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Month: September 2006 (page 13 of 15)

September 8, 2006

Overall August real estate market results for MLS listed homes in the Phoenix area

by

Suburban Phoenix Real Estate Broker

Author website

In the Arizona Regional Multiple Listings Service at large, 6,170 homes sold in August against an inventory of 46,830, an implied absorption rate of 7.6 months. There are 6,185 properties listed as “Sale Pending.” All of these numbers are largely unchanged from July.

The historical numbers make it plain that we did not experience the traditional selling season, but they also make it plain that a simplistic year-over-year analysis — which we can expect from the Arizona Republic a week or more from now — is misleading.

Number of Homes Sold (with Days on Market)

March 2003   6471    67
          2004   8678    60
          2005   9959    36
          2006   7469    58

April    2003   7429    67
          2004   8889    61
          2005   9567    32
          2006   6725    60

May   2003   7428    67
          2004   8932    56
          2005   9853    27
          2006   7582    63

June   2003     7409    67
          2004    9969    55
          2005   10225    26
          2006    7209    67

July   2003     7643    64
          2004    8974    51
          2005    9326    25
          2006    6101    70

August 2003     7648    63
          2004    8968    47
          2005    9996    25
          2006    6170    76

Prices are virtually unchanged as well. The average sales price for a closed MLS transaction in July was $332,426. For the month of August, the average was $331,266, a net loss of about 0.35%.

Note that this may not accurately reflect the Phoenix-area real estate market as a whole. All private sales and most new-home builder sales are excluded from MLS statistics. However, for MLS-represented resale homes, the month of August was virtually a repeat of July — a few more transactions taking a few more days to sell for marginally less money. If the pending sales are any indication, September may be more of the same.

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September 8, 2006

Incremental movement toward a blanket Zillow.com disclaimer?

by

Suburban Phoenix Real Estate Broker

Author website

Today brings a game effort by David Gibbons of Zillow Blog to address Zillow.com’s disclosure/disclaimer issue. The problem for me is that the material he cites is at least one click deeper than where he puts is and two clicks deeper than where it should be. Even worse, the page he cites makes even more extravagant indefensible claims than does the Zillow.com home page.

This much, snipped together from David’s text

A Zestimate is really a starting point in figuring out the true value of a house. A Zestimate is not an appraisal.

would be perfectly adequate — if it were placed prominently on the Zillow.com home page and any page from which a Zestimate can be run. Of course, the extravagant claims would need a pruning, too…

But: This is incremental progress, movement in the right direction. Good on ya’, David!

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September 8, 2006

Move.com looks for viral buzz with sneak peeks of new commercials . . .

by

Suburban Phoenix Real Estate Broker

Author website

They’re looking for comments, they say. That’s because the spots are in the can and the media’s already bought:

As someone who regularly blogs about real estate, we thought you would like a sneak peek at the new Move.com; television ads before they air. We’d love to hear your comments.

What do they really want? Buzz, of course, word-of-mouth pre-conditioning of the audience. To me they’re just commercials — the email, bathroom and microwave popcorn time courteously inserted into broadcast TV. Your mileage may vary.

Here are the spots, shown with Move.com’s titles:

Atlas:

Paper:

Search:

Time:

Tires:

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September 8, 2006

Pre-Akismetization: Inoculating weblogs against comment-spam . . .

by

Suburban Phoenix Real Estate Broker

Author website

This is completely inside baseball stuff for webloggers running the Akismet anti-comment-spam plug-in. If that ain’t you, you can safely press on.

Now then: Akismet doesn’t kill spam, of course, it just locks it up it in secret CIA prison camps hidden in friendly foreign dictatorships–no, wait…

Akismet quarantines suspected spam, but it’s up to you to inflict the actual act of spamicide. You have to do a spam-scan one or more times a day to make sure that there are no false positives — genuine comments misidentified as spam. The rest go to the spam-grinder.

If you only have a few spam comments to look at, it’s no big deal. I found, however, that I was collecting hundreds of detainees every day. True spammed comments, no question, many involving combinations and contortions that cannot actually be possible for normal human beings.

The Akismet server failure a couple of weeks ago brought all this most acutely home, since some spam comments were leaking through and many others were piling up in the moderation queue.

Which led me to a discovery…

Most of the spammed comments were accruing solely to one post, with another one catching the vast majority of the remainder. The implication was, if I were to turn off commenting in those two posts, I would effectively inoculate BloodhoundBlog from most comment-spam before it even got to Akismet — and without installing a captcha kludge.

Guess what? It worked. I get between five and zero spam comments a day. There is no risk that I’ll scroll past a valid comment in my rush to throw out all that very dirty trash. There are two old posts that won’t take comments — but there is no possibility that they would have gotten any in the first place. Presumably, in due course, some skeezy spambot will penetrate (ew!) another post, so I may have to effect the cure there, too.

Will this work for you? Don’t know. Look at your spam comments and see if there are particular posts that are being gang-raped, as it were. If there are, turning off commenting for those few posts may turn off your Read more

September 8, 2006

August 2006 Market-Basket of Homes: Values up .25% on stronger sales . . .

by

Suburban Phoenix Real Estate Broker

Author website

Is the Metropolitan Phoenix real estate market starting to recover? Too soon to say, but prices edged up slightly on sales that were stronger — even if they are still slow — in the August edition of the BloodhoundRealty.com Market-Basket of Homes.

Average prices for Market Basket homes in August were up 0.25%, compared to July. Don’t break out the champagne, though. Year-over-year, prices are still down 1.72%, and down a little less than 6% from the December 2005 high.

A total of 199 sales were recorded, up substantially from July’s total of 151. August is the second-strongest month for 2006, so far, trailing May’s high of 211 transactions. Market-Basket homes spent an average of 78 days on market, four days more than in July. For comparison purposes, 200 Market Basket homes were sold in August of 2003, the last relatively normal year, in an average of 56 days.

As has been the case in recent months, most Market-Basket homes are selling at or above list price. A few deeply-discounted properties pulled down the average, and average discounting netted out to 1.43%, down from 1.61% in July.

Inventories of available Market Basket homes continue their decline. There are now 1,406 homes available for sale in the Market-Basket, where there were 1,506 in July. With sales of 199 homes, the implied absorption rate is a littlle over 7 months, down significantly from almost 10 months in July. A six-month absorption rate is considered normal. The number of homes listed as "Sale Pending" is 179, no change from July.

Based on the idea of the Consumer Price Index market-basket of goods and services, the Market-Basket of Homes uses average sales prices for a small subset of all Valley home sales to get a clearer idea of what is happening in the middle of the bell curve. The alternative method, striking a median among all closed transactions, introduces too many extraneous factors to provide a reliable indicator of what is happening to prices for those homes that are most avidly desired by the greatest number of people. To that end, the Market-Basket of Homes looks at sales prices for Read more

September 8, 2006

Who pays when “seller pays closing costs”? The buyer . . .

by

Suburban Phoenix Real Estate Broker

Author website

This is me in today’s Arizona Republic (permanent link):

Who pays when “seller pays closing costs”? The buyer…

Not all of the phone calls I get in response to these columns are from angry Realtors.

I like the calls I get from real people, rather than Realtors or brokers. Even so, a brief telephone call is not the always the best way for a person to wrap his or her mind around a new idea.

As an example, I had a very nice call in response to the article I wrote arguing that the buyer pays for everything in a real estate transaction. The caller was a very sweet man, but he insisted I must be wrong, because the seller of his home had paid his closing costs.

I explained to him that I write deals that way all the time, that I prefer to do things that way no matter what the buyer’s financial circumstances, because, for now at least, retaining your own cash is usually more profitable than the interest-cost of the additional borrowed funds.

But – emphasize that “but” – it doesn’t matter. You’re paying your own closing costs either way. If you pay them in cash, you can watch the money come out of your checking account. If “the seller pays the closing costs,” all you’re doing is exchanging one price discount for another. Your money stays in your checking account because you are paying more for the home and financing the closing costs.

“But, but, but,” the caller sputtered.

“I know,” I continued. “This is hard. If the seller hadn’t paid your closing costs, would the purchase price have been the same?”

“Heck, no!”

“So you took a three percent discount in closing costs instead of shaving three percent off the price?” I asked.

“That sounds about right.”

“So you borrowed three percent more from your lender than you would have done if you had paid the closing costs out of pocket.”

Silence – the threshold of rhetorical surrender.

“So who paid the closing costs?” I asked.

“When you put it that way…”

“Who paid for everything?”

“I’ll be danged if you haven’t got me convinced.”

If only my Realtor and broker callers were Read more

September 7, 2006

Bed-time real estate blog-bytes: “A hammer’s a great tool until you have to paint a wall, right?”

by

Suburban Phoenix Real Estate Broker

Author website

Rey Estate: Make things simple!

In The Trenches: There’s gold in them thar data!

The Property Monger: Scuse me while I Zillow the sky…

Hamptons Real Estate Blog: Home prices are stable, but the Zestimates are surging.

Rubbing elbows with Nubricks gets Real Central VA, The Real Estate Tomato and BloodhoundBlog in The London Times Online. And you thought my English was hard to read!

Sellsius° counters: Write it so they can read it…

True Gotham: Give buyers real control.

True Gotham again (blogrolled): “It’s a mistake to set up any system that denies there is expertise in real estate.”

The RE.net has been itchingly acrawl with creepy stories about creative mortgages and imminent doom. I have no idea how many of those loans have already been refinanced, but, whether or not they have, there are a hell of a lot more happy mortgage stories than sad ones. Behind the Curtain (blogrolled for sheer effrontery) on negative-amortization loans: “A hammer’s a great tool until you have to paint a wall, right?”

Ardell says buyers and agents need to feel each other out before committing to each other. I don’t hate this idea, provided that buyers remember to nail down the terms of their representation before they run out and fall in love with a house.

Bubbleboys: This is what you’re looking for: The Lord of the Bubbleflies: Lean-looked prophet whispers fearful change, cultivating the worst impulses in otherwise decent people…

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September 7, 2006

Shadowing Zillow, filleting Redfin, and a “Just Plane Smart” approach to change in the real estate business . . .

by

Suburban Phoenix Real Estate Broker

Author website

Dustin at Rain City Guide is giving stat-dancing lessons today. I am neither as talented nor as interested as he is, but I do have an interesting statistic to reveal: Debunking Zillow.com is averaging well over 100 unique hits a day. All of my extended Zillow rants do very well, and Debunking Zillow.com comes in third if you Google on “zillow.com” — which many visitors to BloodhoundBlog are doing every day. It pays to keep things in perspective: Our Zillow traffic can’t hold a candle to that which is landing directly on Zillow.com. But for anyone looking for a second-opinion, and apparently many people are, it’s right there on the shelf next to the branded product.

There are two memes I hear all the time in the disintermediation debate that I think are incorrect. The first is the implication that anyone who expresses a skeptical or negative view of one or more of the dot.com RealtyBots is either an actual luddite or is in some way frightened by technology, disintermediation or simply change in any form. The second is the idea that disintermediation in the real estate industry will — or will not — take the course followed by travel agencies and stock brokerages.

For the first meme, I can discern no evidence whatever. It’s a caricature composed of characterizations rather than quotations with supporting links. Surely I would qualify as a technophile of at least the second rank, and my objections to Zillow.com and Redfin.com have nothing to do with technology, fear or even the idea of disintermediation as such. Zillow.com is deceptive in its portrayal of what it can and cannot do, and Redfin.com is a cowbird that incubates its buyer representation commissions in the listing agent’s nest. I am one of the most pro-innovation Realtors on the planet — and, in case you didn’t notice, yesterday I proposed an innovation that will, as a secondary consequence, obviate Redfin.com’s current business model. What I am opposed to — and what every honest person should be opposed to — is unethical behavior.

For the second meme, I think both the “will” and “will Read more

September 7, 2006

Back story: How we evolved our policy forbidding dual agency . . .

by

Realtor, Staging Consultant

Author website

Someone commented on Greg’s recent post regarding dual agency. I thought I’d give you the “back story” so you can understand how we came to this position.

Just this past May three events converged to make it crystal clear that dual agency was, in general, good for no one except the real estate agent — who doesn’t want to shake loose those extra dollars he can get from both of his clients by serving neither of them well:

One of the classes I attended to earn my GRI (Graduate of Realtors Institute) was taught by Cec Daniels and Don Martin, past president of Arizona Association of Realtors. For two days we learned from Cec all about how practicing dual agency was unfair to our clients, and Don was all over the idea of the liability dual agency creates for the brokers. During this lecture, one of the instructors wore a baseball cap embossed with a capital B (ostensibly for Buyer) and the other a cap embossed with a capital S (Seller). When they stood together in alphabetical order their caps spelled out another term for dual agency. 😉

At about the same time, Greg was representing a dear family friend in the sale of her house. He got a sign call from someone who didn’t think he needed buyer representation… he was shopping on his own and making sign calls. (He told us that the primary reason he was interested in our friend’s home more than any other was that Greg was the only agent who had returned his sign call!) By this time we were already convinced that it’s practically impossible to avoid dual agency when representing a client if the customer (a party in a real estate transaction who is not my client) is unrepresented. The party without representation is sure to rely on us for advice — even though we cannot advise a customer without creating an undisclosed dual agency. Thus, since we would be the only professional representation when half of the parties weren’t represented, we had made it policy to sign limited dual agency agreements with each party. Read more

September 6, 2006

Securing the home-buyer’s place at the table: How two simple reforms can finally result in a full, uncompromised form of buyer representation . . .

by

Suburban Phoenix Real Estate Broker

Author website

Executive summary: This is long, and it’s written (I hope!) for ordinary people, not real estate professionals. But I want for real estate professionals to be aware of this argument, because I think it solves several of the knottier problems affecting our industry. Here’s a quick summary of the essay:

  1. Buyers should negotiate the buyer’s agent’s compensation in detail and prior to looking at any homes
  2. Sellers and listing agents should concede funds directly to the buyer to be disbursed at the buyer’s discretion to compensate the buyer’s agent

Either of these two reforms, or ideally both, will finally, fully empower buyers as supervisory employers of real estate agents in the way that sellers always have been.

If you discuss this in your weblog — and I think you should, in order to hear what your clients think — I would appreciate it if you would either link back to this essay or use the Technorati tag “compensation for buyer representation” (that exact keyword, without the quotes), so that I can track the conversation.

–GSS

Securing the home-buyer’s place at the table: How two simple reforms can finally result in a full, uncompromised form of buyer representation…

I was at a real estate seminar a few years back and the instructor happened to ask what kind of commissions Phoenix-area Realtors were getting on their listings. “Six percent,” someone said. “Five percent,” said someone else. “Five percent.” “Five-and-a-half.” And then a very beautiful young man, not quite overdue for his second shave, stood up and said, “Seven percent.”

“Just keep thinking that way,” the instructor replied. “Someday you’ll make yourself believe it.”

This is a true fact of real estate, widely if not universally known: Sellers negotiate commissions. Routinely. As a matter of course. “How much do you charge?” is often the first question blurted out at a listing appointment. You undoubtedly already know this, as well, if you’ve ever sold a home in your life — or talked to anyone who has. Yet for some reason, people persist in pretending that the six percent commission is still ubiquitous — if it ever was.

As a matter of disclosure, we routinely Read more

September 6, 2006

The Lord of the Bubbleflies: Lean-looked prophet whispers fearful change, cultivating the worst impulses in otherwise decent people . . .

by

Suburban Phoenix Real Estate Broker

Author website

Ahem:

I am rooting for an epic housing collapse, a disastrous recession, the collapse of the stock market, a complete replacement of our current partisian leadership, a questioning of our country’s current economic model, and a severe and historic financial meltdown.

I told you so…

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September 6, 2006

Real estate, reality TV, dual agency and the nefarious influences of the Dark Prince . . .

by

Suburban Phoenix Real Estate Broker

Author website

Daniel Rothamel musing on “Million Dollar Listing”, a real estate reality show on the Bravo TV network:

The fact that dual agency is legal had to be the direct result of Satan himself lobbying real estate commissions all over the country. The only person that EVER benefits from dual agency is the agent. His wallet gets fatter, and the buyer and seller get less representation. Only Satan would call that fair.

Actually, that would make a fun “South Park” episode: Satan versus Saddam at the Department of Real Estate.

I watched the show for the first time last night, but I was playing my guitar (loudly and badly, the way god and Leo Fender intended), so I missed a lot. I did see one agent who was clearly torquing her clients to buy when they weren’t ready to buy — way over the line. I think this might be the dual agent Daniel is talking about. But later in the show the buyers seemed to be completely happy. Maybe they were awed by the TV cameras and didn’t want to make a scene. Maybe they don’t understand reality TV…

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