know how to build relationships off line. But the Internet is where 70% of people start the home search. The blog is the premier mechanism for building relationships over the Internet.

The good news is that the real estate blogosphere will never be overcrowded. It is self regulating. Many Realtors will never start because the evidence of lousy performance sticks around for ever. If you are a lousy networker off line, that’s ephemeral, no one ever knows. The fear of failure will keep this space open to those who are dedicated and enthusiastic. Rock on.

Thanks again to Michael for your insight!

Want more interviews? Try one of these on for size:

PMI is NOW Tax Deductible

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[photopress:Anne_business_card_pic.JPG,thumb,alignright]My friend and colleague (disclosure) Anne Brown of AB Homelending and I have been discussing the fact that PMI is now tax deductible.  Here are her thoughts:

“It’s taken a long time, but finally Private Mortgage Insurance (PMI) is tax deductible.  A loan over 80% loan to value (less than 20% down payment) is required to have PMI unless the loan is split into a 1st and 2nd mortgage.  Until recently, the additional cost of this insurance was not tax deductible. This is Great news, but proceed with caution…     
Here are my two cents: If you take a loan with PMI then the question is what will the investor or PMI company accept for an appraisal to prove the 20% equity.    Obviously their motivation is to A) be protected and B) make money (respectively).  From previous experience I’ve seen in-house appraisals come in lower than market value so be aware that there is a factor of lack of control for removal of the PMI.  Who would want to be stuck with the PMI if the new value is challenged? Just my thoughts. Anne Brown”

Unfortunately her thoughts raise more questions than they answer! LOL  So I thought maybe we could have a discussion here and invite other lenders and accountant types to comment on this important topic.

My thoughts (Ardell speaking here, not Anne)

Back in the old days, when I started in real estate, it was common for the first mortgage to be 95% with 5% down at one low rate.  The monthly payment included the PMI charge, which was not tax deductible.  PMI being Private Mortgage Insurance insuring the lender on th 95% financing loan for the amount above the 80%…in this case 15%.

Today, instead of PMI, most borrowers get a first mortgage for 80% at a LOW rate and a second mortgage at 15% at a HIGH rate in order to avoid PMI.

The question of the day therefore is, when is the buyer better off WITH the PMI instead of the HIGH RATE second?  At least that is MY question of the day.  How does a buyer evaluate which would be better in the long run for them?  I expect the high rate second was cheaper before this news that PMI is tax deductible, or so many would be going that route.  Does this news change that?  If so, does it change it for everyone…or only people in very high tax brackets?

A tough topic…but an important one.  Hope those who know more on this will comment freely to the enlightenment of us all.

Thanks.

Is your agent spending your money without asking your permission?

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It is common practice in the real estate industry, and has been since the beginning of time, for your agent to assist you outside of their area of expertise or geographic service area.

Let’s say you ask an agent to come to sell your house in Seattle.  They ask where you are moving, and you say California.  They offer to have an agent contact you in that area.  You thank them.  You just spent $6,750 if you buy a house in California, using the agent that contacted you, for a home purchase of $900,000.00.  The Seattle Agent who talked to you about this will get $6,750 when you close on your home in California, EVEN IF you never hire that agent to sell your house here in Seattle.

OK, I’ll stop shouting.  The same agents who will scream “disclose, disclose, disclose” when it covers their butt if you do, will not disclose referral fees and ASK your permission to SPEND YOUR MONEY!  Oops shouting again.  Sorry, this topic just freaks me out.  I better go chill.

There are now five drink sizes at Starbucks: Short, Tall, Grande, Venti, and Chuck Cross

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Chuck Cross, former Director of Consumer Services for the Washington State Department of Financial Institutions is on his way to the other Washington to serve within the Conference of State Bank Supervisors.

[photopress:chucknorris.jpg,full,alignright]Quoting from the CSBS press release, “Chuck was one of the key investigators, architects and negotiators of the multistate settlement with Household Finance and Beneficial Finance in 2002, which was the largest predatory lending case to date. From late 2002 through 2005 he investigated Ameriquest Mortgage and served on the multi-state Executive Committee for the country’s second largest predatory lending case, which was filed and settled in March 2006.

Commission double-take

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Ok, for those of you thinking from the title that I’ll be going back to the subject of dual agency and taking a seller and selling side of a commission this is about something else. What I’ve got a question about as well as a big concern right now is that I just got mutual acceptance on a deal for a client and I’ve just noticed that the listing agent has changed the commission on the listing data. It was at 3% on the day my clients saw the house and now, tonight when we got MA, it is at 2.5%. Anyone have an idea how the local MLS views this kind of thing? I have a feeling that she changed it just because an offer finally came in (it was full price on a big price tag) and as of 01/06/2007 it was at 3%.

[photopress:washer_dryer_photo.jpg,full,alignright]Considering the listing agent screwed up and had posted a washer/dryer as part of the listing also and then she couldn’t work that problem out with her client (happens to be her father-in-law) I was planning on using part of the commission to buy a set for my clients. That may be shot now with the reduction although (the set they want is $2600) [photopress:pennies.jpg,full,alignleft] but I’m planning on pointing out the change and requesting that she pay the amount she originally noted and submitting the printed copy of the listing as my documentation with the disbursement form. The MLS rules as I see them state that the “commission shall be paid as designated in the listing (or any change thereto).” Which this could mean that I’m hosed the money, BUT, I can’t tell if she changed it before or after we got mutual acceptance – which I find to be a possible ethical violation if it was the agent’s choosing. Furthermore, which rate would apply if it was changed after the fact? The same section of the rules states “consent required to change other member’s commission”. I’m pretty sure the seller or the listing agent decided to drop it when faced with an offer and for no other reason than to save the money even though this has been the SOC for months – this place had been on market for over 100 days. Anyone got a clue on this one?