Twentysomething

Realtors are professional optimists

This quote was repeated this morning on NPR, on the ongoing discussion of the housing bubble. There doesn't seem to be a housing bubble (yet) here in Seattle, as the Times reported record growth in home sales yet again.

I have to agree with this quote however, and I don't think that realtors as a whole are helping to push the bubble. There job is to sell real estate, and if they don't, they don't get paid. So if a bubble or slowdown occurs in this country, some of that can be attributed to realtors.

With that being said, much of the responsiblity lies not in the realtor, but in the home buyer. A realtor only helps facilate that, much as a car salesman sells a car that one should or shouldn't buy.

The truth of the matter is that the market is flooded by speculators. After the internet bubble burst, many turned to real estate as the fail safe investment, putting their entire financial future on the line with no money down and ARM loans.

I cannot speak for the entire country, but as of right now, in this market, that investment seems to have paid off. The market continues to rise and homes continue to sell. What it comes down to any market, is making sure that you have a good investment to begin with.

That can easily be measured with the rental rate around the area. If for instance, you find a condo that would cost you $2500 a month to buy but only $1200 to rent, you may want to look elsewhere.

While this may appear to be common sense, most people have turned a blind eye to common sense, in the endless quest for the American dream. I commend real estate investors who take a smart approach to investing, and like everything else, believe that becoming literate in every aspect of investing, such as taxes, closing costs etc. will insure a positive investment for any investor.

Google poking into Real Estate Search ?

Is Google trying to own a share of Real estate Search ? Type in Homes for sale in google and you get dropdown menu allowing you to edit your criteria.

With the recent flood of online real estate search engines, it's no wonder that the kings of search want a piece of the action. The only problem is that they've chosen to do it by tying the search into their so far unsuccesful craigslist competitor, Google Base.

It is very important when the king of search takes up a vertical such as real estate. Achieving critical mass for their product should be their main goal in gaining a considerable market share of the real estate industry.

Real Estate: Is it a buyer's market ?

Signs all over the country are showing the slowdown in real estate sales across the country. These are many of the same publications that touted the insane sellers market that took the market by storm in 2004 and throughout the first half of 2005.

I was highly skeptical of those that predicted the real estate bubble would burst such as the tech bubble had in 2001. That hasn't happened and I don't think it ever will.

What it happening however, which I did expect, is a gradual slowdown of the market, and it does seem the tone will continue to go that way.

Here's a little more literature on the matter.

California real estate slowdown will drag economy
Money: Playing a Real Estate slowdown

Insight into the future of Real Estate - Agents here to stay

A attended the MIT Enterprise NW event with the topic of real estate technology and the impact it will have on the business. The 4 panelists included the David Eraker, founder of Redfin, a online purchasing real estate tool, Spencer Rascoff, CFO of the infamous Zillow, a VP from HouseValues, and Gordon Stephenson, a managing broker of Real Property Associates, a traditional real estate firm.

I was expecting a diverse view of opinions on the future of the real estate industry, but all 4 maintained that the real estate agents were here to stay, and that the internet tools being created will in fact empower the agent.

Where they did differentiate was among business plans. HouseValues is a lead generation service, whose business model is outdated. Niki from HV vigourously defended his company and what they do, and it was nice to see Gordon Stephenson set him straight, stating the service "has had mixed results among my agents".

While Niki's speech sounded like a sales call for HouseValues, Dave Eraker was more relaxed, yet pressed hard by the moderator of the event, Jim Reppond, an old school broker from Coldwell Banker Bain. The toughest question for him seemd to be whether or not traditional agents will take offers from Redfin.  Their business plan is very interesting and by far the most disruptive.

I found Gordon's insight the most compelling throughout the event, he clearly understood the real estate business better than any of the other guys up there. It was very smart for Spencer to bring him along as Gordon is also a director and advisor for Zillow.

Spencer's insight was the least revealing, and when asked as to the future of real estate, he iterated that "more tools" would be available for the consumer. What those tools are is anybody's guess. He mostly answered questions about Zestimates and the current product without offering any insight into Zillow's future business plan. He did also state that the travel industry was much different than real estate and that travel agents were mostly just order takers. It's a good thing that Zillow realized this, and I can't help but thinking they still have something up their sleeve.

Dave and Gordon both felt the commision structure for agents is going to change, which I think is a great idea. Gordon didn't think it was fair for an agent to receive the same percentage for a $200,000 home in Lynnwood or a $900,000 home in Seattle. Dave mentioned that his agents were salaried, which is also a new idea in this business.

The Rain City Guide has their own take on the events, as does Spencer Rascoff on the Zillow blog.

Are Seattle Area Homes losing value ?

Toying around Zillow tonight, the most interesting statistic I could find was this:

King
-0.8%

Now I've heard all the hoopla about a cooling market, but that home prices in Seattle, Bellevue, Redmond etc. are going down ?! That's unheard of in my book.

zillow.com - The future of real Estate ?

Zillow.com is Richard Barton (founder of Expedia)'s new foiree into Real Estate.
It's scared Realtors for awhile and it was finally released yesterday.

Agents have speculated as to what it actually DOES for a few months now and now that the cat is out the bag, it does seem to be somewhat impressive.

It basically allows you to view the value of your home for free, with no one trying to contact you or bug you, ala HouseValues, who is now in trouble. It's a great idea and I look forward to seeing what the full feature is.