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Month: August 2006 (page 5 of 8)

August 14, 2006

What good is Zillow.com?

by

Suburban Phoenix Real Estate Broker

Author website

This, possibly, which is just as useful and just as suspect as Dr. Jay Butler’s undocumented statistics. We arrive at the level of actuarial science, at best, which is what an automated valuation method is. An actuary can tell you the anticipated death rate of a specific sub-population. He cannot predict the day and hour of your death. Zillow.com knows almost nothing of importance about particular houses, so it can tell you almost nothing of importance about those particular houses.

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August 14, 2006

Realty reality: When life hands you a lemon — remodel . . .

by

Suburban Phoenix Real Estate Broker

Author website

Sonia came to us from our web site in mid-April, 2005. Young, unmarried, working very diligently at a job that should have paid better than it did. She was pre-qualified at $115,000, which was a very hard number to hit at that time and would be virtually impossible by now. We were just getting to the real fever of the housing boom, with houses at that end of the price range evaporating in hours. What she wanted was something fairly close to her job in North Central Phoenix. Multi-family was okay, but, obviously, safety was a concern.

This is my kind of problem. We love those $700,000 buyers, where the commission check is the size of a brand-new mid-size sedan. But that’s show-horse job, and it’s the work-horse tasks that put a Realtor to the test. One of the things that I think earns loyalty and respect from my clients is that I deliver the goods. If we’re having trouble finding what we want, I will work the MLS like a Rubik’s Cube until I squeeze the right houses out of it.

This is what we did, me and Sonia and Cathy. I would pump out new results, Sonia would drive by the properties on her way to or from work, then Cathy or I would go with her to look at the least objectionable ones. Nothing was easy. North Central Phoenix is the land of the vanishing middle class, and the neighborhoods that aren’t crawling with millionaires are crawling with things you need a special license to talk about.

Eventually we got very lucky, though. A home turned up in the Phoenix Townhouses, a very nice town-home community in the center of town. The home was underpriced, but we saw why when we got there: One owner in twenty years, zero remodels. Everyone wants a bargain, but no one wants what a bargain implies: Less-than-perfect condition. But Sonia had seen a lot of dumps by then, so she could see the value beneath the ugly, old and very dirty decor.

We fast-talked our way into the house by paying a $500 premium — at Read more

August 14, 2006

Unzillowables: The factors that render Zestimates useless . . .

by

Suburban Phoenix Real Estate Broker

Author website

I saw the word “unzillowable” in this post by Sellsius&176; blog. I thought, that’s a great coinage. I should cite that. Life intruded, but Sellsius&176; is back today with a much fuller detailing of unzillowables:

  • Traffic noise
  • Privacy
  • Neighbors
  • Neighbor’s property
  • Neighbor’s pets
  • Unique Day & Night Features
  • Water Issues
  • Cul de sac
  • Stigmatized home
  • Exposure
  • Views
  • Offbeat homes
  • Wallpaper
  • Paint color
  • Land Pitch
  • Smell – Good & Bad.
  • “est” Homes – nicest/ugliest
  • Homes in non-disclosure states
  • Future events

That’s a buckeful, but surely there are more. Go thither and addend.

More zillification here: The real secret behind Zillow’s popularity.

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August 13, 2006

Realty reality: If you want people to remember you, scream at them . . .

by

Suburban Phoenix Real Estate Broker

Author website

I had email earlier this year, a warm lead off our web site. “Can you tell me more about this house?” What I had was an MLS number, but what I saw in the MLS was Westwood High School with a pool. So I sent back what I had on the house I was asked about, but I also sent everything active near Westwood High School with a pool. I followed up with our standard buyer’s email, amending it to ask what else I should be searching for.

This, by the way, is the extent of my initial effort with warm leads coming in from the web site. If you want to dance, we’ll dance. If you want to be left alone — I can do that perfectly.

An email comes back, and it’s good and bad. Clearly motivated and a definite timeline, but they were pre-qualified right at the bleeding edge of no inventory of any kind. That’s okay. I like that kind of problem. Westwood High wasn’t essential; they just like the area. A pool wasn’t absolutely necessary, provided the lot was big enough to support one eventually. Still not easy, but easier.

But very, very motivated. I would shoot out listings and they would be out driving by the homes before I could phone to follow up. They had kissed about a dozen frogs before they found one they wanted to go into.

I met them at that house — that motivated — and we took a look. Not right, but everything they said helped me refine their search.

Outside we hit a stumbling block: “We had another Realtor we were working with, but you just keep sending us more and more houses, so we’re switching to you.”

Oops! I treat the people coming in from the internet as being unrepresented. Many are so far from being ready to jump that they might not actually be in the market at all.

Anyway, I said, “Have you signed anything?” This is a bright line distinction. If I have to ask about specific documents, I will.

“Nope, nothing.”

“Well, I wish you had told me sooner, but I should Read more

August 13, 2006

Last days of the single-family homestead in Frontier Las Vegas?

by

Suburban Phoenix Real Estate Broker

Author website

They have this amazing innovation in Las Vegas. It’s called a newspaper, and what it is is a daily detailed run down of important facts with no editorializing, which they somehow manage to constrain to the opinion pages. It would be so wonderful to have something like this in Phoenix…

Particularly for real estate reporting. Here’s an interesting article from the Las Vegas Review-Journal on the impact of land-use restrictions on single-family housing development:

It’s a local mainstay: The new-home subdivision with 150 single-family homes, comfortably ensconced on 6,500-acre [6500-sf?] lots behind thick cinder-block walls.

More than 71 percent of new homes sold in the Las Vegas Valley today are single-family properties, data from research firm SalesTraq show. Given that market dominance, it would seem inconceivable to consider the typical Las Vegas production-home tract an endangered species.

However, one local housing analyst predicts that sometime in the next seven years to 10 years, the lights will go out on the last traditional new single-family subdivision in the valley.

Steve Bottfeld, a senior analyst with Marketing Solutions, says a multitude of trends will conspire to render new single-family development obsolete within the next decade.

Area builders acknowledge the market changes that are complicating single-family development. But they’re also planning adjustments in how they develop that they say could save the single-family tract.

We’ve been in new home subdivisions in Sin City that were built on amazingly small lots. Three stories to allow for a one-car garage, 2000sf livable on a 2400sf lot. Basically the ‘back yard’ is a smoker’s porch. These are sold as fee estates (you own the underlying land), not condo plats, but your neighbors will never, ever argue in secret. Allowing for appearance, they reminded me of single-family homes in Queens, New York, or the near-in suburbs of Chicago.

There is a lot of high-rise development in Vegas right now, but construction costs put low-end housing at $300 per square foot. Mid-rise wood-frame construction is cheaper — but that cheapness shows in short order, and water damage is accretive and ultimately irreparable.

Las Vegas is a leading-indicator market for Phoenix, so it will be interesting to see how Read more

August 13, 2006

Indian givers? Great White Father makes plans to take back reservations . . .

by

Suburban Phoenix Real Estate Broker

Author website

Indian givers? Great White Father makes plans to take back reservations . . .

Catherine Reagor has a feature in today’s Arizona Republic on the idea of building new residential housing in North Scottsdale using leased land from Native American reservations:

New homes will keep going up on metropolitan Phoenix’s fringes, stretching its boundaries as more people move to the area.

The Valley will grow south toward Tucson, west past the White Tank Mountains and north toward Prescott. But its growth to the east is likely to come to a halt.

Metro Phoenix is already bumping into Native American land on its eastern fringes. And developers can’t just hop over the Salt River or Fort McDowell reservations bordering Scottsdale and Fountain Hills the way they have leaped over other obstacles, including giant chunks of state land, as the Valley grows to the south, west and north. If they tried, they would run into the vast, undevelopable Tonto National Forest on the other side of the reservations.

Despite the recent slowing in home building, the Valley’s population is still projected to double in the next four decades. That has real estate industry leaders looking for the next housing hubs, and the reservations to the east have caught their eye.

The idea was first floated earlier this year by housing analyst R. L. Brown. At the time it seemed unlikely to me because a land lease is an extended game of musical chairs. If you’re on the land when the music stops, you lose.

Even so, I’m sure that land is a sore temptation to developers. Witness:

The busy stuff along the left and top of the image is Scottsdale. That land is worth $1 – $2 million an acre — as dirt, no structures. The vast tract of emptiness in the lower-right of the photo is a small piece of the Salt River Pima Community. A freeway runs through it.

To drive up Pima Road, the north-south yellow line that divides these two radically different uses of the land, is an experience like East and West Berlin before the wall came down.

There are relatively few living Salt River Pima. The reservation Read more

August 11, 2006

Ten more bricks in the wall . . .

by

Suburban Phoenix Real Estate Broker

Author website

I write a lot about disintermediation, but it’s not a front-burner issue in our business. Not yet, anyway. We know that much of what we sell, as a business, is the convenience of being able to dump the real estate problem on us. I’ll say to clients, in jest, “If you can make more money doing my job than you can doing your own job, you don’t make enough to work with me.” In fact, I’ll work with anyone — for no compensation in some cases. But I know that the future of our business is in working with people who would consider it an absurd waste of time and money to do anything more than supervise the sale or purchase of a home. Presumably you can save money doing your own dry-cleaning, too…

So if we don’t worry about the disintermediators, who do we worry about?

Other full-service Realtors, of course.

Cathy came up with the idea of encapsulating our Unique Selling Proposition in a list of ten benefits other Realtors cannot match. We started with a list of 21 things, which I mixed, merged and matched to get to ten. This is policy, summarized in an animated GIF that appears near the top of our home page. We do a lot more than ten things for our clients, of course, but these ten are selected because they will make our competitors sputter, stutter and choke. Better still, we’ll be still better at all of these things before the Realtors we compete against get even close to where we are now.

Today Seth Godin has a post on using ‘another brick in the wall’ to take business away from competitors. Something like this works only if people care about substantive quality differences — and if you can get their attention. But just think about the impact a custom yard sign will have on the neighbors of the seller.

Here’s the cute part: I know that the people we compete against are worried about disintermediation as a front-burner issue. The joke’s on them. Their clients won’t leave them for lower fees but, rather, for greater value…

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August 11, 2006

This is our first custom sign . . .

by

Suburban Phoenix Real Estate Broker

Author website

Condo, so the size is 24 x 18″, half what I want. Crowded and noisy, but it’s what I could could work in the space. The color is delectable.

I sold the seller this home and she has always understood what we’re about, so I’m glad she got to be first with these new signs.

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August 11, 2006

Sellers should select price to make house stand out

by

Suburban Phoenix Real Estate Broker

Author website

Me, from today’s Arizona Republic. (This is a more-permanent link.):

As we’ve talked about before, when you put your house up for sale, you should price it to the market. The idea that you can fool a buyer into paying more than a home is worth is false. Buyers will come to your home knowing what it is truly worth.

Moreover, it is usually not a sound strategy to price the home for more than it is worth, hoping to negotiate to a higher-than-market price, or, at the least, to reduce the price slowly to the market value. In both cases, you will needlessly squander your early window on the market, when the most buyers are interested in your home.

But in our current buyers market, home pricing requires even more finesse. No matter what you might think your home is worth, what it is actually worth is what a buyer is willing to pay for it. To get a home sold in the current surplus of inventory, you might have to start your marketing effort at a below-market price.

We’re not talking about fire-sale discounting, but rather using price to establish market differentiation.

Working with competitive listings, you should try to identify a price at which your home will stand out from the herd. This requires fortitude. You have to be willing to acknowledge where your home stacks up against its competition.

If your home has appropriate upgrades, it might be worth a little more. If it has pet odors, it’s worth a lot less. If you have six nearly identical competitors in your subdivision, you may have to choose a price lower than you wanted, even if your home is objectively the pick of the litter.

In that circumstance, pricing above the true dogs but below the homes that are almost as good can make your house sell while the others languish. Buyers will see your home as the best overall value.

We’re not trying to score points on the neighbors. The goal is to get your money into your pocket on your timetable. A savvy pricing strategy can swing the balance.

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August 11, 2006

Butler: Prices down, sales up, logic sideways . . .

by

Suburban Phoenix Real Estate Broker

Author website

Catherine Reagor in today’s Republic:

Home prices dipped slightly in July, but sales inched up from June.

The median home price of a used Valley home fell to $264,900 last month, after climbing to a record $267,000 in June.

There were 5,545 resales in July, compared with 5,460 the month before, reports the Arizona Real Estate Center at Arizona State University’s Polytechnic. Still, last month was the weakest July for home sales since 1999 when 5,240 resales were recorded.

The numbers come from Dr. Jay Butler of ASU. I have no idea where he gets them, and he doesn’t make them available for independent review — contrary to the common practice of scholarship. From the MLS, I have 7,206 sales in June compared to 6,102 in July. The unreliability of Dr. Butler’s real estate tracking is why we do our own.

Reagor is unusually restrained. Normally, she jumps on negative real estate news with a grave-dancer’s delight. Maybe she’s saving it up for Sunday…

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August 11, 2006

The world is larger than you think it is . . .

by

Suburban Phoenix Real Estate Broker

Author website

I had mail yesterday morning from “keith”, who is Lord of the Flies at HousingPanic. This is the first chance I’ve had to deal with it, and I might just as well ignore it. But there are issues that I think are worth addressing in a metablogical kind of way, in order to dispense with them.

Here is the entire text of the letter:

dude, you’re gonna be seen as the town fool in a few more weeks, if you aren’t already

I’d recommend toning it down a bit. Admit you were wrong, and give your clients (if you have any) good advice, not wrong-headed advice that doesn’t learn

Okay, fine.

First, I’m not going to be seen as the town anything. I get press coverage that other Realtors would kill for, and it’s basically worthless. I was cited first and most in an article in Phoenix Magazine entitled, “Where do the Valley’s best Realtors live?” I heard from one client, who was delighted to have seen the article but got the name of the magazine wrong. I have been published every Friday for almost a year in three regional sections of the Arizona Republic. I get phone calls when I’m controversial, but that’s the sole measurable consequence. We are very highly regarded by our clients, and we are fairly well known in the neighborhoods we farm, but, beyond that, we are not on anyone’s radar.

Not that I’d hate it if we were. We do very well with people who like to read — half of whom are colorful and struggling and half of whom are colorful and very, very prosperous.

Second, there is nothing for me to tone down. I believe the long-term prospects for the residential real estate market in the Phoenix are are very good, but I don’t make any short-term predictions at all. Alike unto “keith” and all those who buzz at his behest, I don’t know what’s going to happen in the future — with the only difference being that I know I don’t know it and I don’t affect to pretend to believe that I do. (Incidentally, I have no opinion Read more

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